How I invest: I grew my pension pot tenfold after almost running out of cash
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The traditional Hollywood happy ending is seeing the hero sail away into the sunset with his family to spend their days sunning themselves on an exotic beach.
Richard achieved this. After a long career in the electronics industry making silicone chips, he moved his family out to the Philippines where they bought a lovely farm out by the beach. Paradise to most.
But Richard realised in a short time that he’d made a potentially critical error and unless he could multiply his SIPP (Self-invested personal pension) by at least two or three times the size, he would soon be out of money.
“I was in really big trouble. And that was the start of my investment journey because I had to do something,” Richard says.
Revealing this movie’s spoiler, today, at aged 68, Richard has grown his portfolio to more than 10 times its original value and withdrawn around two times the original value of the pot along the way.
Setting the scene
Building up your pension is the decades-long endeavour of most adults’ working lives, with a workplace pension scheme usually the first starting point.
At the end of his career Richard had three workplace pensions “and when I reviewed them and looked at the so-called returns of these professionals who had taken a lot of fees over the decades of my life, I couldn’t believe how pathetic they were, just nudging to 7% to 9% a year and I was very annoyed with that”.
Richard moved all three of them into a SIPP or self-invested personal pension, with a value of around a quarter of a million pounds.
“At that point I made a very silly mistake because I needed money, and I thought that the simplest thing would be to just take my 25% tax free at that point,” Richard says.
From age 55 you can take up to 25% out of your SIPP tax free, up to a maximum of £268,275, while the rest is used to provide you with a taxable income. The minimum age at which you can access your pension is increasing to 57 in 2028.
Having taken roughly his full 25% chunk “it was nice to suddenly see 60 odd grand in your bank account, and I had some other savings in gold coins” which kept him going for a few years.
“Until I looked at my savings and my finances, and I realised that we’d be bankrupt in a few years if things carried on as they were,” Richard says.
Act 2: Operation save my SIPP
To not only rebuild his pot but make sure he had a legacy to leave his three children and wife, Richard developed an investment strategy to grow his wealth.
After reading Edward Croft, co-founder and CEO of Stockopedia’s book, Getting Started in US Shares and taking the advice of one of his heroes, Fidelity Magellan fund manager Peter Lynch, to invest in what you know, Richard quickly determined he’d focus on US tech stocks.
After graduating with a physics degree, Richard worked in the US tech sector most of his life “so why would I invest in oil and gas?” he says. “I have tried and lost money. Why would I invest in fashion or retail? I don’t know anything about those”.
His goal was ambitious: manage his lifetime savings himself and target much better returns than his retirement savings had been achieving before he combined them in a SIPP. Richard’s approach is not one which would suit all investors, but there is no denying it has paid off handsomely for him.
Knowing he needed to stick to a strict strategy first and foremost, his research led him to a definitive, three-pronged approach. First, it is centred on geography, investing mainly or wholly in US equities. Second, it is focused on the tech sector, with 50% to 70% of the portfolio in large, blue-chip companies, 10% to 20% in mid- and small-caps, and finally Richard maintains a reasonable cash float for future opportunities.
“I have a very strict selection criteria for any stock that I buy. It’s a bit like falling in love in a way, especially in the US because it’s a beauty contest,” Richard says.
“There’s always a story behind it, but you have to filter them out. So, I look for companies which have something special that sets them apart and have brilliant management as well as good financial metrics,” he says.
Out of the 10 to 15 stocks in his portfolio, Richard says Nvidia has been the best investment of them all.
Richard bought £11,000 worth of the stock in early 2017 when shares were less than $3 a share. Today, the same stock changes hands for more than $200, and this one investment is worth almost as much as his original pension pot he started with.
Alongside being a strong business, Richard greatly admires its CEO Jensen Huang, who he says is “wonderful”. “He’s a genius and he’s just awesome. He’s got brilliant engineers and the tech they built is being used to execute AI today,” he says.
But conscious of diversification, Richard didn’t want to have all his eggs in the Nvidia basket.
He only owns one managed fund at 6% of his portfolio, the Polar Capital Technology Trust run by “another hero of mine Ben Rogoff”. “He’s my gold standard and I compete against him,” Richard says.
Rogoff is also a Nvidia fan, as it takes top spot in his trust, but the list beyond this is diversified from the index. Over five years, the trust has delivered an annualised total return of 26.5%.
Happy ever after take 2?
After traversing the perils of a mistimed pension withdrawal and a move back to the UK, Richard is enjoying his job of building and maintaining the family’s wealth with a “professional attitude”.
“I could cash it in and live in luxury if I wanted to now, but I want to pass a legacy onto my wife and three children first,” he says.
“I achieved my first goal of wanting to give myself an income of £100,000 a year... but I want to grow my SIPP beyond where it is now. Not because of greed but because I want to leave something behind.”
Eve Maddock-Jones: Funds and Investment Trusts Writer
Eve joined AJ Bell in 2026 as a funds and investment trusts writer. She was previously editor at Investment Week, reporting on all major retail investor news, covering funds and investment trusts, ETFs and regulation...