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Weekend reading: Pervasive passive investing is becoming the reality of financial services

Weekend reading: Pervasive passive investing is becoming the reality of financial services post image

What caught my eye this week.

This website is 10-years old, and it’s amazing how much the financial landscape has changed in this time.

Was it really once exciting news when UK investors were offered an emerging market index fund? In 2010, when I wrote this post, yes. Before then you had to make do with active funds, investment trusts, or a handful of ETFs.

Today passive investing is increasingly the mainstream choice, and that is reshaping the financial industry.

Josh Brown from The Reformed Broker explained this week how this is already well advanced in the US:

The advisor clients are meeting with, in the modern era, is not promising them a way to “beat the market” or “discover hidden gems” on the Nasdaq.

Enlightened customers are not expecting their financial advisor, who works in an office complex off the side of the highway, or out of a storefront next to PF Chang’s, to be able to trade tech stocks for them and make world-trouncing macro calls in between handling required minimum distributions from their IRAs and mailing out birthday cards.

Enlightened advisors are focusing on the client’s needs and talking about what they can actually deliver – high quality, highly personalized ongoing advice and counseling.

The portfolio being proposed, and the proposal itself, are geared toward explaining why a specific allocation to a mix of asset classes is going to help the client reach their goals.

Of course the financial services industry is as slow to change as any other incumbent, which is why it puts out scare stories every few months about the risk of passive funds. Stories, which as Vanguard founder Jacke Bogle explains in this new interview below, often aren’t even based on reality let alone opinion:

It’s remarkable how much money Bogle must have saved investors over the decades – not just in terms of popularizing index funds but also how he structured Vanguard so it is effectively owned by its customers.

I sometimes wonder how much impact Monevator has made over the past ten years, based on feedback and traffic figures. Based on feedback and traffic figures, I think we’ve probably helped save investors several million pounds in fees by helping spread the news about passive investing.

But for Bogle, that figure must run to hundreds of billions of dollars.

Not a bad way to reflect back at your time in the office!

From Monevator

Life insurance and protection: A primer – Monevator

From the archive-ator: Why you must get out and stay out of debt – Monevator

News

Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.1

Equitable Life to shut down with surprise £1.8bn policyholder windfall – Guardian

Rich pensioners hoard cash and reject the urge to spend [Search result]FT

House price inflation could wipe out the benefit of stamp duty cut in 10 years – ThisIsMoney

Average-priced homes too pricey for average earners [Search result]FT

Fall in UK rail passenger numbers casts doubt on viability of franchises – Guardian

Snacks, slouching, and stagnant wages: How the office is making us miserable – Guardian

Was the Tether cryptocurrency used to ramp the Bitcoin bubble? [Search result]FT

Bank of England warns on 0% interest rate credit card offers [Search result]FT

How house price gains compare to shares, gold, and bonds – ThisIsMoney

Products and services

NS&I slashes its savings cap from £1m to £10k – ThisIsMoney

How good are Vanguard’s active funds? – The Evidence-based Investor

Vitality offers lower ISA and pension fees to customers who go to the gym – Telegraph

Ten things you should know about getting divorced [Search result]FT

Two active fund ‘World Cup’ portfolios [unsurprisingly] fail to beat the market – ThisIsMoney

Amazon’s Echo Show gadget currently costs £139.99 (it’s normally £200) and it can be yours in just two hours! – Amazon

Lifetime mortgages Vs retirement interest-only mortgages – Telegraph

How to save money keeping your car fueled – ThisIsMoney

Small energy firms are hiking prices, too, but there are still cheaper deals than the standard tariff – ThisIsMoney

‘Ethical grocer’ Farmdrop raises £10m to expand home delivery service – Guardian

Comment and opinion

Your risk tolerance is an illusion: Wait until you lose big money – Financial Samurai

Life is more than compounding money – Intelligent Fanatics

Stock market investors: How to think like a property investor – UK Value Investor

