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UK goon checking in at the same place as the op, also aiming for fire (don't you loving privatise the NHS you bastards I do not want to have to budget for healthcare). Regarding where to invest I take the efficient market hypothesis to it's conclusion. I can't beat the market, I don't believe anyone who will manage my money can either (consistently and on aligned fee basis). Given I don't have special knowledge as to which stock to invest in vs another why should I think I know which market to invest in. Add to that my huge exposure to the UK (I live here, work here and own property here - my house) it makes sense to me to buy the hay stack. Invest global funds excluding uk or global developed market excluding uk. I'll pay a few basis points for that. This also protects me from a collapse in the pound. Though I am at risk from the pound suddenly getting super strong (lol). Regarding car insurance and insurance in general. Switch every year. The industry for general insurance has hosed itself with a model that loses money based on first year pricing. Its dumb and I could talk for hours on it but the short of it is if you don't switch your picking up the slack in years 2 3 4 and 5. Both yours and everyone else that switched. Also optimise your insurance. Be loving wary of add-ons they all make bank for the insurance companies. Play with the excess as well. I personally have sky high excesses because I am in a position to pay the small stuff and only want insurance for disaster protection. Think about what you want covered carefully and try to eliminate use cases you don't want. Things like accidental damage and out of home cover for stuff sound good but all add to the premium. A good emergency fund and the ability to replenish starts earning you a return here.
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May 15, 2019 18:37
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Dwayne Dibbly - That's enough money with enough potential complications to spend the roughly 500-1000 getting some proper independent financial advice. Especially given the questions you're asking. You're highly likely to save what you're spending on advice in tax and fee complications and far less likely to make a dumb mistake that costs you thousands.
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Jan 10, 2020 16:43
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I'll warn strongly against ever focusing on projected returns. Not worth the paper they are written on. Not a good comparison measure. Focus instead first on making sure they are the right type of fund, basically look for accumulation not income and whole market to taste (world, developed world, some mix of specific economies ie America, Europe, UK etc). Same for any bond allocation. Second focus on expense ratios, ie find who charges you the least. Projected returns as a way of comparing funds are utter bullshit unless for some reason they are guaranteed but even then your going to pay for it somehow. If your optimistic assume 7% above inflation per year over a long horizon for stocks and 5% if you want to be more conservative about the future. Bonds take another couple of % off each number. All less your expenses. Use that for your predictions. Wait I just now realise I may have written that screed about a vanguard target retirement fund, in which case ignore it I've gotten the wrong end of the stick. But it's good advice for index fund selection so I'll leave it up anyway. Cast_No_Shadow fucked around with this message at 08:52 on Feb 21, 2020 |
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Feb 21, 2020 08:47
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I'd argue the way the industry thinks about risk. Or at least the way it talks about it to the public is awful too. Public understanding is probably even worse. Confusing volatility and risk doesn't help. Nor does pretending risk of ruin meaningfully exists (For diversified index investing) or that anyone will care about their pension if a well diversified index based portfolio zeros out. (That means it's either full communism now or the total collapse of the world economy) The real risk is panicking when the market goes down and selling and not aligning your investment time horizon with the volatility of the investments your making. Tldr advice stick it all in a target retirement account and let vanguard or similar figure it out for you, assuming it's an option in your pension. Cast_No_Shadow fucked around with this message at 19:11 on Feb 21, 2020 |
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Feb 21, 2020 19:09
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Zedsdeadbaby posted:Seven months ago I got a five year fixed at 2.5% and was told it would take the apocalypse to drive interest rates down further. I mean their not wrong, Pestilence is one of the four horseman and I don't think War, Famine or Death have gone anywhere. Still I put it in the same bucket as trying to time the markets. 2.5% is a historically low rate and is pretty cheap money. At least you've got security for the next five years, between Covid, Brexit and an economy built on endless Ponzai schemes smashing into each other who knows what the future holds, but at least you'll know what you owe the bank each month.
