Can I Live Off My Dividends?
ฝัง
- เผยแพร่เมื่อ 11 ก.ย. 2024
- In this video I reveal I my yearly expenditure on essential bills and show how much is now covered by my dividend payments. I’ve been investing for over 15 years in mainly large cap UK companies with the ultimate aim of becoming financially free and having the option to retire early. I make good use of a stocks and shares ISA to protect my passive income from dividend and capital gains tax.
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Disclaimer
This video should not be construed as investment advice. Investments can fall and rise. Capital at risk.
I have been investing for ten years and my dividends are around £8000 now. That compounding snowball is really taking effect.
That's great to hear. Well done and all the best on the rest of your journey
Would you care to explain what portfolio funds/indexes you hold? Do you have an allocation?
I bought a house 10 years ago using a ten year fix. I rented it out to help pay the mortgage. It’s mine now and worth about £200K. I still rent it out for £900 a month
@@aarondawkins8668 Was that a question for me? I focus on buying individual FTSE shares that pay decent dividends. My goal is to have £7-10k in each of around thirty different companies across sectors to ensure you spread the risk. For example I have BAT, ITV, GSK, National Grid and Unileaver amongst others.
If you search for "Top 40 UK Dividend Stocks" you should get a good starting list.
Do you own individual shares or index funds?
I love your way of thinking.
Starting out with Sainsbury’s paying for your morning brew each day is genius!
Just small targets at first and then keep going little by little. Marginal gains over a long time horizon.
I love the comparison of everyday items compared to companies that supply them. Really encouraging to see
Thanks so much. I really appreciate the feedback. All the best with your finance channel my friend!
Very educational!
Yes and no, not every companies, even top in the region, has gone so well in last 15-20 years ago. A good example is the telecom branch where you don't see such huge profits, with some even losses, unfortunately. So that's why you need a strategy for buying and selling stocks.
Yes very cool approach and another fantastic video!
The biggest problem for beginners is the fact that you need several years to see significant increase either in your portfolio value, or in dividends you receive. Furthermore, not everybody understands the compound interest "deal" and how it works in practice. For them it's pretty hard to understand that the time really matters and that's usually pure luck to earn/get a lot of money within, let's say, half a year or so but everybody wants money asap.
If you get a bear market at the beginning of your investing journey, it's better for you - then you get to know how much resistant you are in such moments when suddenly your portfolio is, like, 20-30% down within 2-3 weeks (vide covid-20 bear market in 03-04/2020) because it would be, in cash, "only" hundreds/thousands of USD/GBP/EUR which would evaporate, instead of tens or even hundreds of thousands.
Anyway good luck to everybody with choosing outstanding companies to your portfolio and stay motivated every single day in your financial goals.
This advice gives me less anxiety when thinking about investing. Thank you!
You're an inspiration. What you show should be taught in every school in the UK. 👏👏👏👏👏👏
This is probably one of the best videos I've ever seen on TH-cam. I guess your experience in the education sector helped you to know how to sell your point well. I've seen loads of videos where people talk about compound interest, but don't explain it in relatable ways. The cup of tea and Tesla examples make it easy for newbies to get their heads around the subject. Cheers.
Thanks so much for the feedback. Yeah I guess I do make living out of making complex stuff seem basic. That definitely helps. All the best on your journey and thanks for your comment.
Paid off my mortgage like you at 42 -also not a high earner - have a similar size portfolio to you pays 5-9% dividends I use investment trusts and some ftse 100s - retired at 55 and now live quite comfortably off the dividends all tax free, like you I never been a high earner - not sure of you're age but don't get stuck in the trap of watching the money grow, you probably now have enough to draw the dividends go part-time / draw pension and have a comfortable lifestyle - I am 57 and my income is as much as when I was working
Quick question: I pay %4.5 interest on my mortgage however I have invested an equal amount in stocks and roughly get a 3% dividend. Doesn't it make sense to not pay the mortgage and surpass that cost in future. This keeps the liquid money as well. Thoughts?
That's a great story to hear and well done. At the moment I enjoy the full time job but if that changes its good to have options. Thanks for sharing your journey / strategy, it will make interesting reading for others.
I'm 7 minutes 39 seconds into the video and I simply had to pause it to write this: what a brilliant video. Genuinely. That Tesla example was a true eye opener. And I love the fact that you've invested in companies that have taken from us our entire adult lives. Very clever way of being 'financially free' from the system we're a part of.
