A Summer Quickly Over

The summer seems to have positively zipped by and I'm at a loss as to where all the time went.  In the month since my previous post it's become clear to me that some of my plans for retirement are not going to come to fruition as swiftly as I'd hoped.  The summer holidays are now over, Linda is back to school and a new term has begun.

I've done some gardening - but not as much as I should have done.  DIY projects are still in the "to be started" bucket.  However, I have been making good use of the motorhome.


Linda and I joined with our church family at Westpoint Showground, along with many other churches, for a long weekend of teaching, celebration and worship.  The weather was fantastic, dramatically better than last year, and we had a great time, enjoying the opportunity to spend time with other members of our church and getting to know one another better.

Ascot Life Church camping area

Westpoint was followed by a few days near Weston-Super-Mare, where Linda and I were joined by our daughter, Cordelia.  This resulted in more walking than Cordelia would have liked, but less than I wanted.  Seaside cafe lunches.  Evening pub meals.  In all, another enjoyable break.

View south from Brean Down  (Weston-Super-Mare is behind me)

Then I was off by myself in the moterhome to Frylands Wood Scout Centre near Croyden, where I was helping crew a Live Action Role Playing event.  An adult version of running around in the woods, playing "let's pretend".

In costume, in the woods, awaiting an encounter with the players

After six trips in the motorhome so far, both Linda and I are very happy.  It's certainly met our expectations and we've no regrets.  Still need to take it over the channel at some point - but I guess that's unlikely to happen until next year.

With summer 2019 behind me, I need to knuckle down and be a bit more constructive.  Let's see how that goes..... 

Bognor, Brighton and Arcade Antics

So last weekend Linda and I went on our second break away in the motorhome (I really need to come up with a cool name for it - suggestions welcome).  This time for three nights rather than just one.  My mother-in-law, Ann, joined us in her caravan and Cordelia came too.

Convoy Ready to Roll

Since it was all rather last minute, unsurprisingly during the summer school holidays the majority of camp sites we called were full!  Eventually we found a camp site that had vacancies for a motorhome and a caravan - so to Bognor Regis we went.  Since we'd left pretty late on the Saturday, having had to wait for Cordelia to finish work, we didn't really have much time in the evening other than setting up and preparing some food.  All in the motorhome was working as expected and a good nights sleep was had.

Sunday was an opportunity to explore the quaint holiday destination that is Bognor Regis.  It didn't disappoint.  Heading into town, on route to the beach, it proved impossible for the ladies not to be distracted by the shops.  I bought a newspaper and camped in a coffee shop, awaiting further developments.  Eventually we made it to the sea front and ended up at the Pier.

Bognor Sea Front

The beach was pretty empty, but given the typical British summer weather of cold drizzle, not really surprising.  It turned out that the Amusement Arcade on the pier was the place to be.  Lured by the bright lights and the promise of prizes to be won, we wandered in.  After a brief look round, I left to have a coffee in the cafe at the entrance to the arcade, anticipating that I'd be swiftly joined.  I was wrong.  It turned out that the lure of easy money had been too strong.  Investigating, I found all three of them...

Absorbed by a 'pusher game'

It was one of those coin waterfall type games where you slot in a 2p coin in the hope it will settle on the sliding shelf and result in displacing more coins for you to collect.  Attention was fixated on a five pound note, tantalisingly close to falling off the edge to be collected by the lucky punter who happened to insert a timely coin.

So close to falling

Surely it wouldn't take £5 worth of coins to displace it.  This must be worth a punt.  And so another set of suckers were reeled in.  250 2p coins later, the note was still sitting stubbornly on the edge - still looking like one more go would push it over.  Defeat was accepted and that was that.  Time to go - or so I thought.  While Linda and Ann had had enough, Cordelia wanted more.  You see, not only did the pusher game give the chance of untold riches, but through some impenetrable algorithm also dispensed tickets during play.  The result of feeding in many many coins into the slot had given us a couple of hundred tickets.  And tickets can be exchanged for prizes.  Cordelia reasoned that having started collecting tickets, we should continue to do so until we had enough to claim a prize, so our five pounds would not have been wasted.  She had set her heart on a mug that cost 1500 tickets!!!