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May 19, 2020 10:54
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You seem to be heading along the right path. 1) Work out what a good emergency fund for your circumstances is. Recent events should be a giant siren to how thin the veneer of stability really can be for any of us. Only you know what you're comfortable with, a young single person with no mortgage or dependents might rightly feel comfortable with far less than someone who is the sole wage earner in a family of four. Keep this in cash that you can easily access. A few months of key expenses (Roof over head, food on table, lights on) should be a good minimum bar. 2) Spend some time understanding your pension scheme. IIRC the teachers one can be a right complicated mess if you've been teaching a while as it'll be split between the old scheme and the new. But you'll thank yourself when you understand what your entitlement is and you make sure if there are any choices to make you're making the right ones for you. 3) Double check my work here but: I think, given your defined benefit pension you're probably not really gaining a huge amount from setting up a SIPP/Personal Pension over and above a Stocks and Shares ISA. You have a lump sum now, but if your yearly contributions are less than 20k you could just set up a S&S ISA slap 20k in over a few years in April and do it that way. Less efficient but perhaps easier to manage. 4) If you do set up a SIPP pay close attention to the platform fee as well as the fund fees. 5) Remember your ISA is available to you at any point and any gains made are tax free, you have a yearly contribution limit of currently 20k. Pensions are locked up until retirement age. Neither is better than the other objectively, it depends on what kind of person you are and your goals. The flexibility of an ISA might be bad if you are the sort to panic over bad news and sell at the bottom for instance or know you'll always be tempted to spend that big wad of cash, conversely a pension might not be right if you could see yourself wanting the money for non-retirement reasons later, eg. at 45 you decide to buy a house. Neither option is a bad option but think through the consequences of each before you decide.
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Jun 7, 2020 10:15
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Sad Panda posted:I'm new to teaching and so am purely on the new scheme, which makes it marginally less confusing. To respond to this I read through the Teachers Pension website, so thanks for that push, and now know I need to read more into Faster Accrual & Additional Payment. Faster Accrual seems like a no-brainer, but have to apply before the financial year. Like I said, double check my work on the SIPP stuff. I hadn't considered the best way from a tax point of view. Since I'm on a defined contribution through work and just use that one. It may be more tax efficient to do that but given you also have a defined benefit scheme you might want someone who is wise to that world to chip in or do the research. But you're right, its nearly always the better option to take the free money first if you're good with the stipulations it comes with. Fund choice wise vanguard targeted retirement funds are likely a good choice if you intend to follow the normal retirement at age X/Year Y strategy and that's somewhere in your last 1/4 - 1/3 of life, especially with a solid defined benefit pension behind you as well.
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Jun 7, 2020 14:03
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Want to explain it for those not in the know? Is it simply making bets with a decent ev to get the most out of a sign up /reload bonus or some form of bookie arbitrage?
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Jun 15, 2020 18:14
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Yeah got it. Thanks for the explination. Probably a bit of a derail if we take it any further. Also probably important to say falling into gambling is awful for your finances and potentially the rest of your life if you fall deep. The reason that they keep these offers going is enough people lose enough money to make it worth it etc. Etc.
