Over the years. My income has grown my mortgage was paid off. Kids have left so my investing went from £200 to £2000 a month. I did not change my lifestyle and drove 15 year old car (which I finally just changed). I’m current sat at £500k and hope to retire at 60. So ploughing as much as I can in index funds. I’ve been burnt too many times on individual stocks.
If he chooses to rebalance to a more conservative, bond-heavy portfolio, and he happens to live a long time after the age of 60, 500k may not be enough to suit the more free, lavish lifestyle he has been working towards all his working life. I say keep on the same trajectory - whilst not jeopardising any enjoyment you can have right now obviously - stay healthy, and bask in your profits later in life. On the other hand, i would agree with 'voice of the' if you thought you werent going to be super healthy or actively able in your older years. As we all know, you cant take it with you so make sure you enjoy your life at all stages @VoiceOfThe
For me index funds was a way to protect my money from myself because im hopeless at saving. I still believe that my money in index funds will be worth more in the future then my money sitting in the bank. Especially with reinvested dividend
The retirement fund that my wife and I have built up is doing quite nicely. The majority of the money, which averaged roughly $2 million, was made by taking advantage of the opportunity to purchase luxury stocks at a significant discount during the Great Recession. 2009 saw my stockbroker fired, all of my mutual funds liquidated, and I purchase individual dividend stocks.
@Elena Castro I concur. According to my own experience with fiduciary counsellor ‘’Brianna Mckee Harris’’, having $385k in a well-diversified portfolio that has increased by 3x via compounding, venture capital doesn't only come down to money; you also need to be knowledgeable, patient, and have strong financial backing.
As someone who has been investing over 35 years, I can confirm that this is all great and sensible advice! The key things in my experience are - Invest regularly (Including when the market is down), minimize fees, minimise tax and diversify.
We’re (my wife and I)in our 40s and only started investing a few years ago. 5-800 a month into index funds rain hail or shine…. Wish we’d started earlier but we didn’t have the info or probably the maturity to do it before whereas now we know we’re in it for the long haul. I guess we take the view that over the long term we should do ok and if it all collapses then the whole world will be in trouble anyway! Slow and steady doesn’t necessarily win the race but the longer you stay in does increase the chances of you being amongst the medals. Thanks for your video and your time on the channel, it is very much appreciated.
It's great that you started though... You have a decent runway still to build up independence. I'm in my fifties, and although I started age 30, almost none of my peers did. Now they are just getting around to starting and consequently are forced into some bonkers things to "try and make up time" Unfortunately, by definition they are not experienced investors so it doesn't usually work out. Of course, the other problem with starting in your fifties is that you do actually believe you're able to beat the market. Just because.
The nice thing wih index funds is that most Americans pensions go into them too. So if they were to get into real trouble the US would kick up a fuss. Like you say it would have to be some sort of apocalypse before they collapse.
This video is kind of.... useless. It sort of suggests that cost averaging index fund investing is bad because it doesn't beat miraculosly investing for 30 years on only Amazon. And kind of berates people for timing the market instead of just reiterating that you should always be buying, especially during market downturns. Of course the more money you invest, the more you compound over time. Duh. What were you even saying??
Essentially the secret sauce is having a long enough runway of time. Each of us realistically only has 5 thirty year periods to invest over (starting from age 25 to 30). If you start in one of those windows, then index funds really will deliver for you. Not just because of the steady real returns, but also because of the habits you embed in yourself
Just getting into investing and as a fellow UK resident I’ve found it incredibly hard to find reliable, informative information from a British perspective, especially on TH-cam. The majority of info seems to be from a US perspective and the majority of larger investing channels seem to follow the same trend. I’m so glad I came across your channel. As a younger investor, I really appreciate your youtubey editing style without it being too overboard! Your information and delivery is spot on. Already looking forward to binging on your catalogue. Thank you.
I don’t invest to get rich nor do I think I will ever be a millionaire I simply do it because it want me and my girlfriend to be finically free and we’ll off when we get a little older. I enjoy the thought of having more than I need but me myself have no real interest In being a millionaire or rich. 🙌🏻
The most important aspect here is that you only pay in 72000 pounds during the whole 30 year period whilst you receive 209000; which means 137000 is totally free money which you earn without doing anything. Why did you not just mention that. How do you calculate the dividends?
Getting started with 250k(€/$/£) from a sale of granny´s apartment and investing it plus monthly payments will get you where you want to be. The key challenge is the starting amount that will make you waste 2 decades. Or not.
In the end the strategy is simple: invest as much as you can for as long as you can. If those 880€ become 1600€, and those 30 years become 35 years, the impact is massive. I'm far from being an expert but I try to be frugal and invest my whole salary while living with my wife's. Right now we don't have kids and it works, but I guess when we have kids our savings power will significantly decrease
I have been saving for retirement for 30 years and it has been bad the last year. Recovery will adjust the portfolio a bit into 2024. So keep investing and don’t worry about all this. Long term you have a winner!
I have long wondered what would happen if EVERYONE decided to invest in index funds... the market would cease to exist, right, because no one would be buying indidvidual shares?
Yes if a market only had indexers at 100%, then of course there would be no market. Although some people would be buying and selling, the weights wouldn't change. But this will never happen :) Although passive indexing is popular, and still growing, there will always be a huge active market, and if anything a larger passive market should make it easier for active investors to win if they really want to (in theory). Humans will continue to do what humans do and make bets, gamble, speculate and trade. The market needs participants from all sides to make it work and not everyone is in it for the long term to build wealth.
Misleading and shallow but not false. First, investing £880 per month is not impossible for a middle-class couple. It is still an investment of £316000 over 30 years becoming a million. Not bad. What is even more misleading is that 2022 was a bad year and down 20Pct and the 3rd worst year out of the last 30. So this account had £1.25M at the end of 2021. It is quite likely that this account will recover in the next year or two and a monthly investment of closer to £680 will get you to a million.
I am worried about the “decade of no returns, plus inflation”. Even though I am booking a loss, I am moving out from a costly advisor and funds with lots of fees into indexes so what returns I do get don’t go straight to the financial folks. Wish I had done this a decade ago.
Look closely at the stock charts of the "lost decade". It is not a straight line. Even though it begins and ends at the same level, it spends lots of time below that level. Actually most of the decade. If you DCA through that 10 years, your average purchase price will be a lot lower than said level. Thus you made profit. Search YT for videos that really explain the benefits of DCA. It will surprise you.
Imagine _DECADES_ of no returns. 👻 If you are gonna do the whole "index fund" thing, research how much you'd make from minimum withdrawals on a 401k vs long term capital gains from directly investing in the index fund. The results may shock you (for better or worse)...😅
The problem is people want an easy way to 10x their money instead of looking for a way to make themselves more valuable so they can earn 10x more money.
This is an excellent point. As people progress through life ideally they move up in their careers and go on to make more money. With more income they should seek to increase the amount of money they invest
As always, realistically, it comes back to 'you need to have money to make money'. Putting £200 per month into the S&P 500 is great, it'll beat inflation over the long run and you'll have a nice pot of cash at the end, but if you want to grow serious amount of wealth you either need to start with a big pile of cash to throw at the market or have an income that allows you to invest £880+ per month as you showed us.
