Investing philosophy – Page 4

From ISA $millionaire to £millionaire

2024-08-22 FIRE v London26 Comments

The best tax break in the UK is the ISA tax-free savings regime. Each UK tax-resident adult can put £20k per year into an ISA account – use it for a wide range of investing activities – and not even have to report on what happens in those accounts, let alone pay tax on them.

This tax break is not exactly mass-market – not many people have £20k of spare funds every year – but for those of us who can avail of it, it is potentially enormous. Kids can have ISAs too, with an annual allowance of £9k. So a family of four, that can find £58k of liquid funds every year, can rapidly shelter a very large sum.

If you are a dual citizen, especially if you are a US citizen / green card holder, then Uncle Sam is certainly going to want to hear about these accounts and is absolutely going to tax them, but for plain UK citizens 100% resident in the UK, these tax breaks are awesome.

I’m now one of thousands of ISA millionaires

ISAs have now been around long enough that the number of investors whose ISA accounts exceed £1m is reaching many thousand. Expect to see this number skyrocket in the next few years. The top 25 largest ISAs average £11.66m of pot each – with I imagine a healthy dose of NVidia / similar holdings. If you haven’t followed the story of (Lord) John Lee, who is one of the first UK investors to amass £1m in ISA accounts, he’s worth checking out (£paywall).

My aim is to see my ISA accounts grow to well beyond £10m – which if I live another three or four decades, and the current policies don’t change, appears achievable.

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I’m 28, and can’t figure out how to start on FatFIRE – what would you do in my shoes?

2024-06-222024-06-23 FIRE v London3 Comments

From: Taz
To: FvL

Hi FvL

I’ve read your blog on and off for the past year or three. I graduated from the London School of Economics in 2017 after which I went through the hardest few years of my life mentally and ended up unemployed or in dead-end low paid jobs.

I currently work in the motor trade for Jaguar Land Rover earning £35,000 which I can save most of as I live at home.

I’m now 28 and can’t seem to figure out how to begin my FatFIRE journey, in terms of a job/career what would you do in my shoes?

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In praise of Berkshire Hathaway

2024-01-27 FIRE v London8 Comments

I think I first clocked Warren Buffett’s (and Charlie Munger RIP’s) Berkshire Hathaway around the year 2000. I loved the story. Starting from, as the story was told back then, humble beginnings and a paper round, Warren Buffett (and Charlie – who I will stop mentioning but absolutely deserves practically half the credit) had built Berkshire into a giant.

Buy & hold – what’s not to like?

Berkshire was the holding company of an investing approach par excellence. Buy great businesses at a fair price, hold forever, reinvest dividends, job done.

The business had never paid a dividend or split the stock, which by that point had reached over $70k per (Class A) share. It had annual meetings in Omaha, its home town, which were already becoming a cult following.

There was also something about Warren Buffett’s penny pinching ways that appealed to me. He lived in his first house, he drove practically his original car. Part of his aversion to splitting the stock was the (tiny, in the scheme of things) cost of a stock split (though he did thankfully create the B shares in 1996, which are identical to A shares but a fraction of the price). He preached from the book of compound interest and his lectures were very compelling.

And yet

There was something sufficiently compelling about Berkshire Hathaway to me, as a baby FIREr back in 2000ish, that I named one of my assets after the business. That asset remains to this day, though it has sadly failed to prosper in line with the mighty BRK.

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