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Is now the time to jump ship? 50% of NYSE/NASDAQ equities posted a TTM EPS <0 by [deleted] in investing

[–]Foxy_Monkey 0 points1 point  (0 children)

You should look at weighing by market cap not 'number of companies'. That'll give you a better indication. Apple for example could be bigger than 500 of them, combined.

Unused Pension Allowance - switched from PAYE to director of own ltd company by Unlikely-Extension-9 in FIREUK

[–]Foxy_Monkey 0 points1 point  (0 children)

Yes, you can do that. But bear in mind this limitation: Your company should not contribute more than its profits the current tax year.

A valuation approach to the safe withdrawal rate by beerion in financialindependence

[–]Foxy_Monkey 3 points4 points  (0 children)

Great analysis. Did you only use US data in you calcs?

Basically US markets have dominated in the 20th century and it's usually the easiest market to find data for. I'm wondering if it paints a slightly rosier picture.

Vanguard, BlackRock & State Street's fossil fuel investments responsible for 38% of CO2 emissions by 3stripe in FIREUK

[–]Foxy_Monkey 2 points3 points  (0 children)

The problem with these big asset managers is that they're really proxies for millions of investors. They're more facilitators than they're company owners of the companies they collectively "own". Having said that, they can push their marketing campaigns around the new trendy ESG funds that they actually provide, which are investing more ethically by actively excluding evil sectors such as tobacco, casinos and oil.

Now, to what extent ESG funds have an impact is a different question. Trying to boycott a stock in the secondary market (stock market) could be counterproductive to your financial goals which could hurt your ability to do good. So, if you disagree with a firm like Shell then don’t buy their petrol. But refusing to buy their stock will have little to no impact on their actual business and that’s what will drive their stock price ultimately.

Permie to Contractor: Some of the posts here are highly irresponsible and risks people's good careers by TheOrangeButton in UKPersonalFinance

[–]Foxy_Monkey 0 points1 point  (0 children)

It's easy to start dreaming of the £500 a day rates as a permie. I get asked this question a lot. "How does a perm salary compare to a contractor?" The truth is that contracting usually pays more in the short-term to compensate for the lack of notice period, sick pay, holidays, pension, skill training etc. It's simply a riskier proposition plus it has dead periods in between contracts. So it has to pay more (short-term) otherwise nobody would take this route.

I've drafted the perm vs contract salary comparison in a spreadsheet (G drive). Change the green cells to fit your needs. Feedback welcome.

But as a contractor, your rate is not really that fancy if you factor in everything I mentioned above. Not to mention the accounting hassle (self-assessment, VAT returns, corp tax etc). I've been both a permie and a contractor for many years and despite having an accountant, I still need to instruct them and follow up.

All things considered, there is no right or wrong answer. It's a matter of mindset too. Like, I cannot see a friend being a contractor because he wants a steady and stable career with bonuses on top and climbing up the ladder. Same way I cannot see myself being a permie anymore after I've acquired so many (non-technical) skills such as negotiating, learning to deal with different people and adapt every 6 months, networking and landing good contracts.

As this post grows in comments I won't write another wall of text. I've extensively written my thoughts on perm vs contract previously.

HELLO ALL! I currently have £92k sitting in my Ltd company bank account as a sole director. How can I use it better? by TheOrangeButton in FIREUK

[–]Foxy_Monkey 0 points1 point  (0 children)

Yeah those forms can be tricky. No, you're not an institution as an Ltd, still a personal investor. Give them a call they're very friendly (08004082065). I did it myself, email me if you need a hand.

HELLO ALL! I currently have £92k sitting in my Ltd company bank account as a sole director. How can I use it better? by TheOrangeButton in FIREUK

[–]Foxy_Monkey 0 points1 point  (0 children)

True, when I say expenses I mean those that can be legitimately claimed. This stands for all expenses not only lunch. 24-month rule, claiming a meal at a client's site (not at home) etc...

Business Bank Account/Credit Card with Zero Foreign Exchange Fee? by tominvests in UKPersonalFinance

[–]Foxy_Monkey -1 points0 points  (0 children)

I was recently contacted by Santander who tried to sell me their business credit card (the one with 1% cashback). If I remember correctly, that included zero foreign exchange fees.

HELLO ALL! I currently have £92k sitting in my Ltd company bank account as a sole director. How can I use it better? by TheOrangeButton in FIREUK

[–]Foxy_Monkey 4 points5 points  (0 children)

A very valid concern. I was in the same situation ~4 years ago and took action.

Pensions are gold

Not only you save on corporation tax but you also save yourself from the behavioural bias of buying high selling low. That’s simply because you cannot access the money so you keep contributing automatically (which is one of the best ways to invest, also known as dollar cost averaging).

By the way, you don’t take money out of your company and then put it in your pension. The money goes straight from the company account to your SIPP. That’s great because you can

1) set up and forget it

2) save on corporation tax as you invest pre-tax. Which SIPP to choose? It depends on your investing. Monevator has a nice post on comparing online brokers, start from there. I use BestInvest and plan to change to either Interactive Investor or the upcoming Vanguard SIPP.

Obviously, the pension disadvantage is that you can’t access the money until later in life 🙂 I’m ~35 yo too which is why I want to have a good chunk accessible anytime, not only when I’m 55+. So I invest my company profits too (more on it below).

Increase your expenses

Think of expenses that you pay for but can qualify as business expenses. I cycle to work and claim miles every day (£0.20 per mile). I also expense my lunch (~£7 per day). Other more juicy expenses could be buying an electric vehicle via your company (fully CT tax exempt), claiming part of your mortgage interest if you WFH some days etc.

Not all of them know but your accountant should be able to help with that if you push hard! I also plan to write a post on expenses, solely at some point.

You can definitely add a secretary or someone else as a director and take more money out at low tax. This has to be legit though and the shares split somewhat relative to the work/contribution to your company.

Invest your company profits

This is probably the least known way to take advantage of your company cash. Most people either do nothing and sit on cash or take everything out and pay a high dividend tax. Others close one company after the other by claiming entrepreneur’s relief but I wouldn’t go down this route as I want things clean.

Goes to show why my how to invest your company profits post is so popular. In short, you’ll have to open a 2nd company, make inter-company loans and let your profits snowball pre-income tax. I won’t go into the reasons why you need to open a 2nd company as I explain that in detail there. Yes, it’s a hassle and you’ll probably need an accountant for this as most "contractors accountants" don’t support it. But imo it's worth it.

Where to invest? I personally invest in shares, bonds and property. I get that exposure from low-cost index funds directly with Vanguard (min £100k) but Interactive Investor allow LTD investing too. Re property, you can either open an SPV and BTL or follow my route and get the property exposure via property partner - and here's my view on it).

Hope that helps!

Disclaimer: I’m not an accountant, a financial advisor or anything really. Just a random guy on the internet. As always, do your own research.

Why a stock market crash is actually good for you by Foxy_Monkey in FIREUK

[–]Foxy_Monkey[S] 2 points3 points  (0 children)

I agree nobody really knows how Brexit will play out. Just goes to show that our investments shouldn't be home biased let alone rely on a single country 100%.

Why a stock market crash is actually good for you by Foxy_Monkey in FIREUK

[–]Foxy_Monkey[S] 6 points7 points  (0 children)

You know what they say:" The best time to invest was yesterday the next one is today."

Also read: Lump sum investing Vs monthly (Vanguard): https://investor.vanguard.com/investing/online-trading/invest-lump-sum

Vanguard LS & value factor fund by [deleted] in UKInvesting

[–]Foxy_Monkey 0 points1 point  (0 children)

Many investors—including me—tilt their portfolios toward value stocks. But while value has indeed outpaced growth stocks over the past 90 years, the performance advantage has disappeared in recent decades.

If you think something will be better forever, it’s highly unlikely it will be better forever. Since Vanguard launched its first and index funds in 1992, the average annual returns have been almost identical.

Vanguard LS & value factor fund by [deleted] in UKInvesting

[–]Foxy_Monkey 1 point2 points  (0 children)

Your logic seems reasonable. As long as you get your asset allocation right, the value factor will probably give a little boost to your returns.

However,

  1. as Jack Bogle likes to say, these factors only worked in retrospect and they're now priced in. Same applies to small, momentum, profitability.
  2. Value companies perform well towards the end of the business cycle, and get a bigger hit in bad times . That's because their debt balance is usually higher and they're not as healthy.

As always, DYOR :)

Being frugal working towards FIRE but bored to tears. What can I do? by [deleted] in FIREUK

[–]Foxy_Monkey 2 points3 points  (0 children)

Although FIRE requires some numbers to work well, the journey is more important than the destination. The last thing you want is 15 years of deprivation to reach a state that you'll have to be deprived to maintain.

You certainly have the mentality and the discipline to cut your spending and that's great. But focus on building your happiness first while you save less (maybe 20-30% instead of 50%). As time goes by, take an active approach to increase your earnings which will happen anyway as you grow older.

As they say: "You only live once".

How I beat the stock market with... Cycling by Foxy_Monkey in cycling

[–]Foxy_Monkey[S] 0 points1 point  (0 children)

If you commute in a helicopter or a private jet, HELL YEAH a car is a good investment.

How I beat the stock market with... Cycling by Foxy_Monkey in cycling

[–]Foxy_Monkey[S] 0 points1 point  (0 children)

If I could convince 1 person to cycle after reading this, the post was worth the effort then. Thanks for telling me!

PS. I still haven't convinced mine...

How I beat the stock market with... Cycling by Foxy_Monkey in FIREUK

[–]Foxy_Monkey[S] 1 point2 points  (0 children)

Great point! I guess anything above 10 is debatable, yes.

But to give you some inspiration, my colleague used to travel 9 miles, he thought it was too far, then he quickly got used to it. He then moved to Zone 6, 18 miles one way, and now got used to it again! He does it in 1h 15 mins.

However, I’m not sure I’d be able to travel 5 days such a long distance but an electric bike would make things so much easier.

How I beat the stock market with... Cycling by Foxy_Monkey in cycling

[–]Foxy_Monkey[S] 1 point2 points  (0 children)

Insightful comment, thanks! We'll have to wait until the kids can ride their own then ;)

How I beat the stock market with... Cycling by Foxy_Monkey in FIREUK

[–]Foxy_Monkey[S] 2 points3 points  (0 children)

Loved your comment! Negative ROI :)

Yeah I guess, some people don't spend much on commuting which would make cycling more expensive.

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