A global tracker fund takes care of all your equity diversification needs in a single investment product.
In this post, we’ll explain how to choose the best global tracker fund for you. We’ll also list our top picks from the choices on offer.
What is a tracker fund?
A tracker fund is an investment fund that tracks an index like the S&P 500 for the US or, in the case of a global tracker, an index such as the FTSE All World.
Your money is pooled alongside the global tracker’s many other participants. Together this capital is invested by the fund’s management team into every major stock market on the planet.
As an investor in an index fund, you get a slice of ownership in thousands of world-class firms. As a result you buy into the prospects of entire industries, countries, and continents at a stroke.
An index followed by a global tracker fund is essentially an international league table of the world’s leading companies, from Apple to Nvidia to Taiwanese semiconductor giant TSMC.
Global tracker funds hold stocks 1 to replicate their chosen index as faithfully as possible. The index meanwhile is driven by the fortunes of its constituent firms. Over the long-term, company valuations rise and fall consonant with their performance, investor sentiment, and global capital’s best estimate of their future earnings.
Investing this way is known as index investing or passive investing. We believe it’s the best strategy for most people to choose to maximise their chances of meeting their financial goals.
All-World – Most products labelled world index funds only encompass developed world countries. They skip the emerging markets, including the likes of China and India.
Such ‘world index trackers’ are less representative of the global economy. Instead look for ‘All-World’ or ‘Global’ index funds that include emerging markets.
Alternatively, if you do choose a developed world solution, you can add an emerging market index fund to your portfolio to make up the difference.
Diversification – Following on from the above, compare how many stocks your shortlist of global tracker funds includes. The more the better, because your index fund will then do a better job of representing the global stock markets that it follows.
Reassuringly-expensive price tags will not secure you a better global equity tracker fund. Go for cheap, vanilla flavour trackers. Don’t worry about bells and whistles.
Don’t fret about small changes in cost, either. An OCF differential of 0.1% on £10,000 is just £10.
For example, if you had £50,000 in a fund with an OCF of 0.25% that would cost you:
£50,000 x 0.0025 = £125 annually.
Whereas a similar fund rocking an OCF of 0.15% would set you back £75 per year in charges.
Of course, only you can know your personal hassle threshold. Try to work out whether the impact of costs over your investing lifetime is worth switching.
Investor compensation – You’re covered for up to £85,000 if your global index fund is based in the UK. ETFs are not included. Note, investor compensation schemes only kick in if fund manager goes bust and your money disappears. Stock market losses are not covered! (Your broker is also covered by the same FSCS scheme. If the broker goes pop then ETFs and offshore index trackers are protected, so as long as your platform qualifies for the scheme.
The index – You should look up the tracker’s index to make sure it’s truly global. If it isn’t, find out what’s missing. Check your product’s factsheet, too.
Global index fund or global ETF?
Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn’t guarantee future results.
ETFs and index funds are both types of index tracker. They’re both excellent ways of diversifying your investments across the globe for an amazingly low cost.
We’re equally happy using ETFs or index funds. We include both in our best global tracker fund table below.
The only time the fund type is a deal breaker is if:
Your stockbroker charges an ETF dealing fee that costs more than 1% of your typical transaction value.
The same broker enables you to trade index funds for free.
In the latter case, we’d invest in a global index fund in preference to the global ETF. That’s because the impact of a high dealing fee is surprisingly damaging over the long-term.
See our cheap broker comparison table for more. Percentage-fee brokers often allow you to trade global index funds for nothing.
Quite a few brokers also enable you to trade global equity ETFs for £0, too. Check out InvestEngine, Freetrade, Vanguard, Dodl, Prosper, and Lightyear for that option.
There is very little to choose between these five global equity trackers:
SPDR’s All Country World Index tracker is the cheapest. Hence it tops the table.
The SPDR and iShares ETF follow MSCI indexes whereas the others follow a FTSE index. The indexes vary somewhat in country composition but have performed identically over the past decade.
Vanguard’s Global All Cap index fund has about 6% small cap exposure. It’s therefore more diversified than the rest.
The reality is these shades of grey haven’t made much difference to results over the longer term. More on that in a moment.
Ch-ch-changes…
There are two relatively new entrants into the global tracker fund market to keep an eye on. They’re low cost but they haven’t had time to build a track record yet:
Amundi Prime All Country World ETF – OCF 0.07% (The cheapest global tracker fund available.)
Invesco FTSE All World ETF – OCF 0.15%
I’ll also throw two other choices into the pot because they do something a little different:
Vanguard’s LifeStrategy funds include a UK equity bias of around 20%. That compares to a 3% UK allocation for the true global index trackers in the table. You could choose LifeStrategy 100 if home bias suits your situation. Go for LifeStrategy 20-80 if you want an all-in-one fund that includes government bonds.
(Vanguard has also recently launched a ‘LifeStrategy Global’ range. These funds are the same deal as the regular LifeStrategy range, minus the home bias.)
The Fidelity fund is actively managed. It features a REIT exposure and small cap allocation of about 10%.
Both are funds-of-funds. They manage their asset allocation by holding other index trackers instead of trading the shares of listed firms.
