Buy To Let vs Index Funds — Which Made More Money Over 25 Years? (Real UK Data)

So you've got a bit of money, you want to invest long term, you don't want to leave it in the bank because you think inflation is going to erode the value, and you're thinking, should I put this money in the stock market or invest in buy-to-let property? Which one will give me a better return over the next 20 to 25 years? Hey, hotly debated topic. Most people who debate this topic do not have the actual numbers in front of them. They just have opinions, gut feelings, what worked for their cousin or their uncle in 1995, or what their colleague did, or Maybe what someone on TikTok or social media said works better. Very few people have sat down and looked at the real data, the mortgage rate, the real tax treatment, the real cost, the real exit. Because who has time for that? I do. So I did it. I had nothing better to do. So I spent time crunching the numbers properly. 25 years of UK, real UK data, real house prices, house price figures from the HM Land Registry. Real rental income bands, real tax calculations, including a rule change in 2017 that most landlords wish never happened. And of course, the capital gains tax bill that arrives when you eventually try to access that money at the end. I'm going to share everything with you today, and I promise you, the part that most people leave out of this discussion is the part that changes everything. Before we get into the numbers, drop your answer in the comments right now. I want to know what you think. What's your own opinion? BTL, buy-to-let property, or the stock market? Which one will do better? Which one do you think wins over 25 years, 20-25 years of investment? Tell me below. We'll come back to that comment. We check all the comments later in the video, and I'll see if your opinion changes at the end when we finish looking at the numbers. But before we go any further, if we've never met, I'm Dr. Andy Egwim. I'm the founder of MoneywiseDoctor.com. Moneywise Doctor is a financial education platform that's built, that is built for doctors and high-income professionals, has helped thousands of doctors avoid costly mistakes and make smarter financial decisions. I started investing at 19, over 2 decades across stocks, property, companies, other people's businesses as well, startups. And, um, I've witnessed 3 crashes, stock market crashes. I've made mistakes, learned from the mistakes, built my own system that helped me reach financial freedom and leave my 9-to-5 4 years ago before I started The Moneywise Doctor. Of course, my book The Moneywise Doctor has helped thousands of doctors make better financial decisions, became an Amazon bestseller on investing and personal finance. Link is in the description. Before we forge ahead, quick, quick disclaimer: I'm not a financial advisor. I'm not here to sell you any products. Everything I share here is financial education. It's designed to help you understand your finances better. I'm not going to tell you what to do, but you're going to get clarity. If you've not subscribed yet, come on, what are you waiting for? Go ahead, do it, hit that subscribe button and the bell as well so you do not miss what is coming on this channel. I will just wait a few seconds. So, okay, let's do it together. Great. Now let's get into it. Here's what prompted this analysis. I didn't just wake up and say, I want to find out which one will do better. So I have got a community, the Moneywise Doctor community, where over 1,000 doctors come together on their journey to financial independence. So a senior NHS doctor in that community shared something that stopped the whole thread of discussion. She said, years ago, I bought a property for about £100,000. I put down £10,000 deposit. I have been renting it out ever since, paying down the monthly mortgage month by month. It's now worth significantly more. On the surface, it looks like a good decision. It's over $200K now. I recently attended the Moneywise Dr. Investing Academy and learned more about investing in the stock market, particularly index funds and the ISA wrapper, SIP. And I started wondering, what if I had taken the same $10K deposit and invested it differently? What if instead of a buy-to-let, she had to put it into a globally diversified index fund inside a stock and shares ISA? And what if every month, instead of a monthly mortgage payment going to the bank, that same amount had gone into her ISA? So we use ISAs to keep it simple. What would the numbers look like today? She did not have the data, neither did most of the doctors in the thread. So I decided I'm going to take a bit of time and run it properly with real numbers, real tax treatment, real cost that most comparisons conveniently leave out. So before you make any investment decision, this tax year, start by understanding exactly where you currently stand. Most doctors have never had a proper financial health check, not