WCI #81 - Medicine and Finance in the UK with Dr. Nikki Ramskill

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Welcome to White Coat Investor podcast 81 Medicine and Finance in the UK at.

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We got something special going on today on the podcast, but before we get into that, we've got something special going on this whole week at the White Coat Investor. This is Continuing Financial Education Week, so not only am I making recommendations for books you should read, but we also have a special deal on our online courses. So if you've been waiting to take one of these because you wanted a discount, now is the time. We haven't had a discount on any of those courses since July I believe. I think it was the last time we had any kind of a sale. But this week we are having another sale and you can get a discount on both the fire your financial advisor course as well as the online version of the White Coat Investor conference we had last March in Park City. Both of them are being available at a discount, so check that out today. You've only got a couple of days left before that goes away. Our quote of the day today comes from Morgan Housel who said there are over 2000 books picking apart how Warren Buffett built his fortune, but none are called. This guy has been investing consistently for three quarters of a century, but we know that's the key to the majority of his success. Our special guest today is a UK doc, so let's get into it. Welcome to The White Coat Investor podcast. Today we have a special guest. We have Dr. Nicky Ramskill who we are keeping up late at night in order to be on the podcast because she is located in the UK she blogs@thefemalemoneydoctor.com which as far as I can tell is. Is the first money blog written by a physician in the UK. Welcome to the show, Dr. Ramskill.

Thank you very much. I'm so delighted to be here.

I'm excited not only that you're here but that you have the great British accent. I love having it on the show makes a. Makes for a change from what we normally have.

Well, I'll do my best.

Let's start at the beginning. Let's have you tell us a little bit about your upbringing and family.

Great. Okay. So I come from, I suppose, quite an ordinary family really. Nobody in my family is actually a doctor or a nurse or anything medically related at all. I was the first person to go to university, you know, so very kind of new. It was very new for all of us to be honest. When I first decided to go into medical school, however, my sister, my mum, my dad, they're all kind of very service based professions that they're in. So I guess it wasn't a million miles away from deciding to become a doctor. I was good at science at school so it kind of just, it led on from there really. So yeah, I think it was, I don't think it was a particularly extraordinary upbringing at all. It was a very, very nice kind of middle class living in London. Yeah, brilliant.

And are you still in London?

I was until about a year and a half ago and then I decided to move out of London and I now live in an area called Melton Keynes which is probably around an hour and a half, two hours drive from London. But it's got very good train connection. So I can be within, you know, 45 minutes of London if I wanted to be.

That's great. Tell us a little bit about your education and training.

So the way that it become you become a doctor in England is that you start off by doing your medical school training and you can go into medical training literally from the age of 18 if you wanted to. So that's how I got into medical school. I started at the age of 18. You can then do a five year degree program and then if you want to, you can do an extra year where you gain an extra degree as well. So I actually did six years in the end and then at the end of six years I went to A couple of hospitals around London where you rotate every four months into different areas. So I started off in kind of a very surgical based specialty, did lots of general surgery for four months and then went on to medicine before finally then doing a little bit in AE and moving on to other kind of medical specialties as well. So you do that for two years. I did a little bit of gp, which is the profession I've now decided to go into. I did a bit of obstetrics and gynaecology. The idea is in the first two years after medical school training, you have a broad base to which then you can choose a specialty on that. So it's quite early, I think. I think it's probably quite different to how it is in America for what I gather you have to do another degree before you go into medical training, is that correct?

That's correct. We typically here will do four years of college or university preparation and something may not even be medically related at all, followed by four years of medical school and then three to seven years of residency and fellowship training after that. It sounds like you get to seeing patients a lot faster than we do really quickly actually.

There's a big emphasis on, on getting medical students seeing patients literally from the first year they start. So you could be 18 years old and you could be seeing your first few patients, obviously very heavily supervised. You're not allowed to do anything on your own. But you know what a lot of the medical students have now is they have a long case where they will follow a patient right the way through their patient journey from if they're in the gp, surgery right the way through to if they get admitted to hospital and things like that. So medical schools now are moving away from the old fashioned model where you do a lot of book work for three years or whatever and then after that you go into clinical work. They want to become much more integrated. So you're actually finding your feet in a hospital setting and you're getting to know what the hospital feels like very, very early on, which I think is a good thing.

So it sounds like you did this two year rotating internship in the various specialties. Do people typically do a residency of any kind after that or do most people, I mean, can you go be a practicing general surgeon after finishing that internship?

