It's time to start digging up those Squirrelled Nuts!!!!

Sea_Shell

jimi_man said:

Sea_Shell said:

Albermarle said:

michaels said:

Sea_Shell said:

Looking at the provisional figures, I think we'll just ignore the last 24 months, and compare to where we were at end of Sept 2020!!!

The huge rise in fund values, and the current fall back, is just skewing the figures. 

Sadly with prices up by about 12% since then you need to actually add 12% to the Sep 2020 value / deduct 12% from the current value to get a fair comparison  

Alternatively increase your projected future expenditure by 12% . When looking at long term planning I think it has the same effect. Just do not do both !

That £31,700 of spends included £3000 of new boiler.  If you take that out that leaves £28,700, or £14,350 pa

This is still below our previously predicted "everyday" £15,000 spends.

Even if we upped that by 12% that gives £16,800.

3% "swr" of our current pot = £17,040

Or £16,920 if reducing pot by £4000 for further "capital expenditure" this year.

Will the markets drop further from here?  Who knows 😉

I suppose it depends if the £3000 (new boiler) is an absolutely exceptional one off cost. As you’re spending a similar amount on a bathroom and then next year/year after, there is likely to be something else. So maybe it’s wise to include that amount in your budget? If you don’t spend it then you’ll be under. Personally I’d rather budget like that instead of having everything down to the wire as you have. I accept that everyone is different so please don’t take that as criticism! 

I agree, there is always "something" likely to need doing every year.

However, I'm not sure we're "down to the wire" as it were, as there is probably some wiggle room up to £20k a year.

I might start to get twitchy if our overall pot starts going back below £500k ! 😉


It's hanging on in there at £568,000.

LHW99

Sea_Shell said:

Great if that works for you.

I think I'll stick with my spreadsheet.

It lists what's what each month end, including a column for monthly spend.

It shows where we were against where we are.

Truthfully, it just makes my spreadsheet a bit bigger and means I can run two spreadsheets (one with income / expenditure, one with portfolio). Twice as much fun!!

(I should get out more....)

michaels

jimi_man said:

Sea_Shell said:

Albermarle said:

michaels said:

Sea_Shell said:

Looking at the provisional figures, I think we'll just ignore the last 24 months, and compare to where we were at end of Sept 2020!!!

The huge rise in fund values, and the current fall back, is just skewing the figures. 

Sadly with prices up by about 12% since then you need to actually add 12% to the Sep 2020 value / deduct 12% from the current value to get a fair comparison  

Alternatively increase your projected future expenditure by 12% . When looking at long term planning I think it has the same effect. Just do not do both !

That £31,700 of spends included £3000 of new boiler.  If you take that out that leaves £28,700, or £14,350 pa

This is still below our previously predicted "everyday" £15,000 spends.

Even if we upped that by 12% that gives £16,800.

3% "swr" of our current pot = £17,040

Or £16,920 if reducing pot by £4000 for further "capital expenditure" this year.

Will the markets drop further from here?  Who knows 😉

I suppose it depends if the £3000 (new boiler) is an absolutely exceptional one off cost. As you’re spending a similar amount on a bathroom and then next year/year after, there is likely to be something else. So maybe it’s wise to include that amount in your budget? If you don’t spend it then you’ll be under. Personally I’d rather budget like that instead of having everything down to the wire as you have. I accept that everyone is different so please don’t take that as criticism! 

I try and build in 'accruals' for lumpy big spends into my budget, so £2000 a year for a new car, similar for house maintenance/improvement etc so it is there in my 'annual cost of living' even though the spending is lumpy and I might spend considerably less some years.  Of course in theory I should then put the under-spend into an accruals bucket when calculating my current capital position - but I don't

Robert_McGeddon

I might start to get twitchy if our overall pot starts going back below £500k ! 😉

It's hanging on in there at £568,000.

I summerise my assets each month on a spreadsheet. Just add a new column each month and there's a quick ready reckoner as to how things are progressing.  All went well until April this year when I added a couple of rows at the bottom, one for the CPIH index and the second for "real" value tied back to 31 March 2022. All to easy to be complacent in an inflationary environment.

Audaxer

NoMore said:

LHW99 said:

Clive_Woody said:

Sea_Shell said:

LHW99 said:

I unitised our (dividend based) portfolio in 2014, and the units are 3% down capital-wise since end Sept 2021. However, income earned per unit has increased by around 50% up to the end of 2021, and looks to be on target for a further increase in 2022. Interestingly although dividends were reduced in 2020, the amount received in the year was barely less than in 2019 (total and per unit). 

Sorry you've lost me, I don't understand any of that?

So glad you said that and it's not just me reaching for Google Translate to try and make sense of it 😄

Sorry - basically in 2014 I assumed my investments were like a unit trust, and assumed each "unit" was worth £100 Dividing the total £ value of the portfolio by 100 gave the number of "units" I had. As the value of the holdings were updated over time, with the number of "units" staying the same, the "value of a unit" would increase. When money was added I worked out how many new units I was buying, based on the current "unit value". When money is withfrawn, the number of "units" gets decreased accordingly.

It means that if I look at the increase in unit value compared to the original £100, each unit is now ~£150, and the increase only takes account of the actual changes in the stockmarket, and doesn't include how much new money went in (or out).

