Hi, I'm Toby, I make personal finance, investing and stock market videos. I'm doing this to share what I've learnt over the past few years and what I wish I knew back then when I started. Be sure to subscribe to the channel for further updates and join me on the journey!
Business Enquiries and Partnerships ONLY: tobynewbatt@icloud.com
it’s all due to a massive ignorance of stocks and index’s in the uk, sap 500 fantastic for long term savings, all financial crashes and covid didn’t ruin the long term gain they have always recovered Just don’t panic and take stuff out when dips happen look at at lifespan and see that it’s always recovered it might just take a few years
Well, the answer I was hoping when watching this video, if everyone bought "and held" onto the index stocks, could there be not enough for everyone? Or would they create more shares at the cost of reduction of share price?
An ETF is set on the price set by buyers and sellers. If nobody sells then the price will go up…but there are always sellers and buyers 😎. At some point the price tempts someone to sell…and someone to buy
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for...
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@GiovanniJakob The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either....
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!..
@@EdwardWells-bj4eh That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!...
@@GiovanniJakob Victoria Carmen Santaella Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
@@DeborahDuggan932 She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
Toby, another Q. I just actually read the gov website on CGT and it mentions that costs can be deducted from gains. It never occurred to me before. So does that mean we can deduct platform and also any additional trading costs off the total gains figure? What if we have two platforms each with costs, but we actually only sell on one of them in a tax year, can we deduct the cost of both platforms from the gain of one of them? Also what if SIPP platform has a cost, can we deduct this from cap gains too😊
I’m glad I found this Chanel. Excellent summary. I keep wondering what is driving the markets. I suspect if you’re a billionaire in Russia, China or bordering countries an overpriced American stock market is still attractive.
Great update 😊 I was wondering what your thoughts are on countries potentially dropping the petrodollar system in favour of something like project mbridge which isn’t dependent on the US dollar for trade. If countries do switch to a new system the dollar would devalue overtime, inflation would rise and the stock market would suffer as a result. Also would you look to reduce your VUAG holdings and diversify further into emerging markets if this is the case?
Hey Toby. I am a standard rate tax payer (usually) and I max out my ISA every year. I want to know the best place to accumulate and park cash (including any costs) - I use this as an emergency fund and also to build up savings without risk as well as a 'safe' place if I decide to convert some of my GIA into 'cash' for safety (same principle as holding bonds in a pension). So up to now I have been just using a standard easy-access savings account (whichever one pays the highest interest) but then I realised I am getting taxed at 20%, whereas if I bought CSH2 ETF, I would get taxed at 10% (and only on crystallisation when sold - not all of it every year). So is this the best way to park cash safely with some growth or is there a better way or better ETF without market risk but still quick access? Trading212 pay 5.2% is this better or is it subject to income tax outside an ISA? Is it better to put any spare Trading212 GIA cash into CSH2? Can you map out the pros and cons please? Thanks.
Firstly great Q here Steve. Good reminder here that any profit made with CSH2 (or any investment) would be a capital gain (only when sold) and not savings income. The only downside would be that any investment like this or the 5.2% in Trading 212 (outside of the ISA) is technically not protected by any FSCS scheme. To some people this would put them off but to me this is not a concern. For a money market fund to fail like this...we'd have much bigger issues to worry about but it is worth being aware that it's not a savings product but more of an investing product. Outside of that I guess the only other option is premium bonds? Fully protected but then it's a lottery so nothing is guaranteed. I like your way of thinking here and that tax saving is a nice little hack if you want to put up with the 'risk'.
@@TobyNewbatt Thanks for reply, of course a higher rate tax payer will be taxed at 40% income tax rather than 20% CGT (assuming the interest payments are above Personal Savings allowance of £500). I tried Premium Bonds for many years but found the return rate far too variable (with some very bad years) and so I have gone off them, though I still have a few as it is fun to check every month to see if I have won!
This is great content. Thanks for sharing.Can I ask what the difference is between Vanguard S&P 500 and Vanguard's U.S. Equity Index Fund - Accumulation? Is one better than the other, or are they essentially the same thing? Which are you likely to get better returns from?
Great question. The main difference is this: The S&P 500 is just 500 companies HQ'd in the US The US Equity Index is MOST of the companies listed in the US (includes small, medium, large etc.) You can see it contains 3,500 stocks or so. On another note the US equity fund is a mutual fund and NOT an ETF - this is just a technicality but it means that it is not available on most platforms to buy. What will perform better - your guess is as good as mine :) - nobody knows. Pros and Cons can be made for either - better to have more companies to be more diversified etc. less concentration?
