The Snowball is currently on track to earn 9k of dividends this year, for the accumulation stage for your pension, using a dividend re-investment plan.

The Snowball has 100k invested in dividend paying Trusts and it’s likely that u do not have 100k to invest or if u do u would still like to see how the Snowball performs before committing. I have intentionally not included any new funds but that might be one way of growing your retirement ‘pension’.

The Snowball’s target yield is 7% compounded as this doubles your income in ten years, if held thru thick and thin and there will be plenty of thin.

9k compounded at 7%

over ten years would grow to an income yield of 18%

over twenty years would grow to an income yield of 35%

Using the 4% rule, if u want to gamble with your retirement, your 100k would need to grow to around 800k, GL with that.

Mr. Market has been very accommodating to dividend hunters in Investment Trusts and the Snowball currently yield in excess of 7% but compound growth of 7% remains the plan.

Current dividends to date £6,268.14

Do not scale to arrive at a total for the year.

If u don’t plan, u fail to plan.

abrdn Equity Income
Kepler Disclaimer

This is a non-independent marketing communication commissioned by abrdn. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.
AEI offers investors an attractive yield and growing dividend…

Overview
Thomas Moore, manager of abrdn Equity Income (AEI), employs an index-agnostic strategy when investing in the UK market, focusing on selecting individual stocks that he believes are best placed to deliver an above-average income, as well as real growth in capital and income. This approach affords him greater flexibility to identify opportunities across the market, without being tied to specific index compositions.

Over the last 12 months, amid historically low valuations, Thomas has found a number of attractive opportunities across the market, identifying value in some of the UK’s larger businesses and increasing existing positions in holdings like Hargreaves Lansdown and Imperial Brands (see Portfolio). Additionally, his index-agnostic approach allows him to explore areas the more traditional equity income strategies might avoid, such as the lower-yielding companies further down the market cap scale. This is an area he’s found value in recently, initiating new investments in Assura and Energean.

AEI’s portfolio balances companies exhibiting high income with those with dividend growth potential, which has led to AEI offering investors a high Dividend yield of 7.3%. This is at a significant premium to the FTSE All-Share Index’s yield of 3.8% and ranks second highest within the AIC UK Equity Income sector. On top of a high yield, AEI has built up a strong track record of consistently growing its dividend over time, with 2023 marking its 23rd consecutive year of increases.

While Thomas’ strategy has proven highly effective at times, AEI’s Performance has lagged the index over the past five years, owing largely to a higher allocation to economically sensitive smaller companies and being more value tilted, given the high-income focus. However, a recent uptick in smaller company performance, driven by positive economic news, could suggest potential for performance to improve this year.

Analyst’s View
AEI stands out in the Equity Income sector for its high yield of 7.3%, while it has also displayed reliable consistency in increasing its Dividend year-on-year. Given Thomas’ smaller companies focus, AEI’s portfolio looks quite different to its peers. In our view, this differentiated strategy and track record of delivering an income to shareholders well above that of the sector and index average makes it both an attractive investment for high-income hunters, and potentially a complement to most traditional UK equity income portfolios.

AEI’s recent Performance has been encouraging. Positive economic news around the falling inflation story and reducing concerns around a recession, has alleviated some of the pressure mid-cap companies have been under over the last few years. This has resulted in an uptick in performance for smaller companies. Given AEI’s portfolio has a greater allocation to this part of the market compared to the peer group and index average, this has boosted performance. However, over the last five years, AEI’s total return Performance has been disappointing, largely due to its greater allocation to mid-caps. These businesses have suffered greatly from economic pressures like stubbornly high inflation, rising interest rates, and geopolitical tensions.

Looking ahead, we think that AEI’s current portfolio is well placed to benefit from improving market sentiment and strengthening economic conditions, which could lead to a turnaround in performance. In that case, we also see potential in AEI’s current 6.3% Discount, which is slightly wider than its five-year average, narrowing which could boost returns for investors.

