Good Investing Habits That Will Help Improve Your Returns
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- Опубліковано 21 лют 2024
- The biggest difference between investors that succeed and those that fail is down to differences in behaviour. Some people are disciplined about investing and have behaviours that work while others repeat patterns of behaviour that destroy their wealth. In this video, we’ll look at how you can build patterns of behaviour that will help you become a better investor and achieve your long-term goals.
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All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.
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I think everyone’s mileage may vary on this but using 1000 to get to 1 million are simple figures to portray a HUGE amount. I earn the average salary and I look at these figures in pension terms. With company contributions and AVC’s I can get to around 70% of these figures but when I add my partners pension to the mix the magic £1m is actually achievable (and could even be considered pessimistic). It would be tough for a UA-camr to strike a chord with all viewers but if it gets youngsters playing around on a compounding calculator it can only be a good thing. I’d have loved for my 20 year old self to have watched this video. Thank you Ramin. 👌🏽
Hi Ramin, I get that £1000pm investment is just an example & probably an easy round number to use, but don't think it's a realistic amount for someone in their 20's to invest each month.
I'm on about national average salary & with 12%+5% contribution only investing less than half the amount in your example.
I get the numbers needed to get £1M pot are high, but not sure how many of the UK workforce have the resources to get there.
Most people are probably in the same boat. I think the £1million is a round number that illustrates his point.
The most important thing is the habit of regular investing into a global index fund. Even if it’s £100 or £500 per month, it will put you in a much healthier position come retirement than not investing at all.
@@__Rum-Ham__ Agreed. I put £150 a month in one.
The samen principle applies with lower savings too. Also, most people never have £40k pa income (I'm 65 and have never come close to that) and will never need that to live.
If you start young (18) then it helps massively, even if just a small amount. Save something!! Get into good habits young. Or if you have missed out and only realised later in life (like I did), help your kids to start off on the right path. A Junior Sipp/LISA/Junior ISA can be the greatest gift you can give to your kids!
With time, the amount you contribute becomes almost irrelevant. Make sure you know all the funds provided by you pension provider. Chances are you may be able to get even 10% annual return on good funds. This changes EVERYTHING. My nest sharia fund returned more than 20% last year, which obviously is not happening again soon but the average is still above 10%, which is acceptable to me.
Ramin going for the mega Wotsits sponsorship… lol!!! 😂
Thanks for the video Ramin, it was really great (as always). Behavioral considerations regarding novice investors are something I'm hoping to avoid as I get more involved in investing. Perhaps a video looking at the other side (ie., not good habits to learn, but bad habits to break or avoid) would be an idea for a video. Or I should just get some review papers on behavioral finance! :) Cheers
Might be time to update the youtube membership video and perks, Ramin. It says you don't take any money from investment platforms or asset managers 😅
Great video as usual though. Not hating at all, it just needs an update!
Thanks for pointing that out @TomsPersonalFinance I forgot that was there. I will rerecord it ASAP!
I can encourage my kids to start to save early but they won’t prioritise high percentages of their income so will be relatively low. £100pm is better than nothing when compounded. But I might experiment with a ‘kickstarter’ lump sum if it really can benefit from a long period of compounding to help them.
I think something such as £100 per month is reasonable target. This won't reach a million, but you would still be tens of thousands of pounds better off in retirement over a 30 year period. And if you return rate increased by just 3 or 4 percent, you could easily reach over 100k in 30 year's, which you otherwise wouldn't have if you didn't put that £100 in the first place.
Very good video for mind set. Certainly my focus is to spend very little and get regular money a month into the SIPP and the ISA. If that means eating noodles to meet the goals then I will 😂
With global equity making up around 60 - 65% US - What are the signs for the US consumer, is it slowing down now that those government cheques have been spent?
For most people the 4% rule just isn't relevant. Most people won't have enough money in their pension or savings for it to be able to last forever. I plan on having £300k when I retire at 55, and fully expect to run it down to nothing by the time I am 80, when I will solely live off of my state pension, with an ISA for emergencies and large one off expenses.
