7 Money Mistakes Doctors Make (and Regret Later!)

You've got to invest in yourself first. Understand what you're investing in. I expect you to read at least one book every year. One book, One good financial book. Someone reached out to me. It broke my heart. Lost like almost £7,000. I know a consultant who also, before they joined the community, lost almost £100,000 in real estate investments abroad. Look, you know all those guys are approaching Dubai. I was approached too. Last time I was in Dubai, they even provided me with a lovely limo. They gave me free tickets to go to the safari. Why? They wanted to send me some real estate. Stayed in Dubai. I enjoyed everything they offered. But when they found out I wasn't going to invest any money, they got upset. They said, okay, it's fine, you can enjoy. By part of the reason I was able to say, oh, I'm done with salary, job, paid job. Okay, good, I'll be fine, was not just because I had a lot of faith myself. Of course I have fit myself. But part of it was because I had an emergency fund. Now, several steps to take before investing. We've already mentioned some of them. Can someone who is feeling quite confident or if you remember any of them, write them in the chat box for me? Any of the steps you remember? I'm just going to be looking at the chat box. There are seven steps we suggest that you take before you start Investing. Money wise Dr. There are lots of people who attended our four weeks deep dive. So we had this four weeks program that is just investing. We start from the beginning. Some people who join this program, they are absolute brand new novices, never invested in their life. And at the end of they've learned how to invest and some of them are ready, they start investing. Some have to wait. Why? Because they've not completed the seven steps. So this is there he said have an emergency fund. Excellent. Okay, I'm just, just for time, I'm going to run through the seven steps. I've already given a lot of rationale to say before you start investing, you need to set the background right. You need to make sure that things are the right place. You don't want to start building a house without foundation. So number one, we've already talked about it a lot, have your emergency fund. And to give some context, I said a part of the reason I was able to say, oh, I'm done with salary, job, paid job. Okay, good, I'll be fine. But why I was able to do that was not just because I had a lot of paid myself. Of course I fit myself. But I also Had a one year old and a wife who was going to ask me to explain a few things, you know, and he had a mortgage and all that stuff. Part of it was because I had an emergency fund. I had like a decent emergency fund. So emergency fund is like your cushion. What is the emergency fund? Three to six months worth of your living expenses. Three to six months. Now people have asked me on the YouTube channel and in different platform. Are you saying three to six months of my. Yeah, thank you. Are you saying three to six Months of my salary? I was like, no, not them. Your living expenses, Your salary is 4,000, but your living expenses is 2,000. Your emergency fund is 2,000 times 3 or 2,000 times 6. Or in my case, if you haven't got a job, you haven't got a pension, all that stuff. 2000 times 12, just what makes you comfortable, what you're happy with. But for most of you here who've got a regular salary, job and you've got NHS pension and you've got all of that in place, three months might be okay. I even know people who've got a month and then they start trying to build it up as they go. Especially I've had some friends who basically in the community who started with a month, then paid off some debt and then came back and built it up to three months. But the emergency fund is basically your cushion before you start investing. That's step one. Okay? Now step two is obviously what you are doing now. Invest in yourself first. Investing in your education. You're learning how to invest. You're not letting people tell you. So many people are losing so much, it's unbelievable. I get all this after my last investment master class. Someone reached out to me. It broke my heart. She lost like almost a £7,000 just from someone said, oh, there's this crypto stuff you can do. Open the account. The funny part is that she didn't even know anything about crypto at that point. But the person opened her account, put in £100, okay, don't worry, to clear it, put in another 500 and all that. And these scams are old, they are not new. They've been around, they just sort of change pattern. And for some people it's not even a scam. They lose money in legitimate investments because they don't understand it. I know a consultant who also, before they joined the community, lost almost a hundred thousand pounds in real estate investments abroad. Look, you know all those guys are approaching Dubai. I was approached to last I was in Dubai. They even provided Me with a lovely limo. They gave me free tickets to go to the safari. Why? They wanted to send me some real estate in Dubai. I enjoyed everything they offered. But when they found out I wasn't going to invest any money, they got upset and they said, okay, it's fine, you can enjoy by. I'm not saying you shouldn't invest in real estate in Dubai. If you understand Dubai and understand Dubai real estate, I think it's the best place you can get the best returns risk free or risk adjusted, go for it. But if not, why are you, why are you investing? Someone says like, like a few years ago someone approached me to buy bonds in Austria. Like, I don't know Austria. I don't understand the market in Austria. The returns might be better than the UK returns. Why do I go and invest in there? Let me invest in what I understand. I've invested in a few markets I understand in different countries. The same with you. You've got to invest in yourself first. Understand what you're investing in. That might mean reading a book, that might mean attending a seminar, that might mean attending a course. And for some of you, like those in the, those have already booked the four weeks deep dive or those in the Mastermind, that is their own investment. So you're investing in yourself first. And for you as a doctor, healthcare professional, you're very busy, you have a family. I don't expect you to read 57 books like I read last year. I don't know who is counting anymore. I don't expect you to read that many books on different things. These are my interests. I read on economics, history and the rest of it. But I expect you to read at least one book every year. One book, one good financial book. You can make it even if you don't read it. You can do it through Audible so you can read if you don't know where to start from. I've made a list of 12 books and everyone who is in the Mastermind gets a book from me. Especially those that were in the first 10 that joined the last time. They get like a personal finance book. You've got to read this book this year. So within one book, attending one seminar, I'm following a newsletter or podcast or something every week that can just give you little bites of information. Oh, look at what has changed in taxes.