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Jun 16, 2020 06:51
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Just remember with investing you can either back the whole market and share in the combined gains and losses of all the companies or you can pick individual stocks or sub-sets. When picking individual stocks or sub-sets one of three scenarios is true. 1) You're having a gamble, you know you don't know better than the market and see it as exactly the same as a trip down the casino. In which case, acknowledge it, sign up to wall street bets and you do you. 2) You don't know better than the market. But you think you do. You might even see a few gains, luck is luck after all but eventually you'll end up losing out to people who just back the whole market. Sometimes spectacularly so. 3) You do know better than the market, or your so fantastically lucky for such a long period no one can tell the difference. In which case if you can beat the market by 1-2% you can easily make a 7 figure salary in new york or london and if you can beat it by more shady people will pay you more money than you can dream of to do it for large stacks of other peoples money. Its next to impossible to beat the people who just buy the whole market in a low cost fund and chill. So much so that even squeezing out just a tiny bit more is a skill worth literally millions a year. Beating it by a large margin (and being able to show its not a fluke) basically makes you the single most employable person on earth and a person who commands a salary that would make most multinational CEOs blush in embarrassment. Think about what the big finance houses put into trying to find that extra 1%, the amount of money, skill, manpower and whatever else might work that Goldman, JP Morgan etc throw at this, never mind all the hedge funds that don't act publicly, if you think 3 is true you think you can do better than those people. If you're that person, good luck and maybe save the forums next time they nearly blow up. I'll be taking the easy life shoving my money into set of a low cost whole market funds. Cast_No_Shadow fucked around with this message at 15:05 on Jul 21, 2020 |
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Jul 21, 2020 15:01
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Stick it in a low cost passive index tracker. Any will be fine as the easiest to find options will be either UK (FTSE), US, Europe or similar. If we want to nit-pick a little you get better diversification by doing a whole world or at least whole developed world fund. Personally I also do versions of whole world excluding UK because I'm already heavily over investing in the UK due to my house, job and life being here. (ie. if the whole world goes to poo poo but the UK doesn't, I'm fine because I live here and work here. If the UK goes to poo poo but the rest of the world doesn't at least I have my savings, if everything is poo poo everywhere or great everywhere it makes no difference). Also the same arguments against picking individual stocks apply to picking individual markets just as well, why do you (plural non-specific you) think you know that the UK will do better than say Ethiopia or China or Germany etc than the market. By investing in just a FTSE fund that's what you're saying with your actions. Admittedly the effects are likely to be far less pronounced than single stock investing but the principle is the same. Cast_No_Shadow fucked around with this message at 14:01 on Jul 22, 2020 |
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Jul 22, 2020 13:58
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Alchenar posted:Oh I think the UK and Europe are absolutely bad investment options at the moment (with a few exceptions put your fun money in Games Workshop) and you should absolutely go for an international or US tracker. Again, what you're doing here might seem logical but it's the same as pointing at a companies full year results and saying they will underperform the market next year. Maybe but it's probably priced in already and who really knows what will happen or what's happening elsewhere
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Jul 22, 2020 19:51
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To be fair, "Hi I'd like a large sum of money in £50 notes please, no I don't want to tell you what its for" does scream drugs and/or money laundering at first glance.
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Jul 30, 2020 12:54
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Breath Ray posted:Great name post combo! Just a rule of thumb of mine, but dont buy a new build or anything built in the last 30 years. Cant speak for Scotland but English house quality has really gone downhill and the size of the rooms seems to have shrunk too. i went for late 80s ex council myself. Also be careful the other way. Mine is 1850s and while spacious and very unlikely to fall down it's has it's own unending host of problems.
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Aug 17, 2020 20:08
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Just Another Lurker posted:An interesting week for me; Furlough is ending so the company is laying off 1/3 of it's workforce (i'm a 52yr old no frills basic worker bee). Does that include your redundancy payment? Also how much do you spend a month? Is it just you or do you support a family? Really with the time horizons mentioned, assuming you have a decent enough pension when you hit 67 you need to make what you have last 15 years. Can you live on ~ £800 a month? (That's the cash you stated divided by the 180 months before you hit retirement with an emergency fund of £18,000 (roof caves in or whatever). Are you then also in a safe place regarding your pension etc.
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Sep 4, 2020 18:24
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in the current market.
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Some kind of part time Job would probably make it much easier for you. I assume you've got your 35 years of NI contributions under your belt already. State pension comes in at about £750 a month iirc. If I were in your situation I'd want as much of that money you'd saved to support me through retirement (which could last a long time) where I 100% can't and 100% wouldn't want to work. Right now, as you say you're still able to work and its not terrible. A part time job makes your maths a lot easier.