Why do investors focus on the wrong things? – Behavioural Economics

Why do stocks (i.e. shares) generally go up over time? – A Wealth of Common Sense

Compounding should be the goal for all investors – The Value Perspective

The best economics podcasts in 2018 – Tim Hartford

What computer chess suggests about investing – Morningstar

De-risking the human condition – Humble Dollar

Frugal motoring: The PCP black hole – The FIRE Shrink

How I live on less than $40,000 annually: Ralph from West Virginia – Len Penzo

Market-timing with multiples, momentum, and volatility [Research]Factor Research

Factors from scratch [Deep research, geeky!]OSAM

Kindle book bargains

Eye of the storm: 25 years in action with the SAS by Peter Ratcliffe – £0.99 on Kindle

How To Be F*cking Awesome by Dan Meredith – £0.99 on Kindle

Quiet Leadership: Winning Hearts, Minds and Matches by Carlo Ancelotti – £1.99 on Kindle

Off our beat

City of Spies: How the battle for Catalonia has divided Barcelona [Search result]FT

Jerry Seinfeld’s closed door – Cal Newport

Marcus, Casper, Oscar: Why start-ups are obsessed with human names – Bloomberg

And finally…

“In my view it’s possible to run a company both successfully and ethically. In fact, I’d go further. My own experiences in the business world suggest that an ethical approach, far from being a potential barrier to profits, is actually the secret to success.”
– Julian Richer, The Ethical Capitalist: How to Make Business Work Better for Society

Like these links? Subscribe to get them every Friday!

  1. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. []
{ 52 comments… add one }
  • 1 diy investor (uk) June 15, 2018, 6:14 pm

    Many congratulations on 10 years with the blog…amazing!

  • 2 weenie June 15, 2018, 7:19 pm

    Congratulations on the 10 years! Keep up the great work!

  • 3 The Rhino June 15, 2018, 7:20 pm

    Bravo on the 10 year anniversary.

    I believe I’ve been an avid reader for at least nine of them?

  • 4 Neverland June 15, 2018, 10:02 pm

    The first posts from this blog are from 2007?

  • 5 Alex June 15, 2018, 10:38 pm

    I found this a good “Off our beat” read with a bit of relevance to the huge amount of investment in AI tech.
    AI nationalism (UK perspective)
    https://www.ianhogarth.com/blog/2018/6/13/ai-nationalism

  • 6 The Investor June 16, 2018, 12:28 am

    The first posts from this blog are from 2007?

    Yep. I’ve updated and republished most of the really old ones along the way, but there’s still a few oldies in there bearing the 2007 time stamp:

    http://monevator.com/how-one-relatives-pension-plight-taught-me-to-save-the-hard-way/

    http://monevator.com/how-to-calculate-dividend-yield/

  • 7 The Investor June 16, 2018, 12:30 am

    @DIY Investor @weenie — Cheers! It’s not an official anniversary though, just a throwaway comment for context. I’d guess it was more August time I started to be honest.

    @The Rhino — Nine? Feels like eleven! (Joking! 🙂 )

    @Alex — Thanks, will take a look tomorrow. Love a bit of AI speculation.

  • 8 dearieme June 16, 2018, 1:07 am

    “EIR allows lenders that offer products with temporary interest-free periods to book in advance some of the revenues they expect to receive once the introductory period ends.”

    Do I understand that correctly – they are in the habit of claiming to have received revenues that are, in fact, entirely conjectural, mere hopes for the future? Good God, why is it allowed?

    I’m taken by the Tel’s article on the RIO mortgage. Could it mean that someone with a DB pension who longs to have control over a heap of capital could eschew the risk of transferring to a DC pension and instead plan to draw his DB pension and then borrow on an RIO mortgage when, say, his (and her) state pensions begin? I don’t suppose anyone would dare sell it under the slogan “Turn your old age pensions into a Lamborghini!”

