Great video again Toby!! I'm celebrating a $3M Dividend portfolio today. I Started investing much time and money into this. I am also with the right Investment Advisor, who handles my portfolio and executes my trades. Now I have steady dividend income and time for my family as well ❤✅
Amazing! I have Liquid $100K to put into stocks, but I want to ensure good profits & safety. With tons of Advisors now, how did you find the right Investment Advisory?
I began my higher earning years in 2007 and kept piling what I could into the markets (mostly SP500 low cost mutual funds as ETFs weren't common yet) - I listened to the experts who said to keep at it over the long haul and the sums involved were low enough that I didn't mind the ride. Annual returns going back to then are 10.5%, which I'm happy with.
Hopefully I get a similar result to you! I’m in my ‘high earning years’ now and I’m also putting everything I can into the market hoping I can sit back and chill in 20+ years!
To give you an idea of how well you’ve done. One of my family members gave a large sum of money to a professional investor in 2009, who charged a 2% management fees. I did the math for him just a couple of weeks ago - 5.1% annualized return after fees. Not great especially it was a large sum of money
Diversification is the secret to optimal performance. This is why I have my interests set on market sectors based on performance and projected growth, such as the EV sector, renewable energy, Tech, and Health. Keep investing regularly and you'll be blown away how much it can change in a few short years. Here's to $1 million and to FIRE
If you don’t understand the markets, stick to an index like the S&P 500. Dollar cost average and hold long term, or better still consider financial advisory to avoid losses
Sometimes I'm surprised most people don't even know they can do that. I've been making at least 200k every year from my investments by working with an FA. When you realise it, it feels like a life hack.
Wow, that's interesting . I've recently been exploring the option of working with an FA too. Any chance you could recommend who you work with? in her area and works for Empower Financial
‘’Aileen Gertrude Tippy’’ is her name. She is regarded as a geniusl Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
I only save for short term goals like a new (but used) car. And of course keep my emergency fund in cash. Everything else goes to investments, however mostly going into pension right now
This is a timely video for me as I was debating whether to put more money into my cash ISA or stocks ISA. The cash ISA is currently looking very attractive (both with T212).
I'm sure you missed this out to keep the video simple but the fredo bar along with virtual all products did change. It got smaller which is another form of inflation which is known as shrinkflasion. So the true inflation is the price rise + the lost size from shrinking.
We managed to get 5% @West Brom building society on a 3 yr term in 2022 . Nets us €2500pa till next yr.were happy with this. Everything else in SP.500. Keep it simple 😁
It would be good if you could say a few words about tax reports - ease and clarity, from the main player sites 2-1-2, Invest Engine, etc. Tax reporting is a reality and you definitely need ease of access and real clarity in this minefield that is the UK tax system.
Minute 4.44 on UK aggregate or compound inflation. Where does the 37.8% come from? I got 23.9% Annual Inflation Rates in the UK: 2020: 0.85% 2021: 2.6% 2022: 9.1% 2023: 6.8% 2024: 3.0% (forecasted) The compound inflation rate over the four-year period (2020-2024) is approximately 23.9% 1. Convert each percentage into its decimal form: 2020: 0.85% → 1.0085 2021: 2.6% → 1.026 2022: 9.1% → 1.091 2023: 6.8% → 1.068 2024: 3.0% → 1.030 2. Multiply the adjusted rates: (1.0085) X (1.026) x (1.091) X (1.068) x (1.030) = 1.2394 3. Subtract 1 to get the compound inflation: 1.2394 - 1 = 0.2394 or 23.94%
Yeah this Toby chap makes lots of errors, he has a long way to go. Plus inflation affects everyone differently. Those in debt are usually more affected, apart from when money was cheaper and lots of institutions used it to inflate stocks. Hence why stocks have done well recently. But cheap money is gone so there will not be as much money floating into the stock market. The USA is also seeing downward projectery in houses, Florida particularly. Which 2007 also started in Florida. We all know what happened by 2008. Spread your bets and don't just hold one egg, being stocks.
Save or Invest…. Basically save is rubbish against inflation and investment is risky and you have to do it for decades 😂….brilliant! There are different strategies out there that work…Learn them instead….have a beautiful day x
Most of our cash rainy day savings are in an offset account against our mortgage. Mortgage interest is 3.13% fixed for a further 3 years. This made sense the last 20years. I can set the offset as reduced term or payment. Currently it saves me £100 a month on the mortgage payment. That £100 goes in to a LISA and is topped up by Gov 25% bonus. I’m worried about devaluing the offset cash with it not growing in line with inflation. Now I can get 5% in other savings accounts but I love the ease of access currently.
“Crazy black swan event where the world starts falling apart - unlikely to happen”. Iran & Isreal “Hold my beer”. 😖 Seriously Toby, your video needs to be shown in schools throughout the UK. Money education in the UK is shambolic and I wish I knew half of this 20 years ago. Excellent examples here. 👍
I dont save much. I just invest in my local untaxed dividend stocks and some US bluechips. Gonna add more spy etf for thr remainding of this year and next year.
Hi Toby, thanks for the great video! Just wanted to ask if I invest in Cash ISA (trading 212) could I make future investments for my children- like for example deposit for their house? Or do you think Junior ISA, which has a lower interest rate is the better way? Thank you
dont have much idear but i know investment is best stock in the short term look more likely to move downward. I Just inherited $500k which I Look forward to invest. what stocks should I look into as a newbie to safely grow my money?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
Many people minimise the importance of counsel until their own feelings become overwhelming. A few summers ago, following a protracted divorce, I needed a significant push to keep my firm solvent. I looked for licenced advisors and found someone with the highest qualifications. She has contributed to my reserve increasing from $275k to $850k despite inflation.
To be honest, I've been wary of banks for a while, but I wasn't sure how to speak with an advisor first. Please let me know who your adviser is if it's okay; I need some recommendations.