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Sep 5, 2020 08:14
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Can we have some kind of /thing/ against individual stock picking? For retail investors individual stock picking is either intentional gambling in which case actual casino's at least offer things like free bets and other incentives or its people confused and/or mislead and at risk of losing, sometimes in horrendous ways. I'm willing to go so far as to say an individual day trading or individual stock picking and beating the market with any more certainty than blind chance is no longer possible. Sure it used to be possible for the top 5% or whatever slim percentage existed and made consistent returns 20 years ago, but with the way the markets have changed, particularly the introduction of HFT bots front running everything, whatever was there to take isn't anymore. This is generally a view upheld by the few studies taken on it post 2000. Which takes us back to our premise. 1) Picking individual stocks and/or day trading. You have no skill advantage, you have no information advantage, you're exposing yourself to huge additional risk without an additional premium for that risk. 2) If you do win, and outperform the market. Its almost certainly by pure chance. 3) If you are somehow the literal Rainman of the market and can beat it, prove it and people will pay you no joke infinity money to do it for them. Its gambling and speculating not investing. Its provably likely to have really bad outcomes, and nearly certainly worse outcomes than the stock investing answer of passive indexes tracking the market. I'm not trying to be a Debbie downer here but the rash of adverts across TV and social media recently are 100% predatory and get my goat cause people who can't afford it are about to lose a bunch of cash.
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Nov 14, 2020 11:02
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Staggy posted:I've been served up a fair few of those adverts recently and what gets me every time is the small (but bold) text at the bottom telling you what percentage of users lost money. The lowest I've seen so far is 79%. Its worse than that. Those 20% need to include the caveat, during the period we looked at. The chances any of them actually have a positive EV (over market) is close to 0. None of them will make money over time and those 20% are most likely to get into real trouble throwing good money after bad because a period of luck has lead them to believe they are actually able to beat the market. Sure someome can hit it good and get out ahead, they will make money. But that's exactly the same as leaving the casino early cause you won. If you actually think you have an edge and it's not luck, why would you ever stop
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Nov 21, 2020 19:57
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HerpicleOmnicron5 posted:I’d say that everyone has an edge so long as they’re thinking straight. You don’t time the market, but when the market nosedives like it did earlier this year, it’s easy to identify ridiculously undervalued stocks and make a sizeable number of small profits. You're saying you know how to time the market. In fact what you said doesn't even make sense. Don't time the market apart from now when you should time the market? I don't think you're understanding the risks here. What if you buy in on the way down but too early, you don't know how far down it will go. What if you see gains after a recovery but sell to early and you only get a small amount of what you could. What if you hold it too long and it falls again and you miss your gains. These are market timing questions. What if the undervalued company you picked doesn't recover with the rest. How exactly are you picking those companies? You're also saying everyone has an edge. By thinking straight? That makes no sense. Im sorry but you are incorrect on both fronts. You made a bet and it paid off, enjoy it but understand it for what it is. When stocks are low, it is usually a great time to buy if you intend on holding for a long time. Many people call downturns a sale on stocks for a reason. But as always, time in the market always beat timing the market.
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Nov 22, 2020 18:06
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Theophany posted:Depends on the long term sustainability of the dividend over time, which is difficult to predict. It would be very easy to fall into the same rabbit hole that people do chasing returns but instead chasing dividends. Or in a company I worked for, they literally nearly bankrupted themselves paying out an unsustainable dividend cause lowering it would look bad.
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Feb 10, 2021 21:46
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Breath Ray posted:nothing's risk-free but it seems worth working out the yield and including as part of a balanced portfolio - along with japanese govies ofc Even ignoring the ethical issues around it, it's financially questionable from a long term personal finance perspective. UK housing, especially around big cities and the South East is in a huge bubble, prices are jacked. Rent as a percentage of capital investment figures are awful these say and have always been bad in the UK. So many BTL properties have been unmaintained by cheap landlords I expect huge bills to bring them back in line in the near future. Basically, like all speculative bubbles, if you buy in now you're buying expensive, getting a low or even negative roi and are usually betting on capital appreciation, aka bubble please inflate more. Remeber that this is on expensive assets that are notoriously illiquid, doubly so in a crash, that you need massive leverage to buy. Also, assuming you own/mortgage your home you're already likely massively overexposed to the UK property market. The general UK population might believe houses are magic money printers that never go down, but they are a massive gamble right now , the fundamentals stopped making sense a decade ago and it comes with the added benefit that half of society will hate you for being involved with it. You can of course put your money where you want and I might be wrong and house prices continue to increase until every house is worth infinity pounds, but long term investing with the thread goal of sort your financial life out it is not.
