Investment advice needed due to sudden disability

Confused_Dog

As someone who is now disabled, I would echo the comments about Personal Independence Payment.  Being disabled costs.  If you need adaptations done  for your home to help your mobility or a wheelchair expect to dip into the savings you have.

The other thing I'd urge you to do is think ahead.  You say you are in a flatshare.  Are you renting?   As someone with a Section 21 no fault eviction hanging over them I'd say make a priority long term living arrangements and security of tenure.  There is no point investing  if the cash can ensure your long-term housing.

Luckily I am in a position I can still work as my job is admin and IT based.  If we did not have the tech we have now I would be stuffed.  It may be worth looking at jobs you can do with your disability for income.  Being disabled should not count against you in an an application/interview process and an employer would be required to make reasonable adjustments both for recruitment and a job if you were successful.

Eyeful

TheGigglingBlowfish said:

Eyeful said:

4. Have you considered as part of your portfolio mix including an ETF that pay higher dividends.
Popular Examples: 
iShares UK Dividend ETF (LSE: IUKD)
Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYL)
SPDR® S&P Global Dividend Aristocrats ETF (LSE: GLDV)

3. As you are thinking of making your own share/cash portfolio, I was wondering why you have not considered including some of the cuurrent best 5 year fixed savings accounts, for some interest rate stability?

4. Have you considered as part of your portfolio mix including an ETF that pay higher dividends.
Popular Examples: 
iShares UK Dividend ETF (LSE: IUKD)
Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYL)
SPDR® S&P Global Dividend Aristocrats ETF (LSE: GLDV)

I've come across higher dividend ETFs, but I'm not sure I understand their purpose.
Generally they seem to have less potential for value appreciation and to make up for this they pay dividends. If you reinvest the dividends, wouldn't it result in roughly the same outcome in the end? Is the advantage that the gain is more immediate?

The fixed savings account to protect against interest rate fluctuation is an interesting idea, thanks!

You are correct, the purpose of ETFs that pay higher dividends, is for those who need them now. .
Your original post stated you had no experience in investing. I mentioned them so that you would know they exist and could consider
them for your needs.

masonic

TheGigglingBlowfish said:
Generally they seem to have less potential for value appreciation and to make up for this they pay dividends. If you reinvest the dividends, wouldn't it result in roughly the same outcome in the end? Is the advantage that the gain is more immediate?

Typically they are suited for those with enough capital that they could live off the income without selling any of their shares/units. It means they would not be a forced seller during a crash, although there is a risk that the dividends could be cut. Investment Trusts can be particularly good for this as they do not have to distribute all of the income from the shares in which they invest, so can build a safety net and maintain their own dividend payouts even when less is flowing into the pot. There are a number of "dividend hero" Investment Trusts that have maintained or grown their dividends consistently throughout decades of market turmoil.

Generally, companies have three things they can do with profits. They can (1) reinvest back into the business to drive growth, (2) distribute as dividends, (3) buy back their shares from investors. Option 1 gives the highest potential for investors in a successful growing business; the decision between (2) and (3) is driven by tax regime. In the USA, share buybacks are more tax efficient, so are generally favoured (this drives up the share price and is similar in principle to an investor reinvesting dividends). High dividend yield is often associated with lower growth sectors and, loosely, "value" investing. This approach will not generally give the best total return, but can be convenient to those taking an income from their investments, and can be (but is not always) slightly lower risk.

In your case, with the amounts you are considering investing in equities (even at the uplifted 30-40%), income is going to generate only a small portion of your monthly needs, so you will be selling investments come what may, and a total return focus would seem to make more sense.

InvesterJones

TheGigglingBlowfish said:

Eyeful said:

1. You have constructed your own Multi- Asset Portfolio, with a share(20%)/cash(80%) split.
If you do not put the 10% into gold, then if you wish to maintain that ratio, then surely it should be put into the World tracker and not the Amundi smart short term ETF.

2. You only need one World Tracker ETF. C

Eyeful said:

1. You have constructed your own Multi- Asset Portfolio, with a share(20%)/cash(80%) split.
If you do not put the 10% into gold, then if you wish to maintain that ratio, then surely it should be put into the World tracker and not the Amundi smart short term ETF.

