Dividend vs Total Return Investing

Dividend Investing vs Total Return: Which Works Best for Income Investors?

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As we move into our 50s and beyond, many of us start to shift focus from building wealth to drawing income from our investments. But when it comes to generating that income, there are two main approaches investors tend to consider: dividend investing and a total return strategy.

Both can work, but they operate on different principles, and each has its own pros and cons. Let’s take a closer look.

What is Dividend Investing?

Dividend investing involves building a portfolio of shares (or funds) that pay out regular dividends. The dividends received are used as income, while the underlying shares are ideally held long term.

For example, UK companies such as Vodafone or Legal & General have historically paid relatively high dividends. Many investment trusts and equity income funds also focus on this approach, targeting a yield of 4–5% per year.

Pros of Dividend Investing

  • Predictable income: Dividends can provide a relatively steady stream of cash without needing to sell investments.

  • Psychological comfort: Many investors prefer “living off the income” rather than dipping into capital.

  • Inflation protection: Well-managed companies often increase dividends over time, offering some inflation hedge.

  • Tax efficiency in ISAs and pensions: Dividends received inside these wrappers are tax-free.

Cons of Dividend Investing

  • Limited choice: By focusing only on dividend-paying shares or funds, you may miss opportunities in sectors with low or no payouts (e.g. technology).

  • Dividend cuts: Companies can reduce or suspend dividends, as many did during the pandemic.

  • Potentially lower growth: High-yield companies may not grow as strongly as firms that reinvest profits instead of paying them out.

  • Chasing yield risk: Investors may be tempted by high yields that aren’t sustainable.

What is a Total Return Strategy?

A total return approach doesn’t focus solely on dividends. Instead, you generate income by drawing a regular amount from the portfolio, which may come from dividends, bond interest, or by selling some holdings. The goal is to maximise the portfolio’s overall growth and then withdraw from that “pot” in a sustainable way.

For example, you might hold a global tracker fund (which pays some dividends but not a high yield) and set up a monthly withdrawal of 4% of the portfolio value each year.

Pros of a Total Return Strategy

  • Broader diversification: You’re not limited to dividend-paying stocks. You can invest in growth companies, bonds, property, or even alternative assets.

  • More flexibility: You can adjust withdrawals depending on market conditions, income needs, and tax planning.

  • Potentially higher growth: By including growth assets, you may end up with stronger long-term performance.

  • Control over timing: You choose when and how much to withdraw, rather than relying on dividend payment schedules.

Cons of a Total Return Strategy

  • Selling in downturns: If markets fall, you may be forced to sell investments at depressed prices to maintain income.

  • Requires discipline: You need a plan (e.g. a safe withdrawal rate) to avoid running out of money too soon.

  • Less “natural” income: Some investors don’t like dipping into capital, even if mathematically it makes sense.

  • Market dependency: Income levels may fluctuate depending on performance.

Dividend Investing vs Total Return: At a Glance

Feature Dividend Investing Total Return Strategy
Income Source Dividends from shares/funds Mix of dividends, interest, and selling investments
Reliability of Income Can feel steady, but dividends may be cut Depends on market performance and withdrawal discipline
Diversification Limited to dividend-paying stocks/funds Broader choice, including growth assets
Growth Potential Lower if focused on high yield Potentially higher with growth companies included
Flexibility Less flexible, tied to dividend schedules High flexibility, withdrawals can be tailored
Psychological Comfort Feels like “living off income” Requires willingness to dip into capital
Risk in Downturns Dividend cuts possible May need to sell assets at lower prices
Best For Those wanting simplicity and regular income Those comfortable managing withdrawals for long-term growth

Which Approach is Better?

The answer depends on your circumstances, risk tolerance, and psychology.

  • If you value simplicity and a steady income stream, dividend investing may be appealing. For example, many UK investment trusts such as City of London or Murray Income have raised their dividends for decades.

  • If you want maximum flexibility and growth potential, a total return strategy could work better — especially when combined with careful planning, such as withdrawing a fixed percentage each year.

For many investors, a blend of the two is the most practical solution. Holding some dividend-paying funds alongside growth-focused investments can deliver both psychological comfort and portfolio resilience.

My Personal Approach

As mentioned above, I have a mixture of growth-focused investments along with my main income-focused Nutmeg portfolio. I wrote about the latter in a recent blog post and also refer to it in my monthly investment updates (such as this one).

My growth-focused (total return) investments include my Bestinvest SIPP (private pension). This comprises a dozen or so investment trusts and funds, which I chose myself. My SIPP is currently in drawdown, so every month I sell a certain amount in order to release the money I will be drawing. This only takes a couple of minutes, and I vary the fund I choose to avoid depleting any too fast. Of course, most funds accrue dividends and other income which helps replenish them, along with (hopefully) growth in the value of the fund concerned.