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Feb 15, 2021 08:46
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qhat posted:Sell them and and buy an indexed ETF. There is no favourable tax treatment in the UK for holding a security long term. You are already risking your salary on the success of your company, don’t risk your life savings too. That's not quite true. Might be for RSU or whatever the heck the new hotness is but at least for what the company I work at offers a number of share awards become free of tax implications if held for I believe 5 years. Unless that's the company saying hold for 5 and we'll cover any tax? I haven't looked that closely.
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Jun 8, 2022 21:16
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As a general principle I tend to avoid being invested in the UK. My job is here, my house is here, my main currency is the pound. My emergency fund is in cash GBP. I feel I already have plenty of exposure to GB related risks that if it all goes to poo poo, I'd rather not have my pension and savings go up in the same bonfire.
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Oct 12, 2022 19:11
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Also this is what people mean when they say it's on sale. If you're long term investing, and you believe that eventually the economy will sort itself out, then anything you contribute now while it's down is basically buying shares at cut rate discount prices as they will eventually recover and you got 'em cheap.
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Nov 4, 2022 10:02
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Yeah, when you break it down you're basically going. I'm risk averse. Market is down. I think it's going to stay down. So I'm not going to contribute yet. Which is clearly timing the market but fundamentally your saying you think you know better than the entire rest of the market, who can also see all the information you can, and so is actually more risky in its own way than just doing a X in every month kind of strategy.
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Nov 4, 2022 23:42
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The Perfect Element posted:I've got a few small lumps of cash in isas or funds, but would a better approach now just to be funnel absolutely as much as I can into early mortgage repayments? We're on a low fixed rate for the next two years, so it seems like just paying off as much extra as I can until we remortgage at an inevitably higher rate is the most sensible thing to do. Obviously factoring in / avoiding any overpayment costs or whatever. The mathematical thing to do is take advantage of your low fix now and save/contribute to something that gives a greater return and then when you no longer have a cheap rate pay it down in a lump sum. Whether this is a net benefit of £3.75 Or hundreds/thousands however depends on the amounts involved and may not be worth the effort over just paying down the mortgage.
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Nov 5, 2022 15:40
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If your council pension defined benefit? Many are especially if it's an "older better" scheme. If so it doesn't really combine with your current defined contribution scheme. (The difference is in a defined benefit scheme what you get at the end is defined (the benefit), in the defined contribution what the company puts in is defined (the contribution)) A defined benefit pension with a decent number of years can be really nice, you should be able to get some info, even if you have to contact your old employer.
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Mar 8, 2024 23:39
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Lady Demelza posted:It is defined benefit, but I only paid into it for about 4 years. By itself, it's probably not worth much. However, if they do raise the state pension age to 71, there's another 30 years of work ahead of me. That's plenty of time for me to end up back at the council. They will have, it's probably 4/80ths or if you're lucky 4/60ths of either average or final salary (indexed for inflation). The shorthand way of getting an idea is whatever you earned divided by 80 (or 60) times 4 and assume it's about the same purchasing power for when you retire. You'll get that each year. Won't be much after 4 years but at least it's locked in. For your current stuff, sucks your company is being lovely but remember you have 30 years of compounding interest to add on to that.
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Mar 9, 2024 00:08
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Lady Demelza posted:About a grand, then. Better than a poke in the eye with a sharp stick. No problem, retirement planning is important. Also remember while you probably won't have as much income as when you're working you probably will have lower costs too.
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Mar 9, 2024 01:06
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