Peering over the hill...

Grogged

QueenJess said:

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! 

I've been rumbled! Have you never noticed I always post the day after you...🤣🤣🤣
We can spur and support each other on.

QueenJess

Grogged said:

NoQueenJess said:

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! 

I've been rumbled! Have you never noticed I always post the day after you...🤣🤣🤣
We can spur and support each other on.

   sounds good as soon as I regain some sleep and therefore sanity!

Grogged

Enjoying Eurovision tonight!
Was told off for suggesting our entry was by Roy from the IT crowd...

South_coast

Wasn't the voting crackers? (Not sure why I'm surprised by that though 🤣) I was backing the Maltese girl, so disappointed she didn't do better. 

And the less said about our null points the better....

QueenJess

I didn't think the voting was ever about the quality of the music and was just political?! But then I haven't seen it for over 20 years now!

South_coast

It used to be, but now they have members of the public calling in to vote as well - except that we got 0 from the officials and 0 from the public as well 🤣! So evidently our exit from the EU and successful vaccine procurement/rollout are rankling with the general public as well as the Govts.... Our song wasn't great - but it was a lot better than the wacky German effort!!!

Grogged

I think the voting is slightly fairer than it was, but it's difficult to tell under the new system who voted for who. But unless something drastically changes I can see us always being in the bottom three.

Grogged

Well I seem to be on the good side of YG, a poll every day this week. At this rate will be able to check out by end of June.
Hope everyone had a relaxing sunny day to.

South_coast

And I thought I was doing well to have had two in 10 days!

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 two transfers from previous pensions.

 

The portfolio is now a year old! 🎂

Started in the middle of a global pandemic, it has seen its fair share of ups and downs.  The two lump sum injections from previous pensions make up 80% of its value today, the remaining 20% has come from regular monthly contributions and dividend income.

I don’t think the overall return will stay at its current 11%, but I’m hopeful for around half that.

What is interesting is that being built up gradually, how far behind the dividend income is compared to a lump sum investment today.  The current annual dividend estimate, based on today’s portfolio holdings and the dividend declarations from the last year, is £216.

The dividend “lag” is currently 35% - £140 paid compared to £216 expected from the portfolio today.

I fully expect this gap to shrink, but it will only be eliminated when we stop contributing (i.e. retire! 😊).

So what next? – well, steady as she grows.  We’ll continue to contribute monthly and reinvest all dividends after fees.

May has been a turbulent month, after contributions the portfolio value fell by £45, the upside is we bought more for the money.

 

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

 

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, giving a annual pension of either £2,000 from income, or £6,000 by cashing in some investments every year.

 

Current contributions are £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.

 

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.

 

Weight Symbol Investment

82%                     Equities

7%         VMID    FTSE 250 UCITS ETF

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

23%       VWRL    FTSE All-World UCITS ETF

29%       VEVE     FTSE Developed World UCITS ETF

2%         V3AM   ESG Global All Cap UCITS ETF

18%                     Bonds

18%       VAGP    Global Aggregate Bond UCITS ETF Distributing

 

April                    £14,295

May                    £14,503

 

We made the decision to include some ESG (environmentally sound) investments and have started to invest in their newly launched Global ESG ETF fund.

 

The annual income is £140 (0.97%) - £11.67 per month.

The annual portfolio investment return 11.2%.

 

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

 

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.

 

Being a small pension, we want to maximise its overall value, the strategy is investing more in what is profitable and less on what isn’t.  We’ll do this by allocating each month’s 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 balanced monthly from contributions, tax relief and dividend payments.

 

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.