No, you can't. So once you've done your first two years, you then have to pick a training program. So it lets. So for example, my first specialty that I decided to choose was obstetrics and gynecology. So obgyn. I Went straight into that after my second year following my, you know, my first two years out of medical school. And the idea is you stay in that program for seven years. At the end of it, you come out as a fully qualified consultant and then you can start working independently in the uk and you can then also start private work as well. Each specialty has their own length of training, so surgeons could be. You could be training to be a surgeon for many, many years before you actually come out the other end with your cct, which is our consultant certificate, and then actually start working as an independent physician. So it's quite a lot of training after you've got out of medical school, to be honest. So the, you know, the medical school bit is kind of the easy bit, if you like. It's the specialty training afterwards is much more intense and it often leads to burnout. And you get a lot more doctors deciding to leave specialty training or even delay going to specialty training because they know that they get almost locked into the training program for however length of time it needs to be. And that's what happened to me. I decided at the end of my fourth year in obstetrics and gynaecology that I was going to leave because I just couldn't. I couldn't face the intensity anymore. I couldn't face the stress, the litigation risk, risk. It just didn't work for me. It didn't fit for the lifestyle that I wanted. So after taking some time out, I then decided to go into family medicine, which is a much shorter training program. It's actually three years, so you can get out the other end, and then I'll be a fully qualified independent physician once that's finished.

So are you in your family practice training now?

I am, yes. So I've done just over a year. I've got around 18 months left before I fully qualify, assuming I pass all my exams. The difference for me is that because I had so much previous experience in obstetrics and gynaecology, I actually had a slightly shortened rotation. So rather than be three years, mine's actually two and a half. So I get out six months faster than my colleagues who start at the same time as me. So for me now, I'm very much looking forward to getting to the end and drawing a line from my undergraduate kind of training, if you like, and being out there fully independent and, you know, choosing whatever it is I want to choose afterwards.

Tell us about practicing medicine in the uk. How's it different from the us and what do you like about it? What do you dislike about it?

Ah, there's loads of differences. I mean, obviously with the uk, we've got the nhs, so patients at the point of care, they don't actually have to pay for anything, they don't have to hand over their credit cards or put any money down to see a doctor. So I love that aspect about our country. I absolutely love the fact that the NHS is there and it means that when somebody is absolutely in their time of need, they have the ability to see somebody quickly. The. The only downside with that is that once you've opened up healthcare as a kind of almost a free for all, waiting lists become much, much longer. So I think one of the things that are very starkly different between America and the UK is that in America, from my understanding, you generally get to see your special, you know, your specialist much, much faster than people in our country would be able to. Just to give you an example, I had a patient literally in the last week, who urgently needed to see a neurologist for symptoms that she had and the earliest appointment they would offer her was three months away. So if that's urgency, you know, can you imagine what it would be like if it was just a routine appointment? So I think that's one of the biggest differences, is that in the. In the uk, we've got this service that, yes, it's free, but it also comes with the drawbacks in that because it's free, everybody then has to be go into the queue and they have to wait. So you'll often get people that will have this kind of strange hybrid between private medicine and the nhs, where they'll go into private medicine for things like an MRI scan or the physiotherapy or something like that, and then they'll plug themselves back into the NHS again when things start to become quite expensive. I don't necessarily think you have the same kind of thing as that in America. I know you do have different levels of insurance, don't you?

Yeah, it's a terrible, complicated mess.

Yeah. I've been heaping.

I mean, anybody that thinks the problem is easy to fix doesn't understand the problem. In the us, we've definitely got some healthcare issues here. So do doctors choose whether they're going to be in the private system or whether they're going to work for the NHS or how does that work?

So until you become a consultant in the uk, you have to stay in the nhs. There are options of some people going into private medicine. I'm not really sure how not legal, but how moral that is, I think most people would generally wait until they get through their NHS training, they come out the other side, they have their full qualification as a consultant, they get on the GMC register fully qualified as a GP or a consultant, and then they can practice privately. And I know of many people that have decided to go straight into private medicine. The only problem with that is that you, you kind of rely on the NHS to be your source of referrals. So if you come out the other side, you go straight into private practice and then you're competing with other physicians that have got much more reputation, much more experience. You may struggle to get your private referrals. So I think what a lot of people do is they use the NHS as a kind of springboard and then once they've got a name known for themselves, they've found their feet for a while. That's when they start going into private medicine. They do that in addition to their NHS hours. So that often means working weekends or late nights to accommodate, you know, what the patients want. Gp. It's a bit different, GP training. You can't actually go straight into private medicine as soon as you've qualified. There are lots of companies out there now offering telemedicine, so where you can actually sit in front of a, you know, a Skype screen and talk to your patient that way. And that's all, you know, basically private sector type stuff. But most people generally stay in the nhs, they don't tend to go private, but it does exist.

