Can I refuse to take out a pension?

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If you have options for a company pension, you would be a fool not to accept it. It is after all money for nothing. You also get a tax rebait from money you pay into your pension. So for every £1 you put in, the government will give you 20p (or there abouts) as tax relief.

All a pension is, is a tax free wrapper around any investment you like. So you can still invest in dividend shares if you want. That said, you are looking for long term growth and a financial adviser may well recommend that you would be better off looking for growth rather than earnings.

Good luck!

The growth in dividend shares comes from reinvesting dividends, it's the compounding effect over a long time that will make you a lot of money.

In theory growth and dividend stocks should produce the same return if the market is efficient, but because of market overreactions, dividend stocks may be a better bet.

Reply 21

milliemogs

Original post by fg45344

But what if I can do a better job than them?

What if they invest in a company which goes bust?

40 year is a long time, not even some of the companies in the FTSE 100 are immune to 40 years. Only super blue chips like Coca Cola could survive that and even then you never know.

It's their full time job to invest this money, you've been playing the markets for a year with only 14k. We all know who is better at it and it isn't you.

Reply 22

fg45344

Original post by milliemogs

It's their full time job to invest this money, you've been playing the markets for a year with only 14k. We all know who is better at it and it isn't you.

Only 14k, it's still a serious amount of money you wouldn't want to screw up. I know enough about investing, I have a MSc in finance and econometrics and am doing a PhD in economics....so I'll survive.

Plus bloomberg teaches me a lot!!

Reply 23

Esoteric-

Original post by fg45344

Can I refuse to take out a pension and just invest in super blue chip stocks that will survive for the next 40 years....something like Coca Cola, Disney, Wal-Mart, Visa etc etc and just live off the dividends?

What is wrong with that strategy?

Lols you do realise that is what pension plan providers do

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Reply 24

Esoteric-

Original post by NW86

What do you think pension funds do with your money?

What your suggesting is literally what pension funds do, invest your money in stocks (you can even select the risk level). The reason you do it in a pension fund rather than on your own - work matches your investment, and you have people who's job it is to manage the fund and investments, not just you doing it as a sideline.

Exactly lol. Your description is literally Pensions for Dummies. OP clearly knows nothing about pensions.

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Reply 25

Esoteric-

Original post by fg45344

A) I doubt you, some random guy off the street is going to do better than multimillion pound fund managers

B) On average most funds/managers don't even beat the market anyway, so over 40 years you are probably going to be just as well off having put your money in tracker funds than actively managing your portfolio yourself.

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Reply 26

fg45344

Original post by Esoteric-

A) Not a random guy, MSc in finance and econometrics, doing a PhD in economics.

B) There job is to beat the market, they are failing at their job if they are not, Tracker funds is the novice way out, you shouldn't expect any handsome reward for a market return.

Reply 27

fg45344

I can do a better job, the pension funds over-diversify into crap you shouldn't be holding right now. There are a lot of failing companies out there like Tesco, which you really shouldn't have in your portfolio.

I can buy great companies at great prices, essentially looking for dips in the market (sort of a technical analysis). For example I bought Legal and General for 175p, it's trading over 195p now. It's still an ok time to buy, but once we go over 220p, we have hit a fair value and it's not worth it.

I wanted to buy Persimmon but I missed the boat, though I did get BP for 361 p and that's made me a lot of money (plus the 7.5% dividend)

I do think I can do a better job than them, they over-diversify too much.

Reply 28

viffer

Original post by fg45344

If you are happy to turn your back on free money I guess it is a brilliant plan. :smile:

Although that assumes you are in the UK but considering your choice of companies you may not be. If you ARE in the UK investing in US stocks puts you at the mercy of currency fluctuations.