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Like some of you aren't aware that your pension has now become part of your estate for inheritance tax if you live beyond 75. So this is a change that happened in October, Halloween last year and most people didn't know about it. And the conference recently when I mentioned some of the consultants very senior were very surprised. Yeah, but these are things that we write about in our newsletter. In our podcast is a five minutes quick read. So one book, one newsletter or one podcast or even somebody following YouTube, wherever or a blog and then one seminar. One book, one seminar. That way you can invest in yourself. That's step two. Step three, Conduct a personal financial audit. If you don't know how to do a personal financial audit, I'm going to share a link. That's money wise Dr. Quiz. You can actually go and do a quiz. It's a personal financial audit. It goes through basically areas where you can check am I, am I making a financial mistake here? Are you financially healthy? You take the quiz. It takes three minutes basically. And you can go through it. Okay. Yeah, I can see someone. Yeah. Thank you. He has already shared it. So moneywise doctor quiz. You can do a financial audit to check before you start investing. This is one of the steps. Remember step one, we said your emergency fund, then invest in yourself. Then step three, do a financial audit. You might find out in the financial did that actually you have a credit card that is 27% interest? I think no, I need to pay off that 27% interest because even if I invest and I get 20%, I'm taking a risk to get the 20%. Meanwhile, if I pay off my credit card, I get 27% immediately. So you need to do an audit. So go through it to say, okay, have I claimed my tax relief? You're rushing to invest, but if the government is owing you £10,000, because if not, claim tax relief for five years or, or more than that, then you want to get that Risk free money. That might be the money you need to invest actually. So these are a few areas to look at. Okay. Now number four, obviously we mentioned it. Establish a financial defensive strategy. So you're looking at things like income protection, life insurance. We, we hear too much now of people who die and they don't have a life insurance in place and their family is suddenly struggling. Remember that life insurance, you want to make sure that you put it in a trust. Again, talking about tax, if someone passes on, unfortunately their estate as a whole, they are liable to inheritance tax even though they've paid tax on all their income. Now if the person passes on then the government to say you need to pay 40% inheritance tax. Did you know that? If you knew that, can you give me a thumbs up? Let's count. Okay. So out of how many hundreds of people here? 190 at the moment. A few people know that. Good. I, I, I, I can see very familiar names, some who have been in our community of former previous seminars. So if you're estated up to 325000 pounds, you've got to pay inheritance tax and 325 000, it's not a lot of money if you've worked as a doctor for the, for a number of years. If you buy a property, your house is worth maybe 250 or 400k, you've already crossed 325, you have a life insurance and it's 300, 300k or 500k, merge it together, your pension, before you know it you've crossed 325k. And if a couple is 500k, so you can assume that, okay, you're going to be liable. Your estate needs some sort of planning point here. Dance tax. Now if taking out the life insurance, I mean none of us is hoping for this but let's just say someone takes out a life insurance, they are paying 20 quid or 30 quid and unfortunately if the person passes. So I'm not talking an abstract here. Some of you that know me know I lost a friend of mine last two years. He died at 36 years. Childhood friend, lovely guy, surgeon in London. We've been friends since we are teenagers and he just went to bed, he didn't wake up. So it's not like I'm not, I'm not just talking. Oh, assuming this happened and that happens, and even when that happens you might be able to raise money and all that but how much do you really raise my risk? 30k or 40k. But imagine if There's a life insurance in place for 500k. The family gets this 500k. But if the money was just a regular life insurance and it was not placed inside the trust, obviously the government is going to need some of it as inheritance tax and inheritance that is 40%. But if it's placed in a trust, the trust is like separate from you. Just like I work. If you work for a limited company, the limited company ends income, but it's separate from you. So the trust could actually be in an equipment or a tool to hold that life insurance so that it's not part of your estate. And if the person passes, I hope this doesn't sound confusing, but if the person passes, their family gets the whole 500k and is not considered as part of their estate.

Now this is very crucial topic. Have you secured your family's financial future? Many times you're busy as doctors and healthcare professional, that's fine. But if we overlook our life insurance and income protection until it's too late, you're taking a bit of a risk here. I mean, nobody can predict the future. You need to protect what matters most. Think about life insurance and income protection. This is really quite important to protect your most valuable assets. Now, if you're not sure about what you need or how to go about it, check the link in the description. I have a free guide that can help you step by step. Let's get back to the episode.