That's true up to a level. I would say that if your income is less than £30k then yes, you'll struggle to create any headroom between income and consumption. Probably not even the 200 a month if you have children. But as your income rises, it's perfectly possible to keep the same lifestyle that you had when earned under 30k. So the key is not really "having money", it's more about trimming consumption to create headroom to gift your future self.
@@uncountableuknot really, if you want to make millions from the markets you need to start with billions, if you want to make hundreds of thousands you need hundreds of millions. I think you need to put away 50k or more per year to see any significant growth.
@@leonhenry4861 yep, well you do it your way and I'll do it mine. I started investing 25 years ago with zero. After 7-8 years I had accumulated a pot of 3-4 times my annual expenses. I continued making contributions for another 18 years and now I don't need to work any more. I only invested in index funds thoughout (guaranteed market return) The key thing is that I kept my annual lifestyle expenses at roughly the same throughout, even though my income rose through that period. In other words, just because you earn more money, doesn't mean you have to consume it straight away.
@@leonhenry4861 I agree that if you put away 50k a year, you will certainly become very wealthy. However, most people are not in that position. But by investing the difference between income and expenditure over a couple of decades into index funds, it's perfectly possible to become financially independent. The real secret is to not let your expenditure grow as much as your income does. That's in your own gift to manage
1998 to 2002 I paid into a works pension that was deferred when I was made redundant in 2002.I think I paid in about 2K. Nothing else was ever contributed to it. I am now 54 and have just rediscovered it. It's value now 38K Nice surprise
I may have one I paid in to many years ago. I cannot even find a pay slip. You have inspired me to do some digging. I think I contributed to it for two years then forgot about it.
Index funds aren't about becoming a millionaire or billionaire, and gates, elon and all those other rich people got extremely lucky. Never mind the people who tried the same thing and failed.
Yet the likes of “our rich journey” claim the opposite…. You need 30 years of regular investing to become a millionaire with index funds, people are just gullible and too greedy. The truth is, if someone claim they are millionaires and feel the need to make TH-cam videos and sell courses to make extra money - they probably aren’t that rich
I have never heard from a serious site/video/book that saving $200 per month for 30 year is enough for a decent retirement. It could work (just) if you save for 45 years, but not for only 30 years. If you want to retire on the cheap, start saving as soon as your first job pays you any money. And don't buy that nice car on credit!
Buffet, Gates, Bezos, and Zucc (and Musk) all have a history as entrepreneurs. Only Buffet was an investor outside his company, Bershire Hathaway, from early days. Buffet is the biggest index investing supporter for every-man type long term wealth (not billions). They are all also Americans, where the 401k often has an employer match on 3-6%, which changes some math. I don't know what is typical of a UK SIPP. The are loads of index fund normal job millionaires. It just takes time and consistency.
Hi Toby! Which platform woul you suggest if I simply want to put my savings into an index fund? I know you speak of vanguard on your channel and it seems simple enough. Do you recommend vanguard or would you suggest something different?
Theres lots of good options out there - firstly I'd make sure to use a stocks and shares ISA. And then I like platforms like Trading 212, Invest Engine and Vanguard themselves (even if they don't offer as many fund options). I'm going to make a full video soon comparing all the platforms.- it all depends what you want and where you feel comfortable though thats really important.
Yes make sure its a stocks and shares ISA, you are not taxed on anything within it or payments coming out which is great. Hargreaves Lansdown is the big one in the UK. Fees are higher though to start but are capped so after a certain point the fees are similar to Vanguard, but you have to have quite a lot invested to get to that point. Also you have to pay about £11 to buy and sell ETFs on there. Customer service is excellent too if you phone or message them. You can buy most shares and ETFs on there. Vanguard is a very good option if you are starting out as the fees are good, there is a limited choice of ETFs so its not overwhelming and there are no fees to buy and sell ETFs as long as you dont mind waiting for a couple of days for the orders to go through. I've found Vanguard to be a bit better due to the limited choice (and lack of phone app) as there is less tendancy to keep messing around with what products you are invested in and just leave things alone.
The thing is you have limited amount of time/attention and what are the alternatives are. So investing in funds in general is very low effort strategy. This enables you to make money elsewhere in that time. If you let's say actively trade stocks. You have 50k and beat the market by 2%. How much effort and stress is it to be better than average investor? Is it worth the 1k extra? The more money you have, the more it is important to be good at investing and less important to have a high income from activities.
To be fair, this is a very simplistic calculation, as typically your employer will contribute, and so will the government, and over your career, your income will hopefully increase, so the actual amount that you end up paying in over the years and decades will be considerably more. Also retirement does not need to be a cliff edge, no reason why you cannot retire a bit early, then do a part time job to cover your expenses, and when the goverment pension starts paying out, take that into account. Also 30 years in this day and age, is a very short career. I would imagine most people would be looking at 35-40, if not more, and those last 5-10 years will make a hell of a difference, compound wise. great video as every bud :)
What would be your advice when you reach the 1 million goal in terms of withdrawal such as isa and sipp or general account and does vanguard allow this I’m 25 and just getting started !
It will sound boring...but make sure you max out any pension with your work, contribute as much as you can to your ISA every single month into low cost index funds, and keep doing that for decades..
I like index funds, low stress. My general strategy is large holdings of low risk assets and small holdings of high risk assets. The only way to outperform regular buying of an index is to put the time in and understand charts and how to draw straight lines on them, but the index was created to keep things simple, so keep it simple and let time do the work.
I can’t remember if I did or not in the video usually I’ll say! But always a good reminder when people don’t account for it having $1m in 30 years won’t be anywhere near as exciting as it now!
@@robertritchie7464 enjoy. I think you’ll like my conclusion. As with TH-cam the title and thumbnail don’t necessarily reflect my own views but something said by others or often assumed. 👍👍
If you are long term investor index funds are a great place to be, invest consistently over many years and you’ll do just fine. And if you like some stocks with a small part of your portfolio then go ahead that’s what I do 👍👍
Greta video Toby I've left a wealth management firm due to their insane fees to come across to vanguard. In hindsight not including inflation and an equity heavy 10% annual average return you should double your money every 7 years. I've learn't along the way diversify and on the 5 yearly or so crash go all in heavy 60% plus into the one sector thats dropped the hardest, let it bounce back up and diversify again while constantly investing. Make much more money this way.
There's no law saying you have to hold, especially in a tax deferred account (ie no taxes on gains when you sell.) If something starts going down, you should be free to sell and get back in once it stabilizes. If more people did this, flash crashes might get worse but long term declines would probably be less of an issue (everyone sells off and then is looking for opportunities.)
