How do I become investment literate?
Discussion
Jockman said:
I see your angle.
I can only advise on what I've actually done. Above the £160k is unchartered territory for me.
Employer contribution trumps Employee contribution essentially down to NI contributions or lack thereof.
In theory if there is a capital distribution to be made making large pension payments to people of a certain age could be attractive. Although I have probably missed something.I can only advise on what I've actually done. Above the £160k is unchartered territory for me.
Employer contribution trumps Employee contribution essentially down to NI contributions or lack thereof.
desolate said:
Jockman said:
I see your angle.
I can only advise on what I've actually done. Above the £160k is unchartered territory for me.
Employer contribution trumps Employee contribution essentially down to NI contributions or lack thereof.
In theory if there is a capital distribution to be made making large pension payments to people of a certain age could be attractive. Although I have probably missed something.I can only advise on what I've actually done. Above the £160k is unchartered territory for me.
Employer contribution trumps Employee contribution essentially down to NI contributions or lack thereof.
https://adviser.royallondon.com/technical-central/...
See which column you fit into.
Jockman said:
What is new now is the definition of adjusted income and threshold income. This may well impact on your decision, though timing will be key.
https://adviser.royallondon.com/technical-central/...
See which column you fit into.
Thanks - it's not me.https://adviser.royallondon.com/technical-central/...
See which column you fit into.
The potential situation is the sale of an asset within the business that will generate a significant profit. For various reasons we don't want to sell the business - if we did one shareholder would get entrepreneur's relief. Another would get GGT charge only.
On the face of it, we stand to pay full corp tax and then income tax on distribution.
If anyone has a spare hour I'd thoroughly recommend watching this https://youtu.be/X0yJETTBA1A
gashart said:
Hi, I can really recommend Andrew Craig's book "How to own the world", read it twice myself and recommend it to everyone., cheers Steve
Great recommendation. This thread prompted me to swat up and make some decisions on finance. I ordered and am just in the final chapters of this book. Just wondering though. For the people who have read it, it’s a book written in 2012. He sets about showing a form of investment that spreads huge diversification with fairly big claims. I’m just wondering if the advice in the book is still solid. With hindsight he’s strong on precious metals, at some point saying 30% of a portfolio could be in gold and silver. Though since the book gold and silver have done terribly. Although I have read that could be changing.
Is there anything in the book that would need updating if starting investing now. Which I intend to.
Apologies if I’m late to the party
For context, I didn’t know a thing about investing - I literally inherited my family’s debt rather than any means. I basically found people wealthier than me and asked them how they did it
My thoughts / experience:
- financial freedom comes at the point where you have a secure, guaranteed source of income that broadly covers your outgoings
- forget equity / fund investments as a way of ever covering income needs
- there are only two real recurring income generators: net yield on property / other assets or recurring income spun out by a trading business
- I completely separate out equity generators from cash generators. Equity growth kicks out returns every few years but can never be relied on for regular cash
- I have very (very) specific financial targets that act as both a motivator and a measure of progress
- I track my finances literally every day (boring but the product of coming from relatively little)
In other words, there’s no magic - I completely avoid advisors, but spend as much time managing what I’ve made as I did earning it
Good luck!
For context, I didn’t know a thing about investing - I literally inherited my family’s debt rather than any means. I basically found people wealthier than me and asked them how they did it
My thoughts / experience:
- financial freedom comes at the point where you have a secure, guaranteed source of income that broadly covers your outgoings
- forget equity / fund investments as a way of ever covering income needs
- there are only two real recurring income generators: net yield on property / other assets or recurring income spun out by a trading business
- I completely separate out equity generators from cash generators. Equity growth kicks out returns every few years but can never be relied on for regular cash
- I have very (very) specific financial targets that act as both a motivator and a measure of progress
- I track my finances literally every day (boring but the product of coming from relatively little)
In other words, there’s no magic - I completely avoid advisors, but spend as much time managing what I’ve made as I did earning it
Good luck!
diametric123 said:
Apologies if I’m late to the party
- forget equity / fund investments as a way of ever covering income needs
I'll acknowledge that returns from equity are variable, so you need to do a considerable amount of buffering to make it work, but is there another reason you rule them out?- forget equity / fund investments as a way of ever covering income needs
b
hstewie said:
hstewie said: If anyone has a spare hour I'd thoroughly recommend watching this https://youtu.be/X0yJETTBA1A
<pulls face> I'm really not convinced by factor investing - neither is monevator:http://monevator.com/factor-investing-bad-years/ </pulls face> The bit about human behaviour matters hugely though. At 33:45 talking about events, and then predicting the impact of results really reminds me of the latest fundsmith letter to shareholders.