@barnstar2077
Not being to pecimistic, but if the tories remain in power I'm not sure there will be any state pension for us going forward. My state pension is supposed to start paying out when I'm 67 yrs old, according to the government website. But I'm scared the tories will increase the age before I get it, or just scrap it altogether. I don't think 300k will be enough for you to live off until you're 80, that's 25 yrs
@@fredatlas4396 - I think you are making a mistake blaming the Tories for your woes. There have been many, many governments, and none of them have fixed the NHS or pensions (or countless other problems), even though a child with a crayon could have worked out that they were heading for trouble. Politicians are all the same. I am old enough to have seen both sides blame each other over countless governments, while nothing gets done and they all line their own pockets. The house of commons is a theatre, and we are all paying for the performance.
@@fredatlas4396 - On a more serious note, I wouldn't worry too much. Yes they may move the age about a bit, or not increase the personal tax allowance to tax pensioners, but the state pension will still exist. People have been saying for years that it is done for, but the elderly are the keenest voters, so the only way it would be scrapped is if the economy collapsed due to some kind of disaster. In which case, your pension will be the least of your worries. The most important thing is to have some kind of a plan for your retirement, otherwise you will be totally at your bosses and the governments mercy.
How old are you now? Im 59 now and my state pension pay out is also 67, if your over 54 now they wont be moving our goalposts mate, its the younger people it will be targeted at.@@fredatlas4396
@@fredatlas4396you need to worry more about Captain Open Borders and the flip-flops arrival at the next general election
Does invest engine only have etfs or are there open ended funds available. Also do they charge to buy and sell etfs. Am i right in thinking there's no platforn charge, so if you invest money with them and leave it to grow there won't be any charges to pay
Hi Ramin, does your Invest Engine referral work for opening a SIPP?
Recommended viewing for Angela Rayner, great video Ramin
70% Total US stock
10% Total international stock
10% QQQ or QQQM
10% SCHD dividend stocks
You’re the man Ramin
Thanks @elnino9772
Great video. Thanks.
Chuckling - Atomic habits is taken straight from the Cognitive Analytic Therapy text book. It is a very good approach.
Hi, can you list the best retirement planning software available to the uk public . Everything I’ve found is either for the American market or only sold to IFAs.
thank you
You're welcome @OmarTravelAdventures
I loved the book, and it's a privilege to have its principles applied to personal by you Ramin. Thank you.
Thank you @antonbruckner7329
Hi. I’m new to investing and as such I log in every day. I don’t want to be doing this but I do want an easy and quick way to see what stocks are doing. Or should I say my ETF stocks. Is there a quick way to show this on a phone. Like a widget or something. Just so I know when there’s a massive dip in the market. Thanks.
Hi Ramin, thank you for your content. Can you make a video on diversifying? Investments outside of stocks and bonds that can balance a portfolio when stocks decline.
I'm not saying that I'm the best investor, but I've somehow put together a portfolio that limits the downside, and is also making double digit returns...30% SCHD, 30% US Market, and 30% in 10 different dividend ETFs (growth and int'l), and 10% BRK.B to round things out. It's more complicated than a single fund, but I am surprised at how well it's done.
great video as ever bud, keep up the great work :D
Thanks for the visit @chqshaitan1
Is there a website that aggregates current performance of money market funds?
Thanks
Thank you @gavthegas547
I'm not sure how I feel about this push for Invesco products. I have recommended this channel to hundreds of people, because I thought you were independent, and not just because of your predilection for no nonsense, long term, sensible investing. You also have a great way of explaining even the most complicated financial ideas to people. I hope my fear will prove unwarranted.
I understand your concern but Ramin needs to monetise the channel as it is free at the point of delivery. The promotions included in the content are easily ignored if that is your desire.
This is a really great and helpful video Ramin. I'm right with you on the Cheesy Wotsits - they're deadly!
Yes they are! @synthboffin
Don't panic, don't invest with emotions, think long term and believe in yourself, don't always follow others.. Buy when cheap and check the facts.
Crypto is monopoly money......invest in a good company.
You seem all UK based? Any recommendations for US based
Noob question, if anyone cares to enlighten me. I watched a few vids and wonder what is best to go with ISA STOCKS and shares or pension.. tax wrapper is good .. can you just invest without using sip or isa ? And are all products and funds the same across whatever method used to buy them ??
