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I transferred 15k from an ISA to Vanguard which is sitting as cash – I won’t invest it as the markets are so high currently. Yes i know, “time in” rather than “timing” yet…
I’m in a similar position. I’ve been holding onto a cash ISA pot for a bit too long so transferred it to my S&S ISA. I’m very wary of sticking it all into funds straight away because I know for a fact there will be a crash the next day.
Wondering if I might be better off taking it out as cash then putting it into the SIPP with a bonus from the government.
i stuck a wodge of spare cash (£1000 from memory) into my SIPP and then waited for the government top up before investing it all.
im aware that i could and should probably stick some into my SIPP as a regular DD/SO and that itll sit there until i invest. my SIPP is with HL which comes recommended but has fairly high transaction fees, so do you generally wait until your DD pot is quite large and invest once, or are some of you investing your DD contributions each month and paying (probably) smaller transaction fees? do they work out the same whichever way you do it or is it better to invest a lump sum maybe twice a year say?
A question to those who talk about managing their own SIPPs and investments: are you actually following the markets on a daily basis and moving your investments around? Or are you paying a stockbroker or other professional to do this for you?
The more I read the more I realise I have no idea how to manage money. So I think I must pay someone to manage it, but obviously I begrudge paying someone out of my hard earned savings/pension/pot. But that is something I guess I need to get my head around.
i know nothing about managing money either, and also begrudge paying a financial advisor to take a cut each year, so took advice from learned financial gurus (one in particular, you know who you are :-)) on here on how to invest over a good spread of funds.
later on i read a book (RESET i think it was called) that gave advice on what to invest in, Lifestrategy funds etc, and how to do it, and it was pretty much identical to the advice i got from here.
i give the fund a cursory glance maybe twice a year or so, never play around with it (i dont really know how to anyway), just leave it to do its job.
i read a book (RESET i think it was called) that gave advice on what to invest in, Lifestrategy funds etc, and how to do it, and it was pretty much identical to the advice i got from here.
i give the fund a cursory glance maybe twice a year or so, never play around with it (i dont really know how to anyway), just leave it to do its job.
+1
Jeez, I just did a big reply but forgot to copy it elsewhere and this pants forum has lost it!
As soon as I started thinking about retirement I realised that I nned to control my spending more and wrote a spreadsheet to do it. Although people say that you need a certain percentage of your old income to survive I am not sold on that idea - I think it is easy to switch to living more frugally, especially with my new spreadsheet helping me.
I'll describe it here in case it gives anyone some ideas.
I've arranged it as monthly pages, 12 months plus a start page.
The start page lists the balance of my main account and my expense account, and my annual expenses, along with their opening balances - which are the amounts brought forward from the previous years spreadsheet.
Each annual expense line lists the amount accrued for it so far, its 'claim' on money in the expense account.
Some annual expenses have a due date, and some are estimates of expenditure, like food or petrol.
The expense account also has a 'float' amount in it, which accomodates paying for a known annual expense before it has accrued a years worth of contributions.
Each montly page lists the income for that month, and also the balances in the main and expense accounts.
It then repeats the annual expenses listing and adds a monthly expenses listing.
(Annual and monthly expenses can increase as needed).
When a receive the income amount I immediately put the total for the monthly annual expense contribution into the expense account, and the speadsheet shows the increased accrued amount for that expense.
As the monthly expenses are pulled from my account by DD I tick them off in the spreadsheet.
I therefore know how much of my account is 'committed' to monthly expenses and how much isn't as is available for spending.
I then have a table to list expenditures, which reduces the account balance, and another for 'claimable' expenses, where I list the annual expense they is being claimed against. I then transfer that amount back into my account from the expense account.
At then end of the month I can see any excesses that I have accrued against estimated costs, like food, and claim them back into my account by putting an entry in the claimable expenses.
At the end of the month I may have an uncommitted balance left in te account, so I take less income the following month.
The spreasheet is in Excel and names all the tables that the numbers are in so I can refer to the previous months numbers 'easily' and I use the INDIRECT macro to create formula that can be copied across sheets because they calulate the table names from the month of the current sheet.
No VBA as that is against my religion.
I may move to Google sheets dependant on watching a tutorial video on it.
Basically I have gone from no monitoring of my spending to fully monitoring and controlling it, and it has been pretty painless apart from writing the spreadsheet.
Fair play @bullshotcrummond providing numbers. Your savings pot is on the large side
I got lucky - my old pots had grown a bit (although less than they could of) but it was the salary sacrifice that 'rescued' me, plus the luck of realising the share options.
