I must admit Iād never actually heard of this before! Iāve just checked it out very quickly and it does appear to be a thing.
Iāll keep that in mind moving forward as a combination with some UK dividend stocks. Albeit I wonāt do this for a couple of years but I have long enough in the market, all being well.
How do you tend to balance your portfolio?
I have a 15 years timeline until 2035
I recommend that not only focus in dividends at the start, look at growth stocks too that will give you a huge buying power for dividends stocks in the future.
15 years seems reasonable, but you must be putting in a lot of cash!
My bag of a fag box calculations are that I want to retire at 50, Iām going to live to be 85, Iāll own my own house outright at 50, and want 36k after tax to live on comfortably. I need to make 2 million in the next 18 years to make this happen. At a 20% return rate per year, that is roughly 1000 I need to put away a month, not counting for inflation (slightly more if I do count for inflation). Is 20% resonable - maybe not, but itās the aim!
What are you planning to spend 3k a month on without a mortgage. 
and 
?
Myself, I worked out I need 12k a year right now to pay all bills right now including mortgage, and have some beer/socialising money each week. That figure halves when I get rid of the mortgage.
With 36k I would be buying myself luxury cars and holidays most months of the year.
Yes. Absolutely correct.
No I find 3k a month is a comfortable lifestyle where you donāt need to look at your bank account. You can still go on holidays, enjoy eating out. Ultimately you will not have to worry in your retirement. Also in 20 years 3k wonāt go as far as it does now!
I imagine most people want their āallocationā to grow at least with inflation?
Yeah true. I try and think of things in terms of todayās value and remove 2% from forecast returns to account for inflation.
Ā£3000 in 20 years is about Ā£2000 of todayās value.
One would assume so! As @Dougal1984 said, 3k in 20 year is more like 2k now. Still more than your 12k a year though! Iām not sure I could live on that even without a mortgage!
550 mortgage
100 Council tax
50 electric and gas
100 food
20 mobile
10 home insurance
50 hobbies
120 beer money
Itās things like tv licence, sky tv, Prime, netflix, appleTv, fixed broadband that all rack up the extra things you donāt really miss.
Itās basic but liveable.
100 on food?! 25 quid a week? 3.50 a day? What do you eat? I also admire you spending more on beer than food.
It is a bear minimum target figure for a reasonable living.
Breakfast is cheap - cereal/overnight oats/banana pancakes.
Lunch / Dinner - dishes high in veggies keep things cheap. Bibimbap, Dishoomās black Daal, lasagne and so on. Dont have to stick with a boring baked potato and beans.
Beer also has calories, so you know, food.
Beer is also made from a grain. Full of fibre. Very good for your digestive system.
I will keep that in mindā¦
And toilet paper, the Covid currency? 
Did you forget?
I spend more than that on olive oil 
I blame Italians for that tho.
Yes it is a thing! 
If you read some of those ādividend growth engineā model books, theyāll go as far as saying ETF investor is inferior even for beginner investors. (I donāt agree with these points but anywayā¦)
I can answer this better if you give me some context about āwhich balanceā you mean
I have target āpercentage of portfolioā, āpercentage of accountā and I try to converge to these ratios. I try to ānever ever sellā and if a stock is over their targets stop buying them. (So if you think in terms of T212 pies, imagine I always add money to pie, never withdraw and always invest with the option self balancing) So think about my portfolio as: pies(verticals), inside pies(accounts), inside a big pie(portoflio)
Accounts are like: ISA_T212, ISA_II, SIPP_II, SIPP_HL
And verticals are like: Reit, Semicon, Finance etc.
Unfortunately some stocks grew a lot faster than others so there are discrepancies between target/current.
The following screenshot tells me I plan to hold 6.34% of my SIPP (abd 4.37% of all portfolio) as StoneCo and currently 8.54% of my all portfolio is StoneCo (despite not buying this for quite some time)
Vertical from II SIPP:
Same vertical mirrored in T212 ISA
Lol, the FIRE movement forget this things. I donāt know what kind of retirement is to live lowering your standards after all the hard work.
At least Iāll want to keep my living standards and of course some expenditures will reduce like health insurance (not paying for the kids anymore), education, mortgage free and so on.
Exactly why Iāve got about 15 years left. I hadnāt forgotten about those things, half are included and itās just a minimum figure for the point of working out my emergency fund. In 6 months I wonāt need to buy new clothes, replace my sofa/kitchen etc.
The free cash in that figure would increase by 550 in a few years as well if I pay my mortgage of. I wonāt as the odds are investing in an index fund long term will earn more than the 0.95% I pay on interest.
That 550 a month is Ā£6600 a year less I need to pay out once the mortgage is gone, which could easily cover several holidays a year, replacing home goods, clothes and alike. Set aside Ā£1500 a year for a new kitchen every 10 years, Ā£300 over the same period for a sofa, Ā£3000 on holidays and you still have Ā£1800 left a year to play with. Hardly frugal.
Seems like you plan very well, but how often do you review individual stocks. Do you make a list of criteria why you picked them, with a view to reconsidering them if they no longer meet that criteria or your criteria change?
Having 6% of your SIPP in a single stock seems quite high to me without looking into what Stone Co do. If they were to suddenly perform badly and plummet, thatās 1/16% of your portfolio potentially gone.
My pension is the one thing I donāt touch. I do tend to pick the more adventurous option with my providers over the years, and Iām reasonably happy they have returned on average over the past 18 years.
Iām generally of the view long term that you pick a cheap global equity fund if sorting your pension yourself and take advantage of all the tax perks you can.
Yeah, maybe youāre right but most of fire people states āI just spend xxx in foodā, āI donāt spend in yyyā, etc.
so whatās the point then? As someone pointed out above, you will spend more in beer than in food lol.