Thanks so much for the feedback, I really appreciate it. I've had this video at the back of my mind for ages and it's taken a while to plan and get it out. Glad you enjoyed it.
If you had of bought McDonalds shares each month since 2012 with the £6.63 you had been spending on purchasing a Big Mac meal each day, you would have an additional £90K in MCD shares and save yourself from ruining your health.
Haha! Love it. If only I was that wise back then and if only my Barclays platform had allowed me to buy overseas individual shares at the time, something they only changed about 2 years ago!
same with idiots that pay 20k for solar panels. that 20k in tech funds over 10 years will be worth 200k. solar panels ore just a huge scam.
Made my 11 year old twins watch this it was so good. Brilliant video and excellent advice thank you.
Thank you so much for the feedback, I really appreciate it.
It's a great feeling to be mortgage free😊
It must be for sure, but it's usually not the best way to accumulate a lot of wealth. Mortgages are pretty cheap, especially if there are some tax incentives. Instead of paying down your mortgage, you could invest that money immediately and as long as your return is higher than whatever your mortgage interest is you are making money, and over time that really, really adds up with compounding.
For example, if I have 10 000£ today and I use it to reduce by mortgage that has 20 years left with the 6% interest in the video I will be 12 000£ richer at the end of that 20 year period, roughly calculated, because I am paying 6% interest a year 20 times on that 10 000£. Notice that mortgages do not compound exponentially. Now, if I put that 10 000£ in stocks and get a 10% annual return instead, at the end of that 20 year period that 10 000 has grown to 67 300£, ie I am 57 300£ richer and 45 300£ better off than if I used the money to reduce my mortgage. If I was lucky or found a really good investment oppurunity and got 15% annual return instead, that 10 000£ by itself becomes 160 000£.
There are reasons to reduce your mortgage, but getting rich isn't one of them.
You are almost there for full financial independence. Well done. Not envious at all 😅
Being mortgage free much earlier is a big middle finger to the matrix
What a great video 👏👏 This should be taught to kids in 6th Form school, college or uni.
Wished I’d started in my 20’s & I worked in TSB in the late 80’s straight from school 🙄
I just looked, and my daily dividends are exactly £1.37 I hope that if all goes to plan, it will be a double with cheese by the end of the year 😉
Money well spent! Good luck on your journey
Nice! Can I ask, do you own the individual shares of each company or do you invest using index funds?
@jayplays568 mainly individual shares but I also have some index funds
There is huge satisfaction of using your money to buy shares and then having those very companies give you money 2 or 4 times a year, instead of spending on unnecessary consumer items. Freedom for sure
I absolutely agree
Excellent video. I hope to build my SS ISA to cover my essentials in the next 20-25 years.
Good luck on your journey. It can get quite addictive when the dividends start rolling in. Good luck
Great stuff. I think you should remind people that stocks go down as well as up so you could end up with a loss...over time I think you would be fine.
Great video and simple to understand, thank you and I’m looking forward to starting this journey to benefit my family!
Thanks so much and all the best on your investing journey
You have great videos! Realistic, informative and positive.
I started dividend investing a short while ago after ISA rules changed. I had a vanguard account for a consistent index tracker fund which has performed very well but I wanter the satisfaction of dividend payments too so I now have a t212 account as well.
Keep the videos coming I will probably watch them all
Thanks so much and all the best on your investing journey
Assuming you are a school teacher or similar educator, I reckon you're a pretty good one.
I like the way you presented this video on terms of your methods/thinking, the examples and the outcomes. Really good.
If all schooling was conveyed in such easily processed ways, we'd all be so much better off.
Keep up the good work!
Thanks so much for the kind words and for watching. All the best
Never make the banks unnecessarily richer. I always rent out my properties here in Australia to claim tax refunds and reinvested those tax refunds back into my offset account while living well below my means. I ALWAYS prioritised investing in stocks OVER my properties because it's better to receive dividends forever than to pay off mortgages with nothing to support your living expenses.
I hope to own at least $2 million AUD in investment properties and $300,000 AUD in stocks by the end of 2030.
I’m aiming to overpay on my mortgage for £700 a month. Will bash it out ASAP. Been investing since 19 and 30 years old now! Hope I’m in your position in a few years!
That sounds like a plan. All the best on your journey
@@TheCompoundingInvestor thank you! 🙏
Now, the next step is total financial freedom. My dividends now total just over £35k per annum tax-free. 👍
Incredible amount and tax free also 👍🏼
@TheCompoundingInvestor thanx . I am sure in your 50s you're past that, ha! 😃
Only tax free if within an ISA wrapper.
