What are the thoughts on Japanese funds. Both my pension and ISAs are very underweight in Japan (in fact virtually nil). From the 80's to about 10 years ago they were abysmal but I notice the last 10 years the Nikkie has almost doubled and been as good as S&P and outperformed Europe and UK. Having said that the index is still below what it was in 1980's. I still have £10k of my shares ISA to invest this year. What are the thoughts on Japan?
Having just checked I have 5.34% of my SIPP portfolio in Japan. Around 13% overall in Asia. 48% in America's and the rest UK & Europe (UK being about 28%). My company pension (less than 15% of the overall pension pot as only been going 18 months) is almost all in UK (about 80%) with the rest in America's which brings the overall Japanese exposure down a bit.
My America's % keeps increasing! I've been putting most of my monthly input into an S&P500 ETF in my SIPP for the last couple of years which has been a great performer, it is down a bit in 2022 (about 5%) but the prior two years were 14% and 32%. I've sacrificed some of my bonus this year so that will further dilute the Japanese exposure although maybe not quite down to Golfie's 3% or less but not far off.
Thanks for the replies re my niece. I think its clear now from what @Rob7Lee has written. It is a one-off, a kind of thank you to employees so they are free shares- not a preferential share purchase scheme. So she has to expect a tax deduction, but we need to understand the mechanism because if they tax it at 45% in one go she wont have any net income tjis month!
but anyway, and as always, thanks for quick and sound advice.
@PragueAddick The only thing I would add to those who answered your query on taxation of vesting shares is that many of these schemes allow a person to time when the shares vest. For example a grant 2018 could vest 2021 to 2028. This allows the recipient to chose and maybe spread the vesting so they can minimise their tax. Also many schemes actually build the scheme actually selling some shares to meet the tax bill eg 1,000 shares vesting, 410 sold to meet tax and NI so recipient only receives 590.
@PragueAddick The only thing I would add to those who answered your query on taxation of vesting shares is that many of these schemes allow a person to time when the shares vest. For example a grant 2018 could vest 2021 to 2028. This allows the recipient to chose and maybe spread the vesting so they can minimise their tax. Also many schemes actually build the scheme actually selling some shares to meet the tax bill eg 1,000 shares vesting, 410 sold to meet tax and NI so recient only receives 590.
Thanks. I’ve seen the explainer from the company and unfortunately they havent pursued those options. There was talk if vesting half, but for some reason rowed back from that.
Thanks for the replies re my niece. I think its clear now from what @Rob7Lee has written. It is a one-off, a kind of thank you to employees so they are free shares- not a preferential share purchase scheme. So she has to expect a tax deduction, but we need to understand the mechanism because if they tax it at 45% in one go she wont have any net income tjis month!
but anyway, and as always, thanks for quick and sound advice.
Are they only taking the tax in her PAYE or are they also paying the share proceeds (I'm assuming she's selling them),
In the past when I've had similar the company say sell £10k of shares and pay that money to you and take 40/45% i.e. 4k or 4.5k in tax and then 2% NI, so she should still get the net and then if needed claim back (if she's a lower rate tax payer they may well sort it out through the months if early in the tax year).
Hi @Rob7Lee she is also looking to me to tell her whether and when to sell. Obviously I think she should sell most, otherwise she’s way overweight in one smallish equity. When, I am less sure. I would suppose the shares dip early on as many employees cash in. Any thoughts?
Hi @Rob7Lee she is also looking to me to tell her whether and when to sell. Obviously I think she should sell most, otherwise she’s way overweight in one smallish equity. When, I am less sure. I would suppose the shares dip early on as many employees cash in. Any thoughts?
Depends on the size of company and number of shares in existence, the fact they are on the NASDAQ I assume it's pretty sizeable and therefore unlikely the staff will move the dial.
FWIW almost always I sold as soon as possible, on the basis that I had a lot of eggs in one basket, job and income, the shares, possibly pension etc - therefore if something major happened to the company there's a lot to lose, especially if this makes up a large proportion of her investments - personally I'd sell the lot, especially if she intends to invest the money.