  • 9 John June 16, 2018, 5:23 am

    Your site has definitely saved myself a lot of money so you are to be congratulated on that – but in addition it actually prompted me to take action and start saving, which is even more important. In 18 years time when I am retired early and comfortably i may use this extra time to seek you out for some hugs!!

  • 10 Vanguardfan June 16, 2018, 7:41 am

    MSW has a commentary following the ‘hoarding pensioners’ report:
    https://www.ft.com/content/671ca486-6f07-11e8-92d3-6c13e5c92914
    Not sure I agree with her that fancy (ie expensive and non transparent) new products will ride to the rescue. Haven’t we been here before with structured products?
    Could it be timely to ask the nice Mr Meldon for an article on annuities?

  • 11 Vanguardfan June 16, 2018, 7:44 am

    Oh, and I think I’ve expressed my heartfelt gratitude before, but congrats on persisting for 10 years, I’m sure it’s not easy keeping going through thick and thin. I think I’ve been around for a little over half of it. Everything important I know about investing was learnt here!

  • 12 Vanguardfan June 16, 2018, 7:50 am

    In nostalgic mood, this is the article that google threw up that took me through the back of the wardrobe:
    http://monevator.com/try-saving-enough-to-replace-your-salary/
    Probably in early 2012.

  • 13 Chris June 16, 2018, 8:29 am

    Hello
    Thank you indeed for the expertise and effort you put into Monevator.

    Could I celebrate this with a question?

    I’ve got my Vanguard core strategy and are now looking at some complementary elements. Have read that Scottish Mortgage IT is too narrow, with Tesla a risk. Better to go with Braille Gifford’s Monks IT, same low fees and innovative focus but broader growth focus.

    Question: is Monks a safer bet or given broader focus likely to replicate my Vanguard core?

    Apologies if this is a vague question and/or wrong place to post a question.

    Thanks again for great work.

  • 14 A beta investor June 16, 2018, 9:36 am

    Monevator is to be congratulated on picking up the flame of passive investing from the Motley Fool. Apart from Lemon Fool, which has no editorial, there is no other media entity that bangs the passive drum which tells us how powerful the active industry is.

    I went to an event this week called Retirement Money and hosted by Shares magazine and AJ Bell which I found utterly depressing. No passive funds present just the usual rag bag of active ITs that were top of recent performance stats, some BTL and peer to peer lending.
    Overhearing some of the discussions at the stands, such as investors asking the sales guys questions about some of their holdings, is just a reminder of how much more work Monevator has to do.
    But please keep doing it.
    Please

  • 15 Malcolm Beaton June 16, 2018, 10:00 am

    Well done all at Monevator
    We need you -your country needs you!
    xxd09

  • 16 Mathmo June 16, 2018, 10:48 am

    Thanks for the links TI.

    Agree with @vanguardfan the Merryn article this week is a fascinating read, even if not wholly agreeable (although she does in fairness call out the lost pension generation early on). Similarly the Intelligent Fanatics link (life is more than compounding money) I think misses the point — she was a lonely, frugal person. That she also became rich is a bonus on that existence. I don’t think causality flowed the other way: it makes the false assumption that you always get to choose who you are. While we can peck away at the edges and be the best version of ourselves, being the best version of someone else is hard.

    Well done on ten years. It wasn’t an anniversary announcement when you wrote it, but this far down the comments, it now most certainly is.

    Absolutely love an infographic that is “23 years” and by a broker. The main takeaway is that you should wonder why the broker picked 23 years. I learned nothing about relative investment performance from the pretty picture. It was an effort to ensure I did.

    Also kudos for the life insurance article article earlier in the week. One of my formative experiences of IFAs was being sold a policy that I still pay into this day, with the vague suspicion that the bugger who sold it to me is still getting rich on it and that I have no idea whether he is or not, nor any transparency or assurance that I am getting a sensible product or adequate protection. So much for selling peace of mind. Mental note to put reviewing that on the to-do list (which can often seem like not doing anything at all, but the intention is there).