Shows how important it is to start saving from an early age so they amounts you have to save are much smaller.
The JL Collins book would make an excellent Christmas present for younger relatives, assuming that they will read it!
sn’t 4% the magic number?
That number is based on the US, in the UK is it more like 3.1%.
But you are in Europe, aren't you, which has a stronger stock market, so that number might be OK.
See
https://portfoliocharts.com/2017/06/09/your-home-country-is-inseparable-from-your-withdrawal-rate/
I’m very wary of sticking it all into funds straight away because I know for a fact there will be a crash the next day. I’ve put 1/3 into funds and am contemplating what to do with the rest.
Tell me about it !
If convinced of a crash you could keep some in cash and then buy more equity when they go down - you won't know when it has reached the dip though but you will still be buying at a better price so decreasing the time to recovery. Have a rule, say buy at 30% down, and stick to that.
History has shown that timing the market like this can be difficult and people have been predicting a crash based on high equity valuations for a long time now...
Or keep some in Lifestrategy 20 as this bounces back much faster (it seems) than a full equity account, and the returns seem quite resiliant to going negative.
Then if there is a big correction sell the Lifestrategy 20 once it has recovered and buy the full equity funds as they are still recovering.
That's not advice though - do your own research 🙂
The more I read the more I realise I have no idea how to manage money. So I think I must pay someone to manage it, but obviously I begrudge paying someone out of my hard earned savings/pension/pot.
If all else fails Vanguard do a low-cost advice service - you can only use their funds but that is probbaly only a problem if you want to do esotric stuff:
https://www.vanguardinvestor.co.uk/financial-advice
A question to those who talk about managing their own SIPPs and investments: are you actually following the markets on a daily basis and moving your investments around? Or are you paying a stockbroker or other professional to do this for you?
It's very unlikely that the 'professional' will have much more idea than you about where to put the money!
As the periodic table of investment returns shows the returns for different asset classes is pretty random and unpredicatable:
https://money.com/investing-callan-periodic-table-investment-returns/
So it is best to have a portfolio of different asset classes in the bet that some of them will preform well that year.
Vanguards Lifestrategy funds, or fund of funds, go someway towards this diversity.
The golden butterfly portfolio I am looking at is similairly diverse and has much less start date dependency than some, which is important if investing a lump sum as it has a big effect of the return you will see.
https://portfoliocharts.com/portfolio/golden-butterfly/
https://portfoliocharts.com/2016/04/18/the-theory-behind-the-golden-butterfly/
Start date sensitivity means that it can be better to go for Lifestrategy 60/40 over Lifestrategy 100, for example.
Vanguard FTSE Global All-Cap is nearly all equity (some REITS) but it is diverse across regions and an awful lot of companies so achieves some diversity that way, and should be safer than 100% equities of one country.
That number is based on the US, in the UK is it more like 3.1%.
Dynamic spending rules also help make withdrawals work with a higher degree of success:
https://www.forbes.com/advisor/retirement/dynamic-spending-rules/
After a little bit of thinking and a staycation drop in adrenaline it’s occurred to me that “retiring” at 57 without the state pension is probably a bit of a pipe dream. I’d have a projected £25k-ish pa income from SIPPs by then, but 19 and 15yo kids to fund. Both have long term child accounts we saved into from thier births intended to fund universities - currently £19k and £9k respectively - but we’ll need to convince them not spend it on cars, round the world trips, hair products, tech, Glastonbury etc first 🙂
Looks like I’ll be working into my 60’s after all and need to reinvigorate myself to the next 10 years of working, currently feeling very morose about by current job and on the crux of a job offer to start something new albeit related.
On the plus side, the markets have dropped significantly from earlier in the week to the point that when I get home I’ll have one eye on the S&P500, ftse and DJ with a view to getting that ISA cash invested.
On the plus side, the markets have dropped significantly from earlier in the week to the point that when I get home I’ll have one eye on the S&P500, ftse and DJ with a view to getting that ISA cash invested.
