Is it conservative to assume a 5% annual return on a S&S LISA - Vanguard 100

grumiofoundation

RobHT said:

<snip>.

I mean, are you serious now?

I think only you are being serious and logical.

Everything you say (on this thread and all others) is completely logical, none of it is unclear, bizarre or patronising in any way.

I commend you on your in depth knowledge of humanity and how much better you are than everyone around you.

masonic

RobHT said:

masonic said:

I was also struggling to buy one or two investment trusts that had fallen to crazy discounts. I had to route my orders to dealer and have them executed manually, which took several hours, but I did get in albeit not at such a great price as I could have if live quoting was working. The problems lasted 2-3 days from what I remember. There were a few threads started by people experiencing problems, including duplicate orders from repeated attempts.

I do believe you, but these things happen on daily basis to traders that make 10-20 transactions a day, especially high speed trading, so why not to you, it's normal, it just happens less because you buy/sell less.

This wasn't normal. Brokers released statements apologising to their customers. There were news articles about it, the problems were widespread. I've never experienced anything like it during normal times. If it happens to you on a daily basis, then perhaps you should think about changing your broker, because even one in 10-20 transactions should not experience such a problem.

RobHT said:
In this thread, the main topic was the LISA, another scheme that locks your money and your freedom to really make money instead of coins, but still, people don't get it.

The main topic of this thread was investment returns for retirement calculations. It just so happened the retirement account in question was a S&S LISA. S&S LISAs, unlike pensions, do not lock your money up. It can be accessed at any time at a net cost of just 6.25%. A S&S LISA works just like a S&S ISA or trading account. You can buy and sell the same investments. I suppose your posts do demonstrate that some people don't get it, but most people who hold a LISA do understand them.

RobHT said:

Also, the advertisement that you can pull out the money for your first house is just a trap, don't you see it?
They force everyone to believe that buying a box is the way to go in life, well, you are just playing their game, remember that UK is a business focused country, they sell crap to people that dream, is it not that the job of a salesman?

For most people, the finances associated with being an owner-occupier of a property are better than the costs associated with renting an equivalent property. Over the long term, even if they could achieve superior investment returns in the stockmarket, when all costs and returns are taken into account, they'd be in a better financial position having bought a home rather than rented and invested. That's even before considering on a risk-adjusted basis.

In this case, the OP already owns property, so there is no question of their LISA being used for this. A S&S LISA should generally only be used for retirement anyway. Obviously pensions are should normally be prioritised, but a S&S LISA can have a place in a retirement plan for some.

I do agree with you in part, incentives aimed at driving the property market are exploiting first time buyers in favour of those who already own property and want to see its price driven up. There hasn't been a property crash since 2008, one is long overdue, and it is badly needed. There's not much left they can do to avoid one, so the coming recession could be the catalyst.

IAMIAM

Thanks for all this. My LISA is to be used to pay off any mortgage and/or bridge the gap between retiring at 58/60 and claiming my full pension at 65. Having around 100-150k cash minimum at age 60 would be great, I have 20 years left. 

I also have an old defined benefit pension I will use at age 60 too and then claim my full tps pension at 65, although depending on the situation, this may be claimed at 60 too. Depends on loads of things in 20 years time, health, life expectancy etc. 

RobHT

masonic said:

RobHT said:

masonic said:

I was also struggling to buy one or two investment trusts that had fallen to crazy discounts. I had to route my orders to dealer and have them executed manually, which took several hours, but I did get in albeit not at such a great price as I could have if live quoting was working. The problems lasted 2-3 days from what I remember. There were a few threads started by people experiencing problems, including duplicate orders from repeated attempts.

I do believe you, but these things happen on daily basis to traders that make 10-20 transactions a day, especially high speed trading, so why not to you, it's normal, it just happens less because you buy/sell less.

This wasn't normal. Brokers released statements apologising to their customers. There were news articles about it, the problems were widespread. I've never experienced anything like it during normal times. If it happens to you on a daily basis, then perhaps you should think about changing your broker, because even one in 10-20 transactions should not experience such a problem.