How do you know when to get back in? This is exactly what timing the market is. The market can make irrational moves all the time and you cannot predict these moves, selling on the way down is exactly what causes retail to keep losing money 😎
I've only recently found your channel and videos and I really like your content and the way you do things. There's sime other channels that are "similar" for lack of a better word with still good content (and sometimes not) but I just don't really like the personality or way about the presenter. I really like your way and how you explain things and your ability to be light hearted but also to the point without having to make constantly (not very funny) jokes etc. Nice one 💪
Great content Toby as usual. Have you still a platform review for 2023 on the way? With index fund investors, should we be looking to diversify the actual fund providers and ISA platforms. So splitting between Vanguard, Blackrock, HSBC etc with VUSA/IUSA VUKE/ISF etc. And then what about the platforms that have FSCS protection. Should we be looking to limit how much we hold on any one platform?
Cool, cheers. Will look out for that one! It would be so easy to just lump everything into Vanguard VUSA, VUKE, VMID, VWRL etc. But it seems sensible to look at others where they’re simple index tracking funds that are identical regardless of the provider.
@@TobyNewbatt You could look at the Hedged ETFs eg IGUS, IGWD at some point, its interesting to plot the hedged vs unhedged and Pound vs Dollar. I think they are quite a good thing to look at when the pound is doing badly ( Lizz Truss time for example ).
Thank you. If you actually do the maths involved investing in index finds like these rich influences are saying does not make you a millionaire. I don't know if they actually know this (they probably do) and what they're motives are, but they are giving false hope by promising tactics that don't work (and by the time people find out they will be 30 years older and have wasted their life).
I have to say this video is quite alarming and compared to your other videos, seems misleading. It’s good to see some real data and examples of ROI, but it’s implying that index funds are a bad investment? I don’t think the comparison with Amazon helps (you did state the benefit of hindsight which is fair), but that stock did incredibly well, much like apple or Tesla. But what I think this video misses is that, yes investing a small (£200 small!) amount won’t make you a millionaire, but investing that amount will return you a potentially inflation and savings account return. My take from this video is that investing in index funds (via ETFs) is BAD, and you’ll waste your money. Please (please!) correct me if I’ve misunderstood this, as from watching you in the past and other videos as well, that index funds (via ETFs) are considered a safER investment that stocks and shares and that will, on average, give a good (not millionaire level) rate of return. I think that needs clarifying.
Hello! I hope you watched the whole video as this is very much in favour of investing in index funds. The purpose of the video is to show that investing will not make you rich, at least quickly, and that wealth is built slowly from investing money that is spare once you have covered all of your bills. I like to inspire talking points and critical thinking :)
@@TobyNewbatt yes I certainly did watch to end, maybe me but I didn’t quite get that message, but your answer here is reassuring. I’ve literally started investing in ETFs, specifically VUSA, ISF and VWRL (feedback appreciate!), with the intention of putting in regular amounts (that I hope will increase over time) in an ISA over the next 30+ years for retirement. Yes I’d love to retire with a million, but even if it ends up as a lump sum of £200,000 that’s still a massive win for me. I’ve enjoyed your other videos and they have helped me work out what’s best for me and how to research what to invest in, so thank you!
Two very different things Gary! I’d much prefer to help many people but have no interest in a professional qualification. Appreciate the comment nonetheless! 👍
I buy whatever is on sale. Index funds i DCA until it drops 15%+, then I add large chunks. I buy real estate rentals when I find good deals there and increase my index fund investing with the cashflow. $1.5m portfolio so far after 15 years
880 per month, sounds a lot, but once you start to use pensions and the tax relief they provide, and the amount you actually save drops dramatically, Basic rate tax payer would only need to pay in 704 a month, higher rate tax payer 528, split these between couples on the similar tax bands and its not that much per person, I know its not the point of the video and probably should be a follow up video but Pensions are the best tax wrapper for this kind of investment.
Sorry to be thick but how does the pension / tax relief / employer matching relate to investing your own money (out of your take home salary) into index funds?
Personal contributions to a pension get tax relief. Basically if you out 80 in you get 100 in the pension, as the pension claims 20% tax relief for you. There's rules and regs about how much you can put in but that's the basic.
I don't understand this mate. In another video you were suggesting that Vanguard FTSE All World ETF (VWRL) was the only find you need which is an indexed fund.
Just entering the 3rd year of proper investing (only token payments to savings previously) and so far so good. I realise markets can and will change so will just ride the emotional roller coaster.
Very simple... Index fund will give you 5/6% average growth per year.. if lucky the average can be 7/8% and I am talking the average of 30 years.. still huge in terms of compound growth... and defo beats inflation as well as interest rate...
So using the S&P500 index (the average) 1st Jan 1992 to 1st Jan 2022 investing at the end of the month (payday) and adjusted for inflation. It would come to 270k so don't know where your pulling your 200k from. Also the average salary in the US in 1992 was 25.9k so 200 pm is only 9% of your gross salary where your meant to put in at least 15% now if you take that into account and recalculate you get a figure of the end figure is 437k which still leave you with 10years of invest before retirement. Also 20 more years of retirement time. So when you do retire you will have a total figure of 1.37 million. That an easy 8k per month income.
@@TobyNewbatt So you're actively using a different index to spin a different narrative, never seen people say invest in anything others than the S&P500 when in comes to index funds.
You'll do better than the vast majority of people. 7% (on top of inflation) is the long term returns of the market and it's amazing what you can achieve over the long run. Keep it up.
Do you need to fill in a w-8BEN form to invest in VHYL all world in a ISA or even the S&P 500. I only hold uk idvidual stocks and FTSE 100 and 250. I want to diversify globally but don't really understand taxes involved.
Hi Joe the broker will tell you if you need to fill out the form. It will be straight forward if needed. To my knowledge though these ETFs don’t require it as you only need to do the forms of you are holding the US shares directly. All taxes are taken care of before you see them in the ETF in terms of dividend withholding. Seek help from your platform or broker to make sure 👍
Still buying, every month for many years and still a few years away from realising the cash drawing things down. If you go in to investing for a short term and inconsistent funding of your investments, I feel you would be incredibly disappointed with what you saw.
Hi Toby I have watched yours and some other TH-camrs videos on investment plus reading articles , books at least for the last year . I am 50. I have invested 5k plus dribbled in what I can afford and I have done the same for my kids . Could you do a video on some thing similar as I think this is a more realistic financial situation for most. I have used ETFs,bonds, and shares etc. And give a 10year and so on estimaton as this would be interesting. I know you are not a financial advisor and I have made my mind up on what I want to do but this would be a good idea as I have many friends with a similar financial situation. Thanks.
I like to think of total market etf’s as a median estimate of return with a median risk. Pure growth stocks have always done significantly better in a very long period, that has never been a secret. Some people may look at that £200 a month strategy and say ~3x your money over 30 yrs including inflation is plenty good enough. After all, there is no other investment vehicle in the world that can generate wealth that consistently for the average person.
For all those wannabe millionaires/billionaires who want to make easy money in the markets, here’s some advice: there is no easy money. The more you chase it, the more you will lose. The way to make big money is to become educated and work hard. Yes WORK HARD. There are no short cuts. Yes, it is boring. Yes,it is stressful. Yes, it will take decades. Investing in the market is really nothing more than a way to try to preserve the wealth you have already made (through work) against the ravages of inflation and perhaps making a little more (not much more) on top. Investing in ultra low cost index trackers will beat costly actively managed funds 95% of the time over the long term. You may think you can spot the 5% but you can’t. All the videos, adverts and comments on TH-cam promising big money for little effort are BS, pure and simple. Do with this advice what you will. You’re welcome.