As mentioned, my main income-focused investment is with Nutmeg. This provides a monthly income without any action needed from me. If I wanted it to be the same every month I could turn on the ‘smoothing’ function Nutmeg offers, but currently I am simply taking whatever income accrues in the month concerned.

For the time being this blended approach works for me, but as I get further into retirement I may switch more of my money away from growth- towards income-focused investments.

Obviously, the above is just for information purposes. Everyone’s circumstances are different, and what is appropriate for me may not be for you.

Key Takeaways

  • Dividend investing offers simplicity and natural income but limits diversification and risks dividend cuts.

  • Total return investing offers flexibility and potentially higher growth, but requires discipline and the willingness to sell assets.

  • Over-50s should consider their income needs, investment horizon, and attitude to risk before deciding.

👉 Final thought: Remember that both strategies can be made more tax-efficient by using ISAs and pensions. And whichever approach you favour, keeping costs low and diversifying widely remain as important as ever.

As always, if you have any comments or queries about this article, please do leave them below.

Disclaimer: I am not a qualified financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due dligence’ and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

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How Over-50s Can Use Vinted to Save and Make Money

How Over-50s Can Use Vinted to Save and Make Money

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If – like many Pounds and Sense readers – you’re over 50, you may not have come across Vinted before – but chances are your children or grandchildren have!

This fast-growing online marketplace has become hugely popular among younger people for buying and selling clothes, shoes and accessories. Yet it’s not just for the younger generations. Vinted offers some real opportunities for older individuals too – both men and women – to declutter wardrobes, make extra money, and save on clothing costs.

What is Vinted?

Vinted is a website and mobile app that lets people buy and sell second-hand clothing and accessories directly to one another. It’s a bit like eBay, but focused specifically on fashion and lifestyle items.

Unlike eBay, though, Vinted doesn’t charge sellers any fees. You keep 100% of the sale price, while buyers pay a small fee for protection (covering refunds if something goes wrong). This makes it a simple and transparent way to trade unwanted items.

How Vinted Works

  • Selling: You list your unwanted clothes, shoes, or accessories by uploading photos, writing a description, and setting a price. When someone buys, you’ll be sent a prepaid postage label. All you need to do is package the item and drop it off at a collection point. Once the buyer confirms they’ve received it, the money is transferred to your Vinted wallet, ready to withdraw.

  • Buying: You can browse thousands of items, from high-street bargains to premium brands. Prices are often a fraction of what you’d pay new, and you can even make offers to negotiate a better deal.

Why Vinted Appeals

For the over-50s, Vinted offers several key attractions:

  1. Decluttering with purpose – Many of us have wardrobes full of clothes we no longer wear. Vinted allows you to turn them into extra cash instead of sending them to the charity shop or letting them gather dust.

  2. Saving money – If you’re looking for quality clothes without the price tag, Vinted is full of bargains. It’s not unusual to find items barely worn, or even brand new with tags.

  3. Sustainability – Buying second-hand is an environmentally friendly choice, reducing waste and giving clothes a second life.

  4. Ease of use – The app is designed to be simple, with clear instructions and prepaid postage, making it less daunting than other online marketplaces.

  5. For men as well as women – Although many users are women, Vinted has a huge range of men’s clothing and accessories too. Whether it’s a hardly-worn suit, branded jeans or sportswear, there’s plenty on offer.

Examples of Bargains on Vinted

To give you an idea of what’s out there, here are some typical deals you might come across on Vinted:

  • High street brands – Marks & Spencer blouses or trousers for £5–£10, compared with £25–£40 new.

  • Designer bargains – A barely-worn Barbour jacket for £60, versus £200+ brand new.

  • Footwear – Men’s Clarks leather shoes for under £20, often with very little wear.

  • Occasion wear – Ladies’ Phase Eight or Hobbs dresses for £25–£30, compared with £100+ in the shops.

  • Sports gear – Branded sportswear like Adidas, Nike, or Under Armour for £5–£15, perfect for the gym or walking.

  • Accessories – Leather handbags, belts, or scarves for £10–£20, often still in excellent condition.

It’s not uncommon to find items that are “BNWT” (brand new with tags) – meaning they’ve never been worn at all. Many people sell clothes that don’t fit, were impulse buys, or were received as gifts, making Vinted a treasure trove for bargain hunters.

Tips for Spotting the Best-Value Listings

With so many items available on Vinted, it pays to know how to separate the true bargains from the rest. Here are some simple tips:

  • Check seller ratings – Every seller has a profile showing reviews from previous buyers. Stick to sellers with consistently positive feedback to ensure reliability.