Hi, suggest you watch a few more videos or podcasts. Ramin has probably covered this and Meaningful Money definitely has recently (basically get the pension right in order of priority). Pete at meaningful money even had an video on how pension contributions over time beat ISAs... check them out.
I’m 39 and save £2.5k in to pension and £1k into shares/ETF each month and still can’t see a comfortable retirement ahead. Sad we are no longer allowed to enjoy later life.
Hi ,I'm 53 ,My plans to stop working 60 or 65.i have savings 100k please advise what to do ,or invest in a private pension , or go on market shares. Thanks
Great video Ramin. I'm new to investing and at 64 starting too late. What fund do you have in your portfolio and why? Any others i could look at to keep things simple.
It's never too late. Tax relief in pensions is available until 75, so even if retired someone can put £2880 into a pension each tax year to receive £720 tax relief boost. While in the pension it's not in a person's estate and therefore not subject to inheritance tax.
One of the key things to consider is whether or not a person may have qualified for pension credit without a small private pension and that can be a margin call for some.
As for funds, anything needed within 5 years is often best kept in cash. Thereafter one would hope investing wins out, and given you'll hopefully live for many more years, a simple global tracker may be worth considering on the equity side. If wanting bonds to 'tame' risk, just be aware bond funds contain various dated bonds, some 30+ years and so anything suited to the time horizon may be something to consider (short-dated bond funds or short-term money market funds).
As financial advice is a regulated activity, you'll find people tend to be quite broad in their guidance/support.
1. Find ways to be as frugal as possible. Learn to budget effectively as you will be heavily constrained through your retirement.
2. Save as much as possible preferably through a WPP (workplace pension) if available for the tax benefit and employee match. If not available use a SIPP for the tax benefit.
3. Savings should go into conservative investments like cash, money markets etc. and maybe a small proportion in an All World ETF. Volatility will hurt too much.
4. Find a job that you could work into your 70s especially part-time as you may need to supplement your retirement income.
5. Evaluate your assets. Do you own a home? Is it paid off? Could you downsize to create retirement income and reduce expenses like heating and council tax etc? Could you use equity release?
6. Evaluate your current liabilities. Do you have any short term debt and if you do pay it off quickly as it will cost you dearly.
7. Perhaps most importantly. Do you currently qualify for the state pension? Can you make payments such that you (and your wife) would qualify if you do not already?
8. Do you have any pensions you don’t know about? Do you have a WPP taken from your payslip?
DMO to allow private investors to bid for govt bonds in primary rather than secondary market, via HL and ii, according to Telegraph article 22 Feb. Would be good to have a video or videos on this. Thanks
4% Treasury Gilt 2031 currently on offer as IPO
It would be useful to have your take on the process and the pros and cons. What sort of discounts have been achieved, historically? Clearly, the buy and hold strategy is available and no CGT gains, which are not available via a Fund of bonds. However, less options in terms of end dates for bonds and balance between income and capital yield. Also, will the maturity date of the bond correspond with where the yield curve is sitting at time of IPO. It would appear you will not be certain of the purchase price, but on the other hand I imagine it does not generally exceed the offer prices. No doubt there are other considerations.
£1000 per month = £12000 per annum - after tax and Nat ins so now about £15-16000 - kind
of scary?
Great advice. Any tips for someone that is late to investing and can’t take advantage of time for compounding? Am self employed and planning on winding down in 15 years time when I reach my 70s and only work a couple of days a week but 15 years isn’t really enough time for compounding to take effect properly.
As a fellow self-employed person... first, I would get my state pension forecast (can be done online). While the new state pension requires 35 years of contributions, people who contributed pre-2016 will have been contributing across regimes, not just the new one, and so what they need for full SP may be more or less than 35 years. Knowing exactly what you have on your personal forecast is essential.
Next, you can contribute to a pension and receive tax relief until you hit 75. As a non-earner, you can put £2880 in to get £720 relief. As an earner, it's 100% of your salary to £60k gross. If someone has earned above £60k in the tax year, and wishes to pay more than £60k into a pension, carry forward rules should be looked into.
