I am considering putting some of my money in commodities (including and especially gold & silver, c. 20% for all; Rogers International Commodities Index seems like a good starting point), c. 10% in P2P lending for passive income generation as it's better than nearly any savings account/bond even accounting for its risk, c. 25% in stock markets in emerging countries and economies with good growth prospects, the rest in stocks in solid Western firms providing vital goods and services and paying good dividends. Also considering putting some into REITs to gain exposure to the property market. Commercial real estate is one area touted to have good growth prospects and to provide good diversification from stock markets, as well as REITs specialised in ground rents. A bit in BTC as a speculative punt would not go amiss, either.
I have a subscription to CXO Advisory but I haven't really taken the time yet to see what their investment recommendations are. They seem to go with an ETF based strategy that allegedly makes good returns.
Like Cojak, I think I am a bit "paralysed" with this stuff. But you have to start somewhere.
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I have to confess that I've no real idea what I'm doing.Originally posted by cojak View Post
HL have some excellent guides, and offer suggestions for where to invest your pension fund SIPP investment ideas | SIPP investment ideas from our research team | Hargreaves Lansdown, as well as telling you where others have invested. Where do people invest their SIPPs? | Most popular funds invested in the Vantage SIPP | Hargreaves Lansdown
I kind of did a mixture of the suggestions and what others had, and hope that others know what they're doing! TBH, it can't be doing much worse than it was.Leave a comment:
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It certainly can be. Remember a -pension is primarily tax deference; the only real benefit arise from the 25% lump sum tax free (which as you say is under threat again). That gives you about 6% effective gain.Originally posted by Troll View PostIf it is one thing I have learned it is never give money to others to manage on my behalf. Unless you enjoy a Public sector pension it is far better to take the hit on taxed income to have full control of any investments you make over your working life. My mother died before she could enjoy any benefit & my fathers pension was burned through paying £900 @week
in care home fees.
The Govt. is planning another raid on pensions by limiting the cash amount that can be taken tax free so all seems a pretty pointless exercise - with investing yourself in either shares or property you have full control & assets that you can hand on to your children
The other substantial benefit can come from being a higher rate taxpayer whilst contributing, but a basic rate taxpayer in retirement. There is obviously rather less flexibility on how a pension is used.
In terms of trying to maximize I would think the most appropriate way (with total taxation as the driver) is:-
1) Pension contributions up to no more than your personal allowance (because you get tax releif going into the pension even though no tax was suffered in the firstplace)
2) Full ISA allowance used
3) Pension contributions from company to keep income down into basic rate band.
Depends on individual circumstances of course.Leave a comment:
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Do we take is this assumes you have no other savings or investments such as BTL's?Originally posted by cojak View PostLeave a comment:
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It would seem quite a conservative approach to use a sliding scale with age with the only downside your net contributions are indeed stifling your ability to live beyond your means, which so many of us currently do.Originally posted by cojak View PostLeave a comment:
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What Cojak Says - Half your age as a percentage and yes this means your full revenue, not wage.
Note - See this is as a reserve, not just a pension, so I would be very tempted to max out ISA allowance each year first, unless you need to get coin out of the business, which a SIPP will defo help with.
Oh and NOT cash ISA, waste of time.
Trust me – Once this starts to compound up and you find yourself with a decent pot and immune from the vagaries of having to work miles away or for total nobbers, it feels great.
To avoid charges I have just finished switching a big chunk into VWRL - all world ETF (exchange traded fund) as a nice foundation. This is with a view to an allocation along these lines across the lot.
US+Canada 15% VWRL
Eur 12% VEUX
AsiaPac 13% VAPX
UK 50% VWRL + HYP of individual shares
REIT 4.0% VWRL + FCPT
Emerging 6.0% VWRL + Aberdeen emerging markets fund.
I will then look to rebalance annually alongside monthly PCA payments, hopefully meaning I am buying whichever is looking lower to avoid buying too much at the top.
If this all seems too much trouble – consider a Vanguard 80/20 lifestyle fund, this is a one-stop shop, setup a SIPP, put the lot in this and start automatic monthly payments (or an ISA). They do the rebalance and if you can hold your nerve for 10 years (minimum) you will do fine.
Oh – check out Monevator for someone who talks sense and thinks like you should....
GLALeave a comment:
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Martin Lewis says that you should take your age, half it and then use the figure as a percentage of your salary for pension contribution.
I'm not sure if it's simple enough just to use this percentage against your day rate since you can't rely on being in contract throughout out the year. You probably need to calculate expected yearly income and work from that.
(But if you put a lump sum in at the beginning of the year...)Leave a comment:
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