Financial review at 31 August 2019

Source: Pixabay

Eight months Summary

A total return in the year to date of 9.92%, slightly behind the index, results after drawdown expenditure in a capital uplift of 7.24%.


As I am not earning any income from employment any more, I am in drawdown in that I am drawing down some of my financial assets each month to cover our spending. I have been in drawdown since December 2013 so the five years and eight months since then will be the main time period under review. I have estimated the annual income and expenditure for the full 2019 year.


My capital has increased by 13.55%. This compares to an increase in RPI inflation of 15.23% (I have estimated the RPI figure for August).


My income has increased from 3.53% to 5.31% of my original capital. This compares to the income according to the “safe withdrawal rate” which has increased from 4.00% to 4.51%, based on inflation from December 2013 to December 2018.


My expenditure has increased by 30.05%. This year my spending as a percentage of my income is 77.43%. Expenditure is running at an annual rate of 3.75% of the average asset value during the 2019 year.

Total return

The portfolio total return has been 38.21%. This compares to 35.71% from the FTSE All Share total return index and 32.62% from the M&G Index Tracker Fund Sterling A Acc, a typical index tracker fund.

Income growth

Income has grown by 54.93%. The portfolio income yield has increased from an annual rate of 3.82% in 2013 to 4.84% in 2019. This is calculated on the average asset value during the year.


My current main objective is income growth rather than total return. Compound income growth is running at about 8% per annum. This is derived from increases in the dividends paid per share, from re-investing any unspent income, from re-positioning the portfolio towards higher yielding investments, and from remaining focused on the higher yielding stock markets in the United Kingdom and Asia. If there is economic trouble ahead, I am hopeful that my dividend income will be resilient even if capital values fall.

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