Wanted: 10% average return over next 18 years

[tomorton]

Sharescope has a facility by which you can chart the performance of an instrument in terms of annualised % gain. I was curious to use it to look at this question. The only period investing directly in the FTSE100 index would have produced an 18yr annual return of 10%pa would have demanded entry between Feb 87 and May 89: entry before or after this window would have failed.

On the Dow, the last such window for entry would have been much longer - March 76 to March 89. But still, those days are long gone: in the 18yr period to date, the Dow has only managed +3%pa.

 

[Big_P]

Tim - I'd be interested, which book was that please?

Hi Ultramagnetic,
You've made clear earlier in the thread in reply to alexaherself that you favour a more liquid asset in preference to bricks and mortar. However, the disclosure that you have a mortgage with 15 years to run means that, in effect, you're already heavily invested in - and committed to - property. I was in a very similar position that you're in now around 20 years ago. At the time, I read a book that examined the benefits of compound interest which, until then, I'd never given any thought to. It blew me away and I followed its advice by ratcheting up my savings to pay off my mortgage at the earliest possible opportunity. The debt reduced, along with the interest payable on the outstanding balance due, while my savings soared. Without doubt, it was the best financial decision of my life.

My advice to you would be to get rid of your mortgage debt asap and then - and only then - consider other asset classes and investment opportunities. Interest rates can only go up from here, so reducing your mortgage as much as possible as fast as possible would be my number one priority if I were in your shoes. Trust me, when you pay off that final chunk of mortgage, you'll be buzzing for days, weeks even. I know I was, and the positive impact it will have in terms of life choices down the line will be massive.
Tim.

 

[timsk]

Tim - I'd be interested, which book was that please?

Hi Big_P,
I suspect it's out of print now. Certainly, no results are returned when I put the title into Amazon. There's bound to be numerous other titles out there that explore the same ideas, probably better and in greater depth. Anyway, to answer your question . . .

Title: How to Increase your Personal Wealth: Success strategies for a richer life
Author: Peter Cutler PhD
Publisher: Thorsons (an imprint of Harper Collins Publishers)
Date: 1992
ISBN: 0 7225 2550 8
Printed by: Mackays of Chatham, Kent
By the same author: Get Out of Debt and Prosper

Good luck finding it!
Tim.

 

[Big_P]

That's great, thanks Tim.

I'll have a dig around...

Hi Big_P,
I suspect it's out of print now. Certainly, no results are returned when I put the title into Amazon. There's bound to be numerous other titles out there that explore the same ideas, probably better and in greater depth. Anyway, to answer your question . . .

Title: How to Increase your Personal Wealth: Success strategies for a richer life
Author: Peter Cutler PhD
Publisher: Thorsons (an imprint of Harper Collins Publishers)
Date: 1992
ISBN: 0 7225 2550 8
Printed by: Mackays of Chatham, Kent
By the same author: Get Out of Debt and Prosper

Good luck finding it!
Tim.

 

[tomorton]

Its on Amazon for 1p (paperback, used). (it doesn't say used as what)

 

[alexaherself]

This won't work because you won't have the benefit of compounding.

You won't, but on the other hand you'll have capital appreciation, as well as the possibility to re-invest most of the income produced.

 

[Barnacle Bill]

Hi trade2winners,

I plan to retire in 18 years, and it is becoming clear I have not saved as much as I should have at this stage and am in danger of not meeting my target.

I have £32,000 in a SIPP, as of this year will be adding £6,000 a year and fingers crossed will be able to keep this up for the next 18 years.

I have a target pot size of 500k, and to achieve this will need an average 10% return per annum. I know the stock market historically return 9% per annum, however I am not convinced this record will be reliable over the next few decades so am taking the risky decision to mange my money more actively (although not very actively).

Do you believe this is achievable? If so what sort of approaches should I be looking at to achieve this?

Find someone who won the Lottery - 50k over 5 years and offer them 30k immediately. (Or what ever amounts you are working with - That would be the first half of your 10 years) - If they are smart they will take it! - The time value of money-


That's a little over 10% a year - 60%


Find someone rehabbing a house (A Quality rehabber who isn't going to overprice their house) - A typical hard money loan in the US is 15%
I've made that in less than 6 months.



Find someone who is about to kick the bucket - Purchase junk bonds in their name with you as the beneficiary. When he dies the bond pays out at full value.

(Now, I'm not sure if junk bonds is the proper term but I'm pretty sure that there are financial instruments that can be bought at a discount but pay out full price at the death of the owner - You'll have to research if that is really true and what instrument that would be - I have never tried that one personally)

If you do wind up buying stocks or indexes.
Lower the cost of purchase by selling puts below the actual price to scale into the instrument and sell calls once you own the stock or ETF. Yes it will limit your upside so you will have to pay close attention to the volatility of the stock. You could keep it consistent even though volatility is changing by selling options at 16 delta (1 standard deviation) or 5 delta (2 standard deviation) or something in between.

 

[itspossible]

denied funny link as spam removed by mods

 

[MikeMurf]

denied funny link as spam removed by mods

Am I stupid? What is this guy trying to say? And why doesn't he use English to express it as opposed to oblique references to media personalities?

What planet does he live on where the reasonable enquiries of an inexperienced investor are synthesised into popular media. This is not being helpful this is arsing around.

 

[itspossible]

Tell him Mike-

 

[kalott]

"Approximately 75% of these clients suffered a loss, of which the average size was €6,900 ($7,357)."

https://leaprate.com/2015/11/inspec...f-ireland-finds-75-of-cfd-traders-lost-money/