Expected dividends for the next three months are £2,251.00 which would achieve the 2024 target of 9k.
There is always the chance for a dividend to be reduced but for balance most dividends are gently increasing and there will be some extra cash as dividends are re-invested, with the full benefit in the calendar year 2025.
Income of £9,175.00 is the plans target for the year ending 2027 which means the Snowball would be on target for a yield at the end of the ten year period of 16%.
A lot of water to flow under a lot of bridges before then, so stick to your plan until it sticks to u.
Investing like Buffett By following this simple approach of using my earnings from investments to buy more shares, I hope I can accelerate the long-term process of building wealth.
That could involve a combination of compounding dividends and putting any capital gains I earn in my Stocks and Shares ISA back into buying more shares.
The post Warren Buffett got rich doing this appeared first on The Motley Fool UK.
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JLEN has announced it’s latest NAV and it’s slipped slightly from the current value shown on the chart.
They have announced their next dividend target and now yields 9%. The chart is obviously not a buy but if u want the dividend there is a small window to secure the next dividend.
Net Asset Value, Dividend Declaration and FY25 Dividend Target
Net Asset Value and dividend target JLEN, the listed environmental infrastructure fund, is pleased to announce an unaudited Net Asset Value (“NAV”) of £751.2 million at 31 March 2024 (31 December 2023: £777.7 million). This results in a NAV per Ordinary Share of 113.6 pence (31 December 2023: 117.6 pence) after payment of the target quarterly dividend of 1.90 pence.
The Board is pleased to announce the Company’s 10th consecutive dividend increase since IPO, with a dividend target of 7.80 pence per share for the year to 31 March 2025, representing a 3.0% uplift from the year to 31 March 2024.
Summary of changes in NAV:
NAV per share
NAV at 31 December 2023
117.6p
Dividends paid in the period
-1.9p
Power prices
-2.1p
Battery revenue outlook
-1.6p
Discount rate changes
0.4p
Other movements (including actual asset performance)
1.2p
NAV at 31 March 2024
113.6p
Power prices The portfolio continues to benefit from a high degree of protection from short term price hedges as well as revenues from subsidies and long-term contracts that are not derived from power prices. As a result the portfolio has been resilient despite a significant reduction in near term electricity and gas price expectations.
Once reflecting the compensating impact from the Electricity Generator Levy, downward power price forecasts have resulted in a reduction in NAV of 2.1 pence compared to 31 December 2023.
Battery revenue outlook Near term battery revenue projections have reduced significantly in recent months. Whilst the portfolio only has one operational asset, this backdrop has impacted pricing and valuations in the market for assets at all stages of their lifecycle.
The impact of changes to revenue forecasts is to decrease the NAV by 1.6 pence compared to 31 December 2023.
Since April 2024, revenues have started to rise, and independent market analysis suggests this trend to continue through 2024 and 2025 as well as continued strong fundamentals for the long term outlook of the sector.
Discount rates Discount rates have been reviewed across the portfolio to ensure they remain in line with evidence of recent market transactions seen by the Investment Manager and assessment from JLEN’s independent valuation advisor. There have been no material changes to discount rates in the period, and the overall Weighted Average Discount Rate remains at 9.4%. The net effect of changes to discount rates is to increase the NAV by 0.4 pence compared to 31 December 2023.
Update on asset sales The Investment Manager continues to progress several credible selective asset disposal opportunities. The Board expects to update shareholders in due course.
Dividend
Financial performance of the portfolio has been satisfactory, with dividend cover of 1.30x for the year to 31 March 2024.
The Company also announces a final quarterly interim dividend of 1.89 pence per share for the period from 1 January 2024 to 31 March 2024.
Together with the interim dividends paid during the financial year to date of 5.68 pence per share, the Company will have paid total dividends of 7.57 pence per share in respect of the year ended 31 March 2024, in line with the dividend target set out in the 2023 Annual Report.