because they're not interested, but because nobody had ever, you know, designed a tool that helps to make sense for the specific complexity of doctors' financial life. So I made one. It's called the MedScan Financial Health Score. So it takes about 3 minutes, it helps you to look at your overall financial position across 7 key areas including tax efficiency, pension, investing, debt management, and financial protection. It gives you a clear score, a breakdown of exactly where you are, where the gaps are, and it's completely free, takes 3 minutes. So if you head over to moneywisedoctor.com/medscan, or you can check the link in the description to get it. It's 3 minutes, Real clarity, free. And hey, if you want to go deeper into investing tax efficiently, if you want to understand how to build a strategy that uses the ISA and the SIP in the right combination, understand investing, the core stuff, um, yeah, I'm running a free masterclass. Basically, we're going to look at investing, look at SIP, ISAs, NHS pension, how to combine them. It's going to be a free investing masterclass for doctors. Now, over 1,800 doctors have already attended previous masterclasses, and we've had hundreds of testimonials. If you want to attend, you want a free ticket, I've got one for you. If you check the link in the description, you can click to get a free ticket to attend my next free investing masterclass. It's 90 minutes. We're going to learn what medical school didn't teach us and what many doctors have spent so many years trying to figure out. If you head over to moneywise.com/masterclass, You can grab a ticket there or check the link in the description to get one. So if you had £10,000 to invest in January 2001, 25 years ago, and you had to choose between buying a buy-to-let property or investing in the global stock market, what would each path have looked like by January 2026? So 25 years later. Of course, I know past performance does not predict future outcomes. We know that. What we are looking at here is real historical data, what actually happened, and we're using it as a framework for thinking about these decisions going forward. Okay? So come along with me. I think this would genuinely change how you think about this question and give you a better perspective. Now let's use two people. For example, meet Bayo and Gloria. To make this concrete, I want to introduce them to you. Dr. Bayo, who's a surgeon, Dr. Gloria, who is a GP. January 2001, both have worked hard and saved carefully. Both have exactly £10,000 ready to invest, about to make very different decisions. Dr. Buyer decides to invest in buy-to-let property. He uses his £10,000 as a 10% deposit on a £100,000 residential property. He takes out £90,000 repayment mortgage. So the average buy-to-let mortgage rate in January 2001 was 5.8%. Sourced from historical UK mortgage rate records. At that rate, his monthly mortgage payment comes to £569.25. Okay, so Buyer rents the property out from day one. He never lives in it. He's a landlord for 25 years. Dr. Gloria, on the other hand, takes a completely different path. She puts her £10,000 into a stock and shares ISA and invests in the MSCI World, a globally diversified index fund tracking companies across 23 developed markets worldwide. Apple, Microsoft, Nestlé, Toyota, LVMH— thousands of the world's best businesses all in one fund, okay? Globally diversified. Then every single month, the same £569.25 buyer pays for his mortgage will be invested in an ISA, okay? Same starting capital, same monthly commitment, same 25 years. The only difference is the vehicle, okay? The same about £570 £1,000. One important point, both Bayo and Gloria are paying rent or mortgage to live somewhere else. Okay, that cost is identical for both and cancels out entirely from the comparison. We are comparing one investment decision against another— buy-to-let versus a global index fund inside an ISA, nothing else. They live elsewhere, right? So let's start with Bayo, the surgeon, buy-to-let, the property. Let's slow things down a little bit. Buyer bought it for £100k in January 2001. The UK national average house price at that point was £79,663. So by January 2026, it's risen to £268,421. So a growth rate of 237%. Applying that same growth rate to Buyer's £100k purchase price, his property is worth approximately £336,940 by January 2026. Let's call it £337,000. £90,000. His mortgage was £90k at 5.8% over 25 years. He was paying about £570. He's made 300 payments. It's fully paid off. He owns it outright. On the surface, Bio looks good. A property worth £337,000, fully paid off after 25 years. He's done well. But this is where we need to slow down because the surface number is not the real number. The rental income— remember, he took some rental income. He's a landlord. Right, over 25 years by your collected rent. He's using real— so if you use UK market rental market data across 5-year periods, because the rent