I’m most interested in the 10-year annualised (nominal) returns for the global tracker selection above because that’s the longest comparison period we have for most of the funds in the mix.
I’ve underlined the 10-year returns of the MSCI ACWI and FTSE All-World indices in magenta. A well-functioning passive fund should perform in line with its benchmark – which this selection does.
In fact, most trackers should lag their index because the fund pays fees whereas the index doesn’t bear that cost.
The iShares and SPDR MSCI ACWI ETFs perform this way. But intriguingly, the HSBC FTSE All-World fund leads its index – suggesting management have got a trick or two up their sleeves.
The FTSE Global All Cap fund follows a different index (not graphed) and has been dragged down by its small-cap shares relative to its rivals.
Over ten years, the HSBC has marginally outperformed the rest. But it hasn’t always. The Vanguard All-World ETF edged it by a nose four years ago.
It could be that HSBC’s significant fee advantage is starting to tell. Or perhaps some other minor variation in their respective holdings means advantage HSBC.
But it’s best not to put too much weight on short-term return results, anyway. They can easily be reversed by market moves.
Stress-free investing
If you’re starting from scratch then by all means choose the HSBC FTSE All-World Index fund.
But there’s no need to switch out of the other top five funds because of the result in the table.
Index trackers are typically cookie-cutter products. Mostly the results just demonstrate our top five all work just fine. They are practically interchangeable.
The fact is we’re not checking performance to crown the one, true, best global tracker fund.
With me-too products, you don’t have to over-optimise. Any candidate from a field of well-matched rivals will probably be good enough.
Our performance check simply ensures that nothing on our shortlist is broken, or isn’t what we think it is.
A world of difference
Here’s a few other things to note.
Fund sizes – All five index trackers in our top table have hundreds of millions in assets under management (AUM). Efficiencies of scale typically kick in above £100 million. Beyond that threshold, size is not a big deal. The iShares ETF is three times the size of the SPDR ETF, but its performance is neck-and-neck over ten years.
Fixed income – The trackers in our table are purely equity funds. Owning additional high-quality government bonds is crucial to help you not to freak out during a stock market crash.
Check out our best bond fund choices to find your fixed-income Venus for your equity Mars.
Income versus accumulation – All of our best global index tracker picks come in both Inc and Acc flavours, except the iShares and SPDR ETFs. They are only available as accumulating funds.
World and World ex-UK – I excluded these trackers, because it makes no sense to only include the Developed World, or to skip the UK when you’re trying to diversify across the whole world.
K.I.S.S.
The beauty of the single global equity tracker strategy is its simplicity.
Yes, you could shave away a little cost by building a similar portfolio from separate regional trackers.
But is it worth the aggro in time and dealing fees? And can you trust yourself to stick to the global market’s verdict? Or will you justify trimming back on Japan or the US or wherever because you can apparently spot a bubble that everyone else has missed?
Fill your boots if you psychologically need the control. But know that you don’t have to.
Nobody can predict which strategy will win over your investment lifetime. But putting a global tracker fund at the core of your asset allocation is a rational choice in an increasingly insane world.
Take it steady,
The Accumulator
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For MAVENS and MOGULS byThe AccumulatoronFebruary 10, 2026
Buffer ETFs you say? Sounds interesting, what are they all about? Stock market upside with limited downside? VERY INTERESTING! Tell me more!
Oh, there’s quite a lot of jargon isn’t there? [Flips through brochure.] I see. I see. I like this diagram, here. I see what you did there. [Notices funny smell.]
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I suppose it’s an occupational hazard of writing a weekly column that you become prone to thinking you’re living in particularly excitable times.
So for the record I agree that a 1930s Monevator would have been plenty preoccupied with the Great Depression and the backdrop to war.
Similarly, students dropping out of the rat race and Neil Armstrong popping onto the Moon would have provided plenty of food for thought in the 1960s.
Just since this blog started, we’ve had a financial crisis, riots in the capital and beyond, an economically witless rupture with Europe, and a global pandemic.
Even so, in 2026 the historical tumble dryer really does seem to have gone into a fast-spin mode.
And I’m not even talking about the latest grim Epstein revelations.
Top Trumped
Tellingly, the two factors driving this year’s tumult are tracked here in Weekend Reading by special link sections I introduced on account of their potential to cause mayhem.
The first is the ongoing disintegration of political norms in the United States under Trump.
As an independent floating voter, I happily ignored politics on this website for the first decade of Monevator’s existence.
The reason Brexit eventually loomed large on Monevator was, firstly, that it fell outside the normal political programming; secondly, that I was sure it would hit both our national and personal finances (see the chart below); and thirdly, because of what it represented – to me, a tech-enabled rekindling of an ugly old populism.
That was also why I began tracking US politics after Trump’s re-election.
That this man could be President after what happened in the 6 January Capitol attack was already beyond the pale. It pointed to those same populist forces growing stronger.
True, both Republicans and Democrats had been polarising into more extreme positions for years. But Trump represented a new and anarchistic impulse that boded even worse.
It seemed to me very likely that his taking office would have consequences for the whole world. And that, of course, is exactly what we’ve seen.
