If you are wearing my shoes. (Redux)

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Hello,

Originally post on the over 50’s forum seeking lifestyle choices. Recommended to post here on my future financial expectations. Cut and pasted comments. 

''Hello, long time reader here but first time poster. I am like a boat lost at sea with no rudder if you get my drift (pun intended). A brief bit about me,  I am a single man with no children, currently not in a relationship, unemployed and living with a relation. Claiming no state benefits soon to be 55 years of age and frugal. For referance i do understand how inflation erodes cash. Just not prepared to invest more money in the stock market or funds.

My state of affairs.

State pension £9,742 (Current figure) Retirement age 67 . 37 years completed.

Small index link pension £3000 annual (Current figure) due at 60 years of age.

Small Dc works pension not contributing £98,000 (Current figure).

Small Vanguard Sipp. Putting in £2880 every new tax year £8,000 (Current figure).

Ns&i bond £310,000 Currently 0.35%

Premium bond £50,000 - winnings this year 0.9%

Investment ISA £65,000 Down about -60% -Lloyds and petrofac

Marcus £88,000. Currently 0.6%

Cash ISA £20,000 0.45%

Spare cash £5000 0.0%''

''Agree, too much cash but will be looking for a home to purchase some time in the future. For the record I won’t be waiting for a so called property market crash, or the interest saving rate to shoot up anytime soon, neither will happen in my opinion.

Inflation? What about my own personal inflation rate? Would this not negate inflation itself.

Without sounding to sad, I don’t drink, I don’t smoke, I don’t drive, no immediate out going cost so no VAT, and no income tax. Guess I’m treading water at this  moment in time.

Agree I need to look at investing in income funds''.

Thank you for you thoughts.

MX5huggy

What’s the ISA invested in? To be down 60% has to be something not very mainstream. 

draiggoch

MX5huggy said:

What’s the ISA invested in? To be down 60% has to be something not very mainstream. 

Looks like individual shares, Lloyds is still about 16% lower that when i bought it a few years ago. Petrofac is quite a bit lower over the last  3 years.

draiggoch

Probably best to invest in funds rather than individual shares to mitigate the risk 

Thumbs_Up

The wheel just might have turned on Lloylds Just maybe. I was in it for the dividends anyway. Petrofac, one to watch this year. Sadly lost out big in Sirius Minerals £30k.

Albermarle

Thumbs_Up said:

The wheel just might have turned on Lloylds Just maybe. I was in it for the dividends anyway. Petrofac, one to watch this year. Sadly lost out big in Sirius Minerals £30k.

So basically you are gambling on the fortunes of a very small number of individual companies, which is very high risk , which is what you have found out . Much better to invest across a wide range of diversified investments , which is easier via a fund. 
Hopefully your DC works pension and SIPP are more sensibly invested ?

Thumbs_Up

I was in work at the time, had money in the bank doing nothing and i'm playing the long game. The 3 pensions are doing ok won't be rich but for my lifestyle should be ok.

eskbanker

Thumbs_Up said:

I was in work at the time, had money in the bank doing nothing and i'm playing the long game.

Anyone investing should be playing the long game, but it's generally regarded as important to recognise when you've backed the wrong horses (e.g. black ones ), rather than being caught up in the sunk cost fallacy, so best not to try to rationalise sticking with losers, and instead reconsider what's best going forward.  Unless you have a genuine aptitude for picking winners (and there'd appear to be plenty of evidence to the contrary if you've spaffed £100K on a small number of companies), you'd be far better off investing in something more diversified, as recommended above....

QrizB

Thumbs_Up said:

I am a single man with no children, currently not in a relationship, unemployed and living with a relation. Claiming no state benefits soon to be 55 years of age and frugal.... will be looking for a home to purchase some time in the future.

You've got roughly £500k of assets plus your pensions.

• Do you intend to return to work, or have you decided to retire?
• How long in the future are you hoping to buy a home, months or years? and how much are you expecting to spend on the purchase?

Your assets & pensions could (if invested carefully) yield you something like £24k pa indefinitely, but if you spend £200k on a home that number is going to be more like £15k. Which might still be OK for a frugal single man.

Thumbs_Up

QrizB said:

Thumbs_Up said:

I am a single man with no children, currently not in a relationship, unemployed and living with a relation. Claiming no state benefits soon to be 55 years of age and frugal.... will be looking for a home to purchase some time in the future.

Your assets & pensions could (if invested carefully) yield you something like £24k pa indefinitely, but if you spend £200k on a home that number is going to be more like £15k. Which might still be OK for a frugal single man.

Please tell me you overlooked the state pension in your £15k calculation? Regarding the home i'm open to anywhere in this country, where the homes are cheap, the people are nice (that rules out the southeast) and the weather is mild in the winter.

QrizB said:

Thumbs_Up said:

I am a single man with no children, currently not in a relationship, unemployed and living with a relation. Claiming no state benefits soon to be 55 years of age and frugal.... will be looking for a home to purchase some time in the future.

You've got roughly £500k of assets plus your pensions.

• Do you intend to return to work, or have you decided to retire?
• How long in the future are you hoping to buy a home, months or years? and how much are you expecting to spend on the purchase?

I won't rule out work - Infact i did some Christmas causal work earning £2,900 gross.

I am living the life of Riley at the moment no real outgoing cost, but ofcourse this can change. Home cost? Below £280,000 - maybe.

Question - I have already contributed £2,800 in this tax year to my vanguard sipp lifestrategy 60. If i am correct with the gross earnings above can i contribute another £2,825 and the tax man will add £725?

Thumbs_Up

eskbanker said:

Thumbs_Up said:

I was in work at the time, had money in the bank doing nothing and i'm playing the long game.

Anyone investing should be playing the long game, but it's generally regarded as important to recognise when you've backed the wrong horses (e.g.  ), rather than being caught up in the sunk cost fallacy, so best not to try to rationalise sticking with losers, and instead reconsider what's best going forward.  Unless you have a genuine aptitude for picking winners (and there'd appear to be plenty of evidence to the contrary if you've spaffed £100K on a small number of companies), you'd be far better off investing in something more diversified, as recommended above....

To be fair to me as a single man with no debts i did roll the dice. Lloylds will be ok with dividends this year. Petrofac will either stay flat or shoot to the stars this year! Sirius i was prepared to take the hit. But i agree with your sentiments.