Listen to Episode 481
In this week's episode, I provide an update on my 'Winter investment portfolio', which uses an investment strategy aimed at capitalising on a seasonal market trend. I reveal how the portfolio has continued to outperform major stock market indices despite being in cash for 50% of the year. I then discuss the "Pension Mirror", a marketing tool created by Scottish Widows to help people engage with their pension savings. I highlight the average pension pot sizes for a range of ages and explain why those figures are likely to be inadequate before revealing the actual amount needed for a comfortable retirement. I finish the podcast by revealing a mantra that's been attributed to Bill Gates and how it can be used to improve your own personal finances.
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Podcast summary
Winter Portfolio Update
- Every year I take a look at my 'Winter portfolio' an investment strategy aimed at capitalising on a seasonal market trend. In this week's episode I provide an update for the current year.
- The portfolio's performance is attributed to its ability to switch into cash during the summer months, reducing volatility.
How much should you have in your pension?
- I take a look at the 'Pension Mirror' tool, created by pension provider Scottish Widows. It aims to guess your age using your camera on your phone/laptop and provides you with the average pension pot based on your estimated age.
- While the tool is a great piece of marketing and gets people talking about pensions, the average pension pot for most people is not sufficient for a comfortable retirement.
- I then reveal how much you would need in your pension pot at various ages in order to afford a comfortable retirement.
A good mantra when thinking about Saving and Investing
- 'Save like a pessimist, invest like an optimist' is a mantra that has been attributed to Bill Gates and I explain its relevance to personal finance.
Episode quiz
Questions:
- What was the original time period identified by the UK Stock Market Almanac for the "Winter" investment strategy?a) November 1st to April 30th
b) December 1st to May 31st
c) October 1st to March 31st
d) November 15th to April 15th - According to the "Pension Mirror" tool, what is the average pension pot size for a 45-year-old?a) £38,500
b) £59,500
c) £87,000
d) £100,000 - When doing his pension calculations, Damien referred to the average wage in the UK. What is the figure he used? a) £25,000
b) £30,000
c) £33,700
d) £40,000 - What is the recommended pension pot size by age 66 to achieve a "moderate" retirement income?a) £150,000
b) £224,000
c) £350,000
d) £500,000 - What mantra did Damien Fahy attribute to Bill Gates?a) "Spend like a pessimist, save like an optimist"
b) "Save like a pessimist, invest like an optimist"
c) "Invest like a pessimist, spend like an optimist"
d) "Spend like a pessimist, earn like an optimist"
Answers:
- a) November 1st to April 30th
- b) £59,500
- c) £33,700
- c) £350,000
- b) "Save like a pessimist, invest like an optimist"
Resources
Links referred to in the podcast:
- Winter portfolio 2023 - Podcast epsiode 440
- Try out the pension mirror
- Pensions Calculator from Moneyhelper
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