	Cordelia:	Do you wanna stay and play more games to try win a mug.
	Me:	No, that's stupid.
	Cordelia:	Oh please, it will be fun!
	Me:	No - it's a waste of money.
	Cordelia:	The money will be spent on the good time and memories we'll have together.
	Me:	Give the tickets to a kid.
	Cordelia:	But I earned them.
	Me:	No - I don't want to.
	Cordelia:	Yes you do
	Me:	No, I'm not going to do it.
	Cordelia:	Pleeeeease
	Me:	No.
	Cordelia:	Just to get the mug.
	Me:	No.
	Cordelia:	Yes, go on.
	Me:	OK

And that's how I ended up playing various games for tickets on Bognor Regis pier.  Having played a fish shooting game, a basket ball throwing game, a Willy Wonka game and I think there may have been something else, it became clear that at the rate we were winning tickets, this was going to be a really expensive mug.  I'm guessing that so far we'd probably spent about £15 to win about 1000 tickets.  We then had a go at a duel player space invaders game.  A pound each to play and we sat next to each other on a bench with a gun that we aimed at a large screen.  This was fun.  We didn't do great on the ticket front, but I was convinced we could do better if we had another go.  Two more pound coins in the slot and we played again.  We played a blinder, beautifully coordinated, picking off the aliens, hitting the bonus ships, manic mayhem, they came faster and faster and we blasted them.  And then it was over. But a new high score and a mega ticket bonus!

We both got an additional 1000 tickets!

This was great!  This was the highlight of my holiday.  The screen flashed!  The colours cycled through.  It flashed more!  People were looking round to see what had happened.  And the tickets, the tickets they kept on coming, the space invaders machine spitting them out, on and on and on.  And onlookers stopped in their tracks to see what was happening.  And the tickets kept coming.  That mug was gonna be coming home.

Those tickets are still coming....

Not only would Cordelia be taking home a hard won mug, but I would be taking one too.  Let me tell you, life doesn't get much better than this.  I admit I was wrong and Cordelia was right.  It was fun.  It will be a great memory.

The Coveted Mug 

After that excitement it's all downhill from here.  More shops, chips from a seaside chippy and Weatherspoons for supper.

During a drink or two in Weatherspoons, discussion flowed on tomorrows activities.  I was suggesting we could go for a more ambitious walk than "one mile into town".  However, there was little support for this notion and the winning notion was "driving to Brighton and spending the day shopping".  I was outvoted three to one.  As a throw away comment, Ann said, "You could always walk and meet us there."  Ha! Challenge accepted.

And so it happened.  (Click here for walk details and photos)  I met up with Linda, Cordelia and Ann in Brighton in time for a couple of beers and an evening meal.  We ate at Bon Appetit - an 'all you can eat' buffet restaurant in the town centre. A big plus from me on quantity and value - however the food was pretty bland and distinctly underwhelming.  I don't think we'll be back.

Tuesday morning saw Cordelia and I heading back to sunny Bracknell with Linda staying on with Ann in the Caravan for a few more days.  It turned out to be a fun weekend break and the motorhome continued to please.  I think I'm done with Bognor, OK for one trip, but I can't see myself longing to go back.

Gibraltar: Thoughts and Photos

A last minute decision a week ago saw Linda and I on a flight to Gibraltar on Thursday - resulting in a significantly more exciting celebration of our wedding anniversary than our normal efforts.

View of Gibraltar from the Airport

 As it turns out, Gibraltar is an excellent destination for a long weekend break.  My list of positives includes: Everything is in English; You can use the Pound - so no currency exchange rip-offs; No jabs required; Sunny; Small enough to walk everywhere (the total ground area of Gibraltar is about half the area of Heathrow Airport!); Reasonable prices - costs seemed similar, or less, than Bracknell; and multiple sites of historic interest.

We were staying in a 'yacht' hotel, moored in the harbour, close to the main town centre and just 15 minutes walk from the airport terminal.  An interesting walk, in that it sees you crossing the airport runway.  Gibraltar is the only international airport where it's runway is crossed by a main road.

Our base for four nights

Our time consisted of walking and exploring punctuated by multiple bar and cafe stops for refreshment.  Highlights for me were the tour of the World War 2 tunnels in the rock, climbing the Mediterranean Steps to the top of the rock, the stunning views and meeting the monkeys (Barbary Macaques) on the rock.  For Linda it was the monkeys and the views when climbing the rock.

One of many pints of San Miguel Consumed

Europa Point, with view of Africa across the Straits

Looking North, from Europa Point

The Mediterranean Steps - a tougher path to the top! 

View to the east, about half way up

View to the north, pretty much at the top

The obligatory monkey photo

Inside one of the rock's tunnels (there are 35 miles of tunnels!)

Circled point is location of guns in previous photo

Crossing the runway, heading back home

So a great weekend away that I'd thoroughly recommend as a short break, with enough to engage both of us.  If we'd have had more time, we'd have probably spent a day at one of the beaches, maybe taken a dolphin viewing tour or a day trip to Morocco.

I found the history of Gibraltar fascinating and it's easy to see why strategically this small peninsular has been so important to the British military and indeed continues to be so.  The defences around the rock are formidable and the ongoing British sovereignty provides a delightful metaphorical two fingers up at the Spanish. 

Makes you proud to be a Brit! 😊   

Chickens and Investing

As an investor, investing for long term income, I find comparisons to a chicken farmer helpful in explaining my investment philosophy.