I'd echo @Rob7Lee, but for the fact the shares should be treated like income or a bonus - have it in cash asap & then it's yours to do with it what you want.
Might be different if it was part of a share portfolio but as part of a remuneration package I'd take the cash.
What are the thoughts on Japanese funds. Both my pension and ISAs are very underweight in Japan (in fact virtually nil). From the 80's to about 10 years ago they were abysmal but I notice the last 10 years the Nikkie has almost doubled and been as good as S&P and outperformed Europe and UK. Having said that the index is still below what it was in 1980's. I still have £10k of my shares ISA to invest this year. What are the thoughts on Japan?
I think Japan has some upside coming, having pulled back a bit recently. I've been in and out of Baillie Gifford Shinnon investment trust (went back in two weeks ago). Don't usually hold more than 5%.
India is worth a look as well (e.g. JII) but with rising dollar rates, some Emerging Markets might struggle in the coming couple of years.
Hi @Rob7Lee she is also looking to me to tell her whether and when to sell. Obviously I think she should sell most, otherwise she’s way overweight in one smallish equity. When, I am less sure. I would suppose the shares dip early on as many employees cash in. Any thoughts?
Most company share and options schemes, certainly the HMRC approved ones, assume any share or option award is an inducement to employment and taxed as income. The advantage with the approved schemes is that the tax isn't due until they're sold and the scheme will automatically withhold proceeds to cover any tax due on the sale.
Your niece could then hold on to the shares and be subject to capital gains on any further gain.
Options can be better as the Revenue considers them valueless if they are struck at, or at a small discount to, the current share price. I.e. you have the right to buy at the price the shares are considered to be worth when awarded. In lots of early stage private companies it's fairly easy to prove shares aren't worth much but the fact that the Revenue doesn't put a value on the 'time element' of the option - e.g. some you can hold for several years - is potentially worth a lot of money. When you exercise the option, same rules apply as for shares. It does rely on the company increasing in value though!
As for Thoughtworks, it's a while since I've had any dealings with them but it used to be a good company. It really comes down to whether she can see the company growing but once she's paid her tax, my instincts are to put the money into an ISA, spread the risk and protect it from further tax. Options would be different - if the company were growing strongly, I'd hold on as the leverage can be huge.
Price Earnings is high in this market, particularly for a services-only company and already taken a bit of a hit since floatation. Has (just) hit its numbers on first couple of results. Does have some reasonable institutional holders. One bad set of results and these will get hammered given that PE.
Not a great time to be selling, though, given market conditions. My instinct would be to wait for the market to recover and maybe sell before the next results.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
Others like Golfy are the professionals but yes I would thought 4% net growth per annum should be achievable
We want a loan for 85% of property so if we did go ahead with the purchase at £365k, we've have to stump up an extra £15k on top of our deposit and everything else we need to pay for, which isn't really feasible anytime soon.
If you can't afford it then go back to the agent and state mortgage company have valued it at x and therefore you can't proceed at the agreed price. They can only say no to a reduction........ they may meet you half way, don't ask don't get!
Or as Golfie says you could try a different lender but the rate may be higher so you will be paying more anyway.
It probably comes down to how much you want it and what you can afford, certainly I'd go back to the agent/vendor initially whilst you explore your options with other lenders either 90% LTV or a better valuation (although I think that unlikely).
Thanks for the advice both, appreciate it.
The problem is that the vendors have had a house accepted and have said they can't go any lower than £365k. However, I do think that if we get another lender to say again it's only worth £350k or whatever then they might be able to go "okay well we will have to find another place then"
Will discuss options about going for 90% LTV, but it's just so frustrating!
Just an update on this - HSBC accepted our application at a £15k higher house valuation than Halifax which is surprising but definitely a weight off my back.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
It really depends on your attitude to risk - a highly speculative portfolio could give 10%+ pa or a very cautious one 4%.
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
We want a loan for 85% of property so if we did go ahead with the purchase at £365k, we've have to stump up an extra £15k on top of our deposit and everything else we need to pay for, which isn't really feasible anytime soon.