He actually did extremely well, he beat the market by a long shot across his time managing the Magellan fund. BUT interestingly enough most of the investors didn't beat the market because they bought in and sold out at the wrong times, especially when he had bad years. Another reminder that we need to invest for the long run! Since he left they haven't done as well.
When markets and the macro are in clear trouble and over bought based on historic values of market why dont you just switch your fund into cash for example and let this play out? You dont have to watch your investment go down, when market reaches a fair value or start a to dip under that fair value as that's how it usual works then start switching your fund back to shares again in increments. I'm not saying do this often just during swings on the long term macro I think bear markers happen every 10 years or so and often there are lots of indicators that it's a probability before it happens.
@@dunk8157 Yes I agree, I don't mean time the bottom but start buying in again at fair value, example right now the S&P is 70% over valued based on historic price to GDP. That's very high still, historically a bad time to buy, good time to sell.
@@frankjaeger393 True, I have done this sometimes when I think "wow things have gone up a lot recently, amybe I'll move some things into cash". But I have gradually stopped doing that as it takes a lot of time and energy to be on top of it. If you google time in the market vs timing the market there are quite a lot of studies done on this subject. The problem I have found and why I have gradually stopped doing this sort of thing is that I tend to be influenced by financial news and advice from traders in the media, they all tend to get caught up in whatever the latest trend is, eg US Market will crash, EM will do well, AI is the next big thing etc and then they turn out to be completely wrong and because I have followed the trend I've lost money. In your example the risk would be that the fair value calculation might not be accurate. I do still buy small amounts of individual stocks when I think they are too cheap, eg airlines a while back, but they are small "bets" which are almost for fun. You could set up a split portfolio where one is not traded and the other one is held steady and see how they compare over time. If you have the time and energy you could make your idea work but like I say for me I have tried and found I'm just not able to dedicate enough time to it.
Great video !! I’m currently investing in VUSA and VHYL. And holding them for 30 years. Atm investing £200 a month in the VUSA. Please can you tell me if I’m doing the right thing ? As I’m hoping to have a nice pot of money for retirement and for my kids etc
Sounds solid enough to me! VHYL will hold a lot of the same names as VUSA but you won’t go far wrong over the very long term in my opinion! All about focussing on what you can put in now 👍👍
@@Connormajka1999 hi mate, your own circumstances are personal so I can't tell you whats best. I'm not a professional sorry! But all the basic concepts are true, invest for a very long time, do it consistently and keep your costs low.
New subscriber for you mate. Nice videos and delivered very well 👍🏻. All the best, continued success and hopefully all of us paupers can have enough money for some sort of quality of life when we’re 65 😅.
Over the years. My income has grown my mortgage was paid off. Kids have left so my investing went from £200 to £2000 a month. I did not change my lifestyle and drove 15 year old car (which I finally just changed). I’m current sat at £500k and hope to retire at 60. So ploughing as much as I can in index funds. I’ve been burnt too many times on individual stocks.
You can retire on £500k before you’re 60.
How old are you now
@@rz202 53. I'm retiring at 60
Hi Pat, thank you, when did you start investing?
If he chooses to rebalance to a more conservative, bond-heavy portfolio, and he happens to live a long time after the age of 60, 500k may not be enough to suit the more free, lavish lifestyle he has been working towards all his working life. I say keep on the same trajectory - whilst not jeopardising any enjoyment you can have right now obviously - stay healthy, and bask in your profits later in life. On the other hand, i would agree with 'voice of the' if you thought you werent going to be super healthy or actively able in your older years. As we all know, you cant take it with you so make sure you enjoy your life at all stages @VoiceOfThe
For me index funds was a way to protect my money from myself because im hopeless at saving. I still believe that my money in index funds will be worth more in the future then my money sitting in the bank. Especially with reinvested dividend
The retirement fund that my wife and I have built up is doing quite nicely. The majority of the money, which averaged roughly $2 million, was made by taking advantage of the opportunity to purchase luxury stocks at a significant discount during the Great Recession. 2009 saw my stockbroker fired, all of my mutual funds liquidated, and I purchase individual dividend stocks.
@Elena Castro I concur. According to my own experience with fiduciary counsellor ‘’Brianna Mckee Harris’’, having $385k in a well-diversified portfolio that has increased by 3x via compounding, venture capital doesn't only come down to money; you also need to be knowledgeable, patient, and have strong financial backing.
Hi, not all funds are well managed, check underlying share price isn’t going down or limiting growth by the way it is set up.
Take care M
As someone who has been investing over 35 years, I can confirm that this is all great and sensible advice! The key things in my experience are - Invest regularly (Including when the market is down), minimize fees, minimise tax and diversify.
Thanks Peter, great to share your experience :)
Great tips. Has it made you a millionaire?
We’re (my wife and I)in our 40s and only started investing a few years ago. 5-800 a month into index funds rain hail or shine…. Wish we’d started earlier but we didn’t have the info or probably the maturity to do it before whereas now we know we’re in it for the long haul.
I guess we take the view that over the long term we should do ok and if it all collapses then the whole world will be in trouble anyway! Slow and steady doesn’t necessarily win the race but the longer you stay in does increase the chances of you being amongst the medals.
Thanks for your video and your time on the channel, it is very much appreciated.
It's great that you started though... You have a decent runway still to build up independence.
I'm in my fifties, and although I started age 30, almost none of my peers did. Now they are just getting around to starting and consequently are forced into some bonkers things to "try and make up time"
Unfortunately, by definition they are not experienced investors so it doesn't usually work out.
Of course, the other problem with starting in your fifties is that you do actually believe you're able to beat the market. Just because.
The nice thing wih index funds is that most Americans pensions go into them too. So if they were to get into real trouble the US would kick up a fuss. Like you say it would have to be some sort of apocalypse before they collapse.
This video is kind of.... useless. It sort of suggests that cost averaging index fund investing is bad because it doesn't beat miraculosly investing for 30 years on only Amazon. And kind of berates people for timing the market instead of just reiterating that you should always be buying, especially during market downturns. Of course the more money you invest, the more you compound over time. Duh. What were you even saying??
I think you missed the point of the video but it’s ok! Thanks for watching anyway much appreciated 👍👍
Artsy had a stinker here 😂😂😂
Essentially the secret sauce is having a long enough runway of time.
Each of us realistically only has 5 thirty year periods to invest over (starting from age 25 to 30).
If you start in one of those windows, then index funds really will deliver for you. Not just because of the steady real returns, but also because of the habits you embed in yourself
Im 16 and I am investing 750$ per Month lol
@@llllkla that's a fab start to your investing journey!
@@uncountableuk Thank you, everytime I earn more my savingsrate will be higher too :)
5 thirty year periods to invest? How's that? That's 150 years of investing how long do u expect to live? Lol
@@kevh7941 25-55, 26-56, 27-57, 28-58, 29-59.
