Am I too old to start a passive tracker?

[scotia]

Hi Folks,

I am 74 and as part of my 'simplifying' my portfolio I am looking at trackers. Mrs B and I have Shares ISAs (containing HPY type shares), Cash ISAs, Savings a/cs, both have a good company pension and I have a state pension (Mrs B doesn't get hers till 2023). No mortgage or other debts. A slight alteration in circumstances mean we have a couple of hundred pounds a month that needs a home. I thought it was an opportunity to try a couple of straightforward, no messing, Global Equity Acc and FTSE type of things. Set up a regular payment and forget it, more or less.

My dad lived to his 90s, my health is good and I hope to manage another ten or more years although there are no guarantees. Mrs B by the same token could manage another twenty years. I have to consider care at some point, but I don't feel we are anywhere near that yet (hope I am not tempting fate).

What do people think?
Ray.

A world tracker in an ISA seems a reasonable choice. And with two hundred pounds per month, you need to think about the fee structure of your investment platform. I use Hargreaves Lansdown - which (I believe) has a charge of £11.95 for each Share,IT or ETF deal - but no charge for a fund ( OEIC or Unit Trust) deal. You pay 0.45 % per annum (monthly) on investment value, but this is capped at £45 for Shares, ITs and ETFs, but there is no cap on funds (OEICS and Unit Trusts). In such a case, forget about ITs and ETFS - and go for an OEIC - HSBC All World Index springs to mind.
Or - as others have suggested - have a bit of fun with Premium Bonds, or pass it on to deserving relatives or charities. Come to think of it - we do all of these (and we are both in our upper seventies).

[Wozzitworthit]

If you haven't already done so, then before doing anything drastic, just take a look at the cost of care homes (bearing in mind the fees often escalate at a higher rate than CPI).

Then imagine various scenarios of either you or your wife (or both) having to go into one later in life.


Remember also that once you are no longer self funding , then you may have to move to more basic room or ven move home to one you can afford - unless of course you have relatives that are willing to pay the difference

As I say, you may already have considered this

[Dicky99]

I think if I had a couple of hundred quid a month going spare I'd use some of it to have a bit of fun with some white knuckle ride shares

[elephanthunt11]

Hi Ray,

I think your idea on trackers sounds quite sensible. From what you wrote, I get the impression that cash on hand probably isn't an issue (as in emergency fund type cash), if this is the case I think your idea on a colective investment is sensible. My only advice would be to be sure that the option you go with aligns with your needs:

-Is this a mutual fund vs ETF vs investment trust?
-is it distributing or accumulating?
-if distributing, a quarterly dividend will compound faster

These are the nitty gritty bits that I, if in your position, would be focussing on. I think you're overall idea is sound.

[stevensfo]

I think if I had a couple of hundred quid a month going spare I'd use some of it to have a bit of fun with some white knuckle ride shares

I'm not convinced that everyone would consider it as 'fun', but I guess it depends on the person. My Dad loved horse racing and gambled a bit every Saturday, albeit within certain limits. I hated any form of gambling from an early age.

Soon after discovering TMF, I inherited about 10K. Approx 7K went straight into my 'sensible' portfolio which I treated/treat as a pension and untouchable, 1K went to a new computer and 2K went to a small experiment with a small cap portfolio that had interested me on TMF.

One year later, older and wiser, I swore never to do it again! Small cap ETFs, ITs yes, but I simply lacked the time, experience and mind-set for analysing and following small companies. However, although I didn't enjoy it, I count it as a valuable learning experience.

Although I could afford to lose a few hundred quid these days, I would never consider it as 'going spare'.

You'll always find something

...I'm rather fond of Liquorice Allsorts.

Steve