Bull
Offers one of the highest yields in the sector, supported by strong reserves
Differentiated portfolio including a bias to small and mid-caps
Trust has recently reduced its charges

Bear
Exposure to small and medium-sized companies may bring more sensitivity to the UK economy
Use of gearing could magnify the gains but also the losses
Value-tilted portfolio could struggle in a growth driven environment

RGL are consolidating their shares and trimming their next dividend, so the headline yield will fall.

I’ve took ‘profit’ with SOHO selling 430 shares for £250.00

I’ve sold 28,864 10p shares in RGL for a ‘profit’ of £1,136.

Nominally, as u can’t choose which shares to sell, unless u sell the whole position, so the profit only reduces the current loss on the position.

This gives the Snowball the option to buy some shares back if they fall in price or sell a few more if the price rises.

£4,620.50 for re-investment

How to get the most out of long-term investing
Myron Jobson of Interactive Investor offers the following tips.

1. Take advantage of Isa allowances

The shrinking capital gains and dividend tax allowances provide the impetus for investors to invest through a tax-efficient wrapper if they haven’t already done so.

The transfer, however, will involve selling and buying back shares, which could trigger a capital gains tax bill.

Over the long term Bed & Isa is likely to outweigh the charges that might apply.

2. Consider using your partner’s Isa allowance

You can also help reduce your taxable income by transferring assets between spouses or civil partners.

Each year you can shelter £20,000 from tax in an Isa – so £40,000 between two.

Only married couples and civil partners can transfer assets tax-free, meaning those who aren’t could potentially trigger a tax liability.

Compound growth, which generates massive gains the longer you save and invest, is lesson number one… so what are the others?

3. Understand your risk profile

Risk is an inherent part of investing, but it’s a tough balance. Take too much risk, and you might find yourself racking up some painful investing lessons.

But taking too little (or no risk in the case of cash) is a risky strategy in itself. It could have a hugely detrimental effect on your finances in the future because you might not reach your goals.

And our risk appetite isn’t static. It can change as our circumstances change so needs reviewing regularly.

4. Diversify your investments

This reduces the risk of any one stock in the portfolio hurting the overall performance.

But diversification doesn’t just mean investing in different stocks. It also means having exposure to different sectors, assets, and regions.

5. Rebalance your investments

Trimming the excesses and redirecting funds into underperforming assets ensures that your risk-return equilibrium remains intact.

This calculated approach of buying low and selling high has the potential to bolster long-term returns.

Whether nearing retirement or sprinting towards a shorter investment horizon, rebalancing grants the opportunity to recalibrate allocations to achieve the desired financial destination.

6. Review costs and fees

Investors cannot control the market, but they can control how much they pay to invest. Understand the costs associated with your investments – not least the platform charge.

7. Drip feed your investments

A good and proven way of lowering your investment risk is by investing small amounts regularly. Most often, investors do this by drip-feeding investments monthly to help smooth out the inevitable bumps in the market.

The advantage is that you also buy fewer shares when prices are high and more when prices are low – a process known as pound-cost averaging.

8. Set clear goals

Define your financial goals and time horizon before making investment decisions. Avoid making impulsive decisions based on short-term market fluctuations. Stick to your investment strategy.

I’ve received a comment about the articles copied from the MotleyFool.

I guess most are aware that the articles are teaser articles to get u to join the premium service.

There are new readers of the blog every week, so they give another view of how to invest for your retirement.

It’s always best to DYOR and I post a watch list of shares for that purpose.

Everyone will have a different timescale to retirement and their portfolio should reflect the time they have before de-accumulation and how much of a risk they are willing to take with their hard earned.

The rules of the Snowball remain the same. GL

How average savers can turn £180 a month into a lifelong second income

by John Fieldsend

The Motley Fool
A recent study put the average UK household saving at £180 a month. Putting a couple of hundred away monthly is to be applauded and this level of saving can even lay the groundwork for a lifelong second income.