did change over time, in 2001 to 2005 average £450 per month. So in 2006 to 2000, um, obviously 2010 is different, and all the way to 2021 to 2026 average was £1,280 £1,000 per month. So the total gross rental income he collected over 25 years was £235,200. You can check the numbers yourself. That sounds impressive. Now let's look at what came out because he spent some money to do that. The cost. First, letting agent fees. Bayo is a surgeon, he's busy. He used a professional agent to manage the property. At 10% of gross rent, he paid the agent £23,520 over the 25-year period. Second, maintenance and repairs. Boilers fail, roof needs attention, bathrooms, kitchens wear out. Using 1% of property value per year, indexed to UK CPI inflation of 2.54% per year, you spend £44,850 over the 25 years. Third, mortgage interest. Total interest paid on the £90k mortgage at 5.8% over 25 years, £85,705. Four, the One thing most people forget to talk about or don't even think about in their calculations is tax. So Section 24, the rule that changed everything, is one thing you need to pay attention. Before April 2017, buy-to-let landlords could deduct their full mortgage interest from their rental income before calculating their tax bill. Generous, particularly good to higher-rate taxpayers. Then Section 24 of the Finance Act came into effect, April 2017, I still remember, mortgage interest rate relief was restricted to the basic rate of 20% only, regardless of the landlord's actual tax rate. So if you're a high rate taxpayer, you are losing here. For a high rate taxpayer like Bayo the Surgeon, paying 40% of income tax, this was devastating. Effectively, the government removed 20 percentage points of tax relief overnight. Bayo now pays tax on income partially used to service his mortgage. He pays tax on money he has not actually kept. So if you calculate it across both periods, full relief before 2017, restricted relief from 2017 onwards, Buyer paid £34,690 in income tax on his rental profit over 25 years. So the rental income summary: gross rental income is £235,200 minus letting agent fees of £23,520, that's 10%, minus income tax of £34,690. £46,850 minus maintenance of £44,850. So final figures, aka net rental income after all costs, is £132,140. 43% of his gross rental income was consumed by cost and tax. Let that sink in. Almost half of it rent, rental income, tax, and cost. So buyer collected £235,200 in rent over 25 years. After cost and tax, he kept $132,140. This is based on the assumption that there were no periods of vacancy, no void periods at all. Of course, that in reality could be an issue. There could be periods of vacancy. So Buyer still has his property worth $337K, but he cannot access those gains until he sells it, right? So in a few minutes, I will show you exactly what happens when Buyer tries to access his money by disposing of that property to get his money, his capital gains. Now, that is the part that takes most buy-to-let landlords by surprise. The capital gains tax. We'll come to that. But first, let us see what Gloria was doing during the same 25 years. What has she been up to? Gloria, Dr. Gloria, let's just switch lanes entirely. While Bayo was filling self-assessment returns, chasing rent arrears, Managing the agents, managing his property, and absorbing the shock of Section 24, which came in in 2017. Basically, he was dealing with what we call the 5 notorious T's of real estate. Again, I've got nothing against real estate. I've got real estate myself. Tenants, toilets, termites, taxes, and trash. What was Gloria doing in the meantime? Nothing. Well, almost nothing, and I mean that in the best possible way. So let's look at Gloria's setup. January 2001, 25 years ago, While Buyer was excitedly picking up the keys to his buy-to-let property, he's now a landlord, Gloria opened a stock and shares ISA. Okay. She put £10,000 in from day one, the same 10K that Buyer put in as a deposit for the house. She chose one simple passive fund, the MSCI World Net Total Return Index. It's a globally diversified fund tracking thousands of companies across 23 developed markets. Then she set up a direct debit from her bank, £569.25, so almost £570 every day on payday, automatic, the same amount I was paying for mortgage. She did that every month, sorry. So what happened the early years, 2001 to 2003, she just put in this money every month. Let's be fully transparent and honest, when you look at the number, the early years were not easy to watch. Were quite rough. So she started in January 2001. The dot-com bubble had just burst. Scary time to be investing. Technology stocks, which had been driving the market to extraordinary highs, were collapsing. The MSCI World Index fell significantly in 2001, 2002, and 2003 as well. So if Gloria had checked her eyesight in early 2003, she would have seen that it was worth far less than what she had put in. So what should she do? What did Gloria