    Also enjoyed Ralph’s story of how he’s scraping by as a millionaire (ie 40k income) by moving to the poor rural area and scrimping and selling off ancient woodland. Go Ralph.

  • 17 John Kingham June 16, 2018, 11:33 am

    The increasing popularity of passive funds is a good thing… but only if investors can actually stick with a passive strategy when the market is going down rather than up.

    It’s very easy to invest in the market average when that average is going up by double digit percentages, as it has been in the US since 2009.

    But when the market averages decline for several years in a row (as they inevitably will at some point, especially in the overvalued US market) I suspect that many ‘passive’ investors will either move into cash (i.e. attempt to time the market) or start looking around for active managers who can beat the declining indices.

  • 18 Anonymous lurker June 16, 2018, 11:52 am

    Hi mate,
    I just wanted to say thank you for all your contributions over the years.

    I came across this website by accident when I was in my first year of University about 7 years ago. This website has really given me profound knowledge and has really help point me in the right direction towards expanding my know how on investing today.

    I do not normally comment, just lurk around the site.

    Just wanted to say thank you and all the best to all of the contributors to the site. Has really saved me a lifetime of financial woes, literally.

    Thanks.

  • 19 Matthew June 16, 2018, 1:57 pm

    Bogle and monevator have (and will continue) to help the economy and create jobs for years to come – what’s saved in fees gets invested, provides liquidity for the secondary market that allows companies to issue new stock and take that money to grow. I think this effect is, over time far in excess of any revenue made

    I set up my own blog about tilts as an archive for my son and so it’s easy to remember everything, I don’t actually want people viewing it and pushing up the price of my tilts!

  • 20 W Neil June 16, 2018, 3:33 pm

    “I sometimes wonder how much impact Monevator has made over the past ten years”

    @TI More than you can imagine, and not just saving fees. It is the clear and informative discussion about investment strategy, unbiased with no vested commercial interest. Monevator is widely referenced and has become a very reassuring presence.

    It takes an enormous amount of time and care to publish consistently good and accurate content, knowing that everything written will be scrutinized. But you are doing this, week after week, gratis. Amazing. Thank you!

  • 21 Steve June 16, 2018, 3:59 pm

    The article “Why Do Stocks Generally Go Up Over Time?” set me thinking. Is one reason because most countries seek to continually increase their GDP? If so, is this leading to a problem given the increasing criticism of the narrow focus on GDP as a measure of ‘prosperity’ and the fact that continued growth is likely to become unsustainable on a finite planet (as discussed in the book ‘Doughnut Economics’ previously mentioned on Moevator)? If continued growth is unsustainable does this mean that assuming continued growth of the stock market may be unwise? I’d be interested to hear other’s thoughts on this.

  • 22 YoungFIGuy June 16, 2018, 4:17 pm

    Thank you TI (and TA) for carrying the torch on UK investing. You helped me kick-start my investing journey. I don’t think I would be where I am today without your guides.

  • 23 Matthew June 16, 2018, 5:07 pm

    @Steve – I think the planet is a long way from maximum capacity – look at the huge swathes of countryside that still exist, we’re not even building upwards much, science will advance and one day we’ll colonise other planets of we really ran out of space – then you’d have not just multinational companies but multiplanetory ones – maybe “global” trackers Wallace new meaning

    Bear in mind share prices should at least rise due to inflation, then add profitability on top in the form of growth and dividends, it’s not unreasonable for it to keep rising in that sense. Even from a supply vs demand perspective, if the company isn’t issuing more shares but more money is entering the stock market it’ll rise

  • 24 Gordon June 16, 2018, 5:41 pm

    Tbh, I’m always amazed at how much money people spend on active funds. A fairly “normal” couple could have £500k in ISAs/ pensions/ portfolio etc. If they’re paying an extra 2% for active management that’s £10k a year. Or enough for a *very* good holiday and a lease for a new BMW.

    However instead of that holiday and BMW they get vague promises from a fund manager that they will try their best….