So what do doctors get paid in the uk?

It's a good question. It depends very much on the kind of job and specialty that you do. Obviously, if you're a surgeon or you work in obstetrics and gynecology, you're probably looking at 80 to 90,000 pounds a year when you first start and then it goes up from there. However, you're not getting people coming out of medical school with, you know, six figure salaries. It doesn't happen unless you become what's called a locum doctor, where you're basically just slotting yourself into the hours that are free and in, you know, whichever hospital needs them or GP surgery that needs them. So I do know of people that are on six figure salaries when they first start, but they are working on a zero based contract, so they're literally not having the hours until, you know, maybe that day or they can book them maybe the week before. So some people don't like it because they don't like that lack of consistency. GPS will probably be on around 60,000, depending on how many sessions they decide to do. So you get paid per session. So a morning or an afternoon, and they replicate that over an entire year's worth of sessions, and then you get paid as per that. So it depends on the GP surgery, the tariffs. It's quite complicated.

But this is all dictated by the NHS by a scale that they have put together.

Yeah, so there is a scale and there are a lot. It's. It's like a banded scale, basically. And yes, NHS England do dictate the kind of salary that people would get. So in hospitals, it's much more prescriptive, however, in GP surgery, because GP surgeries are controlled by the GPS themselves, so they own the business. As such, they can decide how much they pay people. So there's kind of like a recommended amount and then they can decide if they want to negotiate with that individual about how much they get paid.

Super interesting to get a glimpse behind the scenes of how it's done elsewhere. What about during that rotating internship? How much do you get paid during that period?

Not a lot, if I'm honest. And it depends on whether you're in London or out of London. So in London, you're probably looking. I mean, I'm generalizing here because I don't remember the figures off top of my head, but you're looking at around 23, 24,000 when you first start, and then by the time you get up to kind of registrar level in London, you're probably looking at around 27, 30,000. And then you'll get extra depending on whether you do out of hour sessions. The contract recently changed, so you had our previous Health Secretary, Jeremy Hunt, he changed the contract so that out of hours became much later. So you wouldn't start getting paid out of hours work until after 10 o' clock at night, and you wouldn't get paid out of hours work on a Saturday. That would be classed as normal working hours. And Sunday was the only day of the week that you know is technically classed as out of hours. So suddenly there are a lot of people that are doing lots of late shifts, lots of weekend shifts, and they're not being compensated in the same way that they used to be. So things have changed in the last few years as well.

Was that the change made in 2016 that led to all the doctor strikes?

Basically, yes. That's exactly what happened. We had a series of strikes, basically led by some of our peers, and it eventually got to the point where even emergency medicine was being affected. So it wasn't to the detriment of patients. They've never shown that patients, more patients died or anything like that at all. It was purely just that it inconvenienced a lot of things. So a lot of appointments had to be cancelled, a lot of kind of elective surgeries were cancelled but the consultants generally were very, very supportive. So what they did is when the junior doctors had these days out of work they took up the slack. So they carried our long course call bleeps they made themselves present on the wards, they did a lot more hands on type work in order that the junior doctors could do this strike. Unfortunately it led to a few compromises but the contract went ahead regardless, much to a lot of people's dismay I guess.

Do you ever find yourself looking around at other countries and wishing you were practicing there in the US or Canada or Australia or New Zealand or something like that?

Oh, I've thought about this a lot. When I was doing obstetrics and gynecology and feeling very, very stressed and sorry for myself. I fantasized about it a lot. In fact I did a lot of reading on quite a lot of American sites actually about doctors burnout and how a lot of doctors wanted to leave medicine. And it gave me some of kind comfort knowing there are other people out there that felt the same, that we.

Were just as hosed in the US as you are in the uk.

Yeah, so many, so many people have written blog posts and forums, things like that and it was, it was just really comforting. Once I left obstetrics gynecology though, and then decided to go into family medicine, I kind of felt a sense of relief. It was almost like I was now choosing how I was going to live my hours at work. So the nice thing is that once I've finished my training, I'm no longer then bound by, you know, having to do hours, having to answer to anybody. I can pick if I want to work two days a week, three days a week or however I want to do that, I can do that myself. So I love that sense of freedom. So working another country to me now is not as appealing as it once was. Although we are still considering Australia because it's the closest healthcare system probably to our own. So I probably fit in there much more quickly. America has always put me off a bit because I had to do extra exams for it, so it's never really made me want to go there. Because of the amount of work you have to do to actually get into medicine.

