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Once you've "won the game"
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Comments
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billy2shots said:Touching on an earlier idea, for someone that has amassed their lot and doesn't need to grow their pot further, I have often thought about the following.
The only job of money invested is to keep pace with inflation (if that's not the only job then you haven't truly won the game).
You can invest all of it in so called 'lower risk holdings' but let's face it, that risk may still be too high to someone who doesn't need to take further risk.
The alternative.
50% cash gaining as much interest as possible whilst the capital remains totally safe. No need to go into detail here but regular savers, PBs etc where the government guarantees it safety, spread across accounts where needed.
The other 50% is invested. If we take 3% as the average rate of inflation then we have to make an average return of 6% on that money (only 50% invested remember so it has to yield twice the return of inflation).
The historic average return of the stock market before taking inflation into account is up around 10%.
Is hitting 6% really that unthinkable? I think not.
It gets better, that cash invested might be returning you 1% pre inflation meaning the 50% invested portion now only needs to return 5% to keep up with the average rate of inflation.
For any normal year you would withdraw half your annual income from your cash and the other half from the invested pot.
Stock market down years would see you only take from cash. Better returning years would see you take more from the investment side to rebalance the cash towards a 50/50 weighting once again.
It's really simple so probably heavily flawed but sometimes reading on here and other investing forums, people try so hard to overcomplicate things.0 -
cfw1994 said:michaels said:Albermarle said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.
A confident prediction. As the great Paul Gascoigne put it, "I never predict anything, and I never will."
I think your guess will be way off the mark, but that is just my guess.
Well, me & the OECD: https://www.bbc.co.uk/news/business-58638224
I suspect a market 'crash' or indeed market growth will hide that inflation number for most who are invested. I'm personally on the fences as to which it might be: I think we are still due a correction, but we had one last year and yet things went up 10-20%, YoY.
For the reasons above I have stayed out of bonds, but around 40% of my portfolio is in cash, not sure where that will be invested in the future will see how the next few months pan out. Who is going to want to buy a bond with a 1 or 2% coupon if inflation gets to 4 or 5%It's just my opinion and not advice.0 -
Cash?
I would be amazed if house prices were lower in 3, 5 or 10 years time because of the political truth that falling house prices equal unpopularity. Therefore rising house prices, unlike shares, are underpinned by Govt in this country.
Being invested in equities has beaten property over the last decade; but property is 95% likely a better alternative than cash.
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uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.0 -
Audaxer said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
uk1 said:michaels said:Albermarle said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.
But that might not be the right advice for someone who is older than you and wealthier than you. The point is that one view isn't right for all and the place of advice is to offer thoughts for the widest. Some mistankly believe that their view is the view that is right for everyone.You're missing the point. It's not about "advice" or "views", it's about why play the "game" once you've won.There is no "safe haven" that guarantees your pot will not reduce in value in real terms. So if the "game" is preserving the value of your pot, you have to keep playing. You either take investment risk or inflation risk, or both, whatever you do. Obviously, it may be sensible to reduce risk, people will have views and give advice on that, but you can't eliminate risk.If the "game" is getting a guaranteed income for life, you can "win" that with an index linked annuity.
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zagfles said:uk1 said:michaels said:Albermarle said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.
But that might not be the right advice for someone who is older than you and wealthier than you. The point is that one view isn't right for all and the place of advice is to offer thoughts for the widest. Some mistankly believe that their view is the view that is right for everyone.You're missing the point. It's not about "advice" or "views", it's about why play the "game" once you've won.There is no "safe haven" that guarantees your pot will not reduce in value in real terms. So if the "game" is preserving the value of your pot, you have to keep playing. You either take investment risk or inflation risk, or both, whatever you do. Obviously, it may be sensible to reduce risk, people will have views and give advice on that, but you can't eliminate risk.If the "game" is getting a guaranteed income for life, you can "win" that with an index linked annuity.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
bostonerimus said:zagfles said:uk1 said:michaels said:Albermarle said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.
But that might not be the right advice for someone who is older than you and wealthier than you. The point is that one view isn't right for all and the place of advice is to offer thoughts for the widest. Some mistankly believe that their view is the view that is right for everyone.You're missing the point. It's not about "advice" or "views", it's about why play the "game" once you've won.There is no "safe haven" that guarantees your pot will not reduce in value in real terms. So if the "game" is preserving the value of your pot, you have to keep playing. You either take investment risk or inflation risk, or both, whatever you do. Obviously, it may be sensible to reduce risk, people will have views and give advice on that, but you can't eliminate risk.If the "game" is getting a guaranteed income for life, you can "win" that with an index linked annuity.
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zagfles said:uk1 said:michaels said:Albermarle said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.
But that might not be the right advice for someone who is older than you and wealthier than you. The point is that one view isn't right for all and the place of advice is to offer thoughts for the widest. Some mistankly believe that their view is the view that is right for everyone.You're missing the point. It's not about "advice" or "views", it's about why play the "game" once you've won.There is no "safe haven" that guarantees your pot will not reduce in value in real terms. So if the "game" is preserving the value of your pot, you have to keep playing. You either take investment risk or inflation risk, or both, whatever you do. Obviously, it may be sensible to reduce risk, people will have views and give advice on that, but you can't eliminate risk.If the "game" is getting a guaranteed income for life, you can "win" that with an index linked annuity.0 -
zagfles said:bostonerimus said:zagfles said:uk1 said:michaels said:Albermarle said:uk1 said:waveydavey48 said:I've read the expression "once you've won the game why keep playing" in relation to investing and it seems to refer to the situation where someone has invested long and well enough to be in the position where they have enough money to achieve their objectives, and the advice is that they should now de-risk. In other words why keep exposing your money to the vagaries of the market when you don't need to.
What happens next?
Is there a way to ensure your money just keeps pace with inflation so that it doesn't decrease in real terms, or maybe increases by 1 or 2% per annum?I think a further option for a few that is rarely considered is that it you genuinely have enough and you believe using all reasonable assumptions that you will always have enough it does present the option to take all of your cash out of all speculative harbours and put them into purely safe havens that offer no stress at all.I believe that although few in number many might be in this situation without realising it. A good early indicator of this is if you currently have all your cash in non-speculative places and simply keep an uncomplicated spreadsheet that shows that even with decent spending you have more cash at any point in the current year than you did last year and before then perhaps you can live a stress free life and forget fund management.There are of course loads of "ifs" and "buts" but not having to track and fret about investing might actually extend life.
But that might not be the right advice for someone who is older than you and wealthier than you. The point is that one view isn't right for all and the place of advice is to offer thoughts for the widest. Some mistankly believe that their view is the view that is right for everyone.You're missing the point. It's not about "advice" or "views", it's about why play the "game" once you've won.There is no "safe haven" that guarantees your pot will not reduce in value in real terms. So if the "game" is preserving the value of your pot, you have to keep playing. You either take investment risk or inflation risk, or both, whatever you do. Obviously, it may be sensible to reduce risk, people will have views and give advice on that, but you can't eliminate risk.If the "game" is getting a guaranteed income for life, you can "win" that with an index linked annuity.0
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