Stacy Lynn Staples a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Ive got 2 savings accounts (3 now just putting an emergency fun together) htb isa gets me £35 interest a month and a bonus saver getting me £44 a month i recently started interesting too put £1200 in down £31 atm was up then down just under £100 for abit but its going back up. Buying a house soon so will keep them in the savings account but going to buil up my investments over time been getting a few dividend payments ( just under £4 nothing big at all but hay its some.) Definitely in it for the long run with investing
Sounds a pretty solid plan. If you keep contributing to your investments, you'll be in pretty good shape in a couple of decades ... It's a long haul, but worth it!
Have you done / or can you do a video explaining IRR or specifically Vanguards 'Personal Rate of Return' %? and what it actually means? I kind of think its comparable to what interest rate an imaginary bank would have given me to equal the return with the same amount of investments on the same dates...or something??🤔
Forever is a long time to hold on to an individual stock. I definitely subscribe to buy and hold forever, but only the whole market, not individual stocks.
Good morning Toby, thanks for another well explained video on how inflation is important to consider. I wonder if you would do a video on gold as an investment? Thanks
with 2% interest rate (i'm from Europe so i have the ECB rate, which will likely to go down even more in the future) on my savings account, i feel like even if the market will go down for a year or so, in the long run investing will be better. VWCE DCA & chill
I will always choose investing. That’s just me personally. I find that money is constantly being diluted and depreciates over time. I’ve been meaning to ask, where did you get that stocks and shares diplay??
@@kw8757sorry! I’ve become that guy. Man I hate that guy. The one who asks “what’s the titles of the song” or “what movie is this” without looking at the description. Sorry guys
Yes 5% guaranteed is attractive as a way to park some cash at the moment if your worried about market volatility . I use a Royal London short term money market fund for this.
@@TobyNewbatt Yes, I really like the way that everyday you see a positive gain no matter what the markets are doing, with quick access when you decide its time to invest back in. I recently transferred my pension from Legal and General to Interactive Investor and fees went down from over 3k per year to £156 annual charges, but I did not want to go all in with a lump sum at there start so the money market fund has been a great place to park some cash for now.
In 2022, I moved all the bond element of my pf into fixed term cash deposits earning 5-6% ranging from 2-5 years. As they’ve started to mature, I’ve put the proceeds into various Royal London funds…STMMF, Fixed Interest and Fixed Interest Enhanced. Debating whether to go partly back into bonds but haven’t yet
Epic content as always, broken down nicely with the key stats. And keeping in theme with DCA approach to investing, and a balance between savings and investments. And rather timely as my 8% interest flex savings account with Nationwide is reaching its anniversary. Being a renter I'm somewhat insulated and not worrying about mortgage rates, but seeing the 38% aggregated inflation number is scary. My partner and I used to spend about £50-£55 on our food shop, it's now £70-£75 for pretty much the same items at Aldi
As an investment enthusiast, I often wonder how top level investors are able to become financially stable, I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make over $400k like some people are this season.
I believe the safest approach is to diversify investments especially under professional; guide. You can mitigate the effects of a market meltdown by diversifying their investments across different asset classes such as stocks, ETFs etc It is important to seek the advice of an expert.
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal port-folio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my port-folio this red season. I’ve made over $350k since then
My CFA ‘Grace Adams Cook’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Great video. Would like to hear yours and others thoughts on LISAs. Specifically cash LISAs, which I view as a 25% return with the gov bonus on up to £4k (so £1k bonus), plus then the interest. Although not inflation beating, it is a guaranteed return and the best returns non-homeowners will surely ever get right? Then perhaps using a s&s ISA for investing the remaining £16k allowance per year. This may vary for different people's plans for home buying etc., which could change within a couple of years if someone meets a partner, so an s&s LISA seems not worth the risk to me personally.
Yeah well he might seem calm but I've him target me with CAPITAL letter barraged just because I sent a math percentage conundrum. Pointing out that losses are harder to recover from as the percentage is higher. His mates also got involved. This was only last week. I just laughed it off. Only investing in the stock market is putting all your eggs in one basket. All markets change whether it be stocks, property bonds antiques. Gold, commoditys. Spread your bets.
I have access to credit which would cover me for a year in an emergency. I also have a paid off house to use as security if things go completely wrong. To balance this, I keep cash value of a year's emergency fund in MMFs. Everything else gets invested. It's slightly higher risk since all of my liquid capital is at risk, but it suits me.
@@ChrisShawUK The credit line is my true emergency fund. The cash is my (mostly) risk-free section of my portfolio. I don't want to be fully exposed to equities and other risky securities.
@@ChrisShawUK I keep my cash a bit like an imprest account. I do my monthly spending on 0% credit and keep the balance plus emergency fund in cash. After minimum payments are taken to cover the 0% card at the end of the month, I top up the difference from income. The rest of my income goes straight to my investment account. When my promotional 0% rate ends, I clear the card and get a new one (still leaving me my full emergency fund in cash, just in case I'm not allowed a new 0% for any reason).
@@OldQueer got it. So you're effectively earning interest on your monthly spend above the minimum amount, and you don't have to pay back the credit balance for a year?