  • Look for “bundle deals” – Many sellers offer discounts if you buy two or more items from them. This is a great way to cut down on postage costs as well.

  • Search by brand and size – If you have favourite brands (e.g. M&S, Next, or Barbour), searching directly for them can quickly reveal hidden gems. Filtering by your size saves time too.

  • Use “new with tags” filters – If you prefer unworn clothes, you can filter results to show only brand new items, often at a fraction of the shop price.

  • Compare prices – Before buying, check the going rate for similar items. Some sellers price higher, while others just want to clear space and will accept offers.

  • Check item photos carefully – Clear, well-lit photos from different angles are a good sign the seller is genuine. Blurry or limited pictures may mean the item isn’t in the best condition.

  • Don’t be afraid to make an offer – Buyers can often negotiate, especially if an item has been listed for a while. A polite lower offer is sometimes accepted straight away.

Closing Thoughts

Vinted might be better known among 20- and 30-somethings, but there’s no reason over-50s shouldn’t benefit as well. Whether you’re looking to make some extra money, save on clothes shopping, or simply embrace sustainable fashion, Vinted offers a friendly and straightforward way to do it.

If you haven’t tried it yet, it could be well worth downloading the app and having a look around. You may be pleasantly surprised at just how easy it is to sell your old clothes – and perhaps bag yourself a bargain or two along the way.

Many thanks to my sister Annie for suggesting this article!




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How to check your tax code

How to Check Your Tax Code and Correct it if Necessary

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Today I’m spotlighting a piece of official data about you that might seem dry and boring, but is actually crucial to ensuring you don’t pay more tax than you need to.

Your tax code is set by HM Revenue and Customs (HMRC). It determines how much income tax is deducted from your salary, wages or pension before you receive it. 

Understanding your tax code and ensuring its accuracy can prevent you from overpaying (or underpaying) tax.

What is a Tax Code?

A tax code is a combination of numbers and letters that helps your employer or pension provider calculate how much tax to deduct from your income. 

For example, a common tax code for the 2025/26 tax year is 1257L. This indicates that you are entitled to a tax-free personal allowance of £12,570, with tax due on any income you receive over this. 

The letter in your tax code provides additional information about your circumstances, such as whether you have more than one source of income or are being taxed on an emergency basis.

How to Find Your Tax Code

Your tax code can be found on any of the following:

  • your payslip
  • your P60 or P45 (for those who have changed jobs or retired recently)
  • letters or emails from HMRC
  • your personal tax account on the HMRC website

Deciphering Your Tax Code

Here’s a breakdown of what the numbers and letters mean:

Numbers: Multiply the number in your tax code by 10 to calculate your tax-free allowance. For example, 1257 means you can earn up to £12,570 a year tax-free.

Letters: These Indicate specific circumstances. 

L: standard personal allowance

M: you’ve received a marriage allowance transfer

BR: all income is taxed at the basic rate (20%)

NT: no tax is deducted from your income

S: taxpayers living in Scotland

C: taxpayers living in Wales (Cymru)

Common Reasons for Incorrect Tax Codes

Your tax code might be wrong if any of the following apply:

  • you’ve started a new job
  • you’ve received a pay rise or bonus
  • you’re receiving income from multiple sources
  • you’ve claimed or stopped claiming benefits like marriage allowance
  • HMRC hasn’t been updated about changes in your circumstances, such as retirement or moving abroad

What to do if Your Tax Code is Incorrect

Check your tax code: Review your payslip and/or other relevant documents to confirm your tax code.

Use the HMRC tax code calculator: This tool is available on the HMRC website. It  can help you determine if your tax code is correct, based on your circumstances. It will also reveal your annual tax-free allowance.

Contact HMRC: If you suspect an error, contact HMRC directly. You can do this by any of the following means:

When contacting HMRC, have the following information ready:

  • National Insurance number
  • details of all income sources
  • recent payslips or P60s

Of course, if you have an accountant, you may prefer to ask him or her to handle this for you. Accountants are well accustomed to dealing with these matters and will normally be happy to contact HMRC on your behalf.

Adjustments and Refunds

Once HMRC updates your tax code, your employer or pension provider will use the new code in your next payslip. If you’ve overpaid tax, HMRC will issue a refund automatically or else adjust your tax deductions in future months.

Preventing Future Errors

To avoid future tax code errors:

  • inform HMRC promptly about changes in your income or circumstances
  • regularly check your payslip and tax code notifications
  • use your personal tax account to keep track of your tax records

By staying proactive and understanding your tax code, you can ensure your finances remain in order and avoid any unpleasant surprises when it comes to your taxes.

As always, if you have any comments or questions about this post, please do leave them below. 

An earlier version of this article was first published on the Mouthy Money website.



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Could a Smart Thermostat Save You Money?