You needn’t be woke to wake up
I’m not talking here about whether you like Trump’s persona or not. (There’s no denying he’s charismatic.)
Indeed perhaps you can live with the President of the United States telling female journalists they should smile more – rather than answering questions about child abuser Epstein – or posting a video depicting the Obamas as apes.
For my part, it makes me feel angry and ill.
But all of us should be concerned by Trump’s kicking over the global order he inherited on entering the White House.
Trump’s domestic extremism is no exaggeration, as the Financial Timesnotes:
The speed, scale, flagrance and persistence of the Trump administration’s deviations from established legal and constitutional norms during his second term have been so dramatic that it bears stepping back and taking stock.
Within hours of his January 2025 inauguration, Donald Trump had pardoned hundreds of people convicted of political violence — a hallmark of aspiring autocratic regimes — and shown tacit support for violent resistance to electoral setbacks.
Days later he removed legal protections from civil servants and fired 17 oversight officials charged with tackling fraud and corruption.
By March the administration was in open conflict with the courts, summer saw police firing rubber bullets at protesters and the removal of the labour statistics agency chief in the wake of weak jobs numbers, and this month brought the criminal investigation into Fed chair Jay Powell and the shootings of Renée Nicole Good and Alex Pretti by Immigration and Customs Enforcement agents.
While US history is hardly free from political violence or maltreatment of disfavoured groups, this blitz on America’s citizens, institutions and — by many estimations — the constitution itself ranks as arguably the most rapid episode of democratic and civil erosion in the recent history of the developed world.
But to my mind Trump is not just an American problem. And not only because the way he runs his office can only embolden similar characters elsewhere. (See Trump’s Profiteering Hits $4bn in The New Yorker for a recap of his business as unusual).
It’s more because, from a selfish perspective, the end of the global rules-based order that Trump is undoing – to no benefit for the US, incidentally – enabled countries like the UK to earn more from trade, spend less on defence, and enjoy higher living standards.
Noah Smith describes what we’re getting in exchange for that system as ‘international financial anarchy’, arguing it’s why gold has been on a tear for the past year.
Smith warns:
Goldbugs are thus right about gold’s durable safe-haven status, but they’re not right that this is a good thing.
Gold isn’t a superior system — it’s a desperate fallback for a world in which the people who were in charge of the superior system abdicated their duties.
Which sort of takes the shine off the rally, eh?
AI is eating the software that ate the world (maybe)
The other big tumult in 2026 is being driven by – shock horror – artificial intelligence.
Huge market dislocations have hit both legacy software companies threatened by AI insurgents, and also the listed behemoths who are deploying oceans of capital into supporting all this AI that nobody else is really yet paying for.
Here’s just a sampler of the week’s news:
Software stocks hit by Anthropic wake-up call on AI disruption – Reuters via Yahoo
How the AI trade has changed (for the worst) in 2026… – Sherwood
Big tech loses $1.35 trillion as AI spending fears spark sell-off
It’s emblematic of the times when shares can sell off both because they are being disrupted by AI – and because investors are nervous about those same disruptors.
Though that’s not necessarily illogical.
Maybe cheaper AI models are going to crush margins for nearly all software companies, while delivering merely commodity profits to the big AI companies and the hyperscalers like Microsoft and Amazon?
An everyone-loses scenario, in other words. It’s enough to give a stock picker heartburn.
Disruptors disrupted
Passive investors may wonder, as some did before 2022’s rout, whether I’m crying wolf.
The markets are still near all-time highs, after all.
However, turnover beneath the surface has been pretty wild.
Multi-trillion-dollar Amazon began Friday down 10%, for example. Meanwhile a whole host of former ‘software as a service’ darlings are 30–50% below their peaks.
Even the UK market has not been immune, as some of the rare few companies in London that seemed to have a nodding acquaintance with the 21st century were overnight cast as losers on the arrival of a new plug-in for Claude AI:
The question: is AI going to destroy ‘old economy’ (guffaw!) tech stocks, or does the re-emergence of investor nervousness about the lavish spending plans of the likes of Microsoft and Amazon suggest more of a dotcom bubble-bursting type moment?
And if there is a dotcom crash parallel, will it still only be a matter of time, anyway – like how the Internet eventually did remake everything from music and movies to taxi cabs?
Or conversely, will AI run out of puff like, say, the metaverse or 3D printing or NFTs?
Pick your knows
For my part, I’ve rarely been more uncertain about how things will go.
How ironic! The potential dispersal among the winners and losers seems extreme, which in theory means lots of opportunities for portfolio outperformance, and yet the existential-level uncertainty is enough to make even a veteran active investor want to pause stock picking, buy the whole market, and let them fight it out for a decade.
I’m probably not going to do that. But that doesn’t mean it’s not a good idea.
Value conscious
On the other hand, perhaps it’s all just the age-old cyclical ups and downs dressed up with new buzzwords and fears?