do? She did nothing, absolutely nothing. The same thing, the same £570 every month by direct debit. She did not panic, she did not sell, she did not redirect her direct debit into a savings account to say, oh, let me watch the market. She did not hand the money to her cousin, the one who has fantastic million-pound ideas every summer. Every single year. No, she kept things simple, dull, boring. £569, almost £570 every single month, through the losses, through the headlines. And because she kept investing during the downturn, she was buying more units at lower prices, units that would benefit her enormously when the recovery came. Now, the middle years were between 2003 to 2015. Obviously, that 12-year period, markets recovered in 2003 Gloria Dyson began growing steadily, quietly. Then 2008 financial crisis, global financial crisis. This was not an easy period. The worst crash since the Great Depression of 1929. I still remember it. I was in medical school and I was an investor. Global stocks fell approximately 40%. Gloria was a busy doctor. She left things as they were. She did not sell. She did not stop the direct debit anyway. ��569.25 every single month. Again, she was buying units at deeply discounted prices. Units that will be significantly worth more later on. Now by 2009/2010, markets began recovering and Gloria's ISA, now with all the years of compounding behind it, began to grow noticeably. It began to grow quite a bit. This is the moment in a long-term investor's journey where compounding starts to feel real. In the early years, the monthly contributions do most of the heavy lifting, you know. It's not very obvious what compounding is doing because the pot is small and growth on a small number is still a small number even if it's growing. But after a decade of contributions and compounding, the pot is large enough that the growth on the pot starts to matter more. This is the point where Gloria gets to So it starts to matter more than the monthly contribution. The growth starts being more important than the monthly contribution. At this point, the fund is working harder for Gloria than Gloria is working for the fund. So her money is now really working hard. Now she gets into the acceleration period, 2015 to 2026. From 2015 onwards, Gloria's ISA moved into what I will call compounding acceleration phase. Obviously, there were the tech companies like Apple, Microsoft, Amazon, Alphabet, Nvidia, the The global technology sector became the dominant driver of MSCI World returns throughout the 2010s and the 2020s, and they are still driving it now. The global economy was being reshaped by digital transformation, and Gloria's fund owned a piece of all that without betting everything on one single company or sector. Well diversified, she was. She owned the whole lot. But that's not the end of the story. 2020 COVID, sharp crash followed by an extraordinary recovery. What did Gloria do? Nothing. She did not sell. She kept the direct debit running. 2022 inflation and rising rates, volatile markets, up and down. But Gloria's 20-year runway of compounding meant her ISA absorbed the turbulence and kept growing. So Gloria's final ISA value including the fund fees is interesting. Now here is something I want us to be transparent about. Let's not forget something important because most comparisons of this kind of investment returns leave it out. Gloria's Fund charges a total expense ratio, so that's a fee. It's the annual fee for running the passive index fund. It's not a trading commission, it's not a one-off charge, and it's definitely not a management fee. It's not a management fee for a wealth manager to manage your money. It's a passive fund that Gloria invested in. So the TER is a small percentage deducted from the fund's returns every year. It's taken automatically, and for a passive global index fund in 2001 when she started investing, these fees were higher than today. So it was typically 0.4% to 0.5% per year. As competition between providers grew, those fees fell, and they are quite lower now. By the mid-2010s, Vanguard, iShares, on similar providers were offering MSCI World tracking fund at 0.12% to 0.2% per year. And this matters because Gloria was not in a fancy high fees managed fund by a wealth manager. She was not paying a fund manager or financial advisor to pick stocks for her. She was not paying anyone 1% to 3% of her portfolio every single year to try to beat the market or outperform the market. Nope. It was in a simple, boring DIY, do-it-yourself passive index fund, a globally diversified one. Set it up, direct debit, leave it alone, review it yearly. Over 25 years, using a blended TER of approximately 0.22% per year to reflect the change in fees over time, even if you apply that, the MSCI World's gross return of 8.5% becomes a net return of 8.28% after fees. So that 0.22% difference compounded over 25 years cost Gloria the fees approximately £25,000. Now, £25,000 sounds