U have a sum of money u wish to invest to start earning dividends, u would like to achieve a yield of 7% as u know this compounded, doubles yours income in ten years.
Let’s use 10k, all other amounts pro rata and u want to invest your money for four years as u learn more about re-investing dividends. U would like to start your journey cautiously as it’s your hard earned. U could take no risk and invest it all in a Government gilt but u will not achieve a return of 7%.
Your funds are inside a tax wrapper so u want a gilt that pays interest (coupon) to re-invest into a higher yielder. U choose to buy:
ISINGB0002404191TIDMTR28 ExchangeLSE Par Value£100Maturity Date7/12/2028 Coupons per year 2 Next coupon date7/6/24
When u buy u have to pay the seller the interest accrued to date, note that the price u have to pay is above the £100 that will be returned at the end of 2028 because of the market beating interest rate.
The next dividend (coupon) payment is 7th June, so u will not have to wait long for some cash to re-invest. The yield u will receive if u wait until the maturity date is 4.18%, u do not have to do anything, the cash will appear in your account.
You want a Trust that yields 10% to add to your 4% and would like the opportunity for a capital gain so u buy NESF (other Trusts are available so DYOR) trading at a discount to NAV of 30%. The 10% is not guaranteed, unlike your gilt, so u have to be comfortable that the dividend is repeatable before u buy.
The blended yield is 14%, so u have achieved your goal, hopefully nothing to do for the next 4 years but to decide where to re-invest your £700 a year.
NESF has just gone xd so u will have to wait for your first dividend but normally if u buy after the xd date u get more shares for your money and a higher yield.
A journey of a thousand miles begins with a single step” is a Chinese proverb that originates from the Tao te Ching12. The quotation is from Chapter 64 of the Dao De Jing ascribed to Laozi, although it is also erroneously ascribed to his contemporary Confucius. The meaning of this saying is that even the most difficult and longest ventures have a specific starting point. Similarly, it implies that daunting tasks can typically be begun by doing something very simple.
Investors who want to balance their equity bets with fixed income might look to government bonds, also known as gilts.
The name “gilts” dates back to the time when these bonds were issued in the form of paper certificates with gilded edges.
Here, Telegraph Money explains what you need to know about gilts – and how they can even serve to reduce your tax bill.
What are government bonds?
Gilts are a form of IOU that you can buy off the Government. You lend money to the Government that it will use to pay for healthcare or schools or wherever it’s needed, and it pays you a fixed return – sometimes called a coupon – for doing so.
At the end of the bond’s term, when it matures, you get back the original amount you paid for the bond.
The price of a gilt can change in accordance with interest rates – if rates rise, gilt prices will usually fall. However, this means the yield increases.
The duration, as it’s known, can be from three months to as much as 50 years.
Benefits of investing in gilts
Gilts are considered low risk because it’s unlikely that the Government would default on its debts. Issued by the Treasury, gilt investments are deemed as safe as putting your money into National Savings & Investments (NS&I) accounts, where 100pc of your money is also guaranteed by the Government
A key reason for investing in bonds is for income. Gilts provide investors with a known level of interest, which can be attractive for income-seekers – particularly those in retirement.
Diversification is another key benefit. Gilts provide a safer alternative during times of uncertainty. Held alongside equities, they can help to reduce the volatility of the portfolio as a whole. That’s because bond prices typically fluctuate less, and behave differently to stock markets.
Better still, any profit made from a gilt when you sell or redeem it is free from capital gains tax, unlike many other investments, such as shares, funds or investment trusts held outside an Isa.
Gilts are often traded on the secondary market, which means they’re being sold on behalf of investors – by stockbrokers, for example.
You can make a decent capital gain – or profit – if you manage to buy them at a discount, as you will pay less than the price you will get back when the gilt eventually matures.
While the interest you earn from gilts is subject to income tax, for those higher-rate taxpayers who have maxed out their £20,000 Isa allowance and will exceed the £500 personal savings allowance – and would rather not lock money away in a pension – gilts are worth considering.