As a chicken farmer, I'm interested in eggs.  The eggs are what I can eat and what I can sell.  As long as I'm getting a steady stream of eggs from my chickens, I'm happy.  And if I have excess eggs, I can use some to make new chickens and thus provide even more eggs in the future.

When I buy some shares in a company, I like to think of them as chickens in my growing flock.  Instead of eggs, they provide me with dividends.

As a chicken farmer, I'm not too much bothered by the day to day fluctuations in the price of the birds.  As long as the birds I have are giving me eggs, the price fluctuations are irrelevant.  Of course, if chickens became particularly cheap, I can always buy some more and that's goodness, not something to worry about.

Long term investing is similar - the daily price fluctuations of shares is not a worry.  As long as dividends continue to flow, then I can sleep peacefully at night.

Of course, in the same way that I'd want to make sure I had healthy chickens, I want to ensure that the companies I invest in are healthy too.  I'm not looking for small start ups that might be the next big thing and triple my investment, but rather steady investments with a solid record and good prospects for being around over the coming decades.  Profitable businesses that pay shareholders a good dividend.  And in the same way that I could hold back some eggs to grow more chickens, I can ensure that I hold back some of the dividends I receive to buy more shares.

But what about an unexpected disaster?  Chicken fever? A fox?  There will always be things you can't foresee.  For example, the Deepwater Horizon oil spill that hit BP in 2010, which so far has cost BP over $65 billion.  So it's critical to diversify - maybe buy different breeds of chickens or even some ducks and geese.  I try and cover a wide range of different industrial sectors as well as investing in a broad range of geographical economic areas.  If the UK gets "Boris'ed", then that's OK, because the overseas investments should keep me going.

To ensure I keep going forever, then what happens if one year the chickens don't do so well and lay fewer eggs?  Well I don't panic and sell some chickens to make up the shortfall.  Instead, I tighten my belt and have two eggs in my omelette instead of three.  I maintain the flock so that things can hopefully get better in the future.  And every time I can spare an egg or two, I'll pop them in the incubator to make my flock a little larger.

Just remember, it's all about the eggs...

Motorhome Shenanigans

Six years ago we went on a family holiday in America where we hired a motorhome (RV in US speak) and toured round some of the most spectacular national parks: Death Valley; Yosemite; Yellowstone; Grand Canyon; Zion and others.  We really enjoyed it, it was one of our best ever holidays.  Ever since then, Linda and I have nursed the idea of owning one, buying motorhome magazines, attending the Motorhome & Caravan Show at the NEC, visiting dealers, gradually agreeing on what we liked and didn't like.  With retirement fast approaching, in March this year we placed an order for a Benimar Primero from Marquis.

Our key requirements for the van were: Max length, six metres; Seat and sleep four; Fixed bed that didn't require making up each evening.  We liked the people at Marquis, we liked the fact that Marquis has a large dealer network and we liked the competitive price that Marquis were able to offer us when comparing to another dealer for a similar van.

Just over two weeks ago we picked up our new van from Marquis Newbury. It did not go as smoothly as hoped!  Unfortunately, it transpired that my driving record (having driven a company car since my twenties and not personally had any insurance of my own - thus no personal 'no claims bonus'.  Plus six points on the license.  Plus both Linda and I had been involved in accidents recently - both third party at fault.) was not acceptable for the Marquis default "Free One Year Insurance" plan.  However, in terms of going the extra mile, I cannot fault the Marquis team, who spent most of the Friday afternoon trying to find an insurer who would cover me.  After a few hours at the dealership (we did take a 60 minute break for lunch at a local pub) everything was sorted out and I was able to drive our new toy home.

Looking all shiny and new on our drive

This weekend just gone, Linda & I took the van on it's first outing to a campsite in the New Forest.  A chance to test various features and check all was working as it should be.  We're very happy to report that all was working as it should be.  We were on a site in the forest with no facilities - but the van provides everything: fridge; hot water; toilet; proper shower; cooker.  The bed was comfortable and gave us a good nights sleep.  A definite upgrade from our last visit to the forest, when we were in a family tent.

Park, pull out awning, make a coffee, relax.

Getting out and about for a walk

British weather at it's best

The obligatory ponies picture

Lyndhurst in view, home of pubs, restaurants and tea shops

Yep, if this is retirement, bring it on.

So, having got back to sunny Berkshire, what have I learnt?  Well, we're both really happy with the new motorhome.  It was good to drive, I didn't have any issues handling it, the seats are comfortable and the higher viewpoint is a pleasant change from driving a car.  We're both pleased with the layout and size of the van and (based on 24 hours) it works really well for us as a couple when we're the only ones using it.  We did notice a couple of small niggles - a screw missing on one of the seats, effecting the armrest and a missing manual for the heating - but I've e-mailed Marquis and they're sorting it out for us.