Vanguard's ftse global all cap only down 0.88% this week, hardly significantly, although fortuitously coincided with my monthly DD deposit 🙂
Vanguard’s ftse global all cap only down 0.88% this week, hardly significantly, although fortuitously coincided with my monthly DD deposit 🙂
....suggests that your DD is invested immediately rather than waiting for you to invest, and reminded me that i didnt get a response from the question below, and am still procrastinating. any input please?
im aware that i could and should probably stick some into my SIPP as a regular DD/SO and that itll sit there until i invest. my SIPP is with HL which comes recommended but has fairly high transaction fees, so do you generally wait until your DD pot is quite large and invest once, or are some of you investing your DD contributions each month and paying (probably) smaller transaction fees? do they work out the same whichever way you do it or is it better to invest a lump sum maybe twice a year say?
thanks
On the plus side, the markets have dropped significantly from earlier in the week to the point that when I get home I’ll have one eye on the S&P500, ftse and DJ with a view to getting that ISA cash invested.
Stop trying to trade and get the money invested then leave it.
Time in the market over timing the market.
I have a DD set to go in on a fixed date each month - the fancy pants name is "Pound Cost Averaging". In reality it's just a DD set to go out automatically on payday.
Some times you'll buy "high" compared to the rest the month sometimes you'll buy "low" for the month but regardless of the price you bought at today, in 10+ years time todays price should be pretty much irrelevant, especially once dividends are re-invested and compound interest really kick in
There’s no fees for buying funds, only shares and etfs and investments trusts.
HL only starts to look bad for platform fees once your portfolio gets large.
Stop trying to trade and get the money invested then leave it.
Time in the market over timing the market.
I am aware, thanks. Just returned home with access to Vanguard an acknowledge there funds haven't dropped as much at the markets, I'll get that in.
Nice one.
Lots of times the bloomberg feeds etc will not reflect what you see in your portfolios.
It can also be hard to keep abreast of what is actually in your portfolio due to re balancing etc, but that is why you pay a fee to fund managers.
Let them sweat it. All you need to know is that your money is on an upward curve over a period of time (which is not a week or a month btw lol)
The track record for active fund managers is not very good though, only 1 in 5 beating an index of their market. Even ones that beat it for a while tend to transition to poor performers.
They need to outperform an index fund by the differential in their fees, both ongoing and the more hidden fees, like transaction costs.
I still get drawn to Fundsmith though as their strategy of choosing winners in a sector and then holding them seems good and has worked for a long time.
But if you compare them to their relevant global index they have been down for a little while now.
So generally a broad index fund is less risky over the long term.
There’s no fees for buying funds, only shares and etfs and investments trusts.
so i could have say a £50 DD going straight into my HL account each month, and then i log in a few days later and stick it onto one of my 6 funds for no fee?
and same again next month, wait til the DD goes in, log in and chuck into a different fund etc. all for no fee?
im guessing my investments are funds rather than shares, its a spread of stuff like vanguard japan stock index and fidelity index US etc...... funds rather than shares yes, so no fees?
thanks
thanks, as you rightly say, no fees for buying/selling funds, so i assume then that i can keep adding to them as many times as i like without paying fees then.....
and they are funds, not shares yes? i only ask as its a stocks and shares SIPP and its all double dutch to me 😄
stocks, shares, funds, equities, indexes, investment trusts, gilts, dont understand a word of it 🤣
A fund is basically a collection of shares, or some other asset, rather than just that share, or asset.
On the app/website have a look at your sipp and what things are in it, click on each entry and it will probably show you more detail. You should be able to tell from there.
I’ve no individual shares in my account show can’t tell you what it would look like, and I’ve moved my sipp to interactive investor so can’t tell you what a fund would look like, but it should be obvious.
Share Funds are normally suffixed as Income or Accumulation, one pays the income out to you, the other invests it by buying more shares.
Shares will probably show you nav and p/e on the performance charts.
Investment trusts are shares as you are buying shares in the company that invests, not the companies themselves.
When you buy a mutual fund, they will then go out and buy the shares.
so i could have say a £50 DD going straight into my HL account each month, and then i log in a few days later and stick it onto one of my 6 funds for no fee?
Don't know how HL work it, but with Vanguard, I set up DD each month for say £500 to go into the "Make Scruff Stinking rich - Accumulation" fund.
Vanguard takes the DD and once received the cash automatically puts it into the correct fund / split of funds. It's all hands off from my perspective and set to run on autopilot.
When you buy shares or etfs you will know the amount you are paying, which will be the offer price. There may also be a commission.
When you buy a mutual fund you specify either the total monetary amount or the number of units required on the order. The order then goes to the fund manager. If they get it before 12 that day then they will determine the price of the unit after 3pm, and that determines how many units you get for your amount, or what you pay for for the specified number of units.
That’s why you don’t know the price you are paying with a mutual fund and things take a while.