Welcome, grab a stool for our latest interview with a Monevator reader who has achieved FIRE (Financial Independence Retire Early). Okay, so this month’s interviewee ‘Cheap and Cheerful’ has actually moved the goalposts late in the game and hasn’t yet pulled the ripcord on the daily grind. But fear not! This isn’t simply another case of One More Year syndrome. It’s more the potential for one more cost centre…
A place by the FIRE
Hello! How do you feel about taking stock of your financial life today?
Pretty pretty good! I had a big birthday recently and by most metrics I’m financially independent. I’m weighing up whether to retire. I’m still just about in one year more mode which perhaps I shouldn’t be. I’m a bit of a pessimist so there is always going to be a part of me that never thinks that I have enough. I think I might also struggle with no longer ‘accumulating’ in the event that I did hand in my notice.
How old are you?
41. I’m married and have been for nearly eight years. (We were courting eight years before our marriage).
Do you have any dependents?
No. Tongue firmly in cheek: we do have a cat which forms a disproportionate part of our discretionary expenditure.
My wife and I have recently decided that we would like to have one child. Given our relatively old ages on this front, conceiving might be tricky, and we don’t want to go down the IVF route. Clearly, if we do have a child this will impact upon our finances and we are budgeting accordingly.
Whereabouts do you live and what’s it like there?
East London. We’ve lived here since 2017.
There are great aspects: we’re walking distance from the City, and near great restaurants, cinemas, museums, and galleries. Another attractive aspect is the relatively cheap running costs of the flat.
Less good is the low level crime and anti-social behaviour, which has probably got worse in recent years. Life is about trade-offs!
If we have a child then we will look to move after the first few years but still stay in London. We don’t really want to move somewhere that involves driving and prefer city living.
When do you consider you achieved Financial Independence and why?
I’m not entirely sure. It’s complicated slightly by our recent decision to have a child. Before we made that decision I would say I probably achieved financial independence at 37.
My new aim is to build savings and investments that will allow withdrawals of c.£50,000 per annum, excluding my wife’s salary, covering my wife and I for the rest of our life, which I think our current finances just about allow.
My finances and my wife’s finances are quite separate currently and she does not want to retire early. If we have a child she will carry on working after maternity leave and I will be the stay at home Dad.
Any qualms?
Well, I worry about prospective equity market returns from broad indices over the next decade, particularly the US. We are well overdue a prolonged bear market and I’ve been ‘de-risking’ my portfolio over the last few years.
Assets: productivity over property
What is your current net worth?
My net worth is £1.96m and my wife’s is around £640,000.
What are the main assets that make up your net worth?
My assets are as follows:
Half share of our flat c.£250,000. (No mortgage.)
Investments
GIA – £665,875
ISA – £452,220
SIPP – £559,258
Defined contribution workplace pension – £18,246
Cash – £14,524
What’s your main residence like? Do you own or rent it?
It’s a two-bedroom flat with quite high ceilings which doesn’t get too hot in the summer. We own it outright with no mortgage. We purchased a share in the freehold not long after buying it, which thankfully avoids the problems of leasehold. We like living in flats and don’t really want to move to a bigger property, which invariably eats into your money and time.
Having said that if we have a child we would look to move at or around primary school age. We would still live in a flat or small property that is slightly bigger than where we live now.
The reason for moving would be more about moving to a slightly better area. Whitechapel has a fair amount of squalor, although Cambridge Heath Road has become somewhat gentrified which has been pleasant. (I’m all in favour of gentrification!)
Do you consider your home an asset, an investment, or something else?
Although I’ve listed my share of the flat as an asset, I don’t really regard it as such. Though I suppose I regard it as an asset in that I am not exposed to the uncertainties of the rental market, and rent does not form part of my annual expenditure.
Unlike many of my peers – and Britain in general – I do not think property is a very attractive investment. My Grandad thought property was a bad investment, which made sense given that he was born in 1918 and had a very different experience of property to my parents’ generation.
Most people don’t really monitor their annual running costs properly and certainly don’t quantity the cost of filling up extra rooms with more and more stuff!
If you want to FIRE then keeping property costs low is very important.
Earning: on the run from the law
What’s your profession?
Ignoring jobs before graduating from university, I’ve had two main jobs: a solicitor until I was 32 and an investment manager since then.
I did a history degree before going to law school for two years to do a law conversion course. I managed to get a training contract at a law firm before going to law school and they paid my fees and gave me an allowance. That basically paid my costs for the two years. I don’t think I would have gone to law school without this.
I found law quite dull. The area that interested me the most was private client work – wills, trusts, estate planning, tax, domicile and residency – which I specialised in. This was helpful in giving me a degree of expertise in tax, which is obviously quite important in one’s overall personal finances.
I can do my own will, tax return, and Lasting Power of Attorney. That saves considerably on professional fees.
And the switch?
I changed careers at 32, as I thought it was time to do a job where the subject matter naturally interested me – investment.
I’ve enjoyed being an investment manager more than a solicitor (although perhaps not as much as I hoped). The introduction of working from home improved my working experience too. I’m very introverted and find a busy office environment quite frankly a bit exhausting. And I really dislike committees and meetings, which seem to me often exercises in self-promotion.
I like the Japanese concept (hopefully it is still practiced) of only having meetings when there is a new point of business to discuss.