If you can't afford it then go back to the agent and state mortgage company have valued it at x and therefore you can't proceed at the agreed price. They can only say no to a reduction........ they may meet you half way, don't ask don't get!
Or as Golfie says you could try a different lender but the rate may be higher so you will be paying more anyway.
It probably comes down to how much you want it and what you can afford, certainly I'd go back to the agent/vendor initially whilst you explore your options with other lenders either 90% LTV or a better valuation (although I think that unlikely).
Thanks for the advice both, appreciate it.
The problem is that the vendors have had a house accepted and have said they can't go any lower than £365k. However, I do think that if we get another lender to say again it's only worth £350k or whatever then they might be able to go "okay well we will have to find another place then"
Will discuss options about going for 90% LTV, but it's just so frustrating!
Just an update on this - HSBC accepted our application at a £15k higher house valuation than Halifax which is surprising but definitely a weight off my back.
well done & glad to hear that a different lender/valuer took a different view.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
It really depends on your attitude to risk - a highly speculative portfolio could give 10%+ pa or a very cautious one 4%.
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
Thank you Golfie for taking the time to reply with some very useful info.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
It really depends on your attitude to risk - a highly speculative portfolio could give 10%+ pa or a very cautious one 4%.
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
The thing about structured products is that the capital is only really guaranteed if you leave the money to the full term of the product (e.g. 4 or 5 years). That's because the 'guarantee' comes from an underlying bond, which is only guaranteed to be worth the same as you pay for it when it matures.
So, if there's any reason why you might want to access it before that, it's not a good idea, IMO, particularly with expected inflation, which is very bad for bonds. Of course, you can chop it up and lock up some proportion and/or for shorter term periods.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
It really depends on your attitude to risk - a highly speculative portfolio could give 10%+ pa or a very cautious one 4%.
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
The thing about structured products is that the capital is only really guaranteed if you leave the money to the full term of the product (e.g. 4 or 5 years). That's because the 'guarantee' comes from an underlying bond, which is only guaranteed to be worth the same as you pay for it when it matures.
So, if there's any reason why you might want to access it before that, it's not a good idea, IMO, particularly with expected inflation, which is very bad for bonds. Of course, you can chop it up and lock up some proportion and/or for shorter term periods.
Quite - but I wasn't giving personalised advice merely stating that there are products/ investments that can have a capital guarantee. If a client came to me saying that they wanted x,y or z then I would tailor my advice accordingly.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
It really depends on your attitude to risk - a highly speculative portfolio could give 10%+ pa or a very cautious one 4%.
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
The thing about structured products is that the capital is only really guaranteed if you leave the money to the full term of the product (e.g. 4 or 5 years). That's because the 'guarantee' comes from an underlying bond, which is only guaranteed to be worth the same as you pay for it when it matures.
So, if there's any reason why you might want to access it before that, it's not a good idea, IMO, particularly with expected inflation, which is very bad for bonds. Of course, you can chop it up and lock up some proportion and/or for shorter term periods.
Quite - but I wasn't giving personalised advice merely stating that there are products/ investments that can have a capital guarantee. If a client came to me saying that they wanted x,y or z then I would tailor my advice accordingly.
and I'm very much looking forward to my Structured product kicking out in June fingers crossed!
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Could one of you clever people answer a quite straight forward question for me? I must add that I have absolutely no idea regarding investments apart from the basics.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
It really depends on your attitude to risk - a highly speculative portfolio could give 10%+ pa or a very cautious one 4%.
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
The thing about structured products is that the capital is only really guaranteed if you leave the money to the full term of the product (e.g. 4 or 5 years). That's because the 'guarantee' comes from an underlying bond, which is only guaranteed to be worth the same as you pay for it when it matures.
So, if there's any reason why you might want to access it before that, it's not a good idea, IMO, particularly with expected inflation, which is very bad for bonds. Of course, you can chop it up and lock up some proportion and/or for shorter term periods.
Quite - but I wasn't giving personalised advice merely stating that there are products/ investments that can have a capital guarantee. If a client came to me saying that they wanted x,y or z then I would tailor my advice accordingly.
