About a year ago, I wrote a post explaining why there is apparently over a 10% chance that my & Mrs FvL’s tax-free ISA accounts top $100m in our lifetime. This took the £330k lifetime ISA savings we’d amassed to date, assumed 1) we never dipped into the pot, 2) that we maintained an above average risk preference, and 3) that the UK tax rules remained unchanged. About one year on, how are we faring?
The last year hasn’t gone very smoothly. Our ISAs performance was about -5%. This knocks a £330k pot by about £16k. This performance was worse than the market average, but not by much. The resource crash and the China/Asian downturn were starkly visible in our ISA portfolio, with BHP Billiton down 31%, BP down 13%, Henderson Asian Dividend UT down 16%, and HSBC down 23%. Pearson, down 37%, certainly didn’t help either. Isolated gainers including iShares Euro High Yield Bonds (+10%), Zoopla (+40%) weren’t numerous enough to compensate.
We both moved the maximum permitted topup into our ISAs, of £15240 each. Even though a £330k pot sounds like a lot, in fact it is small enough that a 5% drop in value is less than the amount we can top it up. As the pot grows, eventually this won’t be true; a £1m pot dropping 5% would fall by £50k, which dwarfs an individual’s annual allowance. But for now, by topping up our ISAs to the maximum allowed we grew the pot.
Continue reading “How’s my $100m tax-free account developing?”
FIRE v London 