Could a Smart Thermostat Save You Money?

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As I write this, the UK is enjoying a period of fine summer weather; but of course autumn and winter will be along soon enough. 

With energy prices continuing to rise, it’s more important than ever to explore ways to cut your home heating costs while staying comfortable. 

An increasingly popular solution is a smart thermostat. But what exactly are these devices and can they really save you money? In this post I’ll try to answer these questions and discuss my own experiences with one.

What is a Smart Thermostat?

A smart thermostat is an internet-connected device that allows you to control your home’s heating (and sometimes cooling) remotely via a smartphone app, tablet or computer. 

They may use advanced technology such as machine learning, motion sensors and geolocation to optimize your heating schedule, based on your habits and preferences.

Unlike traditional thermostats, which require manual adjustment or rely on fixed schedules, smart thermostats can automatically learn your routines and adjust your heating to ensure comfort and energy efficiency.

Smart thermostats will work with most (but not all) boilers, including gas, heating oil and electric boilers. It is also possible to use them with heat pumps, but you will need a special type of smart thermostat that works a bit differently. In this post I will concentrate on smart thermostats for ‘traditional’ heating systems. This article has some useful information about smart thermostats for heat pumps.

Benefits of a Smart Thermostat

Energy savings – Smart thermostats can significantly reduce energy wastage by heating your home only when needed. For example, they can lower the temperature when you’re out and preheat the house before you return. 

Remote control – Forgot to turn off the heating before leaving the house? No problem. With a smart thermostat, you can adjust settings from anywhere using your smartphone.

Insights and reports – Most smart thermostats provide detailed energy usage reports, helping you understand your consumption patterns and identify opportunities to save money.

Smart integrations – Most models integrate with voice assistants like Amazon Alexa, Google Assistant, or Apple HomeKit, allowing for hands-free adjustments.

Top Smart Thermostat Brands

Here are the three most popular smart thermostat brands available in the UK, along with their pros and cons.

1. Nest Thermostat (Google)

Pros

  • sleek design and intuitive interface
  • learns your habits and automatically creates a heating schedule
  • works seamlessly with Google Home and integrates with other smart devices
  • energy-saving features like ‘Eco Mode’ when you’re away

Cons

  • higher up-front cost compared to some competitors
  • limited compatibility with certain heating systems

2. Hive Active Heating (British Gas)

Pros

  • easy to use and install
  • works with a wide range of heating systems
  • excellent app interface with multiple scheduling options
  • offers add-ons like smart radiator valves and light bulbs for a complete smart home experience

Cons

  • lacks advanced learning features compared to Nest
  • some additional features require a monthly subscription

3. Tado Smart Thermostat

Pros

  • strong focus on energy efficiency with geofencing and open-window detection
  • offers granular control with smart radiator valves
  • provides detailed energy-saving reports
  • compatible with almost all UK heating systems

Cons

  • subscription required for premium features like geofencing
  • simpler design might not appeal to those looking for a high-tech aesthetic

My Experience

I got a Hive smart thermostat for my gas central heating in October 2024. I chose this based on the advice of my regular heating engineer, Dave. He has a Hive himself and recommended it for its simplicity and ease of operation. 

I paid Dave to supply and fit the device, for which he charged around £300. If you’re a keen DIY’er it’s perfectly possible to install a smart thermostat yourself, maybe with the aid of an online guide and/or YouTube video. Personally I was happy to leave the manual parts of the job to Dave, though I assisted with the electronic and online aspects.

With a Hive (and I assume other smart thermostats) you basically get three components. There is a hub you have to connect to your router using a cable; the thermostat itself, which I have on the wall of my living room (though you can detach it and move it from room to room if you like); and the main control unit, which is where my old controller used to be in the kitchen. You’ll also want to download the relevant app, so you can control the heating using your phone.

Set up was pretty straightforward. The only delay was when connecting the app. For some reason this took a few tries (Dave told me this was common in his experience), but we got there eventually.

I set up a weekly schedule for my heating and hot water, and after that basically let the thermostat do its thing. I’ve found the insights page on the app really helpful for seeing temperature changes in the house throughout the day and when the heating has cut in and out. This works far more efficiently than my old manual thermostat ever did, and is undoubtedly saving me money by only heating the house to the temperature I require. 

One small issue I experienced was that initially I kept getting a message on the app that the internet connection was weak. After a bit of research I discovered this was being caused by the fact I’d left the Hive hub too close to my router. Once I moved it a couple of feet, the problem vanished and never returned.

Hints and Tips for Making the Most of Your Smart Thermostat

Here are some tips on maximizing the energy-saving potential of your smart thermostat.

1. Let it learn your routine

If your smart thermostat has a learning feature (like the Nest), give it a week or two to adapt to your schedule. Avoid making constant manual adjustments, as this can interfere with its ability to learn.

2. Use geofencing features

Many smart thermostats, such as Tado, use geofencing to adjust the heating when no-one is home. Ensure this feature is activated and that your phone’s location services are enabled for the app.

3. Set realistic temperatures

Aim for a comfortable yet energy-efficient temperature, typically around 18-21°C. Lower the temperature slightly at night or when you’re away to save more.

4. Take advantage of zones

If your system supports zoning (e.g. Hive with smart radiator valves), heat only the rooms you use regularly. For instance, keep bedrooms cooler during the day and focus heat in living areas.

5. Schedule around your lifestyle

Use scheduling tools to preheat your home only when necessary. For example, program the heating to turn on 30 minutes before you wake up or arrive home.

6. Use insights to adjust habits

Review the energy usage reports provided by your thermostat’s app to identify patterns of wastage. Adjust your settings accordingly to reduce unnecessary heating.

7. Integrate with smart home devices

Pair your thermostat with voice assistants like Alexa or Google Assistant for convenient control. You can also integrate it with other smart home devices, such as lights or sensors, for automated routines.

8. Utilize holiday modes

Going away? Use the vacation or holiday mode to keep your home at a low but frost-protecting temperature while minimizing energy use.

9. Check compatibility with your boiler

Ensure your boiler and heating system are compatible with your chosen thermostat. This will avoid efficiency issues and ensure full functionality. Personally I have a traditional heating system with a separate hot water tank, but others will have a more modern combi boiler. It’s essential to purchase the right smart thermostat for your system (Hive have two different versions for traditional and combi systems, for example).

10. Stay updated

Keep your thermostat’s firmware up to date. Manufacturers often release updates to improve efficiency, fix bugs or add new features.

Bonus Tip: Combine with other energy-saving measures

Combine your smart thermostat with energy-efficient practices, such as proper insulation, draught-proofing and using energy-saving curtains, for even greater savings. 

In addition, try turning down your thermostat by one degree. According to the Energy Saving Trust, this can save you up to £145 annually on your heating bills. 

Closing Thoughts

So can a smart thermostat save you money? My short answer is yes – though how much will depend on your usage habits and the size of your household. 

By reducing energy wastage, offering precise temperature control, and providing actionable insights, it is estimated that a smart thermostat can lower your energy bills by 10-20% annually. This can translate to savings of £100-£200 a year.

While the initial investment for a smart thermostat may seem steep (ranging from £100 to £300, plus installation), for most people the long-term savings should outweigh this. Additionally, some energy providers offer discounts or schemes to help with purchase.

A smart thermostat isn’t just about saving money, though. It’s also about convenience, comfort and doing your bit for the environment by reducing your energy consumption. 

Whether you opt for Nest, Hive or Tado, investing in a smart thermostat should set you on the path to a more energy-efficient and comfortable home.

As always, if you have any comments or questions about this post, please do leave them below. 



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Here's why I'm not a fan of FIRE

Here’s Why I’m Not a Fan of FIRE

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As a Pounds and Sense reader there’s a good chance you’ll be familiar with the FIRE concept already. But just in case you’re not, it stands for Financial Independence, Retire Early. 

The term was first coined in the US but soon crossed the pond to Britain and Europe. FIRE involves working hard to make (and save) as much money as you can, until you have enough capital to give up your day job and retire early.

At first glance it sounds appealing, but as you’ll gather from the title I’m not a fan. In this article I will explain some of the reasons I recommend caution when contemplating a FIRE strategy, starting with the one I regard as most compelling…

1. Life Doesn’t Always Go To Plan

When you’re in your twenties or even thirties, it’s tempting to believe you can plan your whole life year by year, decade by decade. 

As a FIRE aficionado, you might intend to put your nose to the grindstone for 20 to 30 years and retire in middle age, leaving you free to do whatever you want for the rest of your life. 

That’s great in theory, but one thing my 69 years have taught me is that life may have other plans. Sadly, none of us knows when the Reaper will come calling. I’ve had friends and relatives who have passed away at all ages, from their twenties to their sixties. Around one in five men don’t live long enough to collect their state pension, which is a sobering statistic.

Even if that doesn’t happen, other life events can throw a big spoke in your FIRE wheel. These include accidents, serious illness, disability, separation and divorce, losing your job, and so forth. These are things you can’t plan for but they happen all too often. The danger then is that you may have ‘wasted’ the good years that came before.

Let me tell you about my partner, Jayne. She became seriously ill soon after her 50th birthday and passed away four years later. That was clearly tragic, but one small scrap of comfort is that in her early forties she decided to go part-time in her teaching career, to have more time for other interests. We also decided that, as we both enjoyed travel, we would fit in as many trips as we could, even though money was often tight. We had some wonderful holidays that would never have happened if we’d both been working all hours and saving frantically for a future that in her case would never happen.

