Should I continue to add to the Investment Pot ?

From the last few years of monitoring, I can see I've been saving around 50% of my income, most of which is now added to the pot on a monthly basis.

At current valuations, the pot has grown to the point where my monthly additions increase the pot value by only a fraction of a percent each time.    This is well within the expected volatility range of the combined investment pot, even in the most stable of market conditions.

So does it make any sense to continue to add to the pot, or should I put a stop to the monthly contributions and just accept the market return without adding fresh money ?

Now, I'm not about to start wild spending on things I don't need, so you might well ask what's the advantage here, since there's a monthly surplus anyway and therefore doesn't it count as savings if it's not being spent ?

Preferences and Prejudices - a personal trading strategy....

If what follows could ever be described as a 'strategy'....

Financial Advice ?

Note that I'm not a financial adviser and nor would I recommend that you shell out your hard-earned readies in seeking so-called 'professional' investment advice.  Do your own research.

(There's a proviso to this, however, in that I wouldn't be averse to asking my accountant for information on how a particular financial instrument would be treated for tax purposes.   Trading accounts, ISAs and SIPPs etc are simple enough vehicles for most people to readily understand their tax treatment, but there are many things out there that aren't – the UK tax code runs to several thousand pages, and like most tax 'rules' they are not designed to be definitive but are deliberately left open to interpretation....generally though, if you can't fully understand an 'opportunity' yourself, without taking external advice, then it may be more prudent not to pursue it at all.)

Having established and understood what are the particular tax advantages or otherwise of the investment type or wrapper in which they're held, there's absolutely no-one out there who is qualified to advise you in which particular industry sectors, shares, funds, bonds, trackers, commodities etc you should invest.

# ..... ISA ISA baby.....#

In praise of the ISA.....(that's the 'Individual Savings Account' in the UK, which allows you shield capital growth and distributions from capital gains and income tax respectively).

I've been fully ISA'd-up for the last two years (£10,200 limit in 2010-2011, and £10,680 in 2011-2012), and I've also retained holdings in an earlier ISA from contributions I made around four and five years ago. 

I haven't yet added to my ISA pot in the current tax year, but I definitely expect to again be invested to the current annual limit (£11,280) before 5 April 2013, and also every subsequent year in the future assuming I can find the funds. 

I also recently closed my regular trading account with TD Direct and so the ISA account and my SIPP are the only trading vehicles I currently possess.

Considering that I run my own company, and have very limited personal pension provisions, I stumbled upon the benefits of ISAs very late in life – too late, many might say.

Effective tax avoidance – start the homemade Christmas wine now...

Making your own wine is a great pastime on many levels....

Firstly, it's very cheap and the taxman doesn't get to surreptitiously steal a huge chunk of your hard-earned readies.   How big is the chunk ?  Read on...

Just think of the 'Three for £10' wine offer at ASDA that's been running for years; that's a bottle of wine for £3.33.  Now this wine has been made in Chile, California, Australia, South Africa or wherever.  Grapes have been planted, lovingly tended, harvested and pressed, the liquid collected, filtered and then fermented, cleared, put in a glass bottle, sealed, labelled and despatched half-way round the world and it's still only £3.33. 

However, consider that sum even further.  The UK excise duty payable on any standard 75cl bottle of wine of that strength is £1.90*  – yes, a staggering amount on any bottle of wine but a very high proportion of £3.33.  To add insult to injury, the £3.33 selling price also includes UK VAT (sales tax) at 20%, on the whole amount including the £1.90 duty, i.e. there's a tax upon a tax, and therefore the exchequer has just grabbed a further £0.56. 

So of the £10 you handed over at the ASDA checkout for your three bottles, £7.38 has immediately been snaffled by the government.

(* UK Duty rates from 26 March 2012 on still wine of 5.5% to 15% ABV = £253.39 per 100 litres)

The bottle of wine has therefore gone through all the stages described above, plus being distributed to the supermarkets, for only 87p.  In the supply chain everyone, the makers, shippers, distributors and the supermarkets has made a profit from just that 87p.