Yeah, I've actually got that same problem if I go to Canada for some reason, as an emergency doc in Canada, you have to have five years of postgraduate training and I've only got three. And so I actually looked into it at one point, but that was a little bit too big of a burden for me to want to get over.

Yeah, yeah, agreed.

Now what? In the us, our medical students, our docs are starting their careers saddled by massive amounts of debt. The average is over $200,000 in medical school loans. And I'm starting to see people with 300, 400, $500,000. I think my record's over a million. How are people paying for medical school in the uk?

Same thing. They're taking out loans. So what, what's actually happened is when I started my medical school training fees for a year were only about a thousand pounds, just over a thousand pounds, which seems ridiculous now when I think about it. And the loan that I took out was to basically maintain a sort of semblance of a standard of living while I was training, so I didn't have to then work loads of extra hours and things on top of it to support myself. Now people are paying £9,000 plus a year to stay at medical school, which.

I mean, still, you say 9, 9 or 99,000. 9,000. Okay. Still sounds like a deal to docs out here, I'll tell you that.

Exactly. In fact, there was one girl that I lived with from, she came from Florida and she chose to come to England because it was, was so much cheaper to practice to become a doctor out in England. So that's what she chose to do. She chose to up sticks and came to the UK to get her qualifications. So it's still cheaper than it is in America. And I think a lot of people over here don't seem to really appreciate that. And there's a, a lot of people, I think I'm going to use the word whinge. I don't know if you use that one in America, but I feel like people moan a lot about how much they are paying in fees when actually when you look around the world, it's not that bad. And then what happens is you get, you get given a loan which you don't actually have to start paying back until you actually start earning money. And if you never get the threshold of how much you need to earn before you have to start paying back, you never pay the loan off. So it's got a very different set of rules than other loans that you would expect to be paying right from day one. You don't actually physically have to Pay them back until you start earning. So I think there's a lot of miscommunication about how loans work for students. So I try and correct that whenever possible and try and reassure people that for us, having a loan for our medical training is actually not that big a deal. It doesn't affect buying houses or anything like that. So, you know, for us, it's a bit different. I think in America, having student loans is a lot more burdensome, isn't it?

Yeah, it's a big deal. I think you just made a lot of my readers or listeners very, very jealous. So let's talk a little bit about you. I mean, this is a financial podcast, you write a financial blog. Where are you at in your financial life at this point?

So for me at the moment, I had a bit of an epiphany three years ago where I realized that I was in quite a lot of this is not debt related to my medical training. This is debt that I accumulated kind of from university right the way through up to my when I turned 30. And it was more of a. For me, it was more lifestyle. It was, I'm a doctor, therefore I need to live a certain standard of living. And then you're overspending, and then it's kind of you're getting into that cycle of spending creep and your spending, spending more. And because you've got that status as a doctor, it's like, well, I'll always be able to afford to repay it, even though I wasn't really earning that much money. So for me, I'm now correcting the mistakes of around 10 years worth of overspending, which is quite a feat given how much I actually managed to accumulate. But I'm on the track to do it. Probably in the next two years I'll have it all paid off and then I can start start building my investments and my savings up. So I'm in that kind of transition period between, you know, getting rid of that kind of mistake that I made when I was in my 20s and then moving forward in my 30s with a much stronger position.

Very cool. For those who are just tuning in, we're talking to Dr. Nicky Ramskill, a doc in the UK who blogs@the female moneydoctor.com speaking of which, tell us about your blog. What's it stand target audience, and what are you trying to accomplish with it? Should men read it too? What about doctors? Should doctors read it?