If you start much later than 30 you don't get a thirty year period to retire early
Just getting into investing and as a fellow UK resident I’ve found it incredibly hard to find reliable, informative information from a British perspective, especially on TH-cam. The majority of info seems to be from a US perspective and the majority of larger investing channels seem to follow the same trend. I’m so glad I came across your channel. As a younger investor, I really appreciate your youtubey editing style without it being too overboard! Your information and delivery is spot on. Already looking forward to binging on your catalogue. Thank you.
Thanks for the kind words, welcome!
Agreed Toby's content is good. Also check out James Shack, Peter Mathew's and Damien talks Money.
Pensioncraft is by far the best UK based YT channel, don't be fooled by the name
@@rlove21 thanks so much for these recommendations! their content seems great too! 🖤
Pension craft is very good. He is a little boring compared to the usual moon shot youtube style, but he's great.
I don’t invest to get rich nor do I think I will ever be a millionaire I simply do it because it want me and my girlfriend to be finically free and we’ll off when we get a little older. I enjoy the thought of having more than I need but me myself have no real interest In being a millionaire or rich. 🙌🏻
Does this include Dividend reinvestment?
תודה!
Thank you for the support buddy, always grateful 😇
Another excellent video.
The most important aspect here is that you only pay in 72000 pounds during the whole 30 year period whilst you receive 209000; which means 137000 is totally free money which you earn without doing anything. Why did you not just mention that. How do you calculate the dividends?
Getting started with 250k(€/$/£) from a sale of granny´s apartment and investing it plus monthly payments will get you where you want to be.
The key challenge is the starting amount that will make you waste 2 decades. Or not.
Facts
In the end the strategy is simple: invest as much as you can for as long as you can.
If those 880€ become 1600€, and those 30 years become 35 years, the impact is massive.
I'm far from being an expert but I try to be frugal and invest my whole salary while living with my wife's. Right now we don't have kids and it works, but I guess when we have kids our savings power will significantly decrease
❤ this strategy
Probably the most honest investment video I've ever seen. Thank you.
Smashing it bro, been here since the start 💪😎
Appreciate it buddy, hopefully it's improved 🤣
I have been saving for retirement for 30 years and it has been bad the last year. Recovery will adjust the portfolio a bit into 2024. So keep investing and don’t worry about all this. Long term you have a winner!
TH-camrs in 2021 - hey look I figured out how to use a calculator!
TH-camrs in 2023 - Oh, it doesn't work like the calculator.
hahaha yep, and there's a lot more comparisons we can make :P
Although 200k doesn’t sound like a lot that is still a sizeable return on ur investment for only 200 a month
Yes 100% it’s not to be sniffed at I just wanted to highlight that some people think they will be millionaires and keep things on check 👍
put £72,000 in ((12x200)x30 years) and get £200,000 out is not bad at all!
I have long wondered what would happen if EVERYONE decided to invest in index funds... the market would cease to exist, right, because no one would be buying indidvidual shares?
Yes if a market only had indexers at 100%, then of course there would be no market. Although some people would be buying and selling, the weights wouldn't change.
But this will never happen :)
Although passive indexing is popular, and still growing, there will always be a huge active market, and if anything a larger passive market should make it easier for active investors to win if they really want to (in theory). Humans will continue to do what humans do and make bets, gamble, speculate and trade. The market needs participants from all sides to make it work and not everyone is in it for the long term to build wealth.
Misleading and shallow but not false. First, investing £880 per month is not impossible for a middle-class couple. It is still an investment of £316000 over 30 years becoming a million. Not bad. What is even more misleading is that 2022 was a bad year and down 20Pct and the 3rd worst year out of the last 30. So this account had £1.25M at the end of 2021. It is quite likely that this account will recover in the next year or two and a monthly investment of closer to £680 will get you to a million.
I am worried about the “decade of no returns, plus inflation”. Even though I am booking a loss, I am moving out from a costly advisor and funds with lots of fees into indexes so what returns I do get don’t go straight to the financial folks. Wish I had done this a decade ago.
Look closely at the stock charts of the "lost decade". It is not a straight line. Even though it begins and ends at the same level, it spends lots of time below that level. Actually most of the decade. If you DCA through that 10 years, your average purchase price will be a lot lower than said level. Thus you made profit. Search YT for videos that really explain the benefits of DCA. It will surprise you.
Imagine _DECADES_ of no returns. 👻
If you are gonna do the whole "index fund" thing, research how much you'd make from minimum withdrawals on a 401k vs long term capital gains from directly investing in the index fund. The results may shock you (for better or worse)...😅
The problem is people want an easy way to 10x their money instead of looking for a way to make themselves more valuable so they can earn 10x more money.
Yep its something that will always be with us I think
This is an excellent point. As people progress through life ideally they move up in their careers and go on to make more money. With more income they should seek to increase the amount of money they invest
Finally someone who actually uses his brain
As always, realistically, it comes back to 'you need to have money to make money'. Putting £200 per month into the S&P 500 is great, it'll beat inflation over the long run and you'll have a nice pot of cash at the end, but if you want to grow serious amount of wealth you either need to start with a big pile of cash to throw at the market or have an income that allows you to invest £880+ per month as you showed us.
That's true up to a level. I would say that if your income is less than £30k then yes, you'll struggle to create any headroom between income and consumption. Probably not even the 200 a month if you have children.
But as your income rises, it's perfectly possible to keep the same lifestyle that you had when earned under 30k.
So the key is not really "having money", it's more about trimming consumption to create headroom to gift your future self.
@@uncountableuknot really, if you want to make millions from the markets you need to start with billions, if you want to make hundreds of thousands you need hundreds of millions. I think you need to put away 50k or more per year to see any significant growth.
@@leonhenry4861 yep, well you do it your way and I'll do it mine.
I started investing 25 years ago with zero. After 7-8 years I had accumulated a pot of 3-4 times my annual expenses. I continued making contributions for another 18 years and now I don't need to work any more. I only invested in index funds thoughout (guaranteed market return)
The key thing is that I kept my annual lifestyle expenses at roughly the same throughout, even though my income rose through that period.
In other words, just because you earn more money, doesn't mean you have to consume it straight away.
@@uncountableuk you missed my point and I’m not wasting time explaining it. Good luck.
@@leonhenry4861 I agree that if you put away 50k a year, you will certainly become very wealthy.
However, most people are not in that position. But by investing the difference between income and expenditure over a couple of decades into index funds, it's perfectly possible to become financially independent.
The real secret is to not let your expenditure grow as much as your income does. That's in your own gift to manage
1998 to 2002 I paid into a works pension that was deferred when I was made redundant in 2002.I think I paid in about 2K.
Nothing else was ever contributed to it.
I am now 54 and have just rediscovered it.
It's value now 38K
Nice surprise
Take that as a win nice one Simon! There's so many ost pension pots out there people should always check.
I may have one I paid in to many years ago. I cannot even find a pay slip. You have inspired me to do some digging. I think I contributed to it for two years then forgot about it.
How do I find old pensions thanks
@@XORTION I write to the companies I used to work for Cornerstone (abbey national (Santander)) royal life estates now royal and sun alliance.