RobHT said:
In this thread, the main topic was the LISA, another scheme that locks your money and your freedom to really make money instead of coins, but still, people don't get it.

The main topic of this thread was investment returns for retirement calculations. It just so happened the retirement account in question was a S&S LISA. S&S LISAs, unlike pensions, do not lock your money up. It can be accessed at any time at a net cost of just 6.25%. A S&S LISA works just like a S&S ISA or trading account. You can buy and sell the same investments. I suppose your posts do demonstrate that some people don't get it, but most people who hold a LISA do understand them.

RobHT said:

Also, the advertisement that you can pull out the money for your first house is just a trap, don't you see it?
They force everyone to believe that buying a box is the way to go in life, well, you are just playing their game, remember that UK is a business focused country, they sell crap to people that dream, is it not that the job of a salesman?

For most people, the finances associated with being an owner-occupier of a property are better than the costs associated with renting an equivalent property. Over the long term, even if they could achieve superior investment returns in the stockmarket, when all costs and returns are taken into account, they'd be in a better financial position having bought a home rather than rented and invested. That's even before considering on a risk-adjusted basis.

In this case, the OP already owns property, so there is no question of their LISA being used for this. A S&S LISA should generally only be used for retirement anyway. Obviously pensions are should normally be prioritised, but a S&S LISA can have a place in a retirement plan for some.

I do agree with you in part, incentives aimed at driving the property market are exploiting first time buyers in favour of those who already own property and want to see its price driven up. There hasn't been a property crash since 2008, one is long overdue, and it is badly needed. There's not much left they can do to avoid one, so the coming recession could be the catalyst.

Well basically we agree again, we are just spinning around man, we are both saying the same things since the beginning . (your last answer matters more than any post here)

IAMIAM said:

Thanks for all this. My LISA is to be used to pay off any mortgage and/or bridge the gap between retiring at 58/60 and claiming my full pension at 65. Having around 100-150k cash minimum at age 60 would be great, I have 20 years left. 

I also have an old defined benefit pension I will use at age 60 too and then claim my full tps pension at 65, although depending on the situation, this may be claimed at 60 too. Depends on loads of things in 20 years time, health, life expectancy etc. 

Dude is simple, if you wanna make an investment over 20y, it's very easy, and it's easy even if you don't use a fund manager, even though I suggest to buy a common fund (considering the diversification of the other investments you have).

You don't need to lock you down with LISA etc, it's just an option (that obviously I don't like).

If you wanna maximise profits, you can do it by yourself, buy and sell over 6-12 months exploiting market conditions (or call it "rebalance" like common humans, whatever...), your profits will probably be 2x over 20y, up to 4x with what you can achieve investing in a standard fund based on dividends (aka quality stocks or utilities and energy stocks). The fund manager does compounding in your behalf, which is usually less efficient than if you do it by yourself, plus, you can still play with the fund up-down...

grumiofoundation

RobHT said:

Dude is simple, if you wanna make an investment over 20y, it's very easy, and it's easy even if you don't use a fund manager, even though I suggest to buy a common fund (considering the diversification of the other investments you have).

You don't need to lock you down with LISA etc, it's just an option (that obviously I don't like).

If you wanna maximise profits, you can do it by yourself, buy and sell over 6-12 months exploiting market conditions (or call it "rebalance" like common humans, whatever...), your profits will probably be 2x over 20y, up to 4x with what you can achieve investing in a standard fund based on dividends (aka quality stocks or utilities and energy stocks). The fund manager does compounding in your behalf, which is usually less efficient than if you do it by yourself, plus, you can still play with the fund up-down...

If it is so easy to beat a passive investment by timing the market why doesn't everyone do it (and I mean active fund managers).

A 20 year investment in a LISA versus a 20 year investment in an ISA - the LISA will return you 20% more. The money is locked away which is the negative as you say.


No idea what you mean when you say the fund manager 'compounds' on your behalf? Or why this would be less efficient?