There have been threads on here about it, though I haven't seen one lately.

so this: How to unitize your portfolio - Monevator 

I've heard of unitizing a portfolio, but didn't really know how it works. I currently check my returns on a spreadsheet with the XIRR formula, which does give true returns when adding and withdrawing cash during the year. I might try unitizing my portfolio to see if I get the same percentage returns as I do with XIRR.

LHW99

Audaxer said:

NoMore said:

LHW99 said:

Clive_Woody said:

Sea_Shell said:

LHW99 said:

I unitised our (dividend based) portfolio in 2014, and the units are 3% down capital-wise since end Sept 2021. However, income earned per unit has increased by around 50% up to the end of 2021, and looks to be on target for a further increase in 2022. Interestingly although dividends were reduced in 2020, the amount received in the year was barely less than in 2019 (total and per unit). 

Sorry you've lost me, I don't understand any of that?

So glad you said that and it's not just me reaching for Google Translate to try and make sense of it 😄

Sorry - basically in 2014 I assumed my investments were like a unit trust, and assumed each "unit" was worth £100 Dividing the total £ value of the portfolio by 100 gave the number of "units" I had. As the value of the holdings were updated over time, with the number of "units" staying the same, the "value of a unit" would increase. When money was added I worked out how many new units I was buying, based on the current "unit value". When money is withfrawn, the number of "units" gets decreased accordingly.

It means that if I look at the increase in unit value compared to the original £100, each unit is now ~£150, and the increase only takes account of the actual changes in the stockmarket, and doesn't include how much new money went in (or out).

There have been threads on here about it, though I haven't seen one lately.

so this: How to unitize your portfolio - Monevator 

I've heard of unitizing a portfolio, but didn't really know how it works. I currently check my returns on a spreadsheet with the XIRR formula, which does give true returns when adding and withdrawing cash during the year. I might try unitizing my portfolio to see if I get the same percentage returns as I do with XIRR.

I've seen that mentioned before, but I have no idea how it works (looks statistical, and I have very little idea about statistics formulae). It's not a formula I've used away from a spreadsheet, so I'm a bit wary.

In my version of Excel its given as XIRR(values, dates, guess) - which isn't much help. What do I guess? pounds, dates, intervals?

Audaxer

LHW99 said:

Audaxer said:

NoMore said:

LHW99 said:

Clive_Woody said:

Sea_Shell said:

LHW99 said:

I unitised our (dividend based) portfolio in 2014, and the units are 3% down capital-wise since end Sept 2021. However, income earned per unit has increased by around 50% up to the end of 2021, and looks to be on target for a further increase in 2022. Interestingly although dividends were reduced in 2020, the amount received in the year was barely less than in 2019 (total and per unit). 

Sorry you've lost me, I don't understand any of that?

So glad you said that and it's not just me reaching for Google Translate to try and make sense of it 😄

Sorry - basically in 2014 I assumed my investments were like a unit trust, and assumed each "unit" was worth £100 Dividing the total £ value of the portfolio by 100 gave the number of "units" I had. As the value of the holdings were updated over time, with the number of "units" staying the same, the "value of a unit" would increase. When money was added I worked out how many new units I was buying, based on the current "unit value". When money is withfrawn, the number of "units" gets decreased accordingly.

It means that if I look at the increase in unit value compared to the original £100, each unit is now ~£150, and the increase only takes account of the actual changes in the stockmarket, and doesn't include how much new money went in (or out).

There have been threads on here about it, though I haven't seen one lately.

so this: How to unitize your portfolio - Monevator 

I've heard of unitizing a portfolio, but didn't really know how it works. I currently check my returns on a spreadsheet with the XIRR formula, which does give true returns when adding and withdrawing cash during the year. I might try unitizing my portfolio to see if I get the same percentage returns as I do with XIRR.

I've seen that mentioned before, but I have no idea how it works (looks statistical, and I have very little idea about statistics formulae). It's not a formula I've used away from a spreadsheet, so I'm a bit wary.

In my version of Excel its given as XIRR(values, dates, guess) - which isn't much help. What do I guess? pounds, dates, intervals?

The formula in my Excel spreadsheet that works out the percentage gain or loss is =XIRR(D5:D18, A5:A18). Column D shows the value at the start of the year, and then any additions and withdrawals, and column A is the dates of these entries. The last entry in each column is the last day of the year, and the current value. You can use any two columns with any number of rows - it just suited me to use D and A the way I set it up after googling how to do it. 

Sea_Shell

What does XIRR mean?

Sea_Shell

My "pot" spreadsheet columns are...

Date (month ending)
Total pot value (broken down into pensions, ISA, cash etc)
Year on Year growth/loss as a %, and again in £
Monthly spend
12 months spend to date
Those spends as a % of current pot
Those spends as a % of last year's pot
Pre-spends growth/loss in £ and %


The last lot of figures for those columns was...

Sept 22
£568,014
-9.7% (-£62218)
£1,905
£14,771
2.6%
2.34%
-7.56% (-£47657)



I have another spreadsheet to breakdown all spends and any income (interest etc)

Audaxer

Sea_Shell said:

What does XIRR mean?

This is the description of the XIRR function, from the Microsoft website:
"Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic."
It basically just gives you an accurate rate of return taking account of additions and withdrawals to your starting amount. If for example your starting amount was £100k and you invested an additional £20k in January, XIRR would produce a different percentage return than if you invested that additional £20k in say August. If you were adding more money throughout the year, and/or withdrawing money by taking dividends or selling investments, I think XIRR is probably more important if you want to see a true rate of return.