2. Are You Willing to Write Off the Best Years of Your Life? 

If you’re assiduously pursuing FIRE, you will be working your socks off during the day and scrimping and saving in your leisure time. Is this really how you want to spend what are arguably the best years of your life?

An example here is my old schoolfriend Phil (name changed). Phil was the brightest guy in my class (and probably the whole school). He aced all his exams and went to Oxford, where he got a first class honours degree in Agriculture and Forestry. Everyone predicted a stellar career for him.

Except that was never Phil’s plan. He was into FIRE before the term was even invented. He told me he was going to retire at forty. So he took a job he didn’t enjoy but paid well. He saved every penny he could, even running an ancient Austin A40, for which he didn’t have to pay road tax. He even taught himself mechanics and welding, so he didn’t have to waste money on garage fees.

Phil used to visit me and Jayne when we were younger. We admired his intellect and his single-minded determination, but did wonder about the price he was paying. He never (to my knowledge) had a relationship, and never went to concerts, the theatre or anything like that. We took him to a Chinese restaurant once, and he told us he had never been in one before (by this point he must have been in his late thirties). It certainly wasn’t a lifestyle either of us envied or would have chosen for ourselves.

3. What Will You Do When You Achieve Your Goal?

My friend Phil duly achieved his ambition. He was good at investing (naturally) and accumulated enough money to retire at his target age of forty. He then began devoting himself to volunteer conservation work. 

So far so good, but he became more and more of a recluse. He became physically ill and (I’m pretty sure) mentally as well. He broke off all connection with us and other friends. Last time I heard, he was living alone in the New Forest. I hope he is happy but am not convinced this is really a blueprint for how anyone should live their life. 

If you have a clear vision of what you want to do when you’ve achieved FIRE, that will undoubtedly help. If you don’t, though, that should set off an alarm that you need to think very carefully before proceeding. 

Even if you do have a plan – as Phil did – your post-FIRE life may not turn out to be as fulfilling or enjoyable as you hoped. How will you feel then about all the privations in the years leading up to it?

4. What About Work-Life Balance?

You may disagree, but it does seem to me that FIRE and work-life balance are two concepts that are almost by definition at odds with each other. 

For most people, their aim is to achieve a good work-life balance from day to day, with time for work, family, leisure, holidays, hobbies, and so on. For FIRE enthusiasts, however, the balance is more over the course of a lifetime, with work dominating the earlier years and ‘life’ the remainder. Aside from the risks mentioned above in assuming you can plan your whole life this way, that doesn’t seem like a recipe for good physical or mental health to me.

Final Thoughts

So those are some reasons I’m dubious about pursuing a FIRE strategy. 

Of course, I’m not saying you shouldn’t save for the future or indeed make sensible economies. But from my perspective as a 69-year-old, I strongly believe in striking a balance between making the most of your life today and planning prudently for tomorrow.

We only get one life, and sacrificing (say) twenty-five years of it for a very uncertain future is a huge gamble. In my view it’s a journey you should think very carefully about before embarking on. 

Better, in my opinion, to seek work that brings you satisfaction and fulfilment rather than merely being a means to an end. Make the most of everything life has to offer while you still can, since – as I well know – none of us can ever be sure what the future will hold.

Or as the old Guy Lombardo song (see below) has it: ‘Enjoy yourself, it’s later than you think!’

As always, if you have any comments or questions about this article, please do leave them below.

An earlier version of this article was first published on the Mouthy Money website.




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My Investments Update - August 2025

My Investments Update – August 2025

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Here is my latest monthly update about my investments. You can read my July 2025 Investments Update here if you like.

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As regular readers will know, in June I transferred most of the money in my Nutmeg Fully Managed portfolio (just under £25,000) to a new Nutmeg Income Portfolio. I discussed this in detail in this recent post, but basically money in this port is invested to generate an income from dividends and other sources. This is then paid monthly. Capital appreciation is targeted as well, but basically these portfolios are aimed at older people (and others) who want/need their investment to generate a regular cash income.

My Income portfolio hasn’t yet generated any income for me. I assume that is because there is a qualifying period before you become eligible to receive dividends (I have asked Nutmeg for clarification about this and am awaiting an answer). Income is due to be paid in cash to my bank account on the 24th of each month, so hopefully I will have some income accrued by August 24th (check out next month’s Update to find out!).