Index funds aren't about becoming a millionaire or billionaire, and gates, elon and all those other rich people got extremely lucky. Never mind the people who tried the same thing and failed.
True if you start with 999,990 and keep at it for about 8 years you should have just over an million dollars
???
Yet the likes of “our rich journey” claim the opposite…. You need 30 years of regular investing to become a millionaire with index funds, people are just gullible and too greedy. The truth is, if someone claim they are millionaires and feel the need to make TH-cam videos and sell courses to make extra money - they probably aren’t that rich
I have never heard from a serious site/video/book that saving $200 per month for 30 year is enough for a decent retirement. It could work (just) if you save for 45 years, but not for only 30 years. If you want to retire on the cheap, start saving as soon as your first job pays you any money. And don't buy that nice car on credit!
I'm hitting my 30s soon and I realize that I may have wasted the last 10 years when I could have comfortably invested 1000$ each month.
But it’s not too late to start, imagine what you can achieve in another 10 years from now!
Buffet, Gates, Bezos, and Zucc (and Musk) all have a history as entrepreneurs. Only Buffet was an investor outside his company, Bershire Hathaway, from early days. Buffet is the biggest index investing supporter for every-man type long term wealth (not billions). They are all also Americans, where the 401k often has an employer match on 3-6%, which changes some math. I don't know what is typical of a UK SIPP. The are loads of index fund normal job millionaires. It just takes time and consistency.
Hi Toby! Which platform woul you suggest if I simply want to put my savings into an index fund? I know you speak of vanguard on your channel and it seems simple enough. Do you recommend vanguard or would you suggest something different?
Theres lots of good options out there - firstly I'd make sure to use a stocks and shares ISA. And then I like platforms like Trading 212, Invest Engine and Vanguard themselves (even if they don't offer as many fund options).
I'm going to make a full video soon comparing all the platforms.- it all depends what you want and where you feel comfortable though thats really important.
Yes make sure its a stocks and shares ISA, you are not taxed on anything within it or payments coming out which is great. Hargreaves Lansdown is the big one in the UK. Fees are higher though to start but are capped so after a certain point the fees are similar to Vanguard, but you have to have quite a lot invested to get to that point. Also you have to pay about £11 to buy and sell ETFs on there. Customer service is excellent too if you phone or message them. You can buy most shares and ETFs on there. Vanguard is a very good option if you are starting out as the fees are good, there is a limited choice of ETFs so its not overwhelming and there are no fees to buy and sell ETFs as long as you dont mind waiting for a couple of days for the orders to go through. I've found Vanguard to be a bit better due to the limited choice (and lack of phone app) as there is less tendancy to keep messing around with what products you are invested in and just leave things alone.
Very honest video, unlike other u tube videos
Great video 😊
probably the best video you've ever done!
Wow thanks!
Investing £200 a month won't make you a millionaire. Investing £1000 a month will do.
Can't argue with that! :)
i set up a DD and don't check my account. what's the point?
Great way to invest, easier said than done though 👍👍👍
@@TobyNewbatt yep you need to take away the emotion out - which is why i dont check my portfolio as humans are emotional!
The thing is you have limited amount of time/attention and what are the alternatives are. So investing in funds in general is very low effort strategy. This enables you to make money elsewhere in that time. If you let's say actively trade stocks. You have 50k and beat the market by 2%. How much effort and stress is it to be better than average investor? Is it worth the 1k extra? The more money you have, the more it is important to be good at investing and less important to have a high income from activities.
You need to take into account dividends, one of the most significant factors in snowballing your investments.
For sure they matter when you reinvest them. They are not free money though 👍😁
This is sobering but good advice! Very useful information in this clip! 👏👏
To be fair, this is a very simplistic calculation, as typically your employer will contribute, and so will the government, and over your career, your income will hopefully increase, so the actual amount that you end up paying in over the years and decades will be considerably more.
Also retirement does not need to be a cliff edge, no reason why you cannot retire a bit early, then do a part time job to cover your expenses, and when the goverment pension starts paying out, take that into account. Also 30 years in this day and age, is a very short career. I would imagine most people would be looking at 35-40, if not more, and those last 5-10 years will make a hell of a difference, compound wise.
great video as every bud :)
What would be your advice when you reach the 1 million goal in terms of withdrawal such as isa and sipp or general account and does vanguard allow this
I’m 25 and just getting started !
It will sound boring...but make sure you max out any pension with your work, contribute as much as you can to your ISA every single month into low cost index funds, and keep doing that for decades..
As always great clear advise , you’ve certainly helped me rain it in a bit
:)
I like index funds, low stress. My general strategy is large holdings of low risk assets and small holdings of high risk assets. The only way to outperform regular buying of an index is to put the time in and understand charts and how to draw straight lines on them, but the index was created to keep things simple, so keep it simple and let time do the work.
Nah, eventually they all go up.
£880 a month isn't very much if you consider pre-tax salary sacrifice pensions and employer contributions. Net cost to you would be way less
Yep great point and someone else mentioned pension contributions too. It’s doable with some sacrifice! 👍👍👍
Dont forget inflation. It takes years just to make eaven now in stock market. Make your own business, there is real money.
It was a bitter pill to swallow, but it’s the ground reality… Thank you
Maybe stupid question but when calculating this how do you adjust for inflation?
I can’t remember if I did or not in the video usually I’ll say! But always a good reminder when people don’t account for it having $1m in 30 years won’t be anywhere near as exciting as it now!
Well am currently sat on £739,000
Hopefully you watched the whole video :). And brilliant news!
@TobyNewbatt I'll be honest I didn't watch it because of the title, I'll give it a watch
@@robertritchie7464 enjoy. I think you’ll like my conclusion. As with TH-cam the title and thumbnail don’t necessarily reflect my own views but something said by others or often assumed. 👍👍
Well if you do the same but start with 100k and do montly contributions you will end much higher.
So what would your advice be? what would be the best approach? Keep investing in index funds but also look into stocks as well?
If you are long term investor index funds are a great place to be, invest consistently over many years and you’ll do just fine. And if you like some stocks with a small part of your portfolio then go ahead that’s what I do 👍👍
Greta video Toby I've left a wealth management firm due to their insane fees to come across to vanguard. In hindsight not including inflation and an equity heavy 10% annual average return you should double your money every 7 years. I've learn't along the way diversify and on the 5 yearly or so crash go all in heavy 60% plus into the one sector thats dropped the hardest, let it bounce back up and diversify again while constantly investing. Make much more money this way.
I got the all world index fund - is that not a good move?
Nothing wrong with that all, it's a very wise move for full diversification and very good for long term investment in my opinion.
Pointless in my opinion because 60-70% of it will be the US market.
@@manishparmar7637 what's your advice ft250 index?
Finally someone being realistic about investing. Everyone thinks if you just put a pittance into VOO every month they'll be the next Warren Buffet.
Thanks! I want to still be optimistic and encourage people to invest but I wanted to show the reality and not the BS 👍👍👍
There's no law saying you have to hold, especially in a tax deferred account (ie no taxes on gains when you sell.) If something starts going down, you should be free to sell and get back in once it stabilizes. If more people did this, flash crashes might get worse but long term declines would probably be less of an issue (everyone sells off and then is looking for opportunities.)
How do you know when to get back in? This is exactly what timing the market is. The market can make irrational moves all the time and you cannot predict these moves, selling on the way down is exactly what causes retail to keep losing money 😎
I've only recently found your channel and videos and I really like your content and the way you do things. There's sime other channels that are "similar" for lack of a better word with still good content (and sometimes not) but I just don't really like the personality or way about the presenter. I really like your way and how you explain things and your ability to be light hearted but also to the point without having to make constantly (not very funny) jokes etc. Nice one 💪
Welcome aboard! Thanks so much
Great content Toby as usual. Have you still a platform review for 2023 on the way? With index fund investors, should we be looking to diversify the actual fund providers and ISA platforms. So splitting between Vanguard, Blackrock, HSBC etc with VUSA/IUSA VUKE/ISF etc. And then what about the platforms that have FSCS protection. Should we be looking to limit how much we hold on any one platform?
Got one coming soon Chris and great comment I’ll address this in the video
Cool, cheers. Will look out for that one! It would be so easy to just lump everything into Vanguard VUSA, VUKE, VMID, VWRL etc. But it seems sensible to look at others where they’re simple index tracking funds that are identical regardless of the provider.
@@TobyNewbatt You could look at the Hedged ETFs eg IGUS, IGWD at some point, its interesting to plot the hedged vs unhedged and Pound vs Dollar. I think they are quite a good thing to look at when the pound is doing badly ( Lizz Truss time for example ).
I'm planning on putting about 30k a year into the s&p 500 and when I do get pay raises I want to increase that to 60 or 80k a year
Very nice!
Thank you. If you actually do the maths involved investing in index finds like these rich influences are saying does not make you a millionaire. I don't know if they actually know this (they probably do) and what they're motives are, but they are giving false hope by promising tactics that don't work (and by the time people find out they will be 30 years older and have wasted their life).
Use index funds and then use other money for crypto
I have to say this video is quite alarming and compared to your other videos, seems misleading. It’s good to see some real data and examples of ROI, but it’s implying that index funds are a bad investment? I don’t think the comparison with Amazon helps (you did state the benefit of hindsight which is fair), but that stock did incredibly well, much like apple or Tesla. But what I think this video misses is that, yes investing a small (£200 small!) amount won’t make you a millionaire, but investing that amount will return you a potentially inflation and savings account return. My take from this video is that investing in index funds (via ETFs) is BAD, and you’ll waste your money. Please (please!) correct me if I’ve misunderstood this, as from watching you in the past and other videos as well, that index funds (via ETFs) are considered a safER investment that stocks and shares and that will, on average, give a good (not millionaire level) rate of return. I think that needs clarifying.
Hello! I hope you watched the whole video as this is very much in favour of investing in index funds. The purpose of the video is to show that investing will not make you rich, at least quickly, and that wealth is built slowly from investing money that is spare once you have covered all of your bills. I like to inspire talking points and critical thinking :)
@@TobyNewbatt yes I certainly did watch to end, maybe me but I didn’t quite get that message, but your answer here is reassuring. I’ve literally started investing in ETFs, specifically VUSA, ISF and VWRL (feedback appreciate!), with the intention of putting in regular amounts (that I hope will increase over time) in an ISA over the next 30+ years for retirement. Yes I’d love to retire with a million, but even if it ends up as a lump sum of £200,000 that’s still a massive win for me. I’ve enjoyed your other videos and they have helped me work out what’s best for me and how to research what to invest in, so thank you!
Finally! A relasitic look at the stock market and interest rates. Thanks for this breakdown.
Thanks Rav, just my style thanks for the support
why do you not become a Financial Advisor given you have a wealth of knowledge and experience and clearly it interests you significantly?
Two very different things Gary! I’d much prefer to help many people but have no interest in a professional qualification. Appreciate the comment nonetheless! 👍
I buy whatever is on sale. Index funds i DCA until it drops 15%+, then I add large chunks. I buy real estate rentals when I find good deals there and increase my index fund investing with the cashflow. $1.5m portfolio so far after 15 years
It’s worth contextualising it and pointing out the reality of investing
Yes indeed!
Awesome video! Can you share the tool you used to simulate the portfolios you showed?
Yeah sure Dom, here: www.portfoliovisualizer.com/ and then go to tools
Thank you finally someone admits it the S&P 500 won’t make you Rich it takes 80 years to even make any money
880 per month, sounds a lot, but once you start to use pensions and the tax relief they provide, and the amount you actually save drops dramatically, Basic rate tax payer would only need to pay in 704 a month, higher rate tax payer 528, split these between couples on the similar tax bands and its not that much per person, I know its not the point of the video and probably should be a follow up video but Pensions are the best tax wrapper for this kind of investment.
Great point this David! Really good one in fact.
@@TobyNewbatt I forgot about employer matching too another great advantage of employer pensions
Sorry to be thick but how does the pension / tax relief / employer matching relate to investing your own money (out of your take home salary) into index funds?
Personal contributions to a pension get tax relief. Basically if you out 80 in you get 100 in the pension, as the pension claims 20% tax relief for you. There's rules and regs about how much you can put in but that's the basic.
Excelente video!
I don't understand this mate. In another video you were suggesting that Vanguard FTSE All World ETF (VWRL) was the only find you need which is an indexed fund.
Hopefully you watched the whole video 😎. Listen carefully 👍
@@TobyNewbatt Thank you for the quick reply. It was my mistake as I just went by the caption. Apologies.
Just entering the 3rd year of proper investing (only token payments to savings previously) and so far so good. I realise markets can and will change so will just ride the emotional roller coaster.
Hang on for the long run and don't look down :)
Very simple... Index fund will give you 5/6% average growth per year.. if lucky the average can be 7/8% and I am talking the average of 30 years.. still huge in terms of compound growth... and defo beats inflation as well as interest rate...
So using the S&P500 index (the average) 1st Jan 1992 to 1st Jan 2022 investing at the end of the month (payday) and adjusted for inflation. It would come to 270k so don't know where your pulling your 200k from. Also the average salary in the US in 1992 was 25.9k so 200 pm is only 9% of your gross salary where your meant to put in at least 15% now if you take that into account and recalculate you get a figure of the end figure is 437k which still leave you with 10years of invest before retirement. Also 20 more years of retirement time. So when you do retire you will have a total figure of 1.37 million. That an easy 8k per month income.
The portfolio analyser I’m using takes the US total stock market not the S&P 500 so all the numbers are correct it’s just for an example of course 👍👍
@@TobyNewbatt So you're actively using a different index to spin a different narrative, never seen people say invest in anything others than the S&P500 when in comes to index funds.
Brilliant 😊
I can't afford to risk anything other than Index funds, If I only get 7% on average in the long term it'll be better than savings rates
You'll do better than the vast majority of people. 7% (on top of inflation) is the long term returns of the market and it's amazing what you can achieve over the long run. Keep it up.
Well done, mate. Much needed reality check. Thank you
No problem 👍
Even green energy index funds or disruptive index funds (not including ARK - LOL) ?