  • 25 Steve21020 June 16, 2018, 6:23 pm

    — “I think the planet is a long way from maximum capacity – look at the huge swathes of countryside that still exist, we’re not even building upwards much, science will advance and one day we’ll colonise other planets if we really ran out of space – ” —

    When I was a student, we were all talking about over-population and ‘consumerism gone mad’. Then we had Sunday trading, more consumerism and the world population continues to go up. So if you destroy even more countryside, exactly where is our oxygen supposed to come from?

    Steve

  • 26 Matthew June 16, 2018, 7:18 pm

    @Steve – you could chemically synthesize oxygen as long as you have a source of energy – ie synthetic photosynthesis – or rely on algae in the oceans increasing as co2 rises, or rely on existing countryside getting denser as co2 rises, or rely on roof gardens

    I wish Sunday trading law didn’t exist, I don’t see the benefit of restricting trade on a day people can more easily go shopping, it doesn’t even prevent people working past 4, I could understand that it might not be profitable for every shop to have long hours, but it’s strange why they’re all open when most people are at work

  • 27 Gary June 16, 2018, 8:05 pm

    A big thank you from me too. For the past 8 years I have learned so much. Cheers and good luck into the future!

  • 28 Jim Brown June 17, 2018, 8:10 am

    I started investing into the stock market 4 years ago . This website was a godsend. I am a 95% passive investor ,as a result of this website. Must have saved a few hundreds over the past 4 years .

    Nowadays when colleagues and friends ask about investment I always sign post them to this site and it’s treasure trove archives.

  • 29 Charles June 17, 2018, 9:40 am

    I’ve enjoyed reading your your blog over the years and referred it to many people on web forums as a useful place to start on index investing. I specifically came back a while ago to click your RateSetter referral link to provide a small thank you for your hard work. Hope the money came through!

  • 30 Steve June 17, 2018, 11:37 am

    Matthew
    I can’t decide if your comments are tongue in cheek but as the other Steve has said, I’m not sure I want to rely on the remaining countryside being covered or the human race colonising other planets! I do support technological innovation but am not convinced this will solve all the problems. I believe financial innovation is also necessary. There are of course different views as to whether the current financial system is sustainable but this aspect does worry me. If you haven’ read Doughnut Economics: 7 ways to think like a 21st Century Economist, I recommend it.

    I would also like to add my thanks to Monevator for this highly informative site – it never ceases to provide interesting and useful ideas and discussions. It adds to my desire to use passive funds and to try to keep costs down to improve performance. However, I also seek to direct my investments to support the ESG goals although passive ethical/green investment options are currently very limited (hopefully this will be the next growth area to increase the choice for retail investors). I do therefore use an IFA who specialises in ethical investments to help choose both active and passive funds (and construct a balanced portfolio). The advice of an IFA is also useful in navigating the increasingly complex tax situation, especially in relation to pensions and IHT – it’s often a matter of balancing the desire to keep options open (eg for for changing circumstances and changing tax laws – as we can no longer rely on these not being retrospective) and trying to structure things in a tax efficient manner (whilst trying to steer clear of actions which get criticised as ‘avoidance’). Using an IFA helps me navigate this minefield without spending a large amount of my time trying to find my own way through it!

  • 31 Matthew June 17, 2018, 12:59 pm

    @steve – I don’t desire for it to become that way but I just think that it could, and there are higher caps on population limits than it may appear, so I wouldn’t be betting that it’s all going to grind to a halt any decade soon. When population does eventually reach its maximum physical limit it will be uncomfortable and the moral argument would be to sacrifice beauty for houses, nature for resources, etc, because to not exploit it would make a nice life too expensive for future people

  • 32 Richard June 17, 2018, 3:08 pm

    “I sometimes wonder how much impact Monevator has made over the past ten years”

    Well its thanks to you that i now invest. Two years ago i had no investments other than my pension. I had never heard of Vanguard or passive investing. I decided i needed to invest some money other than my pension that will be tied up for so long. I began researching for simple a cash Isa and i came across Monevator. My eyes where opened as you and your contributors gave some great insight into passive investing not to mention some good book reviews too (T.Hale. Smarter Investing, A. Hallam.Millionaire Teacher, L.Kroijer. Investing Demystified).

