Winter is Coming

Oh yes. And not in the Stark way, either - just a normal, buried under snow Ottawa Valley type way. First snow tomorrow, apparently!

So, the winter prep is pretty much done. After a mostly benign but occasionally grim wait of three weeks for a replacement part for our furnace, we have lovely warm natural gas heat blowing up from the crawl space. Apparently the furnace is 'why companies like these went out of business' - it's 30 years old and should last another 30. Not very efficient, but considering a new furnace is $7k, and the gas cost (excluding delivery - so just the cost of the gas we burn) is about $600 a year, an update that saved half is in no way worth it.

Suffice it to say that new, more complicated furnaces probably don't last as long, either...

I've done some 'yard work' - taking branches and leaves to the dump - so the garden looks ok. Three trailer loads! That's stuff that has built up over the last year and a bit. So the pile behind shed number two is more manageable. I want to get a wood stove in here so we can burn the bigger bits!

I also got gravel for the rear easement, and parking spot at the front. Hopefully that'll help with drainage in the spring. $30 for 'a yard' of gravel - bargain.

Finally, I just put the winter ti/yres on the car. Phew. Forget chopping wood to keep warm! The breaker bar I got last year is a godsend...

So we're all good, snug and cosy in our little house. The final tomato harvest was a thing of wonder - probably over a kilogram of really small ones, not ripe but they ripen up just fine near a banana! Should keep me going another week or two! Yum!

In other news - my house in Texas is tidy and ready to rent, just waiting for the agents down there to find me a tenant... Fingers crossed it won't take *too* long...

Couch Potato Investment Plan for the UK

In Canada, there is the excellent Canadian Couch Potato, but I haven't seen anything similar for the UK.

If you are looking for a very simple, inexpensive way to save for retirement in the UK, I'd go this route:

1. Find a brokerage. iWeb is one, and their fees are lower than the others I have looked at. Open an account - preferably an ISA.
2. Set up monthly transfers in to this account from your bank - as close to payday as possible so you don't 'see' the money and want to spend it. If you can afford it, set it up to you get close to your ISA allowance over the year - £950 a month.
3. Set up purchases of low cost exchange traded funds, 'ETFs', in roughly the following proportions:
  - 25% FTSE 100 (eg: HUKX.L)
  - 25% FTSE 250 (eg: HMCX.L)
  - 20% Gilts (eg: IGLT.L)
  - 30% international equity (eg: IWXU.L)

Regular purchases are cheaper to do than manual ones (at least on iWeb) at only £2 a go. By doing percentages rather than specific amounts, any leftover cash from the prior month will get used.

I am not an investment professional, which means two things. Firstly, don't sue me if it all goes wrong - but there is no reason for it to go any more wrong than any managed fund, and plenty of reasons that it'll go much better. Secondly, I'm not trying to make money with this advice. I get no kickbacks, no fees, nothing.

Basically this is 'cheap' in terms of fees. The management fees for index trackers are very low, and there is little commission-generating (for the fund managers) account 'churn' - the ETFs rebalance when the underlying index does so.

Asset allocation is a hotly debated topic - should you have bonds when they are likely to decline in value (yes, as an anchor; yes, they might still go up before they go down; yes, because the point is that you rebalance every so often - perhaps once or twice a year - to get you back to the asset allocation above; no, if you have a mortgage that has a higher rate than the bonds will give, or in fact any debt). One method is 'your age as bonds' but this is probably too cautious if you are far from retirement - 20% will probably work just fine. Stocks do better than bonds over the long term, but rebalancing like this forces buy low/sell high - and if you have no bonds, you can't sell any! But having a smaller percentage of bonds means you give up less potential return.

This is far from guaranteed, and you should of course do your own research. As CCP mentions, though, not starting at all is a much worse option than picking a not-quite-optimal asset allocation - and the above 'will do'. You have large cap, small/medium cap (ie, size of company) British stuff; rock-solid bonds (Gilts are UK government bonds, so called because of the gold edging); and a nice chunk of 'international' stuff - so even if the UK has a bad time of things, there's some other stuff to *hopefully* still give a good return.
Two things are missing from this portfolio - real estate, and developing world. Those could be added in very easily with, say, IUKP.L and IEEM.L. The latter is more expensive in that it has a management fee of 0.75%. You can of course roll your own - figure your own allocations out. But, in doing so, don't settle for some fund manager that is getting 1% or 2% in kickbacks from the expensive fund providers for everything they sell you!