If you can find a gilt where a lot of the return is coming from capital returns rather than interest, you can save on your tax bill.
You also won’t pay any tax on gilts if you hold gilts in a tax-efficient wrapper, such as an Isa or a self-invested personal pension (Sipp).
Risks associated with gilts
One major risk to fixed income is that posed by inflation – the arch enemy for bond investors. Government bonds offer few attractions in periods of rising inflation – as inflation rises, the real value of the bonds’ income falls.
Since the income bonds offer is usually fixed at the time they’re issued, this can quickly become less valuable if inflation rises to essentially eat into the return.
While inflation is rising at a far slower pace at the moment, it remains a risk for the future.
The issue of risk is also something to bear in mind. While the lower volatility of bonds tends to make them favoured for lower risk investors, there are no guarantees; bonds can experience significant downdrafts, too.
How to buy government bonds
You can buy government bonds directly through the Government’s debt issuer – the Debt Management Office – where they are issued in units of £100.
It provides a trading service, meaning that you can buy and sell gilts that are already in the market. However, to be eligible to use the service you must first sign up as a member of a DMO “approved group of investors”, which is only available to British residents.
You don’t need to be a member of the approved group to sell gilts via the service, however.
For buying or selling you’ll pay fees of 0.7pc of the value of the gilts you’re trading. Alternatively, you can use a stockbroker or investment platform.
Each gilt is priced differently, and will have varying coupon and maturity dates, which means that there are several choices to make before investing.
The maturity date and the coupon appear in the name of the gilt, so they are easily found.
Investing via a fund
As well as buying individual bonds, you can also invest in gilts via a fund, which holds a portfolio of gilts either chosen by a fund manager, or via a tracker or an Exchange Traded Fund (ETF) which tracks an index of government bonds.
The benefit of these for investors is diversification across a wide range of issuers, which is more important in the corporate bond market because of the higher rate of defaults than in the developed government bond market.
The downside is you can’t control the maturity of the bonds you’re investing in to the same degree as an individual bond portfolio.
Plus, gains via funds are not free from capital gains tax, which might not be a concern if held in a Sipp or an Isa, but if like many people you are holding low coupon gilts to minimise tax outside of a tax shelter, a fund isn’t going to achieve the same goal.
Comparison between government bonds and investments
Over the long term, it is reasonable to expect gilts to provide lower returns than the stock market because of the lower risk of lending money to the Government compared with investing in companies.
Indeed, data from Hargreaves Lansdown shows that over the last 10 years the FTSE Actuaries All Stocks Gilt Index – the standard gilt index – returned 3.94pc. This is compared to the IA corporate bond sector which returned an average of 26.6pc, the IA high yield bond sector which returned 39.65pc and the FTSE All Share which returned 75.79pc.
Hal Cook, senior investment analyst at Hargreaves Lansdown, said: “Gilts are also likely to have lower returns than more risky parts of the bond market, such as high yield, for the same lower risk reason.
“That said, during periods of stock market stress, it is reasonable to expect gilts to outperform both shares and higher risk bonds. This is because investors like the relatively low risk of gilts compared to other assets.”
Current market trends and rates
Rising interest rates and cuts to the CGT exemption are making Government bonds, or gilts, much more appealing for investors.
10-year government bonds are currently providing a yield of 4.3pc, up from 3.5pc at the beginning of the year.
They might not offer the eye-popping returns experienced by Nvidia shareholders, for example, but individual gilts were some of the most popular investments made by DIY investors who have recognised the buying opportunities.
Hargreaves Lansdown reported that investor demand for gilts has tripled in the first three months of this year compared to the same time a year ago.
Of the top 10 most-bought investments by AJ Bell customers in the first three months of this year, four were gilts.