The only structured product I ever invested in, which was supposed to have intial capital guaranteed, ended up losing me a lot of money. I don't know if they all are, but this one included a derivative (which effectively underwrote the guarantee). However linked within the derivative structure was Leman's. Need I say more! So beware and only invest in a structured product if you FULLY understand the mechanics and the risks YOURSELF.
Comments
My America's % keeps increasing! I've been putting most of my monthly input into an S&P500 ETF in my SIPP for the last couple of years which has been a great performer, it is down a bit in 2022 (about 5%) but the prior two years were 14% and 32%. I've sacrificed some of my bonus this year so that will further dilute the Japanese exposure although maybe not quite down to Golfie's 3% or less but not far off.
but anyway, and as always, thanks for quick and sound advice.
In the past when I've had similar the company say sell £10k of shares and pay that money to you and take 40/45% i.e. 4k or 4.5k in tax and then 2% NI, so she should still get the net and then if needed claim back (if she's a lower rate tax payer they may well sort it out through the months if early in the tax year).
FWIW almost always I sold as soon as possible, on the basis that I had a lot of eggs in one basket, job and income, the shares, possibly pension etc - therefore if something major happened to the company there's a lot to lose, especially if this makes up a large proportion of her investments - personally I'd sell the lot, especially if she intends to invest the money.
Might be different if it was part of a share portfolio but as part of a remuneration package I'd take the cash.
I will post the exact fund details when the Aviva site wakes up from its extended maintenance period which will "make my experience even better".
India is worth a look as well (e.g. JII) but with rising dollar rates, some Emerging Markets might struggle in the coming couple of years.
Your niece could then hold on to the shares and be subject to capital gains on any further gain.
Options can be better as the Revenue considers them valueless if they are struck at, or at a small discount to, the current share price. I.e. you have the right to buy at the price the shares are considered to be worth when awarded. In lots of early stage private companies it's fairly easy to prove shares aren't worth much but the fact that the Revenue doesn't put a value on the 'time element' of the option - e.g. some you can hold for several years - is potentially worth a lot of money. When you exercise the option, same rules apply as for shares. It does rely on the company increasing in value though!
As for Thoughtworks, it's a while since I've had any dealings with them but it used to be a good company. It really comes down to whether she can see the company growing but once she's paid her tax, my instincts are to put the money into an ISA, spread the risk and protect it from further tax. Options would be different - if the company were growing strongly, I'd hold on as the leverage can be huge.
Price Earnings is high in this market, particularly for a services-only company and already taken a bit of a hit since floatation. Has (just) hit its numbers on first couple of results. Does have some reasonable institutional holders. One bad set of results and these will get hammered given that PE.
Not a great time to be selling, though, given market conditions. My instinct would be to wait for the market to recover and maybe sell before the next results.
If I invested 300k over four to five years, what sort of growth could I expect? Would 12k per year be achievable or is that figure way off the mark?
The money would have to go somewhere safe or very low risk as I would need the initial 300k back intact. This is not spare money that I can afford to lose.
Cheers
If its money you can't afford to lose then investing is not for you. No one can guarantee not to lose your initial capital, although with a 4-5 year time horizon I would say its a decent bet you'd get your money back (and some).
There are a couple of "products" that could give you some degree of certainty - with-profit Bonds being one and deposit based Structured Products another. But both would really require the services of a Financial Advisor and would probably cost you at least £2k in fees. Clients of mine in said "products" have been getting back c5% over the past 5 years, although past performance is no guide to the future.
Edit. Thinking about it, the fees are likely to be much higher than that. I usually charge 3% of the investment amount, although for sizable sums then this can be negotiated down. For fellow Lifers there is a special rate, but saying that I don't think I would do a £300k investment for less than £3k with £5k being the norm.
So, if there's any reason why you might want to access it before that, it's not a good idea, IMO, particularly with expected inflation, which is very bad for bonds. Of course, you can chop it up and lock up some proportion and/or for shorter term periods.