Performance reviews and interviews are all pretty grim too.
Can you tell me a little more about your job? For instance, are you running a fund? (Not that I’m an investing groupie with my nose pressed up against the sheer glass walls of the financial service industries’ skyscrapers or anything…)
My role involves managing a client’s investment portfolio by selecting investments and tailoring it to their requirements. Sometimes we work alongside financial planners who give tax, pension, and cashflow planning advice. It does not involve running a fund but I suppose the roles are not too dissimilar.
The job is client facing. We have internal analysts who provide investment recommendations, which we can follow. We have annual meetings – sometimes more frequent – with clients to explain investment performance, portfolio activity, and outlook.
What is your annual income?
My current annual employment income plus bonus and pension contributions is approximately £90,000.
My investment income (dividends and interest) is around £45,000 a year.
I don’t invest to generate dividends per se – I invest where I see value.
How did your career and salary progress over the years – and was pursuing financial independence part of the plan?
My initial salary as a trainee solicitor (two years) was £25,000. It then doubled to £50,000.
When I left the law I was earning around £80,000. Changing careers adversely impacted my salary in the short-term as I started at the bottom again as an investment manager. My salary progressed very quickly after passing my investment exams. And my investment knowledge was very high compared to most other people at my level.
I suppose I began thinking about early retirement as a concept when I began to read about equity investment in my early 20s. I had the grim realisation that to have the option of not being an employee I’d have to save like billy-o and invest well.
If I had substantially less money saved by 32 I would have not have switched careers. In some ways I’m quite risk-averse.
Did you learn anything about building your career and growing income that you wished you’d known earlier?
Not a huge amount. I suppose I would have liked to have entered the investment world earlier as I didn’t really like law. But then again, private client law gave me some very useful skills.
Do you have any sources of income besides your main job?
Yes. The largest part of my wealth accumulation has been through investing. As I’ve said, my investment income stream is currently c.£45,000 a year.
Did pursuing FIRE get in the way of your career?
I wouldn’t say in a direct sense but possibly indirectly in impacting my mindset.
I knew from an early stage that I didn’t want to be a partner having to spend much of my time managing people and clients. Additionally, I didn’t want the stress that comes from being a partner.
Many of them well and truly have the ‘golden handcuffs’ on with massive mortgages and expensive lifestyles and are often seriously stressed. I guess that attaining high status conquers all for some.
You seem to like your job and you clearly like investing. Do you really need to retire? Have you considered something more part-time or ad hoc instead?
My job is okay. I’m not sure that I have ever particularly liked being an employee. I find being around other people all day tiring. There are parts of the job – business development, marketing, committees, client admin – that I don’t like. But I have a good relationship with my boss who shields me from some of this.
Perhaps I don’t need to retire. Knowing I have enough money to retire has made me somewhat pampered as I know I don’t really have to do things that I don’t want to do!
Working from home has been a godsend. I have hinted at working part-time but I’m not sure how well this would work in practice.
Saving: a genetic inheritance
What is your annual spending? How has this changed over time?
My annual expenditure has always been very low. This is somewhat a family tradition.
My grandparents – tenant farmers – were ultra-frugal. My Dad said that they employed an accountant once (not sure for what exactly – some sort of farming thing) and he couldn’t believe how anyone could spend so little money. The accountant actually thought that they were on the fiddle!
My grandparents almost seemed to forget that rationing no longer existed. They saved bread bags, never bought new clothes, and so on.
My Dad was and is very frugal too. He retired at 45 so perhaps frugality is somewhat hereditary?
A pension adviser came to his workplace once and said in terms of saving he was in the top 1% of his workplace. Had he not been so frugal then my life would have been considerably worse, as sadly my Mum was diagnosed with Pick’s Disease when I was 14 – she was 45 at the time – now more commonly known as frontotemporal dementia. She died when I was 16.
Clearly, this event has shaped me and my attitude to money considerably. I view money to some extent as a shield as a result.
During my Mum’s illness I didn’t see many friends as I had to help look after her, which I didn’t regard as a hardship at the time. The hardship was watching her deteriorate knowing that she was going to die.
I learnt to make my own entertainment and read a lot which is my favourite thing to do. Even before my Mum’s illness I always enjoyed my own company. I didn’t actually look forward to the ‘play dates’ that she used to arrange when she was well!
One thing that I enjoyed doing which other people would probably find odd was writing out what I thought should have been the starting XI’s of all the Premier League and football league starting XIs. My memory for facts and figures at that age was pretty good!
Anyway, I got sidetracked…
Not at all, early childhood adversity often shapes the adult. And it’s easy to agree that your mum’s unfortunate early illness could have led to you developing a more cautious mindset.
Well, to get back on track I remember that when I earned my first year’s salary as a trainee solicitor – £25,000 – I saved £8,000. That’s excluding investment income or gains, so just from salary. My rent inclusive of bills was pretty cheap though at £300 a month. I wasn’t living in London then!
My saving rate stayed very high. In fact that was probably my lowest savings rate, at 32%.
My current annual expenditure now is around £17,000 a year, which includes £2,000 a year commuting. I separate my general expenditure and commuting costs as the latter will fall away should I stop working.