Maybe AI index...
Well I am guilty of owning the green energy fund in my HL account :P
@@TobyNewbatt to the moon! Hahahha
It won't if hunt decides to put a cap on the stock's and shares isa apparently that's something that's being talked about .
Try diversifying into bond and international funds and the returns get worse.
Do you need to fill in a w-8BEN form to invest in VHYL all world in a ISA or even the S&P 500.
I only hold uk idvidual stocks and FTSE 100 and 250. I want to diversify globally but don't really understand taxes involved.
Hi Joe the broker will tell you if you need to fill out the form. It will be straight forward if needed. To my knowledge though these ETFs don’t require it as you only need to do the forms of you are holding the US shares directly. All taxes are taken care of before you see them in the ETF in terms of dividend withholding. Seek help from your platform or broker to make sure 👍
I’ve just moved my sipp into VHYL and wasn’t asked to, if that helps. It’s help with Vanguard themselves, btw.
Still buying, every month for many years and still a few years away from realising the cash drawing things down. If you go in to investing for a short term and inconsistent funding of your investments, I feel you would be incredibly disappointed with what you saw.
What happens when you double the time to 40 years ?
I’ll have to check but it’s get very nice indeed with a whole decade!
What is the calculator he uses in the video
When you did the calculations which index are you working on ?
US Total Stock Market - according tot he portfolio visualizer.
@@TobyNewbatt well you would have good gains following the US markets but what would the figures be following the FTSE 100 ?
@@Whitelight77 no idea maybe a video for another day! I wouldn’t go all in UK stocks anyway that would be way too concentrated
I'm investigating between 1.5 and 2k per month
Hi Toby
I have watched yours and some other TH-camrs videos on investment plus reading articles , books at least for the last year .
I am 50.
I have invested 5k plus dribbled in what I can afford and I have done the same for my kids .
Could you do a video on some thing similar as I think this is a more realistic financial situation for most.
I have used ETFs,bonds, and shares etc. And give a 10year and so on estimaton as this would be interesting.
I know you are not a financial advisor and I have made my mind up on what I want to do but this would be a good idea as I have many friends with a similar financial situation.
Thanks.
Do it for your kids.
Two generations it’s twice as easy.
they are the future after all!
I like to think of total market etf’s as a median estimate of return with a median risk. Pure growth stocks have always done significantly better in a very long period, that has never been a secret. Some people may look at that £200 a month strategy and say ~3x your money over 30 yrs including inflation is plenty good enough. After all, there is no other investment vehicle in the world that can generate wealth that consistently for the average person.
Index funds im hoping will protect against inflation and low interest rates
In the long run we just have to build up those assets!
For all those wannabe millionaires/billionaires who want to make easy money in the markets, here’s some advice: there is no easy money. The more you chase it, the more you will lose. The way to make big money is to become educated and work hard. Yes WORK HARD. There are no short cuts. Yes, it is boring. Yes,it is stressful. Yes, it will take decades. Investing in the market is really nothing more than a way to try to preserve the wealth you have already made (through work) against the ravages of inflation and perhaps making a little more (not much more) on top. Investing in ultra low cost index trackers will beat costly actively managed funds 95% of the time over the long term. You may think you can spot the 5% but you can’t. All the videos, adverts and comments on TH-cam promising big money for little effort are BS, pure and simple. Do with this advice what you will. You’re welcome.
Great video, more people need the real truth behind long term investing.
Grateful bud! keep up the good work, halfway to 1k subs.
@@TobyNewbatt I appreciate that Toby, you're actually a huge part of my inspiration.
Ahh yes if you have a magic ball and pick the best performing stock of all time you beat index funds
That was not the point of the video, I hope you watched the whole way through :)
Did even Peter Lynch beat the market over the long run? Enjoyed 'One Up on Wall Street', but not sure how he did overall
He actually did extremely well, he beat the market by a long shot across his time managing the Magellan fund. BUT interestingly enough most of the investors didn't beat the market because they bought in and sold out at the wrong times, especially when he had bad years. Another reminder that we need to invest for the long run! Since he left they haven't done as well.
When markets and the macro are in clear trouble and over bought based on historic values of market why dont you just switch your fund into cash for example and let this play out? You dont have to watch your investment go down, when market reaches a fair value or start a to dip under that fair value as that's how it usual works then start switching your fund back to shares again in increments. I'm not saying do this often just during swings on the long term macro I think bear markers happen every 10 years or so and often there are lots of indicators that it's a probability before it happens.
You can try but its very hard to time the market, sometimes it goes up 6% in 2 days.
@@dunk8157 Yes I agree, I don't mean time the bottom but start buying in again at fair value, example right now the S&P is 70% over valued based on historic price to GDP. That's very high still, historically a bad time to buy, good time to sell.
@@frankjaeger393 True, I have done this sometimes when I think "wow things have gone up a lot recently, amybe I'll move some things into cash". But I have gradually stopped doing that as it takes a lot of time and energy to be on top of it. If you google time in the market vs timing the market there are quite a lot of studies done on this subject. The problem I have found and why I have gradually stopped doing this sort of thing is that I tend to be influenced by financial news and advice from traders in the media, they all tend to get caught up in whatever the latest trend is, eg US Market will crash, EM will do well, AI is the next big thing etc and then they turn out to be completely wrong and because I have followed the trend I've lost money. In your example the risk would be that the fair value calculation might not be accurate.
I do still buy small amounts of individual stocks when I think they are too cheap, eg airlines a while back, but they are small "bets" which are almost for fun.
You could set up a split portfolio where one is not traded and the other one is held steady and see how they compare over time.
If you have the time and energy you could make your idea work but like I say for me I have tried and found I'm just not able to dedicate enough time to it.
Very accurate. One needs to invest more than $200/mo to become wealthy. When I neared retirement, I also shift money to dividend paying stocks.
-Telęgrm app
Im about to start investing, im pleased you mentioned the 3% inflation. Ive been looking at calculators planning my millionaire retirement 😂
That can’t be right-it has a cagr of 28% but spx generally does something like 7%
It’s an inflation adjusted cagr it’s just the measure they use on this analyser 👍
Great video !! I’m currently investing in VUSA and VHYL. And holding them for 30 years. Atm investing £200 a month in the VUSA.
Please can you tell me if I’m doing the right thing ? As I’m hoping to have a nice pot of money for retirement and for my kids etc
Sounds solid enough to me! VHYL will hold a lot of the same names as VUSA but you won’t go far wrong over the very long term in my opinion! All about focussing on what you can put in now 👍👍
So I’m investing in the right things for like retirement and stuff like that ?
Is there anything else I can do to max my returns
@@Connormajka1999 hi mate, your own circumstances are personal so I can't tell you whats best. I'm not a professional sorry!
But all the basic concepts are true, invest for a very long time, do it consistently and keep your costs low.
New subscriber for you mate. Nice videos and delivered very well 👍🏻. All the best, continued success and hopefully all of us paupers can have enough money for some sort of quality of life when we’re 65 😅.
Welcome Joe! Ha let’s hope so mate!