@@tancreddehauteville764 it is in a isa 👍
@@tancreddehauteville764 yes. we pay 1% tax here a year on total ammount. so almost tax free. i made 3k last week all tax free.
I like your approach to investing by purchasing companies you use so they pay you back
Thanks, it really does seem like reversing the tables. Getting them to pay their own bills.
Totally agree paid most of my bills for the year been to costco today so won't be back to the shops for a while very satisfying when these companies pay you and not the other way around thanks again happy investing
Excellent work Alistair
Well done 😊my portfolio now paying 3 off my bills so far 😊much more to go 😅too be free
Good progress Paul. Onwards and upwards. All the best
You have won the investing game through your hard work over the years. 👏👏I love the way that you explained this. Showed this video to my son who is 14 he loved it. He has a junior Isa. Hope he will be a millionaire by the time he is 50. 🎉🎉
That's really nice to hear. A young Warren Buffett in the making!.
What a dividend legend.
Great peace on mind knowing your investments are paying you enough cash flow to cover your essential costs 😮
I agree, but to get there you just have to concentrate on one small step at a time and not try to look at the mountain peak which is mysterious and can not usually be seen anyway.
Great video, thank you. I’m currently 4 years into my own journey for financial freedom, there is no going back now 👍
Thanks so much and all the best with your investing. Can get very addictive.
mortgage long paid off here.
100k in savings
100k in tech funds.
still both working.
cash pouring in non stop. we using it help our sons.
We just hit 770 a month is dividends this month. No mortgage and on the verge of living off living completely off one paycheck and completely investing the other paycheck into the market…
That's impressive. Thanks for commenting and sharing your journey
Your videos always motivating and encouraging. This month is going to be my biggest paying month to date, and it's always nice to add it all to my spreadsheets and see the graphs and numbers growing over time. Just keep buying and reinvesting and let the companies and compounding do the hard work
Haha, Love the Guinness picture! Yes I agree. Part of the fun and motivation is recording and tracking everything. All the best on your journey my friend
@@TheCompoundingInvestor I also invest into Diageo, I think you can see why!
Very powerful motivation, the Tesla case is great
Thanks so much I really appreciate the feedback
Awesome as always! So motivating to see and I look forward to hopefully one day being in a similar position :)
Thanks my friend, glad you enjoyed it. All the best with your investments and your channel
simply the best youtuber in the world!
Well done to you. Great solid investment strategy
It's great to see your results, for which you worked so hard for. Unfortunately in Germany, where i live it is not possible to receive Dividends tax-free or to invest for retirement without paying taxes. So every dividend is taxed with 25% and for ETF with do not pay dividends i have to pay an additional tax at the beginning of the year 😢
But great system that you have in the UK 🎉
I'm sorry to hear that. 25% is quite a lot. We are very lucky in the UK that we have this tax shelter.
I live in the Netherlands, 20% here on dividends. It does not matter. A good company raises it's dividend every year so the dividend income per share will grow in 5 or 6 years about 20%
Thank you for the video mate and well done on getting to where you are. My question is, are the dividends paid into your current account or back into the S&S ISA? I ask because withdrawing money from an ISA counts as part of the £20k yearly allowance
Thanks so much. All dividends remain in the platform. I don't take any cash out at all from the ISA because as you point out it would use up your allowance.
Awesome video, again. Other car costs can add up without noticing. I need to start making a spreadsheet for all my out/in costs ❤
Thanks Colin. Yes keeping track of expenditure is really useful and also motivating too if you can bring the numbers down.
Better late than never. Wish your vides were out in early 2000's. Love the vids playing catch up by watching of your vids now. Out of your £400k+ portfolio how much of your own money have u invested. Not including dividend re-investment
If you watch the video below it should have all the info you need. Feel free to skip to the end couple of minutes to see the overall summary of total amount invested since the start. I'll be doing another update in July.
th-cam.com/video/oHRN5GDu3r4/w-d-xo.html
Great video, hope it inspires more to start the journey, a nice place to be having that safety net of income coming in too
Another really inspiration video and great to have options in life. Amazing the results you can get from a consistent approach. Am sure you have a long list of topics you plan to do a video on. I'd be interested to know what sort of metrics you look at when deciding to trim your portfolio or sell up a stock. Is it just down to where you think a business has not done as well as hoped or you feel the dividend cover is at risk? Thanks very much.