Based on first impressions then, it's a good purchase and Marquis have been excellent.  Very early days, but no regrets so far.

Further Pension Musings

(This is a follow on post from: So how is this pension thing going to work...?)

Last week, while I was away walking the South Downs, my 25% tax free lump sum came through and was credited to my account.  So this week, I've had to actually decide how to allocate the funds from my IBM pension pot, to investments that I'm confident will see me through the next few decades.

First, where's the money?

I've got four distinct pots within which I hold investments.  The largest is a SIPP, which now contains the IBM pension money plus various investments that I'd also built up in the SIPP outside of the IBM plan.  I'd already consolidated two other plans into this SIPP that had been started before I'd joined the IBM scheme.  Then I have an ISA, which I've been building up over the past decade.  I also have some funds invested in VCTs.  And finally I have some shares that are not in any kind of investment wrapper at all.

Snapshot at retirement start

The Cunning Plan

Ideally, I'd like to just put all the investments I have into the ISA pot - then I'd have no restrictions on what I can do with the money and all the income would be tax free.  However two things prevent that.  First, I'm limited on how much I can put in an ISA each year.  Second, I get taxed on what I take out of the SIPP - so too much in one year and I'm giving 40% or more to HMRC.

So the plan is to move the funds from the SIPP and the Other pot, into the ISA over time - putting off actually drawing any income from the ISA as long as possible, hoping that by the time I've emptied the SIPP, the ISA will be big enough to take over.

Therefore, I've decided to draw down from the SIPP as much as I can each year without hitting the 40% tax bracket, live on what I need to live and add what's left over into the ISA.  I will also transfer the shares in the Other pot into the ISA - as I can, up to the annual ISA limit.

At the moment, the only income I have that is taxable is what I draw down from the SIPP - VCT and ISA income is tax free and the dividend income from the Other shares is below the current dividend income threshold for tax.

If the cunning plan works, then eventually, the amount I have invested should stay constant (or even better - go up) and I will have all my investments in the ISA and be living off the dividends, tax free.

The Investments Bought

The IBM Pension cash has been split between six investments.  Together, these six investments make up the largest proportion of my retirement pot and I regard it as my core portfolio.  This is what I've gone for:

Investment Name	%	Ticker	Comments
Vanguard FTSE All World High Div. Inc. ETF	30%	VHYL	An ETF, tracking a world index of high dividend paying shares. Good international diversification.
Vanguard FTSE UK Equity Inc.	30%	VVUKEI	A low cost fund, tracking the index of UK dividend paying shares
Phoenix Group	10%	PHNX	Closed book, life insurance consolidator.  Reliable, solid, multi year income projection available.
Henderson Far East Inc.	10%	HFEL	A regional investment trust, focusing on dividend paying shares in the Far East region.  Multi year record of growing dividend.
Merchants Trust	10%	MRCH	A UK focused Investment Trust, focusing on generating income.  Has been running for over a century with 30+ years record of increasing dividend
BMO MSCI UK Inc. Leaders	10%	ZILK	A UK focused ETF, tracking dividend paying companies, with algorithmic filter to exclude potential poor performers.

To help visualise this, I've created a virtual portfolio, which I can track.  So with a £100K spend, it would look like this:

Spending the cash 30%, 30%, 10%, 10%, 10%, 10%

Now because I can't stand money sitting around, not working for me - that £23.34 left over can get me two extra Phoenix shares and one each of Henderson and Merchants:

Final investments for virtual portfolio (Prices from 12/07/2019)

I'll review this portfolio regularly to see how it's performing.  Obviously I hope that over time the income will gradually increase and I will see an increasing valuation.  We will see.

My core portfolio represents about 85% of my SIPP, the remainder being a mix of high yield individual company shares and high yield bond funds.  It is those that I plan to sell first as I start to draw down income from the SIPP.  It is my intent that as I sell investments in the SIPP, I will be able to buy equivalent value investments in the ISA - so as to not erode overall capital value.

Within the ISA and Other shares, there are a mixture of over thirty different funds and individual company shares, all paying dividends (except one - but that's a story for another post) and covering a diverse range of industries (I wont invest in tobacco or gambling stocks).  The largest holding is less than 8% of the total, most are about 3%.  I'll post about the other companies I've invested in, later this year.

Overall my income from investments looks like this:

Significantly better than I could get from an annuity - but will it prove to be as safe?

How far would you walk for a burger?

Having been invited to the annual departmental barbecue, which is held at IBM's site in Hursley near Winchester, it made sense to me to use it as an excuse for walking the South Downs Way.

It was British summer at it's best, with five days of sun and no hint of rain.  The visibility was fantastic, providing excellent views of Southern England throughout the length of the trail.

Click here for further details of the walk and selected photos.

Progress: 3 out of 16 National Trials in the bag.  No idea at the moment which my next one will be - sometime in September probably.