Great video as usual Toby & I'm really grateful to you & your efforts. You're actually the reason I started investing in trading 212. I do have a question for you, if you'd be so kind as to help me with it. I currently have some money invested in the stocks ISA (currently all with the s&p 500), which I invested in approximately 4 months ago . Is there a way I can work out what sort of return on dividends I'll be likely to have in return for my investment, over the year? The s&p500 I have is where the dividends are automatically reinvested. I hope this makes sense. Many thanks in advance & keep up the good work ☺️
Here's a good way to compare if you want to see the effect of dividends being reinvested. Go to google and run the chart for VUSA vs VUAG VUAG you will see a larger increase as this reinvests the dividends and that is the difference. If you want to get granular then you need to find a source for total returns for your fund and compare it to the same fund with dividends getting paid - there's no magic easy way :)
"Is there a way I can work out what sort of return on dividends " Is it a S&P 500 index fund ? Then they should publish their estimated return on the fund fact sheet. If you have individual shares in the US stock market, then I look at the company web page, where they usually have an income calculator which you can use. But if you have individual shares in the US, remember you may be stung by the US withholding tax measures, which are something like 20%. Unless you've completed a w8ben form, and lodged it with your broker. then they only withhold 10% or thereabouts. Anyway, once you know what your going to get in income, your rough and ready percent calculation is; your annual expected income divided by the value of your investment multiplied by one hundred. As it's a US investment, you also need to factor the exchange rate into your calculation.
I feel you did cherry pick a bit not so much in timescales but choosing the S&P500. Had you chosen the FTSE100 instead (which many pensions are invested in) you'd see a much worse outcome than saving. FTSE100 has not really grown since 2000.
You can pick a global market if you like and the outcome is still the same :) - there's just more data for the S&P 500 available. If you look at total return the FTSE 100 hasn't done worse than saving - don't forget about dividends :) Since 2000 the FTSE 100 has done almost 200% in total returns :)
Nice concice content ! The other form of "savings or should that be "investing "no gambling I think is the correct classification are PB s !But as Clint said "do you feel lucky punk "!! Nice work good chocolate 🍫 choice !!!
Will never happen. Our system is built upon people being in debt for longer and longer periods of time. Banks just announced mortgages for six times earnings and 40 year terms will be common shorty.
That's a tough one - personally I'd rather stick with VUSA in GBP as then I can let the fund take care of any exchange fees on a much larger scale. There is no way to know what will perform better - I just checked on google finance: Max chart VUSA has done 403% SPY5 has done 305% But last 5 years VUSA has done 78% SPY5 has done 94% Exchange rates could work out for or against you so I personally just DCA and don't try and hedge. there are much bigger issues to focus on IMO :)
I'm 52 and have £20k in the bank and £10k in a S&S ISA. My issue is I don't have an income and feel uncomfortable about adding more to the ISA in case I need the cash.
One day at school I went to the shop to get 20p worth of penny sweets and was shocked when I only got 10 back! It was a dark day, my friends. Life did me out of 10 pink foam shrimps and I'm still not over it 😂😂🫠 Rememeber when a 99 was actually 99p? Daylight robbery now. 🍦
Does your country not tax interest rates from banks? My country tax it base on your income tax bracket which makes the 5% look more like 3.5% not factoring that inflation exist making savings feel like losing money in general
The UK has allowances for interest, which are not taxed. Without going into every detail, the lowest allowance is £5,000 for people earning under £12,570. For most people, they will get a £1,000 allowance. Anything over the allowance is taxed as income.
So for 10 years savings rates beat investing in a global index… 2000-2010…. Are we at the end of a 14 yr bull run of the stock markets and maybe index and chill might not pay off for a long time…. Just a thought that diversifying investments from a global index, albeit higher risk, maybe required for a few years?? Thoughts
S&P 500, past performance is no guarantee of future performance. "... the thing all of us have to battle against is inflation ... " One of the assets investors might consider is precious metals, gold and silver. As an example, the face value of the British sovereign coin, which is legal tender, and was a coin in circulation until about 1914, is £1 but if you try to buy one today, it'll set you back about £490. So if you'd acquired a Sovereign coin in 1914 ( Yea I know ) it would have given you a return over the century, if my arithmetic is correct, of forty nine thousand ( it's actually the fiat currency depreciation you are measuring). I guess the question is, do you think the government ( any government ) is likely to stop it's money printing and currency debasement any time in the near future? If your answer is no, then despite the price of Gold being at all time highs. It may still be a good investment for ten or twenty years in the future.
Thats right - nothing is guaranteed except the loss in value of your cash if you do nothing :) - so I prefer to own assets that produce cash flows at their market cap weights which benefit from inflationary pressure.
Your Freddos are 30p?! Around here they are consistently 25p - I get offers from the coop for ‘25p off cadburys products’ and I go pick up a free freddo
Another great vid, thanks Toby. I've been thinking a lot about my investments in the S&P 500 and worrying about the potential negative impact of the enormous (and constantly growing) USA national debt - would be interesting for you to do a deep-dive on this subject
I switched from S&P500 to a global fund. The magnificent 7 make up 35% of the S&P500 vs 20% with a global. I prefer more diversification rather than focusing on the most potential gains.
Great video Toby 👍 I'm personally a bit dubious that these high S&P500 returns from the past 20 years or so are sustainable, but they are almost certainly better than savings for long-term growth - let's see
I'd certainly be a lot more conservative on the next few decades! But like you say I'd rather be invested in cash flow producing assets like stocks than hold cash and pretend I know the tops of the market.
Good question, same boat here but I started investing anyway ( just before that horrid 2022 crash 😂 ) I decided to plan it out ie, Have a year or 2 expenses in cash savings easy ISH access, then aim for another 3 to 5 in lower risk investing IE bonds, anything after that will go into sp500 or vwrl as it won't be needed for a good 8 years. Once that is in place you have wiggle room , If you need cash and investment is doing well spend that, if not then spend from the emergency fund,nif things are really bad for a long time and the emergency fund runs out spend from the bonds, Chances of running out of bonds before stocks recover is slim but if that does happen either sell some investments at a loss or get a part time job side hustle etc to get through .. No one really talks about our age group, they just assume it's only the young that needs help. Good luck.
Am I missing something? Previous crashes weren't predicted, but this one is. Literally, everyone is banging on about. So if the crash is inevitable, why not just withdraw all your money now, at the top of the market, and put it all back in the day after the crash???