Edited by xeny on Sunday 21st January 17:20
bhstewie said:
hstewie said: If anyone has a spare hour I'd thoroughly recommend watching this https://youtu.be/X0yJETTBA1A
As long as you are aware that everyone has an angle!diametric123 said:
Believe me, I am no expert - buts it’s to do with the % return after fees and therefore amount of wedge you have to put down
Put simply, you can make 6-8% net on property versus ~1-2% on some equity thing that I don’t really understand...
Alternatively you could make 4% on property, have to actually occasionally do something for said yield or you could buy BP shares at periodic oil lows which div 6.5% and bounce back 10/20/30/40% with oil whilst doing sweet FA to earn your yield all wrapped up in a tax free pension/ISA etc. I have both these examples, so hopefully am not overly biased.Put simply, you can make 6-8% net on property versus ~1-2% on some equity thing that I don’t really understand...
- past performance is not guarantee of future returns you may get back less than you put in blah blah blah.
BanzaiMan said:
bhstewie said:
hstewie said: If anyone has a spare hour I'd thoroughly recommend watching this https://youtu.be/X0yJETTBA1A
As long as you are aware that everyone has an angle!
I found it useful for explaining the approaches in what seemed reasonably plain english.diametric123 said:
forget equity / fund investments as a way of ever covering income needs
If you have accumulating funds you can always sell a part of the portfolio to realise the gains as income. In that respect they are much more flexible than property as you only draw the amount of cash you need rather than the entire rent. I suppose you could get an offset mortgage to simulate this effect, but when I approach retirement I would like to try and cut down on borrowing.Craikeybaby said:
It takes a lot of the fun out of it, but look at the Vanguard Lifestrategy funds.
This is my 'strategy' at the moment. I've got the 80 20 equity fund growing 2.5k per month and it has been performing quite well since I started April 17 with a 5.7 per cent return, but can't help thinking if I should consider something more active. But then. I keep recalling the Tim Hales book (thoroughly recommend OP) which endorsed trackers and low costs. Don't get me wrong I'm happy with slow and steady...but what are the quicker alternatives?...hahaha there are no quick alternatives you're going to tell me apart from Bitcoin bubble.It's a smart way to invest if you don't have the time... But what else could you potentially do with c.25 to 30k savings per year?? Time horizon 8 years.
The Green Triangle said:
This is my 'strategy' at the moment. I've got the 80 20 equity fund growing 2.5k per month and it has been performing quite well since I started April 17 with a 5.7 per cent return,
SNIP
But what else could you potentially do with c.25 to 30k savings per year?? Time horizon 8 years.
How are you approaching it, £20K into an ISA and the rest into a taxable account?SNIP
But what else could you potentially do with c.25 to 30k savings per year?? Time horizon 8 years.
xeny said:
How are you approaching it, £20K into an ISA and the rest into a taxable account?
I'm maxing my ISA each year, this is the first year I've been able to do this since paying off mortgage. The rest will just go in a nationwide loyalty saving account. I use iweb so a fiver per transaction. I try to time it so I'm buying in dips but TBH not been very successful with that so sometimes it's been a regular 2 k per month or I'll miss a month and do 5k when I think the price is dipping. I've almost given up with that tho as by the time I've made the transaction with delays in it actually happening the opposite has happened.. Balance today is 26k. I transferred in a cash ISA balance.... I get that trackers are flavour of cycle. Is there something else we should be considering tho? Nobody say bitcoin.
Don't forget with iWeb you also get a taxed trading account, you can put some in there and still not pay tax on it (I'd do that with inc rather than acc units so it's easier to track dividend income vs capital gains).
If you want to experiment with a small fraction, a couple of people have mentioned fundsmith, and it seems to have a pretty reasonable record and not too outrageous fees. Have a read of http://www.fundsmith.co.uk/docs/default-source/doc... and http://www.fundsmith.co.uk/docs/default-source/ana...
If you want to experiment with a small fraction, a couple of people have mentioned fundsmith, and it seems to have a pretty reasonable record and not too outrageous fees. Have a read of http://www.fundsmith.co.uk/docs/default-source/doc... and http://www.fundsmith.co.uk/docs/default-source/ana...
Jockman said:
Agreed. You don't need to be debt free to have financial freedom.
It's mainly about confidence.
Yep. The powerful stat I heard is that once you have net assets (excluding primary property) of 20-25x your average annual spending, you have enough money to support you for the rest of your life without working in almost all market scenarios.It's mainly about confidence.
That implies a 4-5% drawdown of your capital per annum.
NickCQ said:
Jockman said:
Agreed. You don't need to be debt free to have financial freedom.
It's mainly about confidence.
Yep. The powerful stat I heard is that once you have net assets (excluding primary property) of 20-25x your average annual spending, you have enough money to support you for the rest of your life without working in almost all market scenarios.It's mainly about confidence.
That implies a 4-5% drawdown of your capital per annum.
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