Okay, so when I basically educated myself around all things personal finance, I was starting to notice in my colleagues and in my Patients kind of big money issues. So for example, I'd be in A and E and there would be a patient that needed six weeks off to, you know, to heal, broken leg or something. And they'd look at you and say, I cannot have the time physically off of work because I cannot afford to have time off of work. And that is replicated amongst so many different people that I've seen now. And it doesn't make for great healing, if I'm honest. You know, when you're worrying about whether or not you can afford to do something, you're not going to be able to heal properly. And I think there's a lot of stress and anxiety life likewise in my medical colleagues and also in other professionals. I've noticed that you're working all the time to pay the bills, but then you're also working to pay off debt and you're never really making any traction and you're never really making savings or investments. So that whole security of your future is also pushed back and back and back. And I think there's a huge problem brewing for people in their 30s and 40s. I think we're kind of a generation that have been kind of almost lost through a gap. So for me it was all about how can I write about personal finance in a kind of fun way that comes not from a financial expert, that comes from me as a community doctor looking at the things that I see every day, the things that worry people on a day to day basis to try and, you know, make their retirement, make their kind of their financial future, make much, much better so they can reduce their own stress and anxiety and improve their mental health. So my, for me it was about speaking to women because I've got a very strong kind of female background in female medicine. But men do read the blog too. I have had some male followers that have commented and spoken to me about it. So it's not like men can't read it. It's just that the people I've kind of generally targeted are women like me, essentially. So I initially hadn't been targeting at doctors specifically because I think for a long time I had this fear that I was teaching people to suck eggs. And I thought that perhaps I was one of the only doctors that didn't really get personal finance. So for me it was. I could speak to other people that are perhaps in the same position. But now I'm learning more and more through podcasts like yourself that there are actually a lot of doctors out there that don't know how to manage their money. And it's not just me. So I'm now looking to breach that gap and now starting to talk to my colleagues and just to get the word out there a bit more about how they can improve their own finances, which then in turn means that they're happier with more secure doctors as well.

Very nice. I appreciate you doing that. It's certainly an important mission. And docs just get so busy focusing on medicine that sometimes they. They don't have the time or don't put in the time to. To really understand their own finances. So despite their high incomes, they still do just as badly as Average Joe.

Absolutely, absolutely.

Now, I read one of your recent books, blog posts, and you talked about how to save money as a wedding guest. Do you think weddings have gotten out of control when a blog post like that needs to be written?

Absolutely. I mean, weddings have just become so ridiculous, in my opinion. I mean, not everyone's going to agree with me. You know, to a lot of people, it's a huge deal getting married, and I understand that. But, you know, when you see that people are spending least £30,000 on a wedding, that's literally one day to say you're getting married and you're having a party with your friends. That, to me is just such an excessive amount of money that you could then be putting towards something like buying your first home, you know, paying off debt, you know, all these other things you could be doing with that money rather than putting it onto a party. So when I started looking at that, I wrote a whole post around how you can save money on weddings. And I spoke to friends about it and how much they spent on their weddings, and it was a real eye opener. And then now getting into my, you know, mid-30s, I'm getting a lot of friends that are now getting married. And I've been invited to a lot of weddings in the last few years. And I read a post recently about how much people are spending on being a guest. And actually, when you think about it, it's a lot of money. You know, just on the day itself, you could be spending £200 if you are, you know, buying drinks, if you need to get taxis, if you need to take, you know, get a hotel room for the night, you know, even more if you're having to get a plane journey over to another country. So I joined a friend for a wedding in Mexico. Cost me over a thousand pounds just to be there for a week. I mean, we tried to make it kind of like a holiday while we were there as well. But that's a lot of money to ask of somebody to come and join for a wedding. So I think writing about being a guest and how you can make it cheaper for yourself absolutely is needed because more and more of us now are having to fork out so much more money to be able to, you know, watch our friends get married. It's just becoming a bit silly, I think.

Yeah, it certainly has. I saw a post the other day that was going around on Facebook about some lady that had asked the wedding guests to pay for the wedding itself. And I was surprised when they basically turned her down and her GoFundMe page didn't raise any money. But people certainly get pretty crazy about celebrating a special day, that's for sure.

Yeah. And I think it's, you have to remember that when it, when you actually boiling it down to its finest ingredients, it is just about you and your partner and getting married. And then the party is the nice bit that you, you have on the end. But you really don't have to spend huge amounts. It's, you know, no one really is going to remember what favors you had on the table and you know, what the food was like or anything like that. So to be honest, as long as people have got food in their stomachs and they've got lots of alcohol and the ones that I've had great times at, I don't really don't think it matters how much you spend.

Yeah, if you put enough alcohol in there, nobody will even remember the food.

Right, Exactly.

Let's change gears a little bit. Let's talk about saving for retirement in the uk. What's the social insurance program there like? I mean, ours is Social Security, which you basically pay into and anytime you have earned income and then get something back at some point after age 67. What is it like in the UK as far as retirement goes?

