Peering over the hill...

edinburgher

@Grogged - how often do you rebalance the underlying funds?

savingholmes

Well done on progress and  the award. Retirement numbers interesting too

Grogged

edinburgher said:

@Grogged - how often do you rebalance the underlying funds?

Within MrsG vanguard portfolio, because it's ETF based, it's done whenever dividends are paid or the normal monthly payment.
This is possible because there are no dealing charges, so it's easier to keep it balanced.
For the ii portfolio, it's monthly, using their free trading option to avoid dealing fees.
If it's been a good month for dividends I may use the monthly free credit to time a purchase so it catches the dividend if it goes XD that month. But that's very rare.

QueenJess

We’ve made a decision to include some ESG (Environmentally sound) investments and have started to invest in their newly launched Global ESG ETF fund.  Currently stands at 1 share, but this will be topped up with March’s dividends and Aprils contribution.  We’ll balance it over time so that the four main funds will all have the same weighting (21%).

Interestingly, I was looking at the same thing the other day. I tried to look into it a bit, but I'm not sure how well an ESG fund really works for an index tracker. It did feel a bit like they were green washing to jump on the ethical investment band wagon.

Ethical interesting is so hard and fraught with difficulties. I really hope companies start making it easier to do and understand although I doubt it!

Grogged

I take your point.
I wish they'd do more to ensure that the business is run ethically as well, rather than on just deciding how to pick it.

Grogged

The MrsG May SIPP Update

 

This is the story of the good SIPP MrsG which started her voyage in June 2020 with an investment of £1,440 and a transfer from a previous plan.

As MrsG earns no income, her maximum contribution per year is £2,880, which the kind tax man will top up to £3,600.

 

The aim is to get a pot of £50,000 by retirement in 2035. Mr Spreadsheet is comfortable that we’ll at least double that.

 

Currently contributing £250 per month (£200 + £50 tax relief).

 

The portfolio is fully invested, with the aim of keeping a running cash balance of £6 to cover the quarterly charges.

 

Weight Symbol Investment

82%                     Equities

6%         VMID    FTSE 250 UCITS ETF

21%       VHYL     FTSE All-World High Dividend Yield UCITS ETF

24%       VWRL    FTSE All-World UCITS ETF

30%       VEVE     FTSE Developed World UCITS ETF

2%         V3AM   ESG Global All Cap UCITS ETF

18%                     Bonds

18%       VAGP    Global Aggregate Bond UCITS ETF Distributing

 

March                 £13,627

May                    £14,295

 

We’ve made a decision to include some ESG (Environmentally sound) investments and have started to invest in their newly launched Global ESG ETF fund.

 

Average monthly income rose by £3 to £12.74 after 11 months, having been boosted by the April quarterly dividends.

The estimated annual income today is £152 after charges.

Total return to date is 12.8%, of which dividends are 1.2% and 11.6% is from investments.

 

Annual values are calculated as (current value / portfolio age in months) * 12.

They will be a little patchy until a full 12 months have elapsed.

 

The bond funds pay dividends monthly and the equity funds quarterly.

 

The current weighting is 82:18 equities/bonds.

The plan is to move to 80:20 by retirement.

 

Now that the portfolio has been established for nearly a year, we’re going to change the balance of the equities to reflect their total contribution to the portfolio, rather than by a simple weighting system based on the weight of the UK market vs the global market.

Being a small pension, we want to maximise its overall value, so as we go forward we’ll invest more in what is profitable and less on what hasn’t.  We’ll do this by allocating each months payment according to the overall contribution made by that share.  What we won’t be doing is selling anything, so it will be a gradual process.

 

This flexibility allows the right weightings to be maintained going forward.

The portfolio is kept balanced after every monthly and dividend payment.

 

The aim is for simple 6 fund portfolio that replicates much of what a LifeStyle or retirement fund would do, but at a cheaper cost overall.

 

The portfolio is held with Vanguard, which whilst not the cheapest, is close for the level of investment and peace of mind.  It also helps that there are no transaction costs, so every penny can be invested.

 

Stay safe,

G.