My current savings rate including investment income is roughly 85% on a pre-tax basis.
So you’re still spending like you did in your early 20s?
My spending has gradually increased over time, but my wife and I haven’t succumbed to lifestyle inflation. We go on holiday, have spent money on improving the flat, got a cat, go to the cinema sometimes, and eat out or meet up with friends periodically.
Some areas of lifestyle inflation have been no longer walking 35 mins to go to Lidl, spending more on holidays, and even buying some art!
Thankfully, my wife is also frugal. Clearly, if she wasn’t our marriage would not have worked.
My wife’s parents are Indian immigrants who came to Britain in the early noughties, having lived in India, the US, and Australia. She jokes that my family have an immigrant spending mentality.
If we have a child then our spending will increase a fair bit. But if I am indeed the stay at home dad, we will save a lot on nursery fees, thankfully.
Our joint spending is currently around £35,000 annually. I’m budgeting for this to increase to £50,000 over the long-term.
My wife plans to carry on working, as I mentioned, and this gives our budget more ‘flex’. Her current salary is £45,000, working four days a week.
That £2,000 seems a lot to spend on commuting costs, given you live quite centrally and you like to walk. Though I guess it does rain…
My commuting situation is a bit odd as I don’t currently work in London. This is because I wanted to work with my boss who I get on with very well. I have worked with other people previously who I really did not like. This is more important to me than location.
Will you leave London if/when you retire, or do you see your flat as your long-term home, despite what sounds a bit like a growing dissatisfaction with the area?
My wife works in London and walks to work. We’re both happy in London for now. We may look to move out but this wouldn’t be for at least ten years in all likelihood.
I think we would always live in a city as we don’t like cars.
Do you stick to a budget or otherwise structure your spending?
I don’t have a fixed budget. I do track my spending. My aim is to spend £15,000 per annum excluding commuting costs. But this is not a hard budget.
I’d probably be a bit peeved if my spending went above £20,000 per annum.
Regarding food, a friend at law school mentioned that for his main meal of the day if he was doing the cooking he would not want to spend more than £2. I hadn’t really thought about this before but I liked the simplicity of it and I still broadly stick to this today!
What percentage of your gross income did you save over the years?
I can’t be precise but I’ve always saved a very large percentage of my gross income. As we’ve already covered, my lowest savings rate was when I began full time work at 32%. It is now 85%.
What’s the secret to saving more money?
The main secret is to be content with very little. My idea of a perfect day is a day with no appointments that includes reading, going for a long walk, and possibly playing The Legend of Zelda: Breath of the Wild.
I don’t find frugality a hardship. It’s just a consequence of how I like to live. Many people would probably find my life very boring.
I don’t think FIRE is necessarily right for most people. There is no point in making yourself miserable if that is how saving excessively makes you feel.
I believe people who like routine and who are introverted are naturally better-equipped to be savers.
Do you have any hints about spending less?
None of my saving tips are particularly revelatory. The big ticket items are: buying a home that is well below what you can afford; not having children or pets (we now have a cat and trying to have a child!); and not having a car.
I live quite centrally in London so will walk wherever possible without getting the Tube, even if this results in a one-hour walk. Clearly, this isn’t always practical. But walking is fantastic all round and people don’t do enough of it.
Other smaller tips include meal prepping for the week and bringing your own lunch to work. We also divide our clothes into ‘slob clothes’ which are only for home and ‘normalising clothes’ for public. This reduces the wear and tear of the ‘normalising clothes’, making them last much longer. We have a few T-shirts that are 25 years old.
Also, we only buy household appliances when they break. Our TV is 12 years old and our microwave 15 years old.
You’re clearly comfortable in your own skin…
You really can do what you want in life. Don’t do things to impress other people who by and large don’t care. Avoid having friends where meeting up is going to cost you £100 every time you see them.
A lot of people fall into the trap of ‘spending money they don’t have to do things that they don’t want to do to impress people they don’t like’.
Our wedding, unsurprisingly, was very cheap – in a registry office with seven people. The thought of a big wedding filled me absolute dread. I know that I disappointed some people by having the wedding that I did but you can’t live your life trying to please other people if it makes you miserable.
People seem to forget that they have agency and often go through life sleep walking. You are allowed to do what you want – within reason!
Do you have any passions or hobbies or vices that eat up your income?
Not really. Our spending on our cat would be high relative to our overall expenditure. Our spending on food and holidays have also increased over the years.
I enjoy lower league football and county cricket, but I am not a regular in-person spectator these days.
When you ask for an image and your interviewee gives a personal snap of Edward Hopper’s Nighthawks, you know you’re in the company of a fellow introvert, as much as a fellow FIRE-ee…
Investing: on the defensive
What kind of investor are you?
Active. I’ve been ‘de-risking’ my portfolio in recent years to give me additional ballast should I FIRE. I’m also bearish generally looking ahead. US large-cap equities are well overdue a prolonged bear market.
I think people with no real knowledge, expertise, or interest in the stock market should probably go passive, although I think that passive might very well encounter problems.