The five most-bought gilts on the AJ Bell platform ranged from those with a coupon of between cc 0.125pc and 5pc, and were all short-dated gilts – in other words, with a maturity of five years or less. The average purchase transaction volume in these gilts was £126,000.
Laith Khalaf head of investment analysis at AJ Bell said: “This year has witnessed a rather conspicuous reverse ferret in the gilt markets as investors have pared back bets that the Bank of England will cut interest rates.
“This has been reflected in rising short-term yields, but the same phenomenon in longer term gilt yields tells us that the market is bracing itself for interest rates being higher for longer, too.
“With the 10-year gilt yield back up to 4.3pc, yields on offer are even more attractive for investors looking to access the asset class. There may be further volatility to come this year thanks to unpredictable inflation readings and an election campaign which has the potential to spook the markets.
“The beauty of buying individual gilts, though, is you get a set return provided you hold to maturity, and if you get a chance to exit at an attractive price in the meantime, well that’s just gravy.”
Mr Khalaf highlighted that the tax treatment of gilts has also fuelled their popularity. Since investors aren’t liable to capital gains tax on gilts, short-dated, low coupon gilts have been popular, being effectively used as a tax-efficient cash alternative.
“There is likely to be some continued appetite for using gilts as tax-efficient, safe cash alternatives for a rainy day fund,” he said, “especially in light of frozen income tax band
Passive income from stocks is often regarded as one of the most appealing aspects of investing. It offers individuals the opportunity to generate a steady stream of earnings without active involvement in day-to-day business operations.
Time is key
At the age of 30, with a retirement goal set at 50, I have a significant advantage — time.
Having a 20-year investment horizon provides me with the invaluable opportunity to nurture and grow my current portfolio into something substantial.
This extended period allows me to harness the power of compounding, where my investments can potentially multiply and generate substantial returns over time.
By strategically allocating my assets and staying committed to my financial objectives, I can aim to build a portfolio that not only provides financial security but also creates a substantial passive income stream, offering me the possibility of a comfortable and fulfilling retirement.
Compounding
Compound returns might not sound like a game-changer, but it really is.
First, I need to start by investing my money in assets like stocks or bonds. Then I need to be patient and resist the urge to constantly tinker with my investments. As time goes by, my investments will generate returns, and these returns will get reinvested.
Here’s the key. I must avoid withdrawing those returns and let them stay invested alongside my original capital. This way, I’m not just earning returns on my initial investment, but I’m earning returns on the returns I’ve already earned.
Over the years, this compounding effect can snowball, significantly growing my wealth.
To make it work efficiently, I should keep adding to my investments regularly, whether it’s monthly, quarterly, or annually. This practice, known as pound-cost averaging, can amplify the benefits of compounding.
In a nutshell, compounding returns require me to invest wisely, be patient, and let time work its magic. It’s a recipe for building long-term wealth and achieving my financial goals.
Aiming for an early retirement
To answer my question in the title, I have to say, yes — but it’s not easy. Here’s an example of how I could grow my investments over 20 years and retire at 50.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
Let’s start by assuming I’ve got £100,000 invested as a starting point.
Then I’m going to need to continually invest, while reinvesting my returns each year. Using my 20-year investment horizon, I’d need to contribute nearly £10,000 a year, while achieving an annualised return of 8%.
Of course, these figures can vary. And there are lots of ways to reach £1m. This is just one route. An easier way would be to start much earlier, maybe retire a few years later and not have to invest quite so much each year.
However, either way, it’s important to remember that if I choose investments poorly, I could lose money.
£££££££££££££££
Now lot’s of people will not have 100k to invest or if they do they may not be willing to commit at this time.
Mr. Market has given u an outstanding opportunity to start on the journey, even if u have limited funds adding fuel to the fire by regular contributions will accelerate your journey.
Remember 100k compounding at 7% doubles your income in ten years and after 20 years your 14k should grow to 28k. Depending on markets that journey may last longer but the destination is assured but u will need to consider the effect of inflation in your plan.