Grogged

The April Update

April’s has been a mixed bag to be honest, which is why I haven’t post much here…

Usual money stuff first; gossip, tea and biscuits follows...

 

Mortgage

End 2020            £87,985

Apr 2021             £85,314

Change               £2,671

%Change            3.0%

Overpaid            £3,212

Apr 21 OP           £68

 

The goal for 2021 is to pay off £10,000, with a view to paying it off in full in 9 (stretch of 8) years.  We’re scheduled to pay £8K off through normal payments.  I will look to make between 2 and 4 extra payments throughout the year.  Our NW mortgage is structured so that if you OP by at least £500 you get to either instantly reduce eth term or monthly payment.

Currently at £264 of the £2,000 target for 2021 and nicely in the £85s!

 

EF/Cash

End 2020            £24,550

Apr 2021             £27,200

Change               £2,650

%Change            10.8%

Target                 £27,300

In Apr 21             £266

 

R@tesetter have fully repaid and the accounts are now closed.

The plan for 2021 is to add a month to the EF and continue this every year going forward.  This will enable early retirement if needed (although not by much!).

Each month I aim to open a new 12 month high interest (lol) account to try and maximise the EF savings.  This will ultimately provide a years buffer, the excess will be held in PB, etc.

Due to the low rates on offer, when the Marcus matured, we moved £5,000 into PB, rather than opening a new monthly account.  With average luck, we should “win” 4 times a year, which would match or beat the current high interest savings rates on offer.  That £100 (4x £25) works out at 0.64%.

Pensions

End 2020            £221,400

Apr 2021             £244,400

Change               £23,000

%Change            10.4%

Target                 £350,000

In Apr 2021        £7,113

 

Pension (as dividends if taken today)

Annually             £3,330

Target                 £8,761

Monthly             £277

The state pension would be added on top of that (another £9K at today’s rate).

This could be boosted by drawing down on the capital, etc.

 

The big ii pension portfolio is managed on the same philosophy as MrsG, except it currently has triple the number of funds in it.  These all do the same job as the Vanguard funds but pay better dividends and are all long term holds.  Still continuing to rebalance, which have been timed around dividend dates.  Where transaction costs have been incurred, they have been covered by the incoming dividend payment.  As it stands today, it should pay £8,900 in annual dividends, which combined with the state pension is our minimum pension requirement.  There are 5 more investments that are now significantly overweight, rebalancing these (one per month) should see the dividends increase by a further £400 per year.  All dividends are reinvested using the monthly free regular investing feature.

 

We are mortgage neutral with our savings, so if needs be, at least the mortgage is covered.

 

Grogged Towers News

 

This was always going to be a month tinged with sadness as it’s the first anniversary of both my parents deaths due to the pandemic.

The crematorium decided to put a little sweetener on top by sending us a bill for storing my mums ashes… Which since we thought we had scattered them with my fathers last year caused the family quite a bit of upset and additional grief, especially when it was found out it was human error and was totally avoidable.

On the plus side, we’ve managed to take advantage of the nice weather to get out and do some walking, and some little jobs around the house and garden.

I also lost 3lbs in my extreme haircut diet, I’ve gone from hippie 60s draft dodger to enlisted office look! 😂

We also invested in a dough hook, which has made such a difference to the quality and constancy of our pizza and bread dough, wish we’d done it years ago.

MrsG made some millionaires shortbread, which whilst nice, had a more toffee filling. I enjoyed it a lot more than MrsG. 

We’ve also discovered that going up a size from medium to large in Chickens and meat joints gives us an additional two meals, which is a big saving given the modest extra cost.  We no longer buy as much meat as it’s easy to use a frozen portion for those curries, Pho, soups, etc. that we’d have bough and frozen fresh for.

Stay safe,

G.

savingholmes

Hugs at the anniversary

You are making great pensions progress

Grogged

Thanks SH!

QueenJess

I don't know why I hadn't noticed before, but all your figures (pension, EF, mortgage) and even where you invest and your targets is almost exactly the same as mine! It's almost as though you read them off my spreadsheet!

Better make sure I don't slack and meet my goals this year or you'll leave me behind!