You can set up automatic purchases on HL as well
So stepping away from 'RetirementFundTrackWorld' - a question for the retirees.
Before you retired did you have a clear idea of how you would be spending your time, and did you actually end up doing that?
I haven't retired yet but hope to in the coming year so I am seriously starting to think about this.
I plan on devoting some serious time and effort to becoming conversational fluent in French, we ski regularly and have budgeted to continue doing this in the retirement plan. I'd love to get to the point where my conversations with the locals can be in either language. I plan on rejoining a tennis club and volunteering a day a week at the local animal sanctuary.
I really enjoy pottering in the kitchen so my other half is looking forward to being well fed. I suspect a good friend is going to be retiring about the same time as me so I might even have a buddy to hang out with while the other 1/2 continues to work.
It goes without saying that I'll continue to exercise but might enter a few events just to keep the motivation up. I think my retirement initially will be an extension of my day off, the only new thing is the volunteering .....
Before you retired did you have a clear idea of how you would be spending your time, and did you actually end up doing that?
I thought I would spend my time walking/hiking, cycling, restoring my Guzzi Le Mans, volunteering for the local Wildlife Trust and maybe picking up a couple of other voluntary posts. I've done all of those except the Guzzi. I'm 10 months into retirement now, and have no regrets (apart from not getting anything done on the Guzzi). I seem to have prioritised fitness activities (the walking and cycling) over other things, and would have done more so if we hadn't been locked down most of that time. I intend to do more multi-day hikes and bike rides next year, assuming the pandemic restrictions allow.
The retirement option came up much sooner than I expected so I had no plan.
I considered re-skilling as a tour guide but looked into it a bit and realised that the sort of thing I fancied would actually involve a lot of time away from home - and my daughter was still quite young.
Looked at the voluntary sector but I found the level of organisation pitiful and knew it would frustrate me.
Accidentally fell into working in a bike shop and the rest is history.
I guess I knew that, with a working wife and young daughter, I wasn't going to give up all work at age 50, decided I'd have to do something, but just needed the right thing to come along. Being open to new/different was the key.
Before you retired did you have a clear idea of how you would be spending your time, and did you actually end up doing that?
thank **** someone has stopped talking about boring ****ing money bollox.
our plans were to go touring in europe on our bikes for a few month to start with.
but with the virus happening, and having 2 new grandkids in the last 18 month, our plans have changed for now.
we cycles 4 or 5 days a week at present and the rest of the time is looking after the grandkids.
once they are in nursery and school we will be heading to europe for a long long tour.
so yes we did end up doing what we planned i suppose. we cycle most of the time.
Before you retired did you have a clear idea of how you would be spending your time, and did you actually end up doing that?
Yes....pretty much. Cycling and walking and a bit of travel...(managed that, barring the last 18 mths) but also renovating a barn and moving abroad...not yet managed that, we've done 99% of the graft but just the small matter of emigrating post covid and post cancer to come. Life is what you make it.
thank * someone has stopped talking about boring * money bollox.
Agreed. I was going to post something after your previous post saying how inspiring it was and how happy it made me. Never got round to it and next time I opened the thread it had completely lost that joie de vivre vibe. Instead of stories celebrating the joy and release of retirement it had turned into Excel spreadsheets and checklists a budgets and loads money people telling us what fad wads of cash they are putting away. In short it had become just like working life itself.🤑
So go on Ton, tell us about retirement itself. Cheer us up.😊😍
thank * someone has stopped talking about boring * money bollox.
Instead of stories celebrating the joy and release of retirement it had turned into Excel spreadsheets and checklists a budgets
I'll just post this link then 🙂
https://www.retirementace.co.uk/
As he says
"On finally accumulating sufficient investments to retire I realised that the easy part was accumulating the money (even though it didn´t feel that way at the time!) the true challenge was devising a strategy that would ensure the funds outlived me whilst not having to live like a pauper."
This site is a UK site and shows his portfolio decisions, as most of the popular portfolio structures might leave you broke if the market goes wrong at the wrong time. Not much joy from that point on...
Before you retired did you have a clear idea of how you would be spending your time, and did you actually end up doing that?
I've not retired yet, but near and it's easy - everything I do know but with the work 'blocking' out my days.
We've a Steading, so always something needs doing - that gets in the way of my cycling. Hopefully I'll be cycling more than at the moment (presently 'only' 3 times a week 🙂 ).
Before you retired did you have a clear idea of how you would be spending your time, and did you actually end up doing that?