So retirement is kind of one of those strange situations where, where as I already kind of mentioned, people in their 30s and 40s kind of got lost a little bit. So for a long time there was no responsibility on the government to make sure that we're all paying into a pension. In our, you know, in our day to day jobs, we pay a small amount in national insurance and then as we build that up with time, the government will then give it back to us when we get to our retirement age. Now for many years the retirement age has been climbing. So for me, my official retirement age according to the government is 68 and that's probably going to get higher. That's a minimum I'd say at the moment, for me, and I'm only looking around 8,000 pounds a year if I stuck with a state pension. So that's kind of the bare bones of how much they would be willing to give you. And then beyond that, it was really up to the company that you worked for to get your pension organised for you. And people could opt out whenever they wanted to. In fact, most people had to opt in to get into a pension. And of course, when you see that it's £200 coming out of your pay packet every month, you don't want to do that because you can see that £200 going on childcare or other things that you need desperately right now. In the last few years, however, things have completely changed in that you have to opt out of a pension, so you're automatically enrolled into a pension as soon as you start working. The only issue I have is that they're only taking around 1% of people's salaries at the moment. I mean, obviously it depends on where you work. Some people are only doing the bare minimum. Other people like me working in hs, I have a lot more coming out of my salary. I have over 9% that I personally contribute and then my employer puts in more than that for me as well to make sure that I've got enough money at the end. So if you're only contributing around 1% of your salary, you're still not contributing enough and they're now pushing upwards. So from April 2019, basically, people will be paying around 3% as a minimum contribution. And what the financial industry are now worried about is whether people are going to start opting out when they're being pushed. So it remains to be seen how it will change, but my hope is that people won't notice the difference and they'll just keep paying into it. But we all know that not everybody thinks logically when it comes to these things. And if they need the money for childcare or whatever else they need, I can totally see people opting out of these things as they have to pay more.

You know, inertia is a powerful thing. Sometimes if you just force people to opt out, they. They just won't because it takes effort. So it's an amazingly powerful way to run a retirement program. So are these. These are traditional pensions that the employer is in charge of the investments and they provide a guaranteed benefit to the participants. Is that what these pensions you're referring to are?

So at the. Essentially, there used to be a thing where you got a guaranteed amount at the End and you it was based on your salary, so it was a final salary pension. It doesn't quite work like that now. It depends on who you work for. So like for the NHS for example, I get kind of an average payout at the end. So it's not whatever I'm on my final salary on. It's over an average of the time that I've been working for the nhs. So it very much depends on who you work for. Most people will end up with a lump sum. They can then decide, decide what they do with. So you actually can take 25% out, you can do what you want with it. A lot of people reinvest it or they do something with it. Some people will pay off debts they still haven't paid off at that point. Other people might decide to downsize their property and that kind of thing. So things are changing and I suspect they will keep changing as time goes forward. But at the moment it's generally you have either the option of taking a lump sum or, or you get like a kind of a monthly amount that you can then use for your pension. But what often happens is people don't really know that because they're not finding out their statements, they're not getting them sent to them. So they don't really know how much they've got to retire on. So there'll be a lot of people that will just be hoping and praying that they'll have enough money at the end, to be honest.

Do you also have any sort of retirement accounts, tax advantaged investment accounts that you can use for retirement like the 401ks or the IRAs that we have in the United States?

Yeah, so we've got an ISA and it's basically what an ISA is. It's a tax free amount that we're allowed to allocate however we like. So there's quite a few different ISAs available. So you can have purely a stocks and shares ISA where any money you put into it is tax protected and then any money that is accumulated in the stocks and shares is also tax protected as well. You've also then got other types of isa. So there's one that's called the lifetime isa, which is what people can use for first time property payments. So if they have an amount they've saved up, the government will match up to 20. I think it's 25% from top of my head. But essentially that money then can be used to put down a down payment on property or if they don't want to do that they can then keep it. And that could be another retirement pot, if you like, at the end. But when you are putting together all of these types of ISAs, you're only allowed up to £20,000 in a year. So you've got the stocks and shares version, you've got a cash version. There's this property one that I've just spoken about and you've also got a kind of child's version as well. So you can put one in for your child right from, from an early age, so you can build up an amount of money for them as well. So it's quite flexible in that sense. But you've got some restrictions in it, so you can't obviously do everything. You can't have more than say, two of these things because you'll push yourself over these allowances. So you have to kind of decide how you want to allocate your £20,000 a year. For most people that don't have that money in the years, it makes no sense. But yes, there is that nice tax free lump sum that we can all utilise if we want to every single year.

