Investing General Discussion

Kalaar kururuc said:

Ok, go gentle on me but I've got a basic question for you.

I know fuck all about investing, and I'm not a billionaire (I wish) but I'm at the point of having extra cash, and about 15 years until retirement. We have things called isa in the UK, tax free investments, that you can chuck 40k per year into as a couple.

Given I know fuck all, and given I'm not rolling in cash would my quick google search results of 'chuck it into a global all cap' have any major problems? I do realise nothing is certain, but an all cap is very diversified. A quick calculation reckons at 10% returns (eminently acheivable looking at the returns over the last 15, even with dips due to covid etc) and maxing yearly contributions for 15 year I'd have a million quid tax free, which seems pretty good to me. Hopefully I can even chop 2 years off my target retirement age, given my house is close to being paid off, and I will have a good pension (32% of wages between me and the company), and I already have 6+ months of our combined wages in an easy access account, which we're now moving towards a year of combined.

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Investing is about your personal situation, risk tolerance, lifestyle, etc. There is no one size fits all.
But the path to wealth is simple. Save consistently and eliminate debt.

I would suggest that one of the most popular investing strategies is https://www.bogleheads.org/wiki/Getting_started
Broad diversified investments - simple set it and forget it. Time in the market beats timing of the market.

Personally I went with VTSAX and it has outperformed all of my friends who choose to play the market with specific stocks.

Kalaar kururuc said:

Ok, go gentle on me but I've got a basic question for you.

I know fuck all about investing, and I'm not a billionaire (I wish) but I'm at the point of having extra cash, and about 15 years until retirement. We have things called isa in the UK, tax free investments, that you can chuck 40k per year into as a couple.

Given I know fuck all, and given I'm not rolling in cash would my quick google search results of 'chuck it into a global all cap' have any major problems? I do realise nothing is certain, but an all cap is very diversified. A quick calculation reckons at 10% returns (eminently acheivable looking at the returns over the last 15, even with dips due to covid etc) and maxing yearly contributions for 15 year I'd have a million quid tax free, which seems pretty good to me. Hopefully I can even chop 2 years off my target retirement age, given my house is close to being paid off, and I will have a good pension (32% of wages between me and the company), and I already have 6+ months of our combined wages in an easy access account, which we're now moving towards a year of combined.

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I don’t see why this would not be a good idea with the caveat that I’m unfamiliar with UK tax laws pensions etc. don’t most of you guys retire to some poor country like Portugal?

Yes, you just buy them as normal, but flag them as for an isa for tax purposes.

Yeah, not sure about the tax implications for the UK. In theory I'd say invest in the US because it seems like any time the economy crashes, everyone else gets it worse. But I have no clue if international stuff gets taxed worse than it would for domestic stuff (also no idea if you all give any favorable terms to EU stuff, or if you ever did).

But broad market shit is generally a good bet.

The investment isa is tax free, for returns and for drawdown 'income'. You'd only pay tax on any further interest earned if you took a lump and banked it. But you wouldnt do that, if you wanted it out of stocks you would just transfer to a cash isa, which is also tax free, these are pretty crap interest rates but are safe.

For my pension, we both (me and the missus work for the same company, but its got 7000 staff and different sites so we don't see each other at work) get a decent chunk of change up front tax free, then an income until we kick the bucket. This is taxed at standard income tax rates, so there is a balancing act of larger lump sum vs income that needs some thinking about as we're also both entitled to the state pension, which is just about the entire 0% income tax entitlement. I'll be speaking to an advisor a few years out from retirement to ensure I don't balls something up when I come to retire.

As for retiring to Portugal, it is quite popular for good reason, ie the uk weather is shit, but its not the top of my list, maybe Spain? Depends what happens in the intervening years, knowing my luck i'll be run over by a bus the day after I retire.

Gravel said:

Yeah, not sure about the tax implications for the UK. In theory I'd say invest in the US because it seems like any time the economy crashes, everyone else gets it worse. But I have no clue if international stuff gets taxed worse than it would for domestic stuff (also no idea if you all give any favorable terms to EU stuff, or if you ever did).

But broad market shit is generally a good bet.

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I think that the all cap is broadly ftse 100 and 500, no bias towards any particular country, but there is currently no tax benefit to buying purely UK funds. Although, I believe they're talking about introducing something that does benefit buying uk based shares, but it would have to be as benefits for UK shares, and not penalising USA shares, as political donors would riot.

I've been looking at this type of thing:


I can't see a time when ill have the desire or knowledge to try and micro-manage my investments, so a managed diverse portfolio seems a good bet (for me).

You don’t need managed assets. The fees may seem small on face value, but compound interest works in both directions. The cumulative compounded fees over the entire investment horizon has a very sizable hit to your final portfolio balance.

This is why everyone is suggesting simple balanced ETFs. The S&P 500 index (SPY or VOO) is most of the diversification that anyone ever needs.

VOO isn't a thing in the UK, according to google:

"The main UK equivalent to the US S&P 500 ETF VOO (Vanguard) is the Vanguard S&P 500 UCITS ETF"

So basically I'd be doing an unmanaged isa, then choose the fund to invest in, eg that s&p 500 one above? And, my idiots understanding is: the unmanaged means I decide which fund to buy every time I add more cash, managed would be handing the company money and they decide?

But basically I could just choose the s&p 500 fund and keep putting more into it, as shifting investments about costs money and I'm no Michael Burry.

Thanks all, much appreciated. I can still use this years allowance until April 1st, so a bit of research is needed