Compounding via dividends for example is less efficient to do your self as you would be paying transaction fees each time, whereas an accumulation fund does it for you.

masonic

RobHT said:

masonic said:

RobHT said:

masonic said:

I was also struggling to buy one or two investment trusts that had fallen to crazy discounts. I had to route my orders to dealer and have them executed manually, which took several hours, but I did get in albeit not at such a great price as I could have if live quoting was working. The problems lasted 2-3 days from what I remember. There were a few threads started by people experiencing problems, including duplicate orders from repeated attempts.

I do believe you, but these things happen on daily basis to traders that make 10-20 transactions a day, especially high speed trading, so why not to you, it's normal, it just happens less because you buy/sell less.

This wasn't normal. Brokers released statements apologising to their customers. There were news articles about it, the problems were widespread. I've never experienced anything like it during normal times. If it happens to you on a daily basis, then perhaps you should think about changing your broker, because even one in 10-20 transactions should not experience such a problem.

RobHT said:
In this thread, the main topic was the LISA, another scheme that locks your money and your freedom to really make money instead of coins, but still, people don't get it.

The main topic of this thread was investment returns for retirement calculations. It just so happened the retirement account in question was a S&S LISA. S&S LISAs, unlike pensions, do not lock your money up. It can be accessed at any time at a net cost of just 6.25%. A S&S LISA works just like a S&S ISA or trading account. You can buy and sell the same investments. I suppose your posts do demonstrate that some people don't get it, but most people who hold a LISA do understand them.

RobHT said:

Also, the advertisement that you can pull out the money for your first house is just a trap, don't you see it?
They force everyone to believe that buying a box is the way to go in life, well, you are just playing their game, remember that UK is a business focused country, they sell crap to people that dream, is it not that the job of a salesman?

For most people, the finances associated with being an owner-occupier of a property are better than the costs associated with renting an equivalent property. Over the long term, even if they could achieve superior investment returns in the stockmarket, when all costs and returns are taken into account, they'd be in a better financial position having bought a home rather than rented and invested. That's even before considering on a risk-adjusted basis.

In this case, the OP already owns property, so there is no question of their LISA being used for this. A S&S LISA should generally only be used for retirement anyway. Obviously pensions are should normally be prioritised, but a S&S LISA can have a place in a retirement plan for some.

I do agree with you in part, incentives aimed at driving the property market are exploiting first time buyers in favour of those who already own property and want to see its price driven up. There hasn't been a property crash since 2008, one is long overdue, and it is badly needed. There's not much left they can do to avoid one, so the coming recession could be the catalyst.

Well basically we agree again, we are just spinning around man, we are both saying the same things since the beginning . (your last answer matters more than any post here)

Where we don't agree is that I take the view that while the LISA scheme was not in the interests of FTB generally, it is here and any FTB that takes a principled stance and refuses to use it puts themselves at a disadvantage compared with their peers, and the genie cannot be put back into the bottle. So FTB are better off using the LISA scheme if they are eligible. Not doing so results in them waiting longer and putting more of their money into a property transaction, which just isn't moneysaving.

While you may have found my last post worthwhile, discussion of LISAs for first time buyers is a bit of a thread hijack and didn't need to be raised at all in a thread started by someone who is already a homeowner. For retirement, a S&S LISA carries none of the baggage associated with its use for property purchase, and has clear benefits over a S&S ISA or general investment account. Unlike a pension, the money isn't locked away, and the cost of accessing it before the age of 60 (i.e. in an emergency or if the investor's circumstances change) is fairly modest.

RobHT said:

If you wanna maximise profits, you can do it by yourself, buy and sell over 6-12 months exploiting market conditions (or call it "rebalance" like common humans, whatever...), your profits will probably be 2x over 20y, up to 4x with what you can achieve investing in a standard fund based on dividends (aka quality stocks or utilities and energy stocks). The fund manager does compounding in your behalf, which is usually less efficient than if you do it by yourself, plus, you can still play with the fund up-down...

This is a myth, which has led many an investor to make poorer returns than if they'd just stayed invested for the long term. Many hedge funds have been set up to do this, and almost all of them have been unsuccessful. They'll have access to more resources than any private investor, so if they can't do it, what hope does a novice investor have? The most dangerous situation is when an investor tries this and gets lucky, because they have a tendency to overestimate their skill going forward and eventually come unstuck.