What about if you want to get some investing advice, you want to hire a financial advisor. What does that cost in the uk?

So it depends on how the financial advisor wants to be paid. Often the advice is that you shop around and you ask the question, question, you know, how do you like being paid? So some will actually charge kind of like an hourly rate. Could be anything from £75 an hour. Plus, you know, in one website I looked at up to 350 pounds an hour if you want to do that. Although they do say the average is around 150 an hour. You could have a financial advisor that just charges a set amount for whatever it is they're doing for you. Some want a monthly fee and some want an ongoing fee. So they'll take a percentage of your investment pot or whatever it is you've got with them, and that might be 1 or 2%. The problem is that a lot of financial advisors won't take you on unless you meet a certain threshold. So there is quite a big pool of people out in the UK who would not be able to access a financial advisor because they simply just don't have enough assets for them to manage for them. So they're just left to kind of deal with it on their own.

Now we have a bit of a problem in the United States with commission salesmen masquerading as financial advisors. They basically call themselves financial advisors, but the way they're paid is with commissions off of mutual funds or off of life insurance products, for instance. Do you have that same problem in the uk?

Used to, but from what I've been led to believe now actually the that's not allowed anymore. So that's actually been stopped. Obviously it doesn't stop a lot of companies from charging fees and things like that on top of what they're already putting into the pot for you. So if they've chosen not a passive fund, but they've chosen somebody to do an active managed fund for you, that person gets their fee and then they're also then charging the financial advisor's charging a fee on top of that. So even though they don't get their kickbacks, they will get their money elsewhere. So they'll get it through their regular fees or how much they charge you to put together your portfolio. So yeah, it's not quite the same way in this country from what I've been told from my financial advisor colleagues.

It seems a little more transparent anyway.

Absolutely.

So are low cost index mutual funds available in the uk? I mean, how do you invest when it comes time to buy some stocks from the UK or stocks from the US for that matter?

Yes, so these are my favorite type of investments actually. So we've got index trackers, exchange traded funds, the same as you do. We can use online brokers for it. So I use an online broker called Hargreaves Lansdowne. There are loads more out there. But essentially I can pick and choose what I invest in and I can choose the S&P 500 if I wanted to and put it into my, my portfolio. And so I can have a nice coverage of both the UK and of America. So yeah, we definitely have low cost, you know, passive index trackers that we can invest in as well. And you know, you can start from £25amonth and you can build it up that way or you can invest lump sums. It's very flexible. You can decide which way you'd like to go depending on your financial situation.

Do you have any idea what the expense ratios are on those exchange traded funds?

So for the ones that I'm in, they're very, very low, you know, 0.08%. It's that kind of, we're talking that kind of ballpark. And that's my criteria for picking a fund in my portfolio. It has to have a very, very low ongoing charge. Basically. I have seen some of the active managed funds recently. I was looking at a couple of ethical investments because that's Becoming a much bigger deal now, I think for people in the uk, maybe in America as well, I don't know. But they're a lot more expensive at the moment because I think, because they're new and the demand is not necessarily there yet. So you're looking at normal 0.9%, 1%, something like that for those kinds of funds. So I always try and keep it, you know, as low as I possibly can. And if I can get it around the 0.08% figure, then I'm happy.

You're saying 0.8%, not 0.08%. Huh?

That's what I mean.08%.08%.

Okay. All right. Yeah, that's about the same price of what we're paying in the, in the United States, my understanding was, and perhaps not in the UK so much as in other parts of Europe that it's just very difficult to find low expense ratio mutual funds. I've seen a few people on US based forums coming from Europe that have had a lot of trouble finding inexpensive mutual funds. Is that all relatively new change in the last few years?

Not really sure I can speak for Europe, but from what I have been seeing is that there's been a huge gathering would be huge explosion, I guess, of mutual funds. So, you know, you've got Vanguard, for example. I mean, I know you've had them in America as well and you've got these, they're huge. Now as people, when you talk about index trackers and mutual funds, people say, oh, you know, Vanguard. So yeah, I think it's becoming more of a thing certainly for, you know, as long as I've known about it, for the last three years at least, it's been a thing. I'm sure it's been like that for a lot longer than that before I was even aware of how to invest in stocks and shares. So maybe it's different in Europe, but it doesn't feel like there is a restriction in the uk. It might be that the access they've got is difficult. I mean, with Hargreaves, Lansdowne, I've got access to so many options. So maybe the problem is that there's a restriction on what they're allowed to invest in from their own country. That might be the problem.