2. You only need one World Tracker ETF. Cheaper the OCF, the better.
The Vanguard has 3636 holdings, does not lend securities, has an OCF charge of 0.22%.
The X tracker has fewer holdings, does lend its securities, has an OCF charge of 0.26%, 

3. As you are thinking of making your own share/cash portfolio, I was wondering why you have not considered including some of the cuurrent best 5 year fixed savings accounts, for some interest rate stability?

4. Have you considered as part of your portfolio mix including an ETF that pay higher dividends.
Popular Examples: 
iShares UK Dividend ETF (LSE: IUKD)
Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYL)
SPDR® S&P Global Dividend Aristocrats ETF (LSE: GLDV)

heaper the OCF, the better.
The Vanguard has 3636 holdings, does not lend securities, has an OCF charge of 0.22%.
The X tracker has fewer holdings, does lend its securities, has an OCF charge of 0.26%, 

3. As you are thinking of making your own share/cash portfolio, I was wondering why you have not considered including some of the cuurrent best 5 year fixed savings accounts, for some interest rate stability?

4. Have you considered as part of your portfolio mix including an ETF that pay higher dividends.
Popular Examples: 
iShares UK Dividend ETF (LSE: IUKD)
Vanguard FTSE All-World High Dividend Yield UCITS ETF (LSE: VHYL)
SPDR® S&P Global Dividend Aristocrats ETF (LSE: GLDV)

I've come across higher dividend ETFs, but I'm not sure I understand their purpose.
Generally they seem to have less potential for value appreciation and to make up for this they pay dividends. If you reinvest the dividends, wouldn't it result in roughly the same outcome in the end? Is the advantage that the gain is more immediate?

It's more about the underlying companies that make up the ETF. If they're growth focused then they don't pay out as much in dividends, theory being they're reinvesting that into the company and the pay off will come in the future. cf High dividend/value companies who give more money back to shareholders as a proportion of their price - it could be that they're mature companies not expecting to grow/need as much capital for R&S etc., or if could be they've chosen that strategy to attract shareholders. 

Because of the reason d'etre of high dividends companies being those dividends, they hope to keep them up even when times are tough, whereas growth companies might seem to drop in price more when times are difficult. If a higher proportion of your total return is those dividends then high dividends companies might be considered a more defensive play. On the otherhand if they're concentrating on dividends then some would argue they're not as good long term prospects because they're taking money out of the business instead of keeping it invested for growth. 

As a result, it's complicated - and usual recommendation is to simply take the consensus view and buy a global market cap weighted index. As soon as you add regional funds or factor tilts like high dividends you're taking a bet that the majority view is wrong and you think you know better.

Brie

TheGigglingBlowfish said:

Albermarle said:

You do not mention any pension provision ?

I'm quite young unfortunately, so can't really think about my pension right now due to my current situation. I have some pension already, but the current amount wouldn't last me very long if I am not able to work and pay into it more.

Have you checked to see if there is any ill health retirement benefits with your pension?  If it is a work pension it may very well have something that you could benefit from sooner rather than later.  Otherwise you'll have to wait until you are at least 57 to access anything.  

And I agree with the others about applying for PIP.  It may allow you to access other things as well.  I don't know how universal this is but someone I know with PIP is also eligible for a blue badge (handy to have even if you don't have a car) and a bus pass despite being well below the retirement age that is the normal qualifier.  

enthusiasticsaver

Given the amount you have it might be worth exploring multi asset funds as the investments you have quoted do not seem very diversified which should be the priority along with not investing outside your appetite for risk. £85k in chase sounds sensible given you will need liquidity.  Have you explored what benefits you will need and how much will you need to draw on each month? If you decide investing is not for you you could put some in a fixed term investment depending on how long you think the £85k will last in Chase. 

TheGigglingBlowfish

Thank you very much for your replies, everyone. I'll look at the non-investment support options that I haven't already tried when I find the energy, and I've certainly been able to navigate this investment a bit better thanks to your help. I appreciate it.

TheGigglingBlowfish

enthusiasticsaver said:

Given the amount you have it might be worth exploring multi asset funds as the investments you have quoted do not seem very diversified which should be the priority along with not investing outside your appetite for risk. £85k in chase sounds sensible given you will need liquidity.  Have you explored what benefits you will need and how much will you need to draw on each month? If you decide investing is not for you you could put some in a fixed term investment depending on how long you think the £85k will last in Chase. 

I have actually decided to put some of the money into a fixed-term investment in the end, and diversified my portfolio more as well. Thank you!