If this is the only thing you learn, this could actually be worth like 200, 300k to some people, basically. And most people don't think about it till it's too late. Okay? Yeah. So it's really important. If you've got a life insurance, go back and check is it in a trust? If it's not in a trust, then you need to be speaking to whoever that set up the life insurance for you to ask them. Okay, how do we set it up in a trust? Or think about speaking to an insurance advisor who can actually help you to to check the market, make sure you got the right deal and then put it in a trust. Okay. If you're not sure if you need any help in that regard, send us a message@SupportMoneywise, Dr. Dot, or again chat our WhatsApp number. Okay. Right. So that's financial defensive strategy. Financial defensive strategy includes things like your emergency funds, your life insurance, your income protection. Some of you might have seen the podcast with them. Dr. Roots, Dr. Ruth Machine was a radiology consultant too. On Christmas Day 2020. Sad news, Christmas Day suddenly developed optic neuritis and couldn't now work as a radiologist. I mean, it's five years now. She's not been back to work as a doctor. Fortunately for her, she said to me on the podcast, she had this income protection, which meant that they had to be paying her every month as a consultant, even though she was no longer working. I mean, it ended beautifully. She's retrained as a health coach and she's striving. But she said to me that they could have actually been in danger of losing their house because she was a consultant, her husband was a radiographer, obviously had an income, but they had a big mortgage and she was earning more money. So basically, these are all the financial defensive strategies we ask people to think about before jumping into investing. Number one, invest in yourself, have an emergency fund, then have your financial defensive strategy, including things like life insurance, income protection, and if you're a doctor, healthcare professional. Of course, I don't need to tell you about mdu. MDD us. These are all protection so that even if someone sees you, someone, Susie, it doesn't be the end of your journey. It doesn't mean that they're going to get wiped out. Okay, right now these are some of the steps. There are a few other steps, like eliminating high interest depth. I've mentioned it. Define clear investment goals and educate yourself continuously. These are some of the seven steps. You can see UD from my team clearly show someone climbing up the staircase one at a time. Before we proceed, I. I think we are running over a little bit on time here. Before we proceed, has anyone got a question around the seven steps? Yeah, hi. So my question is around the isa. Sorry, I'm taking you back. So, yeah, so assuming I open an ISA for my child and he's now 18. Yeah. And. And God forbid, but anything could happen and this child becomes incapacitated, what happens to the money? Okay, so this a bit nuanced again. We're not hoping for that to happen. And yeah, I don't know if you mind me sharing that because you share the. She. She's part of the mastermind, and she also attended investment master class. But she said she watches my videos with her son. Yeah, yeah. Look, sometimes I don't feel like making these videos, but sometimes I get this feedback. I'm like. And. And you did save a bit of money on tax as well. A lot of money. Thank you. I know you're a private person, so I'm not. I don't understand the exact amount, but it's a lot of money. But again, very proud of the journey you've come on so far. I'm very proud. I. I always use it as an example that you don't really need to know everything you can just start from are. And you are a consultant. They're busy already with work and everything. But giving that background, I'll say if a child becomes incapacitated, this is not a usual circumstance. I suspect you'll be able to do something about the lifetime isa. Sorry, the junior isa, you should be able to assess it because remember that there's something called nest of kin and some people have power of attorney. So you can set up power of attorney. If a child that is less than 18, automatically they will defect, defer to the parents. If the child is above 18 and they're not married, they will defer to the family as well. If they are married. If a child above 18 or we not call them a child anymore. Right. But if someone is above 18 and if they are married, then their spouse, if they're married or even if they're not married, they've got like. I'm trying to remember the term, you've got someone who lives with you, your partner, civil, that. Civil partner or something. Civil partnership.

Yeah.

So that civil partner will also be in a position to, you know, get access to it. Yeah, but these are nuanced situations and these are situations that would obviously involve a bit of them involving, I'll say, not a lawyer per se, but you should be able to write to the bank, say this is what's going on. But usually if the child is terminally ill or dead, then the lifetime is that the parents should be able to assess it. It's very grim. But you know, if you don't have these hard discussions, and I'm glad you're talking to medics here, so you're not used to having difficult conversations and it's better to have the hard thought think about these things rather than being caught on a word. Well, I hope you found that helpful and more importantly, I hope it helped you to see investing in a new light. This is just a small section of what we cover in the Flow masterclass. If you like me to drop more of these clips, just let me know in the comments. Comment, invest and share this video as well with friends who may need to hear this. And if you are ready to stop winging it and guessing, guesswork is not good for investing. If you want to learn how to become a confident investor, to learn how to invest properly, check out our investing readiness scorecard with the links in the description to help you determine whether you're really ready to start investing and what you need to do before you even start thinking about investing to reduce the chances of you losing money. And until then, see you soon. Bye bye.