    Now i have my Investment Isa with Vanguard and things are going well so thank you to you and all your contributors, you made an impact on me and i doubt I’m not the only one.

  • 33 Tony Edgecombe June 17, 2018, 7:21 pm

    Ralph from West Virginia manages to live on almost a third more than the median US wage, I can’t say I’m impressed.

  • 34 hosimpson June 17, 2018, 8:23 pm

    Congrats on the 10 years! Your blog has helped me see that financial independence was a possibility in this lifetime, and the way For getting there. Keep up the good work 🙂

  • 35 The Investor June 17, 2018, 10:08 pm

    Thanks everyone for the nice words. It feels like this sort of mass feedback happens once a year or so and I have to admit it is a nice morale booster. 🙂

    A few quick specific replies:

    @Vanguardfan — I still really like that article (and think that way about my own finances) even though the approach is frowned upon by my own co-blogger and many of the SWR cognescenti and readers. It’s certainly not optimal, but if you think that way early like I did it’s very motivational.

    @chris — I would never recommend one investment trust over another without doing a deep dive into them. There’s no point in adding active funds IMHO unless you are adding them for a specific purpose, to address a particular sector/market, or perhaps because you believe in a manager (e.g. Train). If you just wanted to add overweight large cap technology exposure (as a passive investor you wouldn’t, but you are pursuing a broader strategy I take it) then you could in the first instance use an appropriate tracker or ETF to get very similar exposure at low cost. (Don’t get me wrong, I hold ITs from time to time but I research them as deeply as I do individual companies.)

    @a beta investor — The trouble is there’s so little money in passive investing, let along passive investing education. As I’ve noted several times when facing bizarre accusations from time to time about our motivations, even Vanguard hasn’t thrown us a penny in direct advertising in a decade. You’d think they’d do it almost as a community project, but no. If I wanted to go full-time with Monevator, I’d almost certainly have to hive off my active opinion behind a paywall and charge for it. And we’re just a couple of guys, not even a company with an office.

    @Mathmo — The choice of 23 years did stick out like a sore thumb, eh? But I’m a sucker for all data dives. Also it’s actually not a bad year for me to benchmark myself to personally, as that’s about the first year that I started paying attention to (but not buying! 🙁 ) London property. Ho hum!

    @anonymous lurker — Thanks for delurking to comment, and for all lurking past and future. Same goes to any other lurkers out there!

    @W Neil — Very generous assessment, much appreciated.

    @Charles — Thanks, that’s thoughtful and I’m sure it made it through and bought a nice meal (/let’s face it got rolled into the Freedom Fund. 😉 )

    @all — Running out of time for tonight, thanks again to everyone who commented and to all the readers who didn’t. It’s a busy world, and while we try to serve up good information there’s a lot of stuff competition for attention out there, so your visits are appreciated. It’d be a pretty miserable pastime blogging for 10 years if nobody was reading! 😉

  • 36 Matthew June 18, 2018, 2:02 pm

    Ralphs story is inspirational, if only millenials would sell off the timber and shale on their land :p

  • 37 The Investor June 18, 2018, 2:39 pm

    RE: Ralph’s story, I agree it’s not “save X a month into financial product Y and compound it and you’ll have Z.” 🙂

    I found it interesting because his way of doing things (hard assets and DIY) is so different to what we usually discuss around here, and what I usually read. When he bought his property, those physical assets clearly weren’t in the price (otherwise he wouldn’t have been able to afford it.) It’s not going to be directly implementable today, but perhaps something similar is / could be. Or at least it makes me think.