  • Nutmeg have now confirmed I was basically correct above. They point out that – like all Nutmeg investments – the money in income portfolios is held in the form of ETFs (exchange traded funds). They say: ‘Usually for an ETF to pay a dividend, it is one month after it is recorded. Taking the example of the JP Morgan Global Equity Premium ETF, [a dividend] was declared and recorded in early July and will be paid in August.” It would therefore appear that you have to be invested for between one and two months to start receiving monthly payouts. Nutmeg say I can expect to receive my first income payout on August 24th, so I will await this with interest 🙂

The better news is that this portfolio has grown in value in July. It’s now worth £25,793 compared with £25,092 at the start of last month, an increase of £701 or 2.79%. As the screen capture shows, this portfolio has actually grown in value by £840.89 since I opened it.

Nutmeg Income Port August 2025

I still have a smaller, growth-oriented pot using Nutmeg’s Smart Alpha option. This is now worth £4,346 (rounded up) compared with £4,164 a month ago, a rise of £182. Here is a screen capture showing performance for the year to date.

Nutmeg Smart Alpha port August 2025

And at the start of December 2023 I invested £500 in one of Nutmeg’s thematic portfolios (Resource Transformation). In March 2024 I also invested a further £200 from referral bonuses. As you can see from the YTD screen capture below, this portfolio is now worth £863 (rounded up) compared with £827 last month, a rise of £36.

Nutmeg Thematic port August 2025

Finally, I still have a small amount left in my original Nutmeg Fully Managed portfolio. I have kept this largely for comparison purposes. This has increased from £581 at the start of July to £594 (rounded up) now, an increase of £13.

Nutmeg Fully Managed port August 2025

As you can see, July was a good month for my Nutmeg investments. Overall I was up by £932 or 2.69%.

I am up by £1,168 since the start of 2025, so the April 2025 fall (caused largely by Trump’s tariffs) has now fully reversed. I am also up by £2,583 or 8.90% since the start of August last year. All things considered, that’s not a bad result.

As I always have to say, some volatility is to be expected with stock market investments, but over the longer term they tend to even themselves out (and generally perform better than bank savings accounts, although that is never guaranteed). In general the worst thing you can do is panic and sell up when downturns occur (as happened in April). You are then crystallizing your losses rather than giving the markets time to recover. This is something I had cause to discuss recently in this blog post.

You can read my full Nutmeg review here. If you are looking for a home for your annual ISA allowance, based on my overall experience over the last eight years, they are certainly worth considering. They offer self-invested personal pensions (SIPPs), Lifetime ISAs and Junior ISAs as well.

Moving on, I also have investments with P2P property investment platform Assetz Exchange. As discussed in this recent post, the company has rebranded as Housemartin.

My investments with Housemartin continue to generate steady returns. Housemartin focuses on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my HM portfolio has generated a respectable £262.48 in revenue from rental income. I have made a small net loss of £0.71 on property disposals. Capital growth generally has slowed, in line with UK property values generally.

At the time of writing, 16 of ‘my’ properties are showing gains, 2 are breaking even, and the remaining 19 are showing losses. My portfolio of 37 properties is currently showing a net decrease in value of £60.06. That means that overall (rental income minus capital value decrease and loss on disposal) I am up by £201.71. That’s still a decent return on my £1,000 and does illustrate the value of P2P property investments for diversifying your portfolio. And it doesn’t hurt that with Housemartin most projects are socially beneficial as well.

The net fall in capital value of my Housemartin investments is obviously a little disappointing. But it’s important to remember that until/unless I choose to sell the investments in question, it is largely theoretical, based on the latest price at which shares in the property concerned have changed hands. The rental income, on the other hand, is real money (which in my case I’ve reinvested in other HM projects to further diversify my portfolio).

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of Housemartin as far as i am concerned. You can actually invest from as little as £1 per property if you really want to proceed cautiously.

  • As I noted in this blog post, Housemartin is particularly good if you want to compound your returns by reinvesting rental income. This effectively boosts the interest rate you are receiving. Personally, once I have accrued a minimum of £10 in rental payments, I usually reinvest this money in either a new HM project or one I have already invested in (thus increasing my holding). Over time, even if I don’t invest any more capital, this will ensure my investment with Housemartin grows at an accelerating rate and becomes more diversified as well. I did, however, withdraw £50 from my earnings in June to assist my cashflow in what was an expensive month for me 😮

My investment on Housemartin is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Housemartin and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange/Housemartin here and my article about the rebranding to Housemartin here. You can also sign up for an account directly via this link [affiliate].

In 2022 I set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (then about £412) copying an experienced eToro trader called Aukie2008 (real name Mike Moest).

In January 2023 I added to this with another $500 investment in one of their thematic portfolios, Oil Worldwide. I also invested a small amount I had left over in Tesla shares.

As you can see from the screen captures below, my original investment (total value £888.36 in pounds sterling) is today worth £1,061.44, an overall increase of £173.08 or 19.48%.

