Question No. 7

"How Can I Map a Value Path to Retirement Riches?"

Our Response

Knowing how much money you will need for your retirement is not an easy one to answer.  See "how big a pension pot will I need?"

It's almost impossible to estimate when you're going to retire and even more impossible to calculate the amount of money you'll need.

The younger you are now, the less idea you will have. But you can make a start.

Let's say someone aged 30 wants to plan for their retirement. You will have many options.  So many asset classes to consider - would you buy gold, invest in properties, buy shares, fine art, stamps, coins ...?

The list is almost endless.

But you're on this website so we can only give you the answer to one of those - buying shares.

"Use Our Pension Pot Calculator"

Our suggestion would be for you to use our Pension Pot Calculator.

Decide how much money per month you want to save and play around with numbers.

But for someone so young, it's difficult to estimate what age you'll want to retire.  You could aim for 60 or even 55, but then there's the big question of how much money you'll actually need.

It's a fact.  We are, as a demographic, all living longer.

Deciding when you're going to retire is one thing. Knowing how long you'll live is another,

So our advice would be to save as much as you can, start as early as you can, and contribute as much as you can.

DIY Pensions today are so flexible and practical compared to say, 20 years ago.  In their present guise, they've been around since about 1990.

But every year they are being made more flexible and commonsensical.

In the bad old days, you were obliged to buy an annuity.

Great in principle but bad in practice.  Or to put it another way, some people won and some people lost.

We have always maintained that if you've worked hard all your life, you, or your dependants, should benefit from the fruits of that labour.

If you were unfortunate enough to die soon after your retirement, you would naturally want what's left in your Pension Pot to go to your dependants.

In the bad old days that wasn't the case.

How did they get away with that for so long?  (Even Dick Turpin had the decency to wear a mask).

But back to the question of "how much."

We're afraid there's no simple answer to that.

All you can do is start early and save regularly.

Better to have too much than too little.  So go for it.  Shoot for the stars.

If you do that, select the right shares, buy favourably, sell wisely, and above all - be patient.

It's all about time in the market not timing the market.  Don't lose that patience by thinking you can do better.

You could miss out big time.

"The Two Techniques
You Need To Master"

There are only two techniques that you will need to master.

One is the basic method used for identifying the right kind of share and the other is a pictorial method that is used for knowing when to buy and when to sell.

The first method is called Fundamental Analysis and the second method is called Technical Analysis. 

Fundamental Analysis can reveal the right kind of share that you need to be invested.  It's not a quick fix.  It takes time and effort to weed out the right kind of shares.  And the right kind of shares are what are called "value" shares and, to a lesser extent, "growth" shares.

This quick Q&A can't possibly go deep into this topic but it is well covered on our website.  How to identify the right kind of share to invest in is also well covered on our website.

Likewise, Technical Analysis is covered in some detail.  Our website is not intended to make you into a Technical Analyst of detail, the idea is to give you just enough information to know when to buy a share and when to get out.

To delve any deeper into either of these techniques would infringe on more frequent trading, commonly known as day trading. 

Investing for your retirement is, in our opinion, not about day trading, or very short term trading.  That's speculating.  And is the subject of numerous books - none of which will be covered or recommended on our website.

Retirement Investing is all about the long term. 


We know it sounds too easy to be true but you only have to master two principles.  Fundamental Analysis and Technical Analysis.

The reason most people don't succeed is because they think they can do better.  They don't have the discipline and the patience to do the basic things.

If you're ever in doubt as to what direction you should be taking, you should always get back to basics.

And the basics are to select value shares, and hold them for the long term (with some buying and selling during that time).

Warren Buffet is on record as saying that over a lifetime you need only ever invest in about 20 or so stocks.

We can see what he means by that but we look a little deeper than that.  But that's just our strategy.  We like monitoring a fairly large watch list.

However, history is on the side of the value investor and the growth investor.  The principle of buy and hold stands firm but it needs to be monitored.

You do need to buy and sell your chosen shares, but not too aggressively.  And if it's only 20 companies, who are we to argue with that?


As a newbie, you may want to read the other "Frequently Asked Questions" on this website.  Doing so, will give you a good introduction to running your own DIY Pension.

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