That may be the case. I just don't know enough about it to really say much more on it. But it sounds like you're set up pretty well in the uk. You've got a lot of great options, you've got some nice tax advantaged accounts to use, you've still got a pension system in place and there's some social insurance in place. It sounds pretty nice.

Yeah, I mean, I think so. I think we've actually got a really good system set up. You know, people are cared for if they have a problem. There have been issues lately with the change in how benefits work in our country. So people being switched over from their usual benefit system to what's called universal credit, which is basically just one size fits all. And unfortunately payments have been taking their time to get through to. There's been multiple issues with technology and all that kind of thing. And unfortunately some of our poorest people are becoming massively affected by it, having to use food banks more and more. So even though we've got all these great sort of tax advantaged accounts and pensions and all those kinds of things, the poorest of our country are still really struggling and if anything, things are getting worse for them. I know of a few colleagues, you know, that I've worked with who have had to use food banks and that's where you have a parcel of food given to you which will last, you know, one to two weeks and that's, that's it, that's what you've got to live off of. So I think for the poorest in our country, I think things have got a lot of improving to do and it's largely down to a change in government, I think, although I don't want to give, get into the kind of politics of it, I certainly think that there's a lot more emphasis on people looking after themselves rather than living on government handouts, certainly the way that it comes across. So it remains to be seen really how this universal credit system is going to work for people. But certainly at the moment it seems to be a bit of a shambles and a bit of a mess.

Yeah, I think the political changes in both countries have had some similarities the last few years as the pendulum seems to swing back and forth between progressivism and conservatism as it probably has done for millennia. All right, we're starting to run out of time here, but I wanted to give you a chance to ask, you know, what else do you think physicians and other high income professionals in the US basically the audience of this, of this podcast should know, but don't know.

Yeah, I've been thinking about this question. I think for me, I mean, coming from a doctor's perspective, I think spending creep is one of the biggest things that people need to be aware of. And I'm sure the People that are listening to you are actually really savvy when it comes to this, but maybe not. I think professionals are extremely guilty of spendcreep. We start working in our professional lives and we think that we have to look the part, drive a particular car, live in a particular neighbourhood, have, you know, a certain size house to look successful, look like we're actually doing a good job. And actually this is one of the biggest problems because then we get stuck in this cycle of having to pay more for things that we don't really get huge amount of benefit or joy from. Then we get ourselves stuck into this system where we have to work to be able to pay the bills and the credit cards and all these kinds of things and we're not taking care of our futures. So for me, I think it's very important as a professional to guard against that as much as possible and to encourage others not to do that as well. You know, we don't have to wear a particular outfit or carry a particular bag or something like that in order to look like we're doing really well. It just, it just shouldn't be like that. So I don't know if that's something that you have spotted in people as well or whether you think that's getting better, but I certainly still see it around me.

Yeah, I think it's. It's an ongoing problem for docs and really for everybody, but docs just have the income to make the mistakes in a much bigger way, I think.

Yes, I agree with you. I think the more money you have, the bigger the mistakes come. So, yeah, agree with that one.

Well, Dr. Ramskill, thank you so much much for being on the podcast today. Those who would like to read more of her writing can find that atthe female moneydoctor.com and I really appreciate you taking the time out and I know it's middle of the day here, but it's a little bit later in the UK and I appreciate you staying up late and talking to us tonight.

No worries at all. No, it's absolutely fine. It's been great. Thank you very much.

Thank you. I hope you all enjoyed that as much as I did. I thought that was wonderful to have somebody from another country that's to going not only a physician, but also interested in finance on the show. So I hope that was great for you. I always enjoy talking to Brits just because I like the accent. We've got a new thing going at the White Coat Investor. You can actually call in using your computer and leave us a question that we will play on air and then answer. You can do this by going to www.speakpipe.com white code investor. If you don't want to remember that, just go to the White Coat Investor podcast page on the main site and there's a link right up at the top that you can click on and record your own message that will be used on the podcast. Now don't use that to send us feedback or to send us hate mail or anything like that. I think we only get like 20 of them a month. But if you actually have a legitimate question, write it down and read it so it comes out the way you want it to and we'll use it on the podcast and and that'll be a lot of fun. I think to get some more fresh voices on the podcast.

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My dad your host, Dr. Dahl, is a practicing emergency physician, blogger, author and podcaster. He is not a licensed accountant, attorney, or financial advisor, so this podcast is for your entertainment and information only and should not be considered official personalized financial advice.