@@dazzadwm great question…and the answer is nobody knows when a crash is coming but there are always people predicting it. If it was that easy everyone would do it! You are not missing anything. There will always be grifters and conmen who will claim to know the future 😇
Hey Toby, quick question, I’m planning on opening a Vanguard SIPP and adding an Index Fund U.S. Equity Index Fund (VUSEIDA with Vanguard ETF’s with a view to reduce costs. Do you know if this is possible or does it have to be either all ETF’s or all Index funds in a Vanguard SIPP?
If you use Vanguards own SIPP then you can only choose from Vanguard mutual funds and ETFs - completely up to you how you choose them - just remember that with ETFs you cannot buy these in fractions on Vanguards site so you may end up with change every time you buy.
Money is hard to come by. The fact that I could lose all my money or some of it when investing is a big no no for me. Why can’t they make it in such a way that I won’t have to lose a penny of my capital but rather the interest if any😂😂😂
you only 'lose' money with investing if you sell - whatever happens you are an investor whether you know it or not :) - all of your work pensions are invested and you invest every time you get paid even if you dont realise it :)
There aren't two different types of money. It's all capital. If you have £1000 and get 5% interest, the next year your total capital is £1050. It's impossible to "lose all your money" if you invest in an index fund. That's the same thing as saying "the top 100 companies are worth zero". Which is the same thing as saying all companies are worth zero. In which case, the world is so very different from today, none of this matters.
It's pretty horrible - even worse is how some parts of the media get angry about wage increases when they are nothing of the kind. Public sector workers have been losing money in real terms for the last decade and more
If saving was the answer, why are so many people still struggling financially? Investing might be risky, but isn't that where the real growth happens? 📈🤔
You can't save if you aren't being paid enough and you cant invest if you cant save. Unfortunately I can't solve that first part, you have to earn more if you want to save or invest. If wages aren't keeping up with inflation and the cost of living that's a whole different problem which governments need to sort out
Your goal should be to maintain your % ownership of the network. If you own 10% of Tesla stock then keep that forever. If you own 10% of all the £££ then keep that forever. The problem is they will print more £ than what the savings/bonds will offer. Thats why you should buy Bitcoin. If you own 10% of all Bitcoin then you will own 10% for the next 1000 years without doing anything. You cant say that for any other asset.
@@timg1246 I have a idea. $1,000,000 by 2030. $10,000,000 by 2040. Just assume the % of money it will take from other assets and the devaluation of fiat currencies over that period.
Great video again Toby!! I'm celebrating a $3M Dividend portfolio today. I Started investing much time and money into this. I am also with the right Investment Advisor, who handles my portfolio and executes my trades. Now I have steady dividend income and time for my family as well
❤✅
Amazing! I have Liquid $100K to put into stocks, but I want to ensure good profits & safety. With tons of Advisors now, how did you find the right Investment Advisory?
Sincerely speaking i work with Essmildaa Morgan , and will continue to buy and trade. I will stick to her guides for as long as it works.
Thanks, Looked her up, I can see her profile here on the web, will send her a well articulated mail. I hope she finds time in her schedule to help me
out of curiosity I had to do a research about Essmildaa Morgan. she has a great resume
Holy Smokes, congratulations. Investing can be complex, it's so smart to get professional guidance when building a financial portfolio.
I began my higher earning years in 2007 and kept piling what I could into the markets (mostly SP500 low cost mutual funds as ETFs weren't common yet) - I listened to the experts who said to keep at it over the long haul and the sums involved were low enough that I didn't mind the ride. Annual returns going back to then are 10.5%, which I'm happy with.
Amazing returns - especially well done considering that was during a tough time in the market - you could have sold out plenty of times!
Hoping for this type of scenario myself !
Hopefully I get a similar result to you! I’m in my ‘high earning years’ now and I’m also putting everything I can into the market hoping I can sit back and chill in 20+ years!
To give you an idea of how well you’ve done. One of my family members gave a large sum of money to a professional investor in 2009, who charged a 2% management fees. I did the math for him just a couple of weeks ago - 5.1% annualized return after fees. Not great especially it was a large sum of money
Everyones investing in stocks but the people in the know just buy freddos and keep them 10 years and sell them at over 200% profit 😃
😂😂😂😂😂
The Economist uses a Big Mac Index to measure Purchasing Power Parity across countries - maybe Toby can do the same with Freddos 😀
😅😅😅😅
10 year old freddo
😂😂😂 Damn, I missed out on
It’s all a balance. Saving and investing is not binary. Do a bit of everything.
Diversification is the secret to optimal performance. This is why I have my interests set on market sectors based on performance and projected growth, such as the EV sector, renewable energy, Tech, and Health. Keep investing regularly and you'll be blown away how much it can change in a few short years. Here's to $1 million and to FIRE
If you don’t understand the markets, stick to an index like the S&P 500. Dollar cost average and hold long term, or better still consider financial advisory to avoid losses
Sometimes I'm surprised most people don't even know they can do that. I've been making at least 200k every year from my investments by working with an FA. When you realise it, it feels like a life hack.
Wow, that's interesting . I've recently been exploring the option of working with an FA too. Any chance you could recommend who you work with? in her area and works for Empower Financial
‘’Aileen Gertrude Tippy’’ is her name. She is regarded as a geniusl Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.
I only save for short term goals like a new (but used) car. And of course keep my emergency fund in cash.
Everything else goes to investments, however mostly going into pension right now
Saving is deferred consumption. Investing is for wealth accumulation.
You just have to pick which you want.
Save then invest
Great content as always Toby, thanks! Good to listen to with a morning coffee ☕😊
Enjoy :)
This is a timely video for me as I was debating whether to put more money into my cash ISA or stocks ISA. The cash ISA is currently looking very attractive (both with T212).