I agree with Mike Green of Simplify’s Asset Management and Russell Napier’s views on passive. At some point I think a combination of de-accumulation from retired boomers alongside protectionism will start adversely impacting passive flows, which have principally been directed to US large cap. If this does transpire then things are going to look very different.
I’ve moved large chunks of my portfolio into defensive investment trusts like Capital Gearing and Personal Assets. Additionally, I initiated a reasonably large position in RIT Capital Partners, largely because of the discount. (For clarity, I don’t regard RIT as defensive).
Mentally, I currently break my portfolio into five parts:
I was very fortunate in that I started investing in 2008, right at the very bottom. I inherited £20,000 when my grandmother died and invested it in a concentrated fashion in some small-mid cap UK equities.
The most profitable was Avon Rubber (now Avon Technologies). The returns were spectacular, enabling me to get to a net worth of six-figures very quickly.
I was very lucky!
Did you make any big mistakes on your investing journey?
Not really. I missed out on all the FAANG stocks as I felt I couldn’t take a differentiated view on large-cap US tech. I’m also broadly a value investor, so tech is an area that I normally shy away from.
My worst ‘investment’ by far has been my London flat, which is static in nominal terms since our purchase in 2017. Of course, I’ve lost money on some investments but I’ve managed to avoid big drawdowns.
What has been your overall return, as best you can tell?
I don’t know what my overall return has been as I have only kept records for the last four years. The period from 2008 to 2015 was very good. From 2015 it has been average to slightly ahead of the ACWI (All-Country World Index).
My worst relative year was probably 2024. My portfolio was only up 5.5% versus 19.6% for the ACWI – but I did have around 25% cash. Last year I was up 14.2% which was a very good return considering that only 40% or so of my assets were in equities. My direct equities performed very strongly.
I’ve also had a strong start to this year with my commodity equities performing well. My exposure to US large cap is quite low, too. But I said previously, I expect my investment performance to be lower in the future, as I’ve shifted more to a wealth preservation mode.
I don’t keep precise records compared to a lot of investors. At the start of the year I write down my net worth and details of the investment portfolio. I then do a line for each security outlining why I hold it and what I think the market is missing. I also write down my macro views for the year. This is all on one page.
I like simplicity and think lots of investors like complexity for its own sake to a degree. My Dad details his own investment performance every day, which is really a form of meditation or therapy for him. I don’t want to do that!
How much have you been able to fill your ISA and pension contributions?
I’m fortunate in that I’ve been able to do full ISA and pension contributions for the last few years. I missed out on having a potentially massive ISA as my best early investments were in my GIA. So I’ve had to pay a fair amount of CGT.
Whilst working I will continue to ‘max out’ my pension contributions, assuming the higher-rate relief doesn’t get cut at the next budget.
To what extent did tax incentives and shelters influence your strategy?
Tax is certainly an important consideration. Currently, I have all of my equity type investments in my ISA and SIPP. My defensive investment trusts and low-coupon short-duration gilts are in my GIA.
I don’t do EIS or VCT schemes and the like. Perhaps if my income was above £100,000 I might consider it.
How often do you check or tweak your portfolio or other investments?
First thing in the morning I do a review of any RNS’s for the securities that I hold. I also check the portfolio at the end of each day. I quite like this routine and don’t regard it as work.
I don’t trade very much. I can go for months without doing anything. Though sometimes the activity is more frequent.
I’m certainly not a trader and don’t get any pleasure from it. I like to buy and hold. As Buffett put it: “lethargy bordering on sloth”.
Wealth: two is the new one million
Which is more important, saving or investing, and why?
I think saving for most people is probably more important than investing although both are very important in building wealth. If you can’t save then you can’t really invest.
Unfortunately, the economy in the West is very anti-saving. You’re forced to invest to build wealth and to get on the property ladder. My grandparents didn’t invest and just saved money, which you were able to do pre-zero interest rates.
I think zero interest rates and QE have been absolutely disastrous in exacerbating wealth inequality and inflating asset prices in general, although given the eye-watering levels of government debt I guess there is no going back on that front.
I think some sort of overt financial repression will take place in the West in the not too distant future. Maybe even next year if Trump replaces Powell with a lackey and goes full on Erdogan.
When did you think you’d achieve financial freedom – and was it a goal with a timeline?
It could have been three years ago per the 4% rule, but I wanted to be in a financially stronger situation where my safe withdrawal rate was lower than 4%, and to work until I was at least 40.
Did anything unexpected get in your way?
No. I’ve been very fortunate in my FIRE journey. I should stress I inherited £300,000 unexpectedly when my stepmother died. I was 32 at the time. This helped considerably and obviously gave me a big leg-up. I massively admire those who have FIRE-ed without any inheritances or gifts.
And you’re still growing your pot?
Yes, my pot is still growing and the snowball is gathering momentum – 2025 was a very good year for me. It is growing through a combination of employment and investment income and gains.
Do you have any further financial goals?
My goal is to protect my wealth and beat inflation in the future. I quite like the idea of attaining a net worth of £2m before retiring.
I think I do have a problem with no longer accumulating wealth, which probably does not reflect particularly well on me. I also view wealth as a shield to protect oneself against the bad things that can happen in life. I probably over do that.