significant, but let me put it in context. What if Gloria, instead of choosing a passive fund, if she had chosen an actively managed fund charging 1% per year which many investors who don't know better do. At 1% annual fees, the total fees dragged over 25 years will be £104,000. Not £25k, £104k gone in fees. More than times 4. At 1.5%, it will be £149k. At 2%, it will be £190,000. Over £190,000. This is nearly like £190,000 that will never appear in Gloria's account, not because of bad decisions, simply because of the fee structure. It looks harmless, 1.5%. If she chose that kind of fee structure in managed funds, the high fees, which looks small but it's quite a lot compounded. So I'll dedicate a separate full video to deal with passive versus active fund performance. The data is fascinating and frankly is quite damning for the financial industry. Subscribe so you don't miss miss it when I publish it. This is tea, as Gen Z will call it. For now, back to Gloria's final number. We are sticking to the passive fund for Gloria with the lower fees for her, so just the TER of 0.22%. She basically does nothing extra. Her automated monthly contributions to our fund happen without any intervention from her, and it just follows the market average returns passively. Okay, so let's work out the numbers. Even with the 0.22% blended total expense ratio. So the initial £10K lump sum growing at 8.28% for 25 years will give you £73K. Now, monthly contributions of £570 for 300 months at, um, 8.28% is a different picture. When you put it all together, you're getting £640K. Now, the total money glory actually putting over 25 years is roughly £181,000. Growth generated by the market, net of all the fees, is £459,000. Now the market did most of the work. Gloria had to just stay consistent, stay patient, and stay away— out of her own way. No tenants, no maintenance calls, no letting agents, no self-assessment returns, no Section 24 headlines. Just one boring fund, a direct debit, and 25 years of patience. Now let's talk about what happens when both Bayer and Gloria decide they want their money back. They want to exit. Okay, this is the part that changes everything. Okay, when they dispose of the asset, you sell your shares, I sell my property, and they decide to do this in January 2026. So both Bayer and Gloria decide to access their money. Gloria's exit is clean. She opens her ISA app, she taps sell. Within a few days, about £640k lands inside her bank account. Hmm, that's it. HMRC receives nothing, zero, zilch, not a penny, not a form, not a phone call to an accountant. The ISA wrapper protects every single pound of her returns regardless of the amount. That's it, okay. There's no capital gains tax, there's no income tax, there's no exit charge of any kind. ��640,000, all of it, house, tax-free. Buyer's exit, on the other hand, is a little bit more complicated, okay. So buyer decides to sell the property, and I don't know if you've ever sold or bought property, but it's not like at the snap of a finger. First, he needs to find a buyer. That takes a few months. Estate agent fees, legal fees. Then our dear friends at HMRC arrives. The capital gain on buyer's property is £237k. That's £337,000 sale price minus £100,000 he paid in 2001. So there's no private residence relief. Buyer never lived there. It's always been an investment property. The full gain is exposed. For capital gains. So the annual capital gains CGT exempt amount in January 2026 is £3K. It was slashed from £12,300 in 2022 to £6K in 2023 to £3K from April 2024. So it's been going down. So buyer's taxable gain is roughly £234,000. Okay, not too bad. Now let's not forget something. Buyer is a higher rate taxpayer, so 40% taxpayer. Capital gains Tax rate for residential property sold by a higher rate taxpayer is currently 24%. Okay, I made a video about it, confirmed in October 2024 budget, the Halloween budget. So CGT payable is now £56,145. £56k written as a cheque to HMRC before buyer sees a single penny of the property gains. Now remember that TER cost I mentioned earlier? Yeah, Gloria paid a cost as well. The fee drag on Gloria's passive fund over 25 years is just about £25k, £25,000 if it's a passive fund. Bayer just paid more than double that to HMRC as taxes in a single transaction before he could even touch the money. Let me put both exits side by side. Gloria ISA value £640k, Tax paid to HMRC, £0. Net in her pocket, £640k. She's gonna need bigger pockets to contain it. Buyer, gross property value, £337k. CGT to HMRC, £56,145. Net from the sale, £280,795, almost £281,000. Plus accumulated rent, and when you deduct the cost, it's got about £132k. $2,000 from rent. So his total, um, after all the expenses, Bayo's total net wealth will be $315K roughly. Okay, so $315K is not nothing, but compared to $640K that Gloria made from passive investing, doing nothing, it pales in comparison. Even more so when you factor in the efforts on Bