richbee wrote: ↑Fri Apr 05, 2024 8:44 pm
Joeboy wrote: ↑Fri Apr 05, 2024 6:18 pm
The 4% rule can be looked at a couple of ways. Live off the 4% or live off the 4% + a set depletion rate on the principal. It is a handy way to see how near or far an individual is but its only a focus tool.
That pension magic book made a huge difference to me. It paid for itself before i'd finished the first chapter and it went on to save me huge sums. The main thing was really getting a fix on what a FA is and then from there looking at the multiple AMC's chopped up and disguised with other 3 letter acronyms or as in the old days full on front loaded funds up to 5%. Absolutely mental but where do we think the FA will steer us?
My best was sitting on a hotel bed in Macau Brazil reading that book cover to cover then reading it again with notepad. I went offshore, did my trip, came home and ripped all my pensions away from the providers and SIPP'd the lot. I then had a refining process where i split into two SIPP's but that is another story.
the AMC thing niggled at me so when I got back I looked up all my funds and that in itself took a bit of doing. 'They' dont want you to be doing this, 'they' want you to sit still and take the reduced return while they take a whack off the top. Anyway, my worst offender was a BRIC nation fund with i think Standard life. It was charging me 2.75%, makes me want to puke even now thinking of that.
Lets say i've got £100k in it . Before I turn a coin they'll take £2,750 in fees from me. If I run the same money in Vanguard S&P 500 ETF with 0.04% AMC, I will pay £40 in fees. Imagine the compounding effects of that over a decade or multiple decades for the younger fella's?
This is worth a look.
https://engaging-data.com/visualizing-4-rule/
FA - financial advisor?
AMC - annual management charge?
It's a minefield - I've just been talking a financial advisor, waiting for him to come back with recommendations to see if I feel like paying ? %
It does feel like you wouldn't need to work at all if you could really get a handle on the money markets & investments
Yes to both. I wouldn't let an FA clean my shoes let alone handle my money. It's not that difficult. The industry does try to overcomplicate and obscure the playing field. John Bogle says it very well in the clash of the cultures.
Bear in mind that the FA has a fiduciary responsibility to act on your best interests, not his own. How do you prove that though? Therein lies the crux. Although investing in broad, low churn, low AMC, index tracking funds can get you a long way down the road to financial freedom.
Churn is a particularly loathsome little trick to look out for.
I have met a few FA'S and the first one I was introduced to by a friend sat there behind a big desk on Queens Road Aberdeen. I'm 24, he's speaking about doing this with money, that with money, move this here, that there, tax rights offs. I'm looking at him thinking 'shite'. I shook his hands said thanks, i'll be in touch. Never went back.
Years later I'm doing properties, another FA does the hoops spiel in front of me. This time though i'm aware and knowledgeable enough to know that both their stories only make sense when looked at from a fee generation perspective. My accountant did the same when I got him to track down and pull a few old small pension pots together. I knew exactly what he was doing, I let him have 1 year fees then moved the lot to a SIPP.
Just be aware, often the financial products they'll present benefit them equally if not more. Either way, you lose out.
On the other hand,
These guys.
https://www.vanguardinvestor.co.uk/