    There’s always something going cheap somewhere! 🙂

  • 38 Matthew June 18, 2018, 5:06 pm

    Ralph did well to find hiden value, that’s fair credit to him, I think he had a high enough income that he didn’t need to be aggressive to become a millionaire, property was enough for him. The disconnect with what most people call frugal is the funny part. Also I don’t think you can really say that property is more physical than shares, because ownership of property is as much a paper thing as ownership of companies, although I suppose a company is ultimately a footloose thing and the only physical thing is the cash in the balance sheet. Cash itself might look physical, but it’s still bits of paper (I suppose technically it’s plastic now! )

  • 39 Lydia June 18, 2018, 5:20 pm

    Congratulations on the 10 years! Monevator got me interested in investing as a fresh faced 25 year old. 4 years later and I have a big chunk invested in my SIPP and based on your Slow & Steady Portfolio! Huge thanks for getting me interested and getting the benefit of that compounding, owe you a large drink and a debt of gratitude.

  • 40 Nathan June 18, 2018, 7:37 pm

    Thanks TI, I took back control of my investments in 2010 I would not have had a clue how and what to do without this site.
    Thinking back, it was one of your articles that made me aware of the whole FI thing with actual worked (£) numbers, my work ethic shriveled and died that day:)
    I don’t think I’ve read anything with the same consistent depth and quality of content. I hope you decide to continue for another 10 years.

  • 41 Anon June 19, 2018, 12:34 am

    Some years ago (7? 8?)I was asking around work colleagues if anyone could recommend an IFA and someone said to me “No! *You* are the only person qualified to look after *your* money! Go and read Monevator!” or something very much like that. Anyway, it was a bit of an epiphany moment. I’d already caught the low cost index tracking bug from The Motley Fool back in the late 90s, but it was Monevator led me to Vanguard, the DIY platforms and all the other FIRE bloggers and just generally helped me understand the assets I’d somewhat haphazardly accumulated a lot better than I did before (for example there’s a piece on taxation of out-of-tax-wrapper accumulation units which is by far the most comprehensible article I’ve seen on the topic anywhere on the net). I have no doubt my own wealth is in a much healthier state as a result of that “Go and read Monevator!”, so a sincere thank you for all your efforts; long may they continue!

  • 42 Learner June 19, 2018, 7:05 am

    For someone of advancing age and relatively low wealth, Monevator has been a mixed blessing 🙂

    Rather than a trigger to divest of ropey active funds and pour into passive products, it was a prompt to honestly assess my situation, likely future employability, and cost of retirement – something I had not done properly until then, unfortunately. The result is a financial plan that is simple, low cost, and easy to follow.. but also very unlikely to result in a comfortable life post-employment given the starting position and time remaining.

    I thank the writers for pointing me in the right direction none the less, for countless hours spent fretting about the future, and for turning me into an economics and public policy nerd. (On balance and in all seriousness, surely better to know your fate to some approximation than to continue in blissful ignorance!)

  • 43 Matthew June 19, 2018, 8:16 am

    @learner – worth delaying retirement maybe? Or part time? Up to you

  • 44 Learner June 19, 2018, 2:38 pm

    If it’s an option, yes.

    @TI you missed a classic from Forbes the other day that has been doing the rounds. The opening line alone..

    https://www.forbes.com/sites/josephcoughlin/2018/06/11/millennials-arent-having-kids-heres-why-thats-a-problem-for-baby-boomer-real-estate-retirement/

  • 45 Matthew June 19, 2018, 3:28 pm

    @learner – if you defer the state pension or a defined benefit pension, your guaranteed income when you do draw will be higher, but that’s one less year of drawing it so you’re not guaranteed to make back what you missues out on. If you don’t draw a private pension it should (in theory) have another year to grow, but growth itself isn’t guaranteed

    If the value of baby boomers houses don’t increase that’s actually a problem for the millenials who will inherit, so millenials not having kids will doom their own generation

  • 46 Alan June 20, 2018, 5:17 pm

    @Gordon

    I’m not sure a combined £500k represents a “normal” couple, although it might in 20 years as pension auto enrolment works through the system.