I'm sure you missed this out to keep the video simple but the fredo bar along with virtual all products did change. It got smaller which is another form of inflation which is known as shrinkflasion. So the true inflation is the price rise + the lost size from shrinking.
Yes that’s also true indeed.
We managed to get 5% @West Brom building society on a 3 yr term in 2022 .
Nets us €2500pa till next yr.were happy with this.
Everything else in SP.500.
Keep it simple 😁
Good explanation of the effects of inflation !
It would be good if you could say a few words about tax reports - ease and clarity, from the main player sites 2-1-2, Invest Engine, etc. Tax reporting is a reality and you definitely need ease of access and real clarity in this minefield that is the UK tax system.
Yes good point and this is useful if you are investing outside of an ISA - most people should however be investing inside ISA/ SIPP accounts :)
Minute 4.44 on UK aggregate or compound inflation.
Where does the 37.8% come from? I got 23.9%
Annual Inflation Rates in the UK:
2020: 0.85%
2021: 2.6%
2022: 9.1%
2023: 6.8%
2024: 3.0% (forecasted)
The compound inflation rate over the four-year period (2020-2024) is approximately 23.9%
1. Convert each percentage into its decimal form:
2020: 0.85% → 1.0085
2021: 2.6% → 1.026
2022: 9.1% → 1.091
2023: 6.8% → 1.068
2024: 3.0% → 1.030
2. Multiply the adjusted rates:
(1.0085) X (1.026) x (1.091) X (1.068) x (1.030) = 1.2394
3. Subtract 1 to get the compound inflation:
1.2394 - 1 = 0.2394 or 23.94%
Truflation uses their own methodology to reflect what they think is a better representation of real inflation 👍
Yeah this Toby chap makes lots of errors, he has a long way to go. Plus inflation affects everyone differently. Those in debt are usually more affected, apart from when money was cheaper and lots of institutions used it to inflate stocks. Hence why stocks have done well recently. But cheap money is gone so there will not be as much money floating into the stock market. The USA is also seeing downward projectery in houses, Florida particularly. Which 2007 also started in Florida. We all know what happened by 2008. Spread your bets and don't just hold one egg, being stocks.
Save or Invest…. Basically save is rubbish against inflation and investment is risky and you have to do it for decades 😂….brilliant!
There are different strategies out there that work…Learn them instead….have a beautiful day x
Most of our cash rainy day savings are in an offset account against our mortgage. Mortgage interest is 3.13% fixed for a further 3 years. This made sense the last 20years. I can set the offset as reduced term or payment. Currently it saves me £100 a month on the mortgage payment. That £100 goes in to a LISA and is topped up by Gov 25% bonus.
I’m worried about devaluing the offset cash with it not growing in line with inflation.
Now I can get 5% in other savings accounts but I love the ease of access currently.
Often it comes down to do you have to pay tax on that interest, if so then offsetting works really well.
“Crazy black swan event where the world starts falling apart - unlikely to happen”.
Iran & Isreal “Hold my beer”. 😖
Seriously Toby, your video needs to be shown in schools throughout the UK. Money education in the UK is shambolic and I wish I knew half of this 20 years ago. Excellent examples here. 👍
Thank you - we've all got a lot of work to do :)
Whilst I’m still working and not spending as much, I’m paying off mortgages, despite the fact they are
I dont save much. I just invest in my local untaxed dividend stocks and some US bluechips. Gonna add more spy etf for thr remainding of this year and next year.
Hi Toby, thanks for the great video! Just wanted to ask if I invest in Cash ISA (trading 212) could I make future investments for my children- like for example deposit for their house? Or do you think Junior ISA, which has a lower interest rate is the better way? Thank you
dont have much idear but i know investment is best stock in the short term look more likely to move downward. I Just inherited $500k which I Look forward to invest. what stocks should I look into as a newbie to safely grow my money?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
Many people minimise the importance of counsel until their own feelings become overwhelming. A few summers ago, following a protracted divorce, I needed a significant push to keep my firm solvent. I looked for licenced advisors and found someone with the highest qualifications. She has contributed to my reserve increasing from $275k to $850k despite inflation.
To be honest, I've been wary of banks for a while, but I wasn't sure how to speak with an advisor first. Please let me know who your adviser is if it's okay; I need some recommendations.
Stacy Lynn Staples a highly respected figure in her field. I suggest delving deeper into her credentials, as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
Ive got 2 savings accounts (3 now just putting an emergency fun together) htb isa gets me £35 interest a month and a bonus saver getting me £44 a month i recently started interesting too put £1200 in down £31 atm was up then down just under £100 for abit but its going back up. Buying a house soon so will keep them in the savings account but going to buil up my investments over time been getting a few dividend payments ( just under £4 nothing big at all but hay its some.) Definitely in it for the long run with investing
Sounds a pretty solid plan. If you keep contributing to your investments, you'll be in pretty good shape in a couple of decades ... It's a long haul, but worth it!
Have you done / or can you do a video explaining IRR or specifically Vanguards 'Personal Rate of Return' %? and what it actually means? I kind of think its comparable to what interest rate an imaginary bank would have given me to equal the return with the same amount of investments on the same dates...or something??🤔
I buy dividend stocks and hold them forever
Forever is a long time to hold on to an individual stock.
I definitely subscribe to buy and hold forever, but only the whole market, not individual stocks.
@@ChrisShawUK I agree! You never know which companies are going to be around in the next 20 years, we've seen giants fail in the past
Good morning Toby, thanks for another well explained video on how inflation is important to consider. I wonder if you would do a video on gold as an investment? Thanks
Maybe a good idea for the future - I did one a very long time ago that could be worth updating :)
with 2% interest rate (i'm from Europe so i have the ECB rate, which will likely to go down even more in the future) on my savings account, i feel like even if the market will go down for a year or so, in the long run investing will be better. VWCE DCA & chill
Great subject toby and eloquently explained 👍
Cheers Lenny :)
I will always choose investing.
