LIC & LIT Pete Wargent Interview

I can never figure out where to post stuff on PC nowadays but the following link includes some talk of LICs so I’m putting it in the LIC section. @Snowball has a beauty for readers this week being an interview with very well known author / investor / entrepreneur Pete Wargent:

Interview with Pete Wargent: Part One - Financially Free at 33 - Strong Money Australia

Interesting comment:

 

Dave: Can you share what your investment strategy was from the start? And has it changed at all over the years?

Pete Wargent: It’s been varied. At the beginning there was more value investing in individual companies and share trading, including with margin loans, options, and other leverage. Throughout the entire period we’ve dollar cost averaged into the FTSE index, which we’re still doing even today.

The FTSE indices total return (when including reinvested dividends) in the past twenty years has been pretty good — 163 per cent to be exact. Any investor who had the gumption to hold on through both dotcom bubble and the financial crisis has more than doubled their money. Link

 

Impressive.

Hard to do very hard. When the next pear shaped event hit, I'll go through the same emotions as many others and sweat like crazy. I've no doubt about it and that despite enduring the fun events. Fingers crossed.

 

Like others, I have been a big fan of PW for some time.

When it comes to FI, I like to categorise people into Active FI (that is, they still earn an income from labour) and Passive FI (their only income is from their investments; any work they do is for free eg volunteering).

We went from Active FI to Passive FI in August 2010. We found it really, really scary. I would warn people who aren’t Passive FI not to underestimate the effort required to take the “leap of faith”.

Our financial planner told us we would be fine.

Our accountant told us we would be fine.

We crunched the numbers and our brains told us we would be fine but our hearts ...

Over 8 years later and we are starting to believe in our hearts that we will be fine.

We have not earned a dollar from our labour. We have done lots of volunteer work, everything about our lifestyle (including travel, wine selection, etc) has gone up a number of levels, we have experienced some major expensive health issues, ... and our Net Worth today is a lot higher than it was in 2010.

We are getting the message that our Passive FI is sustainable .

Not having a go at anyone but just sharing our experience. We never foresaw the emotional turmoil of that final step.

I would like to warn others not to think it will be a breeze. For some, it might be. For others (like us), it might put the wind up you .

 

I found that comment interesting also, unexpected.

Given his aversion to selling and CGT my guess is he’ll simply keep the rest of his portfolio intact and add progressively to Aus shares over time.

 

And he’ll be able to borrow cheaply against those properties to leverage up on equities during periods of “opportunity” over the rest of his life.

 

@petewargent great interview mate. You always put out great material.

 

My wife must love me a lot. No input from anyone else. Just plain old me. She’ll be right dear. Thankfully we’ve been better than that.

 

From his Blog

Disclosure – holding

UK & Australian Property Portfolio (LVR ~30pc)

UK farmland (ungeared)

Diversified LICs:

-Argo Investments (ARG)

-Australian Foundation Investment Co. (AFI)

-Milton Corporation (MLT)

Index Funds:

-FTSE100/Ethical FTSE Tracker

-Stocks & Shares FTSE ISA*

Cash:

-Macquarie CMA

-UK Cash ISA

Disclosure - trading:

-stocks within the ASX200 (XJO)

* What is an ISA?
It's a savings account you never pay tax on, it's as simple as that. You can save up to a maximum of £20,000 in 2018/19, and this can be in a cash ISA, a stocks & shares ISA, an innovative finance ISA, a Help to Buy ISA, a Lifetime ISA or a mixture of all of them (with a little wrangling).

How much can you put in an ISA?
Each tax year, you get an ISA allowance which sets the maximum you can save within the tax-free wrapper from April to April.

The previous ISA system used to limit how much you could put into each pot – you'd get half your allowance in cash and half in shares, or you could choose to put it all in cash or all in shares.

In July 2015, however, the rules were almost completely relaxed. Although the amount you can save is limited – £20,000 from 6 April 2018 – you now get to choose whether you want to split this between stocks & shares ISAs, cash ISAs, innovative finance ISAs, Help to Buy ISAs and the new Lifetime ISA, and how you do so.

Yet do note, there's a limit to how much you can put in the last two. For example, you can only put £4,000 in the Lifetime ISA every year, which means you could put the remaining £16,000 into any of the other options.

 

And here’s part 2 of the interview:

Interview with Pete Wargent: Part Two - The Future of Australia's Economy - Strong Money Australia

 

Just posting to plug @petewargent daily blog and semi regular podcasts. Also have found he is very generous in replying to the average mug's emails etc.

Shame's he's a Sp*rs fan, but everyone has their issues I suppose.