What would you say to Monevator readers pursuing financial freedom?
Be honest with yourself and focus on the things that truly matter to you.
Understand that wealth does not move in a linear fashion. You can have months or years when it feels like you’re wading through treacle and then – bam – you accelerate rapidly.
Also, focus on processes rather than outcomes, particularly in investing.
Given elevated valuations in much of the market, focus on the downside rather than the upside.
Assume that your investment thesis might very well be wrong, incorporate a ‘margin of safety’, and avoid first-order thinking, which is the norm in much of the investment world.
If saving money really makes you miserable and deferring gratification does not come naturally, then FIRE isn’t for you.
In the weeds: Buffett is still the best
When did you first start thinking seriously about money and investing?
Before investing I really enjoyed betting on horse racing and sports. I loved the analytical process involved. I also admired Arsene Wenger’s initial recruitment at Arsenal – consistently buying massively undervalued players.
My Dad began talking to me about companies when I was about 21, which I found interesting. I then read The Snowball – Alice Schroeder’s biography on Warren Buffett – which was the catalyst for my investing.
A lot of Buffett’s personal character traits – shyness, fear of public speaking, contrarianism, a desire for independence, and frugality – resonated with me. Most people in business on TV had seemed quite loud and extroverted, which I couldn’t relate to.
I read The Snowball every few years. It’s still the best investing/FIRE type book that I’ve read.
Investing appeals to me on an intellectual level as it is a combination of many different disciplines. I found law incredibly dull in comparison.
Did any particular individuals inspire you to become financially free?
My Dad would be my main influence as he retired at 45. I’ve since discovered that his ambition had been to retire at 40. He passed on his frugality to me and his belief that the best thing about money is that it gives you independence.
None of my friends are interested in FIRE or investing.
Of course, I have read many FIRE stories online and thoroughly enjoy the FIRE-side chats on Monevator! The FIRE stories I particularly like are those people whose employment income has been relatively low. The janitor who became a millionaire, for example.
What about your dad? He was influential on the FIRE side, but what about the investing aspect?
My dad never explicitly encouraged me to invest – and as I say I hadn’t thought about investing as a concept really until I was 21. Once my dad saw that I had an interest in investing, he began to speak to me about it. He then gave me advice and helped me open my first investment account.
Before 21 our main topics of conversation were sport and history. And my dad’s parents had no interest in investing whatsoever – they thought it was spivvy! They were, however, prodigious savers just like my dad.
Can you recommend your favourite resources for anyone chasing the FIRE dream?
Monevator of course! On the investment front I’d read Margin of Safety by Seth Klarman and The Snowball by Alice Schroeder.
Margin of Safety emphasises the importance of looking at investment as a risk assessor and focusing on the downside. Many younger investors – WallStreetBets types – don’t seem to do that now. But a lot of building wealth and investing is about avoiding the big drawdowns.
The Snowball highlights the character traits that I think are helpful in achieving FIRE: discipline, focus, independence, contrarianism, and frugality.
A lot of the FIRE stuff on YouTube is crap. I haven’t learnt many ‘life hacks’ from YouTube videos on the FIRE front.
I listen to quite a few investment podcasts. I quite like listening to John Lee on Investors’ Chronicle given his preference for UK Small Caps. I think lots of investors are a bit snooty towards him because of his preference for dividends and because of an age bias.
The Acquired podcast does some excellent in-depth episodes on the history of companies like Nintendo, Microsoft, Google, and so on that I’d recommend.
What is your attitude towards charity and inheritance?
If we can’t have a child I will start giving more to charity as I age. I’ll probably leave most of my money to charity on the death of both my wife and me. Of course, this would be different if we manage to have a child.
As I’ve inherited money, I don’t really have a problem with it otherwise I wouldn’t have accepted it! I think it’s natural that people want to provide and look after their families.
My Dad is giving most of his money to charity when he dies, which doesn’t bother me. Given the complexity of Inheritance Tax and the time it takes HMRC to administer it – and the amount of tax legislation devoted to it (see the massive Tolley’s Yellow Booktax manuals) – it would be better to abolish it and replace it with a Land Value Tax.
The tax system in the UK is a mess and getting worse.
What will your finances ideally look like towards the end of your life?
I haven’t really thought about it, but I think I would struggle to Die with Zero. Psychologically, wealth is a bit of a shield or comfort blanket for me. Hopefully I will learn to shake this off.
I don’t mind thinking about death and end of life – I have already done my Will, and put a Lasting Power of Attorney in place. That’s quite unusual for someone of my age.
It’s important to put your affairs in order for those you leave behind. Probate really isn’t very fun. I speak from personal experience.
I enjoy investing too much to get an annuity!
My thanks to Cheep and Cheerful for a great interview, which combines the best of two genres – a frugal mindset and a high income combined with a high savings rate. Thoughts and feedback are welcome, but remember that Cheep and Cheerful is not a hardened blogger like me so please keep it constructive! I’ll delete anything I deem mean or uncivil. Finally, I’d like to wish him and his wife all the best with their hopes for their family.