While it may be 5 years until you plan to stop working, remember that you may live 30/40 years, so compounding isn't just a matter until retirement as you may still be invested for quite some time thereafter.
Pension contributions are taken into account when calculating person's ability to access Universal Credit and so this is also something worth investigating if you feel applicable to your situation... many don't realise they would qualify for support.
Are there any small cap, mid cap ETFs in UK with 100% exposure in indian market?
No, there are 7 ETFs on Just ETF, covering Indian large caps; only one with low fee.
When the market peaks no doubt one will be marketed.
You may get one but imagine for uk buyer , it would be a tiny fund and you may end up not being able to sell it. Go look on invest engine, few saying they picked obscure country etf and couldn’t sell for months. Not a platform issue but you need a buyer somewhere.
How are you not a millionaire with all this knowledge
"Cheesy whatsits"! 😋 I'm off to the shops! 😂
😁
Interesting subject but investing at the right time is key, I think the US stock market took roughly 20 year’s to recover from the 1929 crash, if you were looking to retire a few years after that you had had it, that’s a technical investment term by the way. Good luck everyone, there is a long way to go from youth to retirement!
When is the right time? In order to know that you have to be able to accurately predict the future. We know markets will crash at some point but nobody knows when.
cheesy wotsits hahaha very understandable ramin
:) @iang6118
THE reason 99% of retail day traders fail is that the market literally trains you, like Pavlov's dogs , to make the exact wrong decision. It will train you close when you should hold or even add and to hold when you should close in both winning or losing positions. Even with a mechanical strategy it's impossible to eradicate 'emotions' of fear . Fear of missing a position, fear of losing a winner , fear of losing more money to the point where you even fear winning ! It will train you feel more comfortable being in a losing position than in a winning position !! If you can be honest with yourself and recognise the truth about YOU then you have been trained already . Trade what you see NOT what you think you see....Good Luck.
I don't really understand the 4% rule. My Wife and I both hope that by the time we die, the pot is empty. Impossible to time that I know but we earned our money and we want to spend it. There is no doubt that as we enter our twilight years we all slow down our spending, so until that time comes we intend to make the most of our investments.
The 4% rule related to a 30-year retirement in America, looking at being invested 50% US stocks and 50% US intermediate bonds. Thus people should use such 'rules' with great caution, paying attention to their own reality instead.
Why only 1 ETF?
I think it gives you exposure to global equities. less volatility and he is not trading its investing. mostly long term .
In 40years, with the current rate of debasement, £1000,000 will be the price of a weekly shop😢
Yes, but as inflation eats into the value of your currency, so you should increase your contributions to counteract this as time passes.
@@johnboggiano indeed, and hope that the stock market continues to provide higher than inflation returns 🤞
@johnboggiano That's all well and good if your wages are anywhere near keeping up with inflation even before this recent cost of living crisis, and high enough in the first place to save a load into a pension scheme
@@fredatlas4396 The principle still applies, even if it cannot be achieved in some periods: your pay will generally have increased significantly (even if only in nominal terms) many times between 20 years old and 60.
My habits are very Atomik 😂
That's it, I'm not calling them ten baggers anymore - From now on they're dectuplers
I think a more realistic example would have been a bit more useful. I guess a £1000 a month is what Invesco wanted you to say though.
Maybe £1000 is just a nice round number.
I think everyone’s mileage may vary on this but using 1000 to get to 1 million is simple figures to portray a huge amount. I earn the average salary and I look at these figure in pension terms. With company contributions and AVC’s I can get to around 70% of these figures but when I add my partners pension to the mix the magic £1m is actually achievable and could even be considered pessimistic. It would be tough for a UA-camr to strike a chord with all viewers but if it gets youngsters playing around on a compounding calculator it can only be a good thing. I’d have loved for my 20 year old self to have watched this video.
Cheesy wotsits 😂
I'm going to stop watching investment videos as you need years ahead of you and I'm 51.
You have 24 years left where you can receive tax relief on pension contributions and, fingers crossed, many years beyond of life.
Who tf can save £1K p\month on minimum wage? How about something more realistic?