That’s just me personally. I find that money is constantly being diluted and depreciates over time.
I’ve been meaning to ask, where did you get that stocks and shares diplay??
Link in the description for the ticker display, someone asks every video 👍
beat me to it!
@@kw8757sorry! I’ve become that guy. Man I hate that guy.
The one who asks “what’s the titles of the song” or “what movie is this” without looking at the description.
Sorry guys
Yes 5% guaranteed is attractive as a way to park some cash at the moment if your worried about market volatility . I use a Royal London short term money market fund for this.
Definitely nice for some short term uses - big fan of money market funds :)
@@TobyNewbatt Yes, I really like the way that everyday you see a positive gain no matter what the markets are doing, with quick access when you decide its time to invest back in. I recently transferred my pension from Legal and General to Interactive Investor and fees went down from over 3k per year to £156 annual charges, but I did not want to go all in with a lump sum at there start so the money market fund has been a great place to park some cash for now.
@@TobyNewbatt my emergency fund/ spare cash sits in my 212 investing account making 5%. rest is in my maxxed out S&S ISA
In 2022, I moved all the bond element of my pf into fixed term cash deposits earning 5-6% ranging from 2-5 years. As they’ve started to mature, I’ve put the proceeds into various Royal London funds…STMMF, Fixed Interest and Fixed Interest Enhanced. Debating whether to go partly back into bonds but haven’t yet
@@mikew5274 meanwhile im up 28% in that time with the s&p 500
Epic content as always, broken down nicely with the key stats. And keeping in theme with DCA approach to investing, and a balance between savings and investments. And rather timely as my 8% interest flex savings account with Nationwide is reaching its anniversary. Being a renter I'm somewhat insulated and not worrying about mortgage rates, but seeing the 38% aggregated inflation number is scary. My partner and I used to spend about £50-£55 on our food shop, it's now £70-£75 for pretty much the same items at Aldi
As an investment enthusiast, I often wonder how top level investors are able to become financially stable, I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make over $400k like some people are this season.
I believe the safest approach is to diversify investments especially under professional; guide. You can mitigate the effects of a market meltdown by diversifying their investments across different asset classes such as stocks, ETFs etc It is important to seek the advice of an expert.
On the contrary, even if you’re not skilled, it is still possible to hire one. I am a project manager and my personal port-folio of approximately $750k took a big hit in April due to the crash. I quickly got in touch with a financial-planner that devised a defensive strategy to protect and profit from my port-folio this red season. I’ve made over $350k since then
That does make a lot of sense, unlike us, you seem to have the Market figured out. Who is this financial planner?
My CFA ‘Grace Adams Cook’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Just ran an online search on her name and came across her website; pretty well educated. thank you for sharing.
Great video. Would like to hear yours and others thoughts on LISAs. Specifically cash LISAs, which I view as a 25% return with the gov bonus on up to £4k (so £1k bonus), plus then the interest. Although not inflation beating, it is a guaranteed return and the best returns non-homeowners will surely ever get right? Then perhaps using a s&s ISA for investing the remaining £16k allowance per year. This may vary for different people's plans for home buying etc., which could change within a couple of years if someone meets a partner, so an s&s LISA seems not worth the risk to me personally.
Great for saving for a house and a pretty good way to get a tax free pension too!
Hi Toby, thanks for a great video as always.
Another good vid from toby there’s a reason why his subs are on the up. Calm, solid guidance
Yeah well he might seem calm but I've him target me with CAPITAL letter barraged just because I sent a math percentage conundrum. Pointing out that losses are harder to recover from as the percentage is higher. His mates also got involved. This was only last week. I just laughed it off. Only investing in the stock market is putting all your eggs in one basket. All markets change whether it be stocks, property bonds antiques. Gold, commoditys. Spread your bets.
John I love you, hope you have a great weekend.
I have access to credit which would cover me for a year in an emergency. I also have a paid off house to use as security if things go completely wrong.
To balance this, I keep cash value of a year's emergency fund in MMFs. Everything else gets invested. It's slightly higher risk since all of my liquid capital is at risk, but it suits me.
Why do you have both a credit line and a cash fund for emergency?
@@ChrisShawUK The credit line is my true emergency fund. The cash is my (mostly) risk-free section of my portfolio. I don't want to be fully exposed to equities and other risky securities.
@@OldQueer oh, I see. If you have to dip into the emergency credit, do you pay it back from income to keep the cash funds intact?
@@ChrisShawUK I keep my cash a bit like an imprest account. I do my monthly spending on 0% credit and keep the balance plus emergency fund in cash. After minimum payments are taken to cover the 0% card at the end of the month, I top up the difference from income. The rest of my income goes straight to my investment account.
When my promotional 0% rate ends, I clear the card and get a new one (still leaving me my full emergency fund in cash, just in case I'm not allowed a new 0% for any reason).
@@OldQueer got it. So you're effectively earning interest on your monthly spend above the minimum amount, and you don't have to pay back the credit balance for a year?
Great video as usual Toby & I'm really grateful to you & your efforts. You're actually the reason I started investing in trading 212.
I do have a question for you, if you'd be so kind as to help me with it.
I currently have some money invested in the stocks ISA (currently all with the s&p 500), which I invested in approximately 4 months ago .
Is there a way I can work out what sort of return on dividends I'll be likely to have in return for my investment, over the year?
The s&p500 I have is where the dividends are automatically reinvested.
I hope this makes sense.
Many thanks in advance & keep up the good work ☺️
Here's a good way to compare if you want to see the effect of dividends being reinvested.
Go to google and run the chart for VUSA vs VUAG
VUAG you will see a larger increase as this reinvests the dividends and that is the difference.