    If normal equals the majority then less than £50k would be my guess.

  • 47 ermine June 20, 2018, 7:32 pm

    full-time with Monevator, I’d almost certainly have to hive off my active opinion behind a paywall and charge for it

    I know I really shouldn’t do this, and it runs against the passive pack drill, but what the hell. Once upon a time, TI used to voice active opinions on here, while all the time saying DYOR and hedging. But one could read between the lines. I acted on some of those and they serve me well; these are still in my ISA and my primary regret is I didn’t do more. So I for one would actually be prepared to pay for this, obvs subject to the price. There are three other UK PF guys who do this to some extent, but I have resisted. I’d make the exception for TI.
    I will crawl back into the mists from whence I came and whistle loudly and pretend I hadn’t said that. Oh and BTW a belated deep thanks TI. Nine years ago I read this and thought to myself this guy is absolutely barking, but I have to get out of the workplace right now, so I acted on it in a DC pension and in an ISA. Timid blighter than I was, half the ISA initially was in cash, but I didn’t perpetrate that error any more afterwards.

    I worked three more years. That DC pension, from a standing start, carried me since 2012 and is all in gold and cash now to run out over two more years, when I will reach normal retirement age for my company pension. I still have the ISA, also from a 2009 standing start, from which I have never drawn a penny. It’s now worth more than my share of my house. I am ever in your debt, for holding the lamp in the darkness of the GFC, and just enough rationale for hope in desperate times.

  • 48 Mr Optimistic June 20, 2018, 8:32 pm

    I reckon I have learnt more from this website and blogs than all other sources added together. Apart from direct information, it got me thinking on more accurate lines and threw in books and other sites. Can’t tell you how often I have given it as the only recommendation people need.

  • 49 old_eyes June 21, 2018, 2:54 pm

    May I add my thanks to all those that have gone before. I started reading in 2010, or thereabouts, and it was a revelation! Since then I have got my passive strategy sorted out and implemented (50:50 equities and bonds/cash with a strong global emphasis), kept feeding in money as and when available, cashed nothing in, and taken early retirement.

    I have had the smug pleasure of listening to an IFA explaining that because he is ‘in the business’ he could manage my portfolio for only 2% pa, and that I could never get the costs that low myself, and then telling him ‘no thanks’. I fired my existing IFA for providing me with less useful and clear information than Monevator, and now only pay for specific advice on complex topics (pensions), and then only to confirm or contradict my own analysis.

    I have enjoyed the posts and the links, as well as the comments.

    I particularly enjoyed posts about calculating an income floor and how you might provide one. This influenced my thinking a lot.

    The only slight niggle is that now I have got the portfolio sorted out, driven down costs and made it as boring as possible, it is – well – a bit boring. So far I have been able to resist the urge to tinker, but some of the fun has gone out of the game.

    On the other hand, I have not yet experienced a proper bear market so there is probably enough excitement, and then some, waiting for me somewhere in the future.

    Once again my thanks for providing this amazing resource that has taught me so much, and in such a painless way. All the contributors write like a dream.

  • 50 Buzzzard June 21, 2018, 5:57 pm

    Three things:
    Congratulations on 10 years. After starting on the fool, you and your links have become my main source of financial common sense these days.

    I think you should consider a patreon. Either for routine funding or some specials – how much for some online advertising or a full page in the Sunday papers encouraging passive investing?

    Did you see / link the following? http://www.collaborativefund.com/blog/the-psychology-of-money/

  • 51 Matthew June 21, 2018, 6:12 pm

    On the subject of boring, I failed my previous hobbies out of laziness (karate, stock car racing, gaming and blogging) so I’m pleased to have a hobby here where laziness makes me better!

  • 52 @conkers3 June 27, 2018, 10:35 pm

    To all the Monevator Team & contributors congratulations on an amazingly successful 10 years on investing & financial wizardry. You have all made such an amazing positive impact on your global audience. Long may it continue.

    Many thanks Peter/conkers

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