Thanks so much and I’m glad you are finding the videos useful. I don’t sell shares that often but if I see a continued downtrend on the long term graphs I might consider selling completely and putting the money to better use elsewhere. Vodafone, Royal Mail and Centrica, Direct Line were all examples of when I had lost faith in them. Sometimes I trim a company which has done unexpectedly well just to rebalance the portfolio as they were beginning to dominate it, e.g. Shell, BP and Rolls Royce. Sometimes I need to trim a fairly stable company simply to raise some cash within the ISA e.g. the pay for a rights issue. I did this recently and sold some AstraZeneca to pay for the NG rights issue but I intend to buy those back later in the year. In theory however it’s best not to sell stuff too often so I keep it as minimal as I can.
I first saw this channel a few months ago, I have saved money since then.
I'm 17 (18 in September) - I attempted to make a trading 212 account but am not allowed until I'm 18.
Can anyone give me advice for which platform I should put my money in to receive stable dividends - I'm happy to wait until I'm 18 - seeing as I'm new to all of this, any advice you can share is much appreciated.
I started this year with trading 212. I'd recommend it.
Just catching up on your videos.. But would you recommend a dividend etf for most people, or is it better to pick individual companies.. Many thanks
Its usually not wise to copy someone else's portfolio or strategy because what is right for them might not be right for you. We all have different investing time horizons, attitude to risk etc, financial commitments / goals etc etc. In general most people would do better by simply investing regularly in a low cost index tracking ETF held for several decades if you can tolerate the boredom of it :)
@@TheCompoundingInvestor thank you for the fast reply much appreciated 🙏😊
Love the channel, I'm 50 and debt free but no pension and looking for options how to best start to invest. Could I ask how big a pot I may need to make around 15k in dividend payments?
Thanks so much. It works out at around 430k needed to generate 15k a year assuming a 3.5% dividend yield
Thanks for the reply and sharing your story it really helps me. Just wish I had started earlier 😔
Are all of these investments within an ISA? What are your thoughts on individual investments with the S&S ISA vs. FTSE Global / S&P 500. And why have you went for income/distributing over accumulating?
Around 80% of investments are within the ISA. There is not enough room for everything as I fill the ISA each year. I try to keep the non ISA dividends below the allowance which last year was £1000 but this year is only £500 so this is going to be difficult to avoid tax in future years. I therefore buy companies paying zero dividends outside the ISA or which pay very low dividends. I'm not too worried about capital gains tax as that is more controllable and won't hit me each year.
To answer your second question, I choose distributing ETFs for 2 reasons. Firstly I like to choose where the money goes instead of it being automatically reinvested and secondly as I keep some of my ETFs outside the ISA I'll eventually have to pay tax on them when the allowance is exceeded. With an accumulating ETF you still have to pay dividend tax and working out what that is can be a nightmare because you don't receive it on one lump sum. To answer your question about individual shares v ETFs I would say for most people global ETFs or the S&P500 are probably the best way to go. I was restricted to buying UK individual shares by my platform, up until just two years ago and ETFs were not mainstream when I started in 2009. These days I invest quite heavily into them.
I like the idea you making the companies pay your bills via dividends, but not to sound negative, looking at your total returns, would you have not been better in the S&P 500. Currently my ISA YTD is 14% and 1 Year is 23% and less hassle to decide what to buy or sell ?
I also invest in the S&P500. Over the last 2 years I've put in over 30k into my "IUSA" ETF.
When I started this portfolio in 2009 ETFs were not mainstream and I only heard about them many years later. These days I invest a lot into them including VHYL and VWRL
Great way of thinking about finance 👍
this is a great inspirational video for those who are starting their investment journey or haven't yet started. Then, out of curiosity, does youtube bring much income? how about the sponsored links? just curious
Thanks. This channel is only a hobby as I have a busy full time job so I basically do it for fun and hopefully viewers find it useful and helpful to see my investment journey so far. The channel is monetised which means I get a small amount from adverts which are viewed. I don't have sponsorships just a few affiliate links such as T212 and if anyone signs up with them using the link then they get one free share and I get one too.
Always look forward to your monthly videos,I owe 45k left on my mortgage £249 a month was £900 a month 2 years ago,I have taken my pension and working so when I saw your videos a light bulb 💡 went off,
A way to support my pension by a few hundred pounds a month!
Thanks
Thanks Tony and also for sharing your journey / strategy. All the best my friend.
A tech ETF like IITU would give you 32% in just last 6 months this year (50% 1 yr, 210% 5 yrs), or a less volatile global quality ETF like XDEV gives you 16% in last 6 months (30% 1 yr, 80% 5 yrs). I don't get it? Cost of buying shares under Barclays must be £6 (so buying £250 of Sainsburys means dividends wont pay for that in first year). presumably you have maxed out your ISA if you are buying Premium Bonds? Why use Barclays when other platforms offer lower fees (or free) and have a wider range of funds, etc.? If you made 20% gain in accumulating ISA ETFs (investing say 250K) you would make 50K a year and could sell 15K a year to cover bills and still be way better off. Even if gain was only 10% you could still sell off enough to get 12K a year and capital would still accumulate.
The tesla example made me shiver a bit. Thinking back to when I bought my MacBook pro for 4000 GBP .... I wonder if I will regret the purchase and how much will apple share be worth in the future.... On the other hand tesla shares cant drive you around for 12 years so there is a fine balance between assets and liabilities.
Agreed, some liabilities are essential but buying too many of them can be wealth damaging
If you could start again when you did but will all the options available today for example more diverse index funds and etf’s, would you have invested the same way ?
If I started investing again from scratch I'd mainly be in index tracking ETFs. They were not mainstream when I started and my platform did not allow me to buy overseas individual shares. Today I invest heavily into ETFs such as IUSA and VWRL. I might still buy the occasional single stock however if I see bargains e.g. the collapse of oil during covid and the troubles at Rolls Royce. Good question you asked!
we have 100k in funds. we just cream off anything over that each month if we need it. dividens not needed . i make money from my profits. made 3k last week
Good work
Another fantastic video! Just wonder what the best way to track all the dividends/ investments you have? With all those companies you invest in all paying dividends differently how do you keep it from being overwhelming!
Most companies pay their dividends at the roughly the same times each year. I record every payment on a spreadsheet so can see who pays in what month from the previous year. Dividend Data is a great website to see which dividends are coming up in the next month. Dividend Max is another website to find out which months a company pays. I also store this info in an iphone calendar app so I can quickly check whats coming up next.
All I want to know is where Guinness is being bought for £4.05 a pint!!!!!!
wetherspoon!!!
Congrats on your journey, how much tax do you have to pay on this dividends? Isn’t it quite high?
Thanks. I actually pay zero tax as I’m in the U.K. and use a stocks and shares ISA which is a tax-efficient way to invest. No capital gains or dividend tax needs to be paid on investments within an ISA
I agree with the message in your video but should anyone start investing in bank stocks today, they will absolutely go bankrupt
I'm just showing my own journey but I agree the banks have not been great over the years. I certainly don't add more to them these days.
Great video as always and I've finally made up my mind to start my investing/dividend journey. Probably a stupid question but if I use Trading 212 to invest in a stocks and shares ISA then how will the companies I invest in know I'm invested and where to pay dividends?
The platform will hold the shares on your behalf and any dividends will be paid to the platform and they distribute them to you. You should receive an alert when the dividends are paid
Call me stupid but there’s something I don’t understand. If S&P500 goes up say 10% a year, and your house is paid off in full. Is not worth taking out all the money in your house as a new mortgage at say 5% interest and put it into a S&P500 ETF that makes an average 10%?
Good video! Receiving dividends is motivating. There is, however, an argument for investing in companies that don't pay dividends. That way, you decide when to take your profit and how much, rather than a board of directors deciding for you. James Shack does an excellent video on that. Both strategies are fine of course, but sometimes people forget that if dividends were not paid, that money would stay on the company balance sheet, so those shares would increased in value correspondingly.
I own shares in CPB, CAG, KDP, and soon HRL. I will have aisle 7 and the coffee aisle covered in my local grocery store. 😂
Lol!
❤❤❤❤ Fabulous video ❤❤❤
Thanks 🤗
Excellent as always 😁
Appreciate your content
Its certainly prompted & steered me on my investment journey up to now. If only we all had discipline & a similar approach!
👍All the best now
Thanks so much for the feedback. all the best on your journey
Am 16 when can i invest or buy dividens i have a part time job and am trying to learn financial literacy
Great video again! Although I just cannot agree with the principle of allowing private companies to provide essential services, like energy, water etc as I think those are too important for the running of a country and for the welfare of citizens to be given to companies whose sole purpose is to make profit. The objective should be to provide reliable and affordable services to the clients, but if you are just aiming for profit the prices will be high and you will try to cut service quality to save on operational cost. It just does not work. Good thing for you for turning the tables on these companies which charge you for their services and basically making them pay their own bills. I won't be buying shares in UK energy or water firms, as it is against my principles, as I think they should be nationalised. It is a disgrace (I am not speaking against you but everyone who allowed this to happen) that water companies continue to pay out dividends while their services and systems are so old and not fit for purpose that they are letting raw sewage end up in the water. That is just wrong on so many level.
Sorry, another question.. I've got trading 212 app but open to other platforms which you may feel are better? So say I'm invested in Sainsbury's with £250 and the dividend comes in, I'm assuming to the account.. I'm assuming it'll ist as cash, can we set it to auto reinvest? Would there be any fees, or would I need to add more of my own money to the £12.50 dividend payment to make say a minimum investment.. Thanks and appreciate your time.. Total beginner
I'm not 100% certain but my understanding is on T212 you can choose to have dividends auto-reinvested and their shouldn't be any fees for that or you can collect the dividends as cash and it remains in the platform for you to invest how you want. I believe that T212 allows you to buy fractions of shares so you don't need to wait until you have enough for a full share. I prefer to take the dividends as cash as I like to choose where the money goes and its more interesting that way but perhaps the best method from a long term financial perspective is to have the dividends auto reinvested. As regards platforms, yes T212 is a good one for those first starting out and with smaller portfolios. InvestEngine is also good if you only want to buy ETFs.
@@TheCompoundingInvestor many many thanks.. Finally looking forward to doing this.. Here goes!
Would like to know the amount invested to achieve those dividends. Also isn't this a relatively high-risk approach compared to investing in funds from a diversification perspective?
When I started in 2009, I didn’t have a lot of choice. ETFs were not mainstream and I couldn’t buy individual overseas stocks on my platform. They only changed this policy 2 years ago. However you are right, low cost index funds are the way to go for most people. I have both an S&P500 and two All World ETFs. In the S&P500 alone I’ve invested over 30k over the last 2 years. They will become more important as the years go by now.
@@TheCompoundingInvestor I like the idea of dividend investing but it's the higher risk that puts me off at the moment. Perhaps to supplement index funds. Nice vid anyway 😀
Thanks, Its possible to have the best of both worlds. A FTSE 100 index fund ETF such as ISF pays a dividend of 3.9% according to the Dividend Max website. The dividend yield of my own portfolio is only 3.3% currently.
@@TheCompoundingInvestor Vanguard VHYL is 3 per cent too.
Fantastic and insightful video as always! 🎉
Thanks my friend. Really appreciate the feedback
Nice one!
Thank you!
This great information . But how is this viable with 500 allowance tax now. . Someone please explain . Thanks Paul
Anything inside a stocks and shares ISA is protected against capital gains and dividend tax
Isa , Pension, then premium bonds
This is such an awesome video!!
Thanks so much John, I really appreciate the feedback. Glad you enjoyed it.
@@TheCompoundingInvestor you’re welcome. What I really loved about it was how you slowly covered one expense at a time. It makes the compounding exciting from the very first day you get a “free” coffee!
Missing a key fact here.
Unless I missed this… how much did he have invested in total - must need to be at least £200k!? With a 5% dividend that would only get you £10k.
I do complete portfolio update videos each quarter. 225k drip fed in slowly each month (from spare wage money) over 15 years. Shares go up over time by themselves. Total value now is 470k of shares but I also have 50k of premium bonds on top as my emergency fund. Average yield of portfolio is currently 3.4% per year, premium bond prize rate is 4.4%
You have made a mistake at 8.21. You say "for doing absolutely nothing". Wrong your risking your capital . If you ever invest in a company that I'd involved in fraud or relies too much on government contracts You really can lose 80% in a couple of weeks.. mind you it focuses your mind ...
I enjoy your videos and understand the point your making..
Thanks, yes there is always risk especially with individual companies but I have around 30 of those now in different sectors in addition to thousands of others in global ETFs. This should reduce the risk somewhat but nothing is guaranteed. In the early 1970s the FTSE fell 70% in just a year. Over the long term however e.g. several decades, markets tend to do fairly well.
In effect you can retire now! And you can add your state pension later too!
I do enjoy my job however but the passive income does give options if things change
Quite inspiring but, wouldn't you need around a quarter of a million pounds in shares to earn a total dividend payout of this size?
