FIREside Chats

Grogged

June and July Pensions catch-up

 

June Pension Summary

End 2020            £221,400

Jun 2021             £251,300

Change               £29,900 (in June £3,942)

%Change            13.5%

Target                 £350,000

 

Pension (as dividends if taken today)

Annually             £4,784 (Monthly £396)

Target                 £8,761

The state pension would be added on top of that (another £9,300 at today’s rate).

In June our monthly contributions and dividend payments was 50% of the gain. 

 

July Pension Summary

End 2020            £221,400

Jul 2021              £254,000

Change               £32,600 (in July £4,100)

%Change            14.7%

Target                 £350,000

 

Pension (as dividends if taken today)

Annually             £5,364 (Monthly £447)

Target                 £8,761

The state pension would be added on top of that (another £9,300 at today’s rate).

In July our monthly contributions and dividend payments was 30% of the gain. 

 

Both months have been mixed, but turned out OK.

Suffolk_lass

@Grogged I checked our ISAs this morning and they have flown away since the end of June. Over 10% growth so far on the ones I manage (DH, DS and mine). Less than 5% for the one in a managed fund on their own platform. I've had that one years and it is very slow, because their fees are so high. I have kept it for comparison reasons but seriously considering either combining with mine or cashing it in and buying more PBs as I am probably a bit over exposed in equities for a retired person

Grogged

@Suffolk_lass I think we'll be on for 18% growth this year.
Only 6% will be down to the investments, the rest is contributions.
But not to be sniffed at.
The dividends are really coming into their own now, especially since they're starting to return to more "normal" payout levels.

A big push for us was seeing the returns and costs from a VG SIPP compared to our managed pension funds from the usual well known providers. It was a no brainer to do it ourselves using their global funds. We've never looked back and gained in financial confidence from doing it. It's not for everyone, but it's also not as difficult or complex as they'd like you to think. Especially if it's tracker or all-in-one lifestyle or retirement funds.

A good majority of our cash pile is also in PBs.
We seem to have average luck, so it's working for us.

Suffolk_lass

@Grogged ours is all growth but probably higher risk than they should be. We are still over half in shares rather than funds and the returns and growth have been variable to say the least.

I think for me, the initial investing part was OK, lots of experimenting and a bit of risk appetite. It is the migration into retirement I am still struggling with as I hate selling things!! I know it is too high risk for us with no more to invest though

becky_rtw

Even my fairly recent SIPP is doing well at 6.4% this year. I am not doing well on PB wins though so that probably evens out

Plodding along here, saving hard, but in that 'nothing much exciting' phase of too far away from FIRE to be seriously planning anything else, but no need to be changing anything. Pots are ticking up and time is ticking down so its all good, but its just a bit dull here. 

Grogged

Balancing our Portfolios for Total Returns

I haven’t seen much discussion here on how people keep their portfolios balanced.

By this I mean, how do you decide how much to invest in each investment (share, fund, ETF, etc.)?

I thought I’d get the ball rolling by describing how we manage our two retirement portfolios.

 

We follow a simple system where we top-up those investments that are doing better (everyone say "OK, Mr Obvious!" 😂).

We virtually never sell anything and when we do it's because an investment doesn’t meet our criteria anymore, not that its currently underperforming.

 

Our strategy is based around growth and income and so our system takes that into account.  We track the growth in value and the income generated by each investment since it was purchased.

The value of each investment is based on three things - a minimum holding, a growth top-up and an income top-up.

 

To determine which investment gets what, the first thing we do is split the portfolio total value into three pots – minimum holding, growth and income.

For my pension the split is 40% minimum holding, 30% grown and 30% income.

For MrsG the split is 40% minimum holding, 40% grown and 20% income.

(VG income funds are generally focused more on growth than income).

 

Each investment then gets an equal share of the minimum holding pot and a proportional share of the growth and income pots based on how it has done.  Negative growth (i.e. a loss) is treated as zero growth.

 

Every month we just top-up the investments that are currently below the value they should be.  We invest to minimise costs, in my case on the monthly free trading day, MrsG has free trading and invests when money is paid in or dividends paid.

 

We’ve found that the minimum holding protects against wild swings and worked really well during the pandemic.  The other benefit (to us anyway) is that over time it excludes fads and concentrates on overall performance.  It also reduces the urge to tinker (second guess what’s going to happen) as the spreadsheet tells us what we need to top-up, so we do.

What’s your sure-FIRE system? 😊

ElmoR

@Grogged Thanks for starting this discussion topic - it's something I'm personally not able to wrap my head around, having read the various smart investing books and Monevator discussions etc. but I have dyscalculia, so that's probably why. The numbers in your monthly accounting above look like they are trickling down the page!! 

I mostly let V@ngu@rd do it for me with a Life Strategy (ISA) and Target Retirement (SiPP) with an end date slightly beyond my actual TRA. There is almost certainly a better way to do things and I'm going to read everyone's posts with avid interest...

Grogged

@ElmoR The VG Life Strategy and Targeted Retirement finds (and their equivalents) are a great strategy.
The nice thing is that there is no real answer to the question, just what feels right or comfortable to you.
I'm also looking forward to seeing what others do and think.
It's always interesting and informative.
With any luck someone may have the answer and we can all retire millionaires! 

greent

I confess that I also just use Vanguard LS and TR funds for my ISA and both of our SIPPS - just stick the money in and let it do its thing..... I have money going into my ISA monthly and occasionally throw some bonus money into a SIPP (both of us also have current DC pensions and old DB pensions)

Chiglepig

@ElmoR - SNAP! even down to the setting the Sipp beyond my intended TRA!