How to get £1,000pm from a lump sum

Aminatidi

But it's impossible to get that level return with taking a level of risk.

I don't think I'd read this thread as anyone suggesting any fund is guaranteed to return a given amount but you can do backtesting independently of specific funds and take some inference from what a given portfolio might return going off as much evidence as you have available.

A_T

Jonathan_Kelvin wrote: »

Because, to put it bluntly, there is absolutely zero evidence that it will. This is pretty much lesson number one in investing, that past performance does not predict future performance.

The growth in the past has been driven by events in the past. If you want specific driving factors that simply cannot be repeated, which drove this growth then the introduction of QE and the collapse of interest rates are two pretty major ones.

Hopefully you are having a little bit of a joke here, but please, suggesting that something that has risen for years will continue to is both foolish and irresponsible.

A lifestrategy-type approach will have worked for what the OP wants for 50+ years. And there is nothing irresponsible in suggesting putting your money broadly into the investible world.

What is your suggestion?

Linton

Surely if you want a sustainable income of say 5% from bonds you need bonds that are paying 5% interest given that over the lifetime of the bond there is no capital growth. VLS20 is invested something like 40% in developed government bonds. They are not paying anything close to 5%.


Suggesting that inexperienced investors blindly use VLS20 because it has provided an adequate return since it it started around 7 years ago is I think bad advice. Bond behaviour in that period has been historically unprecedented.

Eco_Miser

Don't get too hung up about getting a monthly income. Pick your investments for their return, and use a cash float to smooth out the gaps between income and expenditure. You should be holding some cash anyway to cover emergency and planned erratic spending, and to avoid being a forced seller when the market has crashed.

Investment Trusts are a type of collective investment which are companies traded on a stock exchange. Their trade body The AIC has data and links. Some ITs have had a rising dividend for decades. They mostly pay quarterly dividends. See their Dividend Heroes link.

See also Monevator's deaccumulation pages for more suggestions about generating your own income.

bostonerimus

Jonathan_Kelvin wrote: »

Because, to put it bluntly, there is absolutely zero evidence that it will. This is pretty much lesson number one in investing, that past performance does not predict future performance.

The growth in the past has been driven by events in the past. If you want specific driving factors that simply cannot be repeated, which drove this growth then the introduction of QE and the collapse of interest rates are two pretty major ones.

Hopefully you are having a little bit of a joke here, but please, suggesting that something that has risen for years will continue to is both foolish and irresponsible.

You need to consider the probabilities and part of that should involve the moments of the historical market data. That way sensible plan can be developed.

wmb194

It could be that they're not fashionable anymore and will have relatively high charges compared to Vanguard but one option for a monthly income at about the 5% annual level always used to be a strategic bond fund e.g., Invesco Monthly Income Plus Y Inc. The data on Trustnet shows that it is invested about 60/40 rest of world/UK and, although obviously it was a good year, in the last year yielded about 5% and gained 11%.

Thrugelmir

Aminatidi wrote: »

I don't think I'd read this thread as anyone suggesting any fund is guaranteed to return a given amount but you can do backtesting independently of specific funds and take some inference from what a given portfolio might return going off as much evidence as you have available.

The past performance disclaimer was introduced for good reason.

want_to_save

the other option is you can put the full amount into an investment bond and draw 5% per annum tax deferred (you can draw this for 20) years once the full capital that was paid in has been drawn and the remainder is effectively the growth this would be taxable and you would have to pay tax (potentially dependent on your income tax bracket)

Londrum

I don't know how many years you want it to last, but remember that £1,000 in twenty years won't be worth as much as £1,000 now, so you'll have to withdraw higher amounts as you go along.

Twenty years of 2% inflation means you'll need to be withdrawing £1,500 a month by then, just to stand still. (But you'd better check my maths, I'm lousy at maths!)

easterbunni

Eco_Miser wrote: »

Investment Trusts are a type of collective investment which are companies traded on a stock exchange. Their trade body The AIC has data and links. Some ITs have had a rising dividend for decades. They mostly pay quarterly dividends. See their Dividend Heroes link.

See also Monevator's deaccumulation pages for more suggestions about generating your own income.

I have 30K worth of ITs that generated ~£1750 in dividends last year. Times that by 8.3 (250K / 30K) is about ~£14500 divs a year?


It is a mix of fairly high yield ITs so future divs are not guaranteed etc