If you want to get granular then you need to find a source for total returns for your fund and compare it to the same fund with dividends getting paid - there's no magic easy way :)
"Is there a way I can work out what sort of return on dividends "
Is it a S&P 500 index fund ? Then they should publish their estimated return on the fund fact sheet. If you have individual shares in the US stock market, then I look at the company web page, where they usually have an income calculator which you can use. But if you have individual shares in the US, remember you may be stung by the US withholding tax measures, which are something like 20%. Unless you've completed a w8ben form, and lodged it with your broker. then they only withhold 10% or thereabouts.
Anyway, once you know what your going to get in income, your rough and ready percent calculation is; your annual expected income divided by the value of your investment multiplied by one hundred. As it's a US investment, you also need to factor the exchange rate into your calculation.
I feel you did cherry pick a bit not so much in timescales but choosing the S&P500. Had you chosen the FTSE100 instead (which many pensions are invested in) you'd see a much worse outcome than saving. FTSE100 has not really grown since 2000.
You can pick a global market if you like and the outcome is still the same :) - there's just more data for the S&P 500 available.
If you look at total return the FTSE 100 hasn't done worse than saving - don't forget about dividends :)
Since 2000 the FTSE 100 has done almost 200% in total returns :)
Nice concice content !
The other form of "savings or should that be "investing "no gambling I think is the correct classification are PB s !But as Clint said "do you feel lucky punk "!!
Nice work good chocolate 🍫 choice !!!
Great video/ I’m about to do both
Good advice . Needs teaching in school.
Will never happen.
Our system is built upon people being in debt for longer and longer periods of time.
Banks just announced mortgages for six times earnings and 40 year terms will be common shorty.
Nice one T
Can't beat the freddo index
My morgage is 1.55% on 20 years. It was the best i could do
wow!
Always a great video Toby.
Thanks 👍
Morning mate, love your content
Thanks Richard! :)
Great video 😊
Do you think it's better to invest say 10k in VUSA at 0.07 TER or SPY5 at 0.03 TER but pay the exchange fee?
That's a tough one - personally I'd rather stick with VUSA in GBP as then I can let the fund take care of any exchange fees on a much larger scale.
There is no way to know what will perform better - I just checked on google finance:
Max chart
VUSA has done 403%
SPY5 has done 305%
But last 5 years
VUSA has done 78%
SPY5 has done 94%
Exchange rates could work out for or against you so I personally just DCA and don't try and hedge. there are much bigger issues to focus on IMO :)
@@TobyNewbatt Confirmed my thinking, thanks Toby, that's the plan. DCA rather than large lump sum
Why is the price of VUAG slightly different on Trading 212 than what it is on Vanguard? Should i just stick with vanguard?
It's probably live price on T212 and not updated live on Vanguard that's all :) - Vanguard do all their orders once a day unless you pay extra :)
@@TobyNewbattthanks!
In addition to inflation, we’ve to consider taxes!
Absolutely - which is why it's so important to use tax free saving and investing accounts :)
I'm 52 and have £20k in the bank and £10k in a S&S ISA. My issue is I don't have an income and feel uncomfortable about adding more to the ISA in case I need the cash.
£30k isn't a lot, why no income?
@@NewPoet-r4e Not working and unable to claim benefits.
One day at school I went to the shop to get 20p worth of penny sweets and was shocked when I only got 10 back!
It was a dark day, my friends. Life did me out of 10 pink foam shrimps and I'm still not over it 😂😂🫠
Rememeber when a 99 was actually 99p? Daylight robbery now. 🍦
Does your country not tax interest rates from banks? My country tax it base on your income tax bracket which makes the 5% look more like 3.5% not factoring that inflation exist making savings feel like losing money in general
The UK has allowances for interest, which are not taxed. Without going into every detail, the lowest allowance is £5,000 for people earning under £12,570. For most people, they will get a £1,000 allowance.
Anything over the allowance is taxed as income.
So for 10 years savings rates beat investing in a global index… 2000-2010…. Are we at the end of a 14 yr bull run of the stock markets and maybe index and chill might not pay off for a long time….
Just a thought that diversifying investments from a global index, albeit higher risk, maybe required for a few years??
Thoughts
If you have money in UK besides savings acc where else is a safe place if you a 62 year old as an foreigner
As long as you are resident in the UK, you can open an ISA. It doesn't depend on citizenship.
S&P 500, past performance is no guarantee of future performance.
"... the thing all of us have to battle against is inflation ... "
One of the assets investors might consider is precious metals, gold and silver. As an example, the face value of the British sovereign coin, which is legal tender, and was a coin in circulation until about 1914, is £1 but if you try to buy one today, it'll set you back about £490. So if you'd acquired a Sovereign coin in 1914 ( Yea I know ) it would have given you a return over the century, if my arithmetic is correct, of forty nine thousand ( it's actually the fiat currency depreciation you are measuring). I guess the question is, do you think the government ( any government ) is likely to stop it's money printing and currency debasement any time in the near future? If your answer is no, then despite the price of Gold being at all time highs. It may still be a good investment for ten or twenty years in the future.
Thats right - nothing is guaranteed except the loss in value of your cash if you do nothing :) - so I prefer to own assets that produce cash flows at their market cap weights which benefit from inflationary pressure.
Your Freddos are 30p?! Around here they are consistently 25p - I get offers from the coop for ‘25p off cadburys products’ and I go pick up a free freddo
Can you get me some please :P
Another great vid, thanks Toby. I've been thinking a lot about my investments in the S&P 500 and worrying about the potential negative impact of the enormous (and constantly growing) USA national debt - would be interesting for you to do a deep-dive on this subject
I switched from S&P500 to a global fund. The magnificent 7 make up 35% of the S&P500 vs 20% with a global. I prefer more diversification rather than focusing on the most potential gains.
@carlyndolphin I did precisely the same
Is it simple to transfer funds in vanguard?