I had a fair idea. Five years into retirement and some things have gone the way I expected and some haven't. For example I've done a fair bit of cycling but not as much as I'd expected. However the reason for that is I've found lots of other new interests that are filling much of my time.
Five years ago I'd expected retirement to be brilliant. In reality it's been utterly awesome. Not the slightest regret about doing it. Mind you I still haven't written that best selling novel yet!!
So go on Ton, tell us about retirement itself. Cheer us up.😊😍
first thing, stop worrying about having enough money. we are living of half we had when working. it is ace.
like i said, we cycle on the days we dont have the grandkids. but like today, we will cycle with em too. i have a weeride on my bike, and a hamax on the wifes bike.
we take em on the canal to a local park with everything a babysitter needs. most important, coffee van.
regarding coffee, the joys of riding somewhere, even into town, and just sitting with no timescale, sipping coffee, watching the world go by, it is a great feeling.
we sometimes take a alpkit stove, and make a brew wherever we head on the bikes.
we built a couple of plastic greenhouses too, and have a glut of fresh red and yellow tomatoes. oh, and chillies and basil and chives. never had the time for stuff like that before. now we seen time rich rather than cash rich, which is what we wanted.
when i started this thread, i asked if anyone was prepared to live a meagre lifestyle to enable them to retire. well i am glad we did, as i feel rich in other ways now.
spending whole days of quality time with the grandkids is one of the biggest rewards.
spending time cooking is a love now too. even started doing a bit of bread making to have with my homemade tomato soup.
also, not having to cram things in on a weekend is ace. going shopping on a wednesday morning, when places are empty, just brilliant.
and through the lockdown, we all know how busy local paths and trails were. now folk are back working, it is quiet and peacefull again.
so, if you are thinking about it, stop thinking and start doing. stop worrying about finances. you may not live long enough to reap what you are saving for.
become time rich. it is ace.
Being one once obsessed with time keeping, I gave up wearing a watch (might be a bit unpopular on here). I've spent ages in art galleries. Took up wood carving. Cycling and walking. Leisurely boozing. Visiting medieval churches. Just started restoring some oak doors (will be paid with a massive tab). Listened to RTE's Ulysses about 4 times. My Mrs is retiring end of Oct, she's booked meals out, health spa, leccy bikes round the reservoir, a castle for her 61st, threatening a boat trip across the pond, we've sold our property and are moving up north. Kin loads going on. All a bit random, some planned much not. Don't miss work one bit and happily living on just over half my last salary.
Ton
That's all very well, but a bit hard to assimilate in that format. Could you put it into a spreadsheet please with exact timings, costs, balance before and after and an amortised £ per Happiness quotient please 😉
This is very dangerous to read right now - completely over my job (and career) and have the means to retire early (like 48 early !). Worried I am 'giving up' when it feels more like 'just starting' ! Heartening to read all the positive stuff so thanks.
Blimey, wished I'd done it at 48 rather than 58. Obviously money's a big deal if you're completely brassic but you don't need a lot and I think material stuff ranks low down the list against family, friends, doing stuff. Plus I'm quite happy with 26''.
watching the thread with more interest as only 125 work days till I retire 🙂
I retired a couple of years ago at 61, and my only regret is that I didn't do it sooner. We get by on a small pension, topped up from savings. Many would think they couldn't live on it but we do just fine. Not really interested in stuff like big tv's, new cars, exotic holidays.
In the past few months we've been away more than we've been at home: 4 trips to various parts of Devon (reli's), 2 trips to Scotland (daughter lives there), 1 trip to Norfolk (where son lives), 2 camping trips with mates (and another next week), then another trip to Devon.
Before I retired I made a list of things I wanted to do: I've already canned some of them (like riding the C2C off-road, walking the south-West coast path), on the basis that I'm too old. Even though I think I'm fitter and healthier than many my age (I ride 20 to 30 miles most days and have done for around 20 years), I no longer have confidence in my ability physically and mentally to do them. When I look in the mirror in the mornings I see some old bloke I don't recognise (although he looks a bit like my dad). I used to ride at Afan fairly regularly but haven't been since retirement. Again, due as much to lack of self belief as anything else.
So, if you possibly can, I would say do it. Consider what you really need, accept that bigger, newer, shinier things don't bring happiness, and do it as soon as you can.
Unless your work brings you immeasurable joy and happiness, obvs 🤔
Lovely post Squirrel. Very thought provoking.
🤮