Creating an income stream from average savings — around £6 a day — sounds like a tall order. But new savings vehicles with low fees and easy-to-use platforms have simplified getting big returns on investments. A passive income stream that lasts for life is easier to achieve than ever, I’d say.

More and more people are targeting this kind of income too. Some 4,000 people have reached £1m in ISAs now with around half of them hitting the figure in the last year alone.

Reaching the million-pound mark given the deposit limits on those accounts is impressive indeed, but such a large nest egg isn’t needed for a life-changing income.

Losing cash
I’ve been working towards something like this myself, and for me, financial security is what appeals most. The State Pension isn’t really enough to live on (and only 38% of under 35s expect to receive it). Plus near-double-digit inflation makes saving in cash look unattractive.

Inflation is a killer for average savers. Our society is built around low levels of inflation, it’s true. While keeping cash circulating benefits an economy, it hurts savers who see their cash lose value constantly

Even single-digit levels of inflation can be devastating. A 5% inflation rate means prices double after just 14 years. In other words, a £3 sandwich becomes £6. Perhaps more pertinently, £1,000 of savings will have the buying power of £500.

While current inflation levels are unusually high, whichever way you slice it, all of us are seeing our cash being worth less and less. And with money losing value, I see inflation-beating investments as a no-brainer.

Let’s waste no more time then. On to the strategy. My plan essentially requires two things: a return above inflation and compound interest over decades.

What I’m doing
For inflation-beating returns over years and years, I see no better option than investing in high-quality stocks.

Wait a second! The stock market? Isn’t that risky? Won’t I be competing with bankers working 80-hour weeks and lightning-fast algorithm traders?

Well, the answer is no, for the most part. While the stock market has plenty of high-risk, high-reward gambles, I won’t be touching those. My investing strategy is boring and slow – although the risk can never be fully removed and I may still lose money.

I invest the same way as billionaire Warren Buffett. He doesn’t buy stocks for a few days, but for a few decades. He says his “favourite holding period is forever”.

Slow and steady
By looking long term, I can enjoy the inflation-busting effect of stock market returns while avoiding the erratic ups and downs of day-to-day share price moves.

Better still, £180 a month is more than enough to dip my toe in the water. These days, fees to buy stocks are only a few pounds with modern platforms like Hargreaves Lansdown or AJ Bell that make it simple for anyone to invest.

The Motley Fool

A second income of £500 per month for £25 a week ? Here’s how.
Story by Christopher Ruane

Setting up additional income streams without having a second job could be a positive thing when it comes to personal finance. If I wanted to build a second income, I would aim to do so through investing in shares.

Even with a shorter timeframe, I think I could still aim to build up a more modest second income through this approach. Here’s how.

The basics

Shares are like a tiny sliver of a company. In this case I am not thinking about small companies like a local chemist or a car hire centre. Instead, my sights are set on the sorts of blue-chip businesses that sit in the benchmark FTSE 100 index of leading shares, or the smaller firms in the FTSE 250 index.

What I hope is that, by owning even a very minor piece of such firms, I can benefit from their business success when they pay out dividends.

I might make some bad choices or have unfortunate luck along the way, so I would invest in a range of companies to help reduce my risk.

Working towards a target

I could take any such dividends out as cash to give me a second income.

Imagine I earn an average yield of 8%. Investing £25 a week like that, I would already be earning £10 per week on average in dividends after five years.

The power of compounding

That is why, taking the long-term view, I would compound my dividends. That simply means reinvesting them in buying more shares.

Imagine I put the same amount away each week in identical shares to my above example, but compounded the dividends. After five years, my portfolio would be worth £7,900 and would generate an annual second income of £632.

But what if I could manage a higher average dividend yield, of 10%?

In that case, after 18 years of investing £25 weekly, my Stocks and Shares ISA would be throwing off £500 per month on average in dividends.

Finding high-quality shares that yield 10% is not easy. It takes time, effort, and research. But if I could manage to do it, my second income goal could come closer into view.