To get income, invest for income, not growth
Start by understanding the income you need in retirement and where it might be derived from. If ever you needed a second opinion on pension, ISA and other investments, before you retire is probably the most important time.
The FTSE100 fell 14% last year, fell 31% in 2008, fell 42% in the dotcom fall out, our income portfolios have always paid an income, and always had a rising income. That’s fact, not optimism.
You’ve probably not noticed, but income from equities does not fall in line with share prices.
We’ve filtered out 30 mainstream investment trusts from 4,000 funds, and since 1989 they have a 100% track record of income payments, 93% increased every year. The annual increase of those income payments was 5.7% per year, knocking inflation into a cocked hat.
Note: if you want or need your income to be guaranteed each month, each year, you must use cash, gilts or annuities. The collapse in interest rates means those rates may be low, but they are guaranteed.
The evidence
This is the dividend income from just one of the trusts we use, from an investment of £250,000; it includes the years of the dotcom crash, the ‘08 financial crisis, the ’11 €uro bank crisis and the ’20 pandemic.
| 2020 income paid | £46,236 |
| 2020 income as yield on 1990 cost (yield to cost) | 18.49% |
| Increase in income per year | 4.80% |
| Years for income to pay back original investment | 15 |
| Total income paid to date | £830,798 |
| - and underlying capital value excluding all income | £922,470 |
| Confidence level: last 30 years | |
| - on payment | 100% |
| - on annual increases | 96% |
Optimism isn’t a reliable investment strategy, now is the time you need to know precisely how your savings will generate income you can spend, rather than you using up capital that you can’t really afford to spend.
What happens next?
If you know you need our advice to get the right income at the right time, then let’s getting chatting now. Give us a call or email us for a non-committal call or video chat. We will discuss where you are today and what your key objectives are. We guide you at every step. We explain every detail. We will never hassle you and the progress is slow and measured and reflects our understanding of how important this is to you.
If you want to explore further then click on ‘Get Started’ and you’ll find our array of analysis tools that show you the income and capital histories of the key UK investment trusts.
Geek warning: you may find the tools to be a little ‘techy’. Sorry, but it’s complicated.