@@meinages I use Vanguard and IG
Is it easy to transfer fund on vanguard. Thinking maybe changing my s&p 500 to an global set and forget
super easy - next to your investment there are 3 dots, you can then sell, switch or buy more
Great video Toby 👍 I'm personally a bit dubious that these high S&P500 returns from the past 20 years or so are sustainable, but they are almost certainly better than savings for long-term growth - let's see
I'd certainly be a lot more conservative on the next few decades! But like you say I'd rather be invested in cash flow producing assets like stocks than hold cash and pretend I know the tops of the market.
Is it worth starting to invest at 60, or stick to cash isas and saving accounts. I’m on catch up for retirement
10 years to drawing down, definitely, less than five probably not.
Good question, same boat here but I started investing anyway ( just before that horrid 2022 crash 😂 )
I decided to plan it out ie,
Have a year or 2 expenses in cash savings easy ISH access, then aim for another 3 to 5 in lower risk investing IE bonds, anything after that will go into sp500 or vwrl as it won't be needed for a good 8 years.
Once that is in place you have wiggle room ,
If you need cash and investment is doing well spend that, if not then spend from the emergency fund,nif things are really bad for a long time and the emergency fund runs out spend from the bonds,
Chances of running out of bonds before stocks recover is slim but if that does happen either sell some investments at a loss or get a part time job side hustle etc to get through ..
No one really talks about our age group, they just assume it's only the young that needs help.
Good luck.
@@FlyingFun.Thanks really helpful, good luck to you too!
@@FlyingFun.the funny thing is, the young doesn’t really care about saving.
A lot of people your age like to do a mix. Maybe 60/40
Bitcoin has a lot of tail winds for growth if you don’t mind volatility.
My mate had his account hacked. Lost £300K in bitcoin
Bitcoin is no different to a bet on the horses.
@@timg1246 There are many horses. BTC has a limited supply. Bitcoin ETF’s and pension funds using BTC. 40% growth per year.
Am I missing something? Previous crashes weren't predicted, but this one is. Literally, everyone is banging on about. So if the crash is inevitable, why not just withdraw all your money now, at the top of the market, and put it all back in the day after the crash???
@@dazzadwm great question…and the answer is nobody knows when a crash is coming but there are always people predicting it. If it was that easy everyone would do it! You are not missing anything. There will always be grifters and conmen who will claim to know the future 😇
A Freddo Caramel?! When did this appear? I remember the good ol' Taz!
Ahh yes I forgot about Taz!!!
Hey Toby, quick question, I’m planning on opening a Vanguard SIPP and adding an Index Fund U.S. Equity Index Fund (VUSEIDA with Vanguard ETF’s with a view to reduce costs. Do you know if this is possible or does it have to be either all ETF’s or all Index funds in a Vanguard SIPP?
If you use Vanguards own SIPP then you can only choose from Vanguard mutual funds and ETFs - completely up to you how you choose them - just remember that with ETFs you cannot buy these in fractions on Vanguards site so you may end up with change every time you buy.
@@TobyNewbattmuch appreciated Toby, I wish you great success 🙏🏾
If you're saving for a house, save
Money is hard to come by. The fact that I could lose all my money or some of it when investing is a big no no for me. Why can’t they make it in such a way that I won’t have to lose a penny of my capital but rather the interest if any😂😂😂
you only 'lose' money with investing if you sell - whatever happens you are an investor whether you know it or not :) - all of your work pensions are invested and you invest every time you get paid even if you dont realise it :)
There aren't two different types of money. It's all capital.
If you have £1000 and get 5% interest, the next year your total capital is £1050.
It's impossible to "lose all your money" if you invest in an index fund.
That's the same thing as saying "the top 100 companies are worth zero". Which is the same thing as saying all companies are worth zero. In which case, the world is so very different from today, none of this matters.
so the 5.5% i get this year in nhs is only 33.3% below inflation
It's pretty horrible - even worse is how some parts of the media get angry about wage increases when they are nothing of the kind. Public sector workers have been losing money in real terms for the last decade and more
@@TobyNewbatthas the private sector done any better, I got 3% this year.
And the tax brackets we r in hasn’t gone up with inflation either so we are all worse off even if we get a half decent pay rise!
Bloody caramel Freddo!? Mr moneybags over here!
@@DanRobards 😂😂😂😂
If saving was the answer, why are so many people still struggling financially? Investing might be risky, but isn't that where the real growth happens? 📈🤔
You can't save if you aren't being paid enough and you cant invest if you cant save. Unfortunately I can't solve that first part, you have to earn more if you want to save or invest. If wages aren't keeping up with inflation and the cost of living that's a whole different problem which governments need to sort out
@@TobyNewbatt agreed
aHHHHHHH My Freddos!
👍
👏🏿👏🏿👏🏿👏🏿👏🏿
Something tells me that you should start paying attention to you diet like you pay attention to your finances... Freddo
Your goal should be to maintain your % ownership of the network. If you own 10% of Tesla stock then keep that forever. If you own 10% of all the £££ then keep that forever. The problem is they will print more £ than what the savings/bonds will offer. Thats why you should buy Bitcoin. If you own 10% of all Bitcoin then you will own 10% for the next 1000 years without doing anything. You cant say that for any other asset.
Really.
But how much will that Bitcoin actually be worth ?
You have no idea. Which makes Bitcoin no better than a punt on a horse race.
@@timg1246 I have a idea. $1,000,000 by 2030. $10,000,000 by 2040. Just assume the % of money it will take from other assets and the devaluation of fiat currencies over that period.
The S&P is at literal maximum. Buying now feels like being a sucker with so many problems in the economy
you had people saying that throughout 2020 and now is even higher
People have said this forever…
There have been 1000s of all time highs.
@@johnristheanswer exactly. always DCA and have a long time frame.
A literal maximum? You mean in the future it's never going to go above the level it is at today? You are literally wrong.