Anybody with Investment Fund Experience Please?

expeditionist

On another note, this Tradestops webinar from Monday 15th August might interest some people, although I didn't watch it myself yet: http://pro.moneyweekresearch.com/TSU-0816-launch/ETSUS842/

EdGasket

I got bored after 5 minutes; anyway its flogging you their software; basically trailing stop losses from what I gather. It's a technique but there are others.

Pincher

expeditionist wrote: »

But who among us isn't greedy and doesn't occasionally hanker to get rich quick, perhaps at their own demise!

Let us say £1million is generating £50k before tax, and roughly £40k after tax. It that rich?

Probably need £2million generating £100k, but pay much more in tax due to higher tax band.

So that's why Coutts wants you to have £2million!

Well, still have something to aim for, before I hop it. :j

expeditionist

Pincher wrote: »

Let us say £1million is generating £50k before tax, and roughly £40k after tax. It that rich?

Probably need £2million generating £100k, but pay much more in tax due to higher tax band.

So that's why Coutts wants you to have £2million!

Well, still have something to aim for, before I hop it. :j

On the other hand, 20 years ago I had just 2 boxes full of stuff plus 4 or 5 days survival money to my name and there's a litlle conflicted, bohemian, part of mySelf that aims to ditch all the things that now rob me of time and return to a life of minimalism.

grey_gym_sock

Pincher wrote: »

Let us say £1million is generating £50k before tax, and roughly £40k after tax. It that rich?

it's tax-inefficient. make your £50k return as a suitable mix of interest, dividends and capital gains (plus, optionally, a bit of pension), and it'll be about £49k after tax.

Probably need £2million generating £100k, but pay much more in tax due to higher tax band.

true, but with the right mix, it would still be about £89k after tax.

but more importantly: are you paying rent or a big mortgage out of your £40k or £49k after-tax income, or do you already own your own home outright? that makes a huge difference to how rich that income makes you feel.

also: how much have you managed to squirrel away in S&S ISAs? which gives you more income and gains, tax-free and without pushing you into higher tax bands.

of course, everybody thinks that being rich means having a bit more income/wealth than they do. therefore, nobody is rich

Pincher

grey_gym_sock wrote: »

it's tax-inefficient. make your £50k return as a suitable mix of interest, dividends and capital gains (plus, optionally, a bit of pension), and it'll be about £49k after tax.

I have used up the £1,000, £11,100 and £5,000 allowances this year. The 20% tax is just a nod to the basic rate tax, not what I actually pay.

If I crystalise all gains, it will push me into higher rate tax.
And pushing £90k return.

Just for fun, I deliberately made a loss by buying the BT.A 9.6p that went ex-dividend 11th August. The dividend I receive will pay 7.5% tax, but the capital loss can be used to offset excess gain and reduce CGT at 10%. It's kind of like transmuting 10% tax capital gains, into 7.5% dividend.

It's the ~£5,000 interest paying 20% tax that is really INefficient.
But I don't want to be all in, so must keep some in cash.

grey_gym_sock

Pincher wrote: »

Just for fun, I deliberately made a loss by buying the BT.A 9.6p that went ex-dividend 11th August. The dividend I receive will pay 7.5% tax, but the capital loss can be used to offset excess gain and reduce CGT at 10%. It's kind of like transmuting 10% tax capital gains, into 7.5% dividend.

i know this is just for fun, but that doesn't add up ...

your tax saving is 2.5% of 9.6p per share, which is 0.24p per share.

but with the share price around 400p, you will incur costs, when you buy and sell soon after, of at least 2p per share (for the stamp duty - plus something for bid-offer spread and dealing commissions).

Pincher

grey_gym_sock wrote: »

i know this is just for fun, but that doesn't add up ...

your tax saving is 2.5% of 9.6p per share, which is 0.24p per share.

but with the share price around 400p, you will incur costs, when you buy and sell soon after, of at least 2p per share (for the stamp duty - plus something for bid-offer spread and dealing commissions).

You would expect the share price to drop by 9.6p on the ex-dividend date, but the really weird thing was, the share price was only 3pence down on 11th August, initially for about an hour, before drifting lower, so I could have sold with less loss than the dividend gain.

It's almost as if people dozed off, and were trading as if it was still with dividend.

A perfect transmutation would have been a loss of 9.6p on the buy and sell, to balance the 9.6p dividend gain. I am holding on to see if I could sell at near the same price I bought, due to random fluctuations. If I sell at ~2.5p above that, the buy and sell would be free, and I get the dividend for free.

If you have not used your £5,000 allowance, but you have used all your £11,100 allowance, there is a bigger incentive to convert capital gains into dividend.

Don't read too much into this, it's just an experiment. If it worked all the time, people would just buy in around dividend time, and then sell up, so it shouldn't work.