Look at his previous videos, his portfolio is around £470k in value
This is true but you don't actually have to invest that amount in the first place because of course it will grow by itself through compounding. This takes time of course and we all wish we had started earlier unless we are Warren Buffett who started compounding aged 11.
@@TheCompoundingInvestor i invested 2 years ago into the big tech companies. made over 50% tax free profit on that. last week alone i made 6% on 50k.
was an amazing week
The problem is that the stock market goes up and down. Sometimes you feel like the market is against you.
Always short term volatility but over the very long term e.g. decades it generally goes up.
Really motivating content as always.
Thanks so much. I really appreciate the feedback
I'm making an assumption your a teacher if so do you pass on this valuable learning to your pupils?
how about the idea of the 'dividend trap' where the initial capital invested rots away and sometimes rots further than the yearly dividend?
Yes good point. It’s important not to chase very high yields. My own average yield is 3.3% which is below the FTSE 100 so I should get dividends as well as capital growth. So far this year my net portfolio value has increased 12%
@@TheCompoundingInvestor I agree having very high dividends is less sustainable than average compared to the overall index the given stock is within
Thanks for the video. Hope you're doing well?
Thanks so much my friend.
Well done! Keep up!
Thanks
I think its important to point out that IG is not a bank but a financial spread betting firm
The reason I included them here is that according to the dividend data website they are listed in the Investment Banking and Brokerage Services Sector. I think they do more than just spread betting.
Am I right in thinking capital growth let's say it grows by 10% a year, does that mean my dividend would grow also by 10% a year if it didn't change it's % ?
I was inspired by your 1p - £50 a day video, -- I don't have enough income to start with trading212 as there's requirements, but like you, I am going to start with the index funds.
First goal £1 a month. I look forward to the £10 a month mark as i'll start to feel that compounding effect when making investments.
Over the last 20 years or so the FTSE 100 has grown around 7.5% per year average, the US market around 10%. It’s up to individual companies how much dividends they pay. These or not guaranteed and they can choose to raise or lower them at any time
Weekend inspiration
Thanks, glad you find the videos useful.
Could you do a video which shares got ex divident day in July. Thanks in advance! I really regret that I didn't watch your video regulary I miss couple ex divident date.
Should be doing one at the end of this month
@@TheCompoundingInvestorI don't need at the end . Would be very helpful at the begining of this month!
I show my dividends at the end of each month and show the ex dividend dates for the month ahead in those videos. If you try to find dates too early they won’t be declared yet by certain companies. If you want to take a look yourself try the websites dividend data and dividend max.
@@TheCompoundingInvestor Thank you for reply. I already started my journey with investing and tought that you've got more expirience and you are able to give dates the month ahead.
Don’t miss an upload….
I know you invest heavily in the UK market.
What is the market sentiment with Labour inbound as the governing party?
Thanks, I really have no idea but I doubt their intention will be to crash the economy so I’ll just carry on investing as normal. Will be interesting to see what happens to the British ISA now and if it will go ahead if there is a change of government.
@@TheCompoundingInvestor I wouldn't worry about changeovers and manifestos either. The real test will come if growth does not materialise, regardless of rosette colour.
In terms of the main parties, doesn't look like there's a lot of appetite to revisit ISA allowances, pensions or Brexit; so impacts on savings are more likely from external shocks than internal policy changes, as things stand.
Hello, this is probably an easy question to find on google but I can’t find it!
If I pay the maximum each year £20000 does it keep adding up? For example 5 years x £20000 = £100000 . In one isa? If my dividends income ends up being more than the tax allowance each year would I have to pay tax? Is the dividends income added to your income from working?
Hopefully that question makes sense. Thanks in advance
Hi yes it’s a common question. Firstly you can add 20k each year into your ISA. I’ve only ever had one on the same platform and I’ve had it for around 13 years now and it’s currently worth around 400k
Unless you choose auto-reinvest, any dividends will be paid to you as cash but remain inside ISA platform ready for you to invest in whatever you want. Dividends do not count towards your allowance. Even if you got 1 million pounds in dividends in a given year you could still add a further 20k in from your wages.
The important thing is not the take any money out of your ISA account and try to put it back in again. For example if you got paid 10k in dividends and took them out and then put them back in again you would have used up 10k of your allowance because that is now seen as new money going in. The idea is not to take money out, just keep shovelling 20k a year into it.
Apparently if labour get in they said they intend to go through with the British ISA so we may even be able to put 25k in each year. Fingers crossed 🤞🏼
@@TheCompoundingInvestor Thanks for the prompt reply. Keep up the good work. You use Barclays right?