  • Note: eToro now displays the value of investments in your native currency, although you can change this if you wish.

Etoro home Aug 2025

eToro port Aug 2025

You can read my full review of eToro here. You may also like to check out my more in-depth look at eToro copy trading. I also discussed thematic investing with eToro using Smart Portfolios in this recent post. The latter also reveals why I took the somewhat contrarian step of choosing the oil industry for my first thematic investment with them.

As you can see, my Oil WorldWide investment is in profit, though at 7.26% it is nothing to write home about. My copy trading investment with Aukie2008 has been doing a lot better, with an overall 45.28% profit. To be fair, I have held this investment a bit longer.

My Tesla shares, which I bought as an afterthought with some spare cash I had in my account, are down a little this month. But they are still showing an overall profit of 172.32% since I bought them. If only I had put a bit more money into this!

You might also notice that I have small holdings in Prosus NV, a Dutch internet group, and South Bow, a Canadian energy infrastructure company. To be honest I don’t understand how I acquired these, but I assume they are some sort of bonus I was awarded. In any event, I am happy to have them in my portfolio!

  • eToro also offer the free eToro Money app. This allows you to deposit money to your eToro account without paying any currency conversion fees, saving you up to £5 for every £1,000 you deposit. You can also use the app to withdraw funds from your eToro account instantly to your bank account. I tried this myself and was impressed with how quickly and seamlessly it worked. You can read my blog post about eToro Money here. Note that it can also serve as a cryptocurrency wallet, allowing you to send and receive crypto from any other wallet address in the world.

If you would like more information about setting up an eToro account, please click on this no-obligation website link [affiliate]. Don’t forget that you also get a free $100,000 virtual portfolio, which you can use to experiment with trading and investing strategies. I have certainly earned a lot from mine.

As an experiment, I recently put £50 into an investment ISA with Trading 212. As mentioned in my recent blog post about dividend investing, I put it into the (Almost) Daily Dividends Portfolio, a ready-made portfolio or ‘pie’ on Trading 212. As you can see from the screen capture below, my portfolio is now worth £53.67, an increase of £3.67 or 7.3% over the four-month period. It has even accrued a grand total of 31p in dividends (which is still more than I’ve had from my Nutmeg income port so far!).

Trading 212 SS ISA

I am quite impressed with how this investment has been faring, despite the small amount I put in (which means I may be missing out on some smaller dividends). If I increased my investment I would almost certainly become eligible for more dividends, and even more the longer I remain invested. If I had any spare money at the moment, I would consider doing this. Of course, I do now have an income-focused portfolio with Nutmeg as well (see above).

Moving on, I published various posts on Pounds and Sense in July. I have listed below those that are still relevant.

As mentioned above, in Nutmeg Launches New Income Investing Portfolios I discussed this new option from robo-adviser platform Nutmeg (with whom I am a long-term investor myself). I revealed how the new income investing portfolios work, and revealed why I decided to switch a substantial portion of my Nutmeg investments into one.

How to Tow a Caravan With an Electric Car in the UK covers a subject relevant to growing numbers of motorists. With over 1.5 million EVs now on UK roads – and staycations more popular than ever – more people are pairing their electric cars with touring caravans. But while the idea is appealing, towing with an EV requires careful planning, especially when it comes to battery range and charging stops. I am grateful to my my friends at specialist caravan insurers Compass Insurance and European EV charging infrastructure company Fastned for their expert tips and information.

In How to Invest in Gold in the UK I looked at another subject attracting growing attention. Gold is shiny, timeless, and often seen as a financial “safe haven” – especially when inflation is rising or the stock market is shaky. The growing popularity of gold among investors in recent months is testimony to this. In this post, I covered the pros and cons of investing in gold, the main ways to invest (even if you’re a beginner), and how to get started easily in the UK

Finally, in Is Private Health Insurance Worthwhile for Over-50s? I looked at the pros and cons of private medical insurance (PMI) for older people, and set out some key questions to help decide whether it makes financial sense for you. The article also discusses health cash plans, a less costly alternative that may be more suitable for some.

I’ll close with a reminder that you can also follow Pounds and Sense on Facebook or Twitter (or X as we have to call it now). Twitter/X is my number one social media platform and I post regularly there. I share the latest news and information on financial matters, and other things that interest, amuse or concern me. So if you aren’t following my PAS account on Twitter/X, you are definitely missing out!

  • I am also on the BlueSky social media network under the username poundsandsense.bsky.social. Twitter/X remains my primary social media platform, but I also post details of my latest blog posts, third-party articles and other financial news and resources on BlueSky for those who prefer to follow me there.

As always, if you have any comments or questions, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss. 

Note also that posts on PAS may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

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