@TobyNewbatt thanks for clarifying. I invested in the US equity fund 4 years ago, rather than S&P 500. I've seen some healthy returns. I like the idea of diversification and less concentration. I'll keep going.
Index & Chill. Thanks, really good video Toby, I've just started my investing journey. Can anyone explain how I can work out when dividends are paid on Vanguard S&P500 VUAG in invest engine and how/when these are reinvested? From what I understand the reinvested dividends are reflected in the increased share price, is that correct? If so, is there a way how can I easily workout how much dividends were received and reinvested? Any clarification on this world be great, thanks.
You don’t receive the dividends as an individual so it’s not a calculation you can make. Of the 500 companies the dividend dates are all over the place, and secondly there’s no single date that you can point to and say that’s where they were reinvested. All you can do if you want to see it is look long term. Get up a google price chart and compare VUAG with VUSA and you’ll see that VUAG is worth more over the long run
Are you aware that that is absolutely incorrect 😂😂😂. Whoever has fed you that line needs to get their head a wobble. You can google it it 2 seconds and get your answer: www.gurufocus.com/economic_indicators/5860/inflation-adjusted-sp-500-index-price Will you please reply acknowledging your incorrect comment?
@@TobyNewbatt Depending on the decade inflation is calculated very different. Every country is creative with measuring inflation, expect for the US i guess.
I couldn’t find VWRP a couple of weeks ago when I started investing so I invested in VWRL. Can I change funds to VWRP without incurring any fees if possible please? Thank you.
Toby, I'm new to investing and have an account with HL after my father in law suggested it. I have a couple of investment funds which I invest in monthly, but now I want to invest in the S&P 500 also. Is HL okay for this? Or would I be better off with Trading 212 to keep the fees down? Great channel by the way, I've just subscribed 🎉
Hi Toby, My question is not related to this video but I always find your vids super informative. I was wondering if a vanguard funds holdings will be adjusted frequently depending on companies performance and if there is a difference between adjusting a funds holdings like for example between Vanguard and a Dimensional fund even if their individual holdings are fairly similar. Reason why I’m asking is because recently a financial advisor explained to me that a Dimensional fund uses an algorithm that is very finely tuned and according to him a Vanguard fund isn’t. My argument was that I don’t see why a Vanguard wouldn’t be using a similar or identical algorithm to a Dimensional fund. My worry is that I’m being pushed into investing into a Dimensional fund whose fees, plus advisor fees, plus platform fees are way higher if I could invest into a similar fund through another platform myself and therefore avoiding those fees. Is dDimensional better managed than for example and Vanguard fund with similar holdings? Thank you 🙏🏽
Hi Peter, in short, a passive index fund is passive. It doesn't do any fancy rebalancing or magic formulas. For example, if a company like Nvidia gets more valuable, so does the assets inside that fund as it owns Nvidia stock as part of the S&P 500 or the world. What exact dates and times they do their trades etc. I have no idea but Vanguard literally created the index fund and you can see the tracking difference as it's public information :) I think you've answered your own question for the rest of it...if you want to pay higher fees to invest in a fund that claims to be able to have magic powers you are welcome to :) Nobody knows the future and the vast majority of actively managed funds DO NOT beat their benchmark in the long run. I prefer to keep my costs low and control what I can. Good luck and thank you for the support :)
Hi Toby, Thank you so much for your fast response. It was very helpful. I’ll do a bit more research into dimensional because I want to try understanding why so many people invest into it. Looking forward to your upcoming videos. Best wishes, Peter
@@peterlux5959 AFAIK a lot of Dimensional funds are factor based - meaning that they are filtering and selecting companies based on certain 'factors' - in the long run could this deliver better results? Maybe, who knows. It's an interesting concept, but you will have to pay for it. Even if something worked in the past, it does not mean it works in the future :)
But you didn’t comment on the fact that many of the S&P stocks are GLOBAL stocks. So in fact you are investing outside the US. You don’t need to be 100% invested in the World.
I’m not sure you watched the whole video 😎. Yes they sell globally…but guess what so do many other companies who are not listed in the US….the UK market is a good example the largest companies on the FTSE 100 make most of their money internationally too
Hi Toby Like you I invest around 1k per month. Originally it was £800 into a Vanguard S&S isa and £200 into a Vanguard sipp, however I now put £500 in each to get extra tax relief. I am 54. though, would you agree with this approach?