Yeah but they are quite expensive. When I started there was not much choice. These days there are far cheaper options but I’m reluctant to change now as I’ve not had any issues and don’t want the worry of transferring money around especially where ISAs are concerned in case anything goes wrong.
I love your insights and advice but what isn't mentioned here and I'm going to make some assumptions on is either you live somewhere relatively cheap and/or in a small house. If not, you definitely don't have children. For annual electricity to cost £780 when in the same year mine was closer to £1400 on a 4 bed house with 2 kids, does make me wonder. It doesn't diminish the returns you have through investing, but it definitely makes it harder to invest at those levels when you're paying half your monthly salary on a mortgage. Maybe one day I'll pay it off... but with how interest rate now are I don't see it on the horizon!
Thanks for your comment. We have a very modern home, incredibly energy efficient, and always looking for the best energy deals.
You seem knowledgable Do you have any books or websites you recommend relating to stocks ?
JL Collins Simple Path to Wealth is quite good although the second half of it is more focussed on US investors. The TH-cam channels Pension Craft and The Donegans are ones I listed to regularly.
I have been maxing out Barclays cash ISA every year, is it possible to convert them into stock ISA’s and is it a good idea?
I would be surprised if it wasn't passible to switch one into the other without too much trouble. However I can't really say if its a good idea or not as that would be giving financial advice which I'm not allowed to do. I simply show what I do myself. Over the very long term, history shows us that investing in a diversified portfolio or an index tracking ETF beats has a good chance of beating inflation but there is of course more risk. Everyone's tolerance to risk is different.
I look forward to your videos - one little question though - don't you use gas?
I do use gas and the cost of that would be covered by the dividends from Shell and BP
Do you ever wish you had missed out paying off your mortgage first and gone straight to investing or was it the peace of mind that made it more worth it to you?
Overpaying the mortgage has a guaranteed result whereas the stock market has no such guarantee. I liked the idea of throwing everything at the mortgage to get rid of it. Then I could concentrate 100% on the next task of investing rather than try to do both at the same time. Just my opinion however and everyone is different
@@TheCompoundingInvestorI've just sold all of my shares at a slight gain and put them in to T212 ISA, I plan on doing it the same way as you once I've saved up a safety net of 3 months bills, I want the peace of mind, I personally can't put a price on it, the feeling of security is what I want first.
Thanks for the video, how do you track all of the dividends? Do you just go through the statement on the platform and note them down?
You are welcome. Dividend Max and Dividend data are good sources for dates. I then manually enter then into a phone calendar app so I know what is coming up and when. I also record everything in excel e.g. what I was paid, when and by which company. The payment dates are more or less in the same months each year.
@@TheCompoundingInvestor ok thanks for the reply
Unlikely. He probably plugs in a neuralink capacitor with a mega flange and downloads it directly into his brain via a GPT processing layer. Then starts recording the video.
@lxp lol. My channel is as low tech and low budget as you can get 😄.iPad plus a small plug in mic I got for £60. Video is edited on the free iMovie app. In fact most of my videos were recorded and edited on a battered old iPhone 10 but it ran out of memory so had to use an iPad instead.
@@TheCompoundingInvestor brilliant job on your videos. I like the style of them and your voice is soothing. I love hearing about who you're invested in and how much, there's something about it that's addictive ha ha
I started to invest now,.
All the best on your journey
How much do you earn from your "normal job"? you must earn a good salary to begin with.
Also how much do you now invest a month on average?
I'm sure you can look up the average salary of a school teacher in the UK. I paid off the mortgage before starting this portfolio so therefore had more left over each month to buy shares with. Initially I planned to put between £500 to £1000 per month in but as the years go by wages do tend to rise. The average going in each month over the 15 years is 1.4k per month.
Thanks for your video, what you think about Vodafone, it’s a good investment for long therm?
You are welcome Mike. Vodafone has not done well for me over the years. When they sold their stake in Verizon (a very profitable part of the business) the share price went on a never ending downward trend it seemed so I let them go. I think Telecoms need to invest so much money all the time in upgrading their technology and this has an impact on profits. Just my opinion however and not investment advice.
hi do you invest in these companies as one pie or are they all seperate investments?
Around 25 separate companies as well as a few index tracking ETFs
Last portfolio update is below if you want to see the complete breakdown..
th-cam.com/video/oHRN5GDu3r4/w-d-xo.html