Itsallaguess wrote:hiriskpaul wrote:
My initial reaction to "How would you invest for income.." has long been "I don't, I invest for total return".
However, it has suddenly dawned on me that this is not true. The majority of our income now comes from our investments, so I am investing for income!
That income is taken from the cash we have on deposit, which is topped up from interest, dividends and the occasional disposal of investments.
Isn't that fairly close to how we might expect an income-IT manager to work - to help provide that final running-yield from the overall income-IT portfolio?
I fully accept that you might be doing it yourself and missing out on paying some sort of management fee for an IT to do it for you, but in the round, is your approach that far away from a collective that regularly and reliably pumps out cash in the form of an overall IT dividend?
Cheers,
Itsallaguess
Not really. I keep a large amount of instant access cash as I need it for variation margin on my option trades. I don't specifically target the removal of precise annual amounts from the portfolio for spending. If I have too much cash I might invest some of it. Not enough I might sell some investments. If we have a major expenditure coming up, eg a new bathroom last year, I need to find cash from somewhere to pay for it.
Our spending can vary significantly from month to month and year to year so arranging for some fixed regular amount to turn up would not be particularly useful or efficient.
I have been keeping track of our actual spending over the last year to try to work out what we actually need to live comfortably and to check whether actual spending is inline with our budget guestimates. All made so much easier to follow where money goes now we have stopped using cash. To give an example of the variability, in the first 3 months of this year we spent (really spent as opposed to just moved money around) £6,604.53 in January, £3,814.02 in February and £10,375.84 in March. March was high as my wife spent £3,345.00 on a dental implant, £1,595.00 on a carpet and £1,000.00 as a holiday deposit. What use regular income?
For people used to running their finances around regular monthly salary in and regular payments out I can understand the appeal of having regular amounts coming in, but we have not lived like that for many years.