I’m curious, and this might be a good start for a future video: the first 10 company on the SP500 beat the 10% over the last 10 years? And what about the first 50 or the first 100?
Over the long run only around 3-6% of all companies have managed to produce the majority of all of the returns in the market: it’s extremely difficult to predict…I’d say impossible. I have covered it in many previous videos 😎
@@TobyNewbatt I will said that on the first 10 company is to little for the long run, I’m sure that on the first 10 company a few of them didn’t exist 10 years ago, but a SP50 or SP100 I think can deliver a better result. I think that all the others are there for contingency, but if i would play to beat the SP500 I will just take the first 50.
I’ve initiated a transfer from Vanguard to InvestEngine. Taken an absolute age and now on the 2nd to last stage. I’m assuming I’ll still get the bonus when the transfer completes
Hi, Toby! Greetings from Argentina! A teacher here. We get sacked by the state with an outrageous 18,5% of our gross salaries contributing to the retirement schemes. And that's without taking into account what our employers pay. That's why I have started a long-term investment with considerable weight on ETF's (SPY and QQQ) and local stocks. Although your videos are mostly focused on British viewers, they have been of great help and have contributed to my financial knowledge.
8:21 I set up my SIPP via IE last year (I haven’t invested this year, yet), I could only put the minimum allowance of £2880. And I split it 50/50 between IITU & FWRG What I don’t understand, if I invest 100% of my SIPP in ETF’s how do IE take their fee? 🤷🏻♂️
They have a whole document explaining fee collection - if you don't have cash in your account they will contact you to make payment. Worst case scenario they would sell some of your investments to pay your fees.
I did this too. In 2021, I received a lump sum. Put it all into savings when the best thing to do was to drip feed into the markets. Oh well, you live and learn.
Investing this way allows greater control. So Toby can dial up/down certain markets when he wants to. It also tends to work out cheaper than say VWRL. I replicated VWRL, avoiding the 0.22% fee, paying 0.13% instead.
As per below, yes it's pretty much a global portfolio - however it is cheaper this way + I can tinker a bit and adjust if I like. But if I really want to make it simpler yes I could stick to one fund :)
Hi Toby. Relatively new to your channel. Why have you invested only on Growth funds in your isa? When it comes to retirement, from what I understand, you won't be able to cash out your dividends as they are automatically reinvested. I'm 50 now, so I've opted to invest in the Income version, but reinvesting dividends for now until I retire.
Hi Ruby, great question - and I have talked about dividends quite a lot on my channel :). They are totally not a necessary thing for retirement, if I need money from my investments I will be selling what I need. In short, this is a bit of a trap that is repeated to investors that you somehow need dividends to get income. What ends up happening is people focus on only buying companies that pay a dividend. This is like buying a car because it has red paint. See my videos on my channel about dividends :)
I'm just sharing what I've read and watched about retirement, but the common wisdom is to draw down on your investments rather than live off dividends. Once you retire, hopefully, you still have decades for your investments to grow. As you get close to retirement, consider moving investments into bonds or having savings to weather a crash, perhaps two years' worth of living expenses.
Last year I put £6k from my small side hustle into a business IE account, the usual suspects, FTSE, Naz, SP etc I had to withdraw it as I approached the end of the financial year otherwise HMRC would assume I’d paid myself a salary and I’ve be hit for income tax This was my understanding, I’m not 100% sure if I was correct Incidentally I made £600 but I’m not sure if I need to pay tax on it, corporation tax possibly?
Your Personal Savings Allowance is separate from any ISA allowance you may have. The amount of allowance depends on the type of taxpayer you are: basic rate taxpayers (20%) can earn £1,000 in tax-free interest each year. higher rate taxpayers (40%) can earn £500 in tax-free interest each
Probably best to talk to an accountant, if you’re worried. I’ve used online only accountants for about £170. It’s a lot when you compare it to the £600 you made but at least you know you’ll be tax compliant and you’ll have that knowledge in future.
Rates and prices have an inverse relationship. If rates stay where they are, no meaningful changes, then prices will likewise stay where they are. I've held Vanguard's bond fund for the last few years and have watched pricing drop while rates ran up. The fund's yield doesn't compensate for declines realized due to price declines.
£20k is the TOTAL in one tax year for ALL the ISA types combined. Do not go over £20k in total. For example. Lifetime ISA £4k Cash ISA £5k S&S ISA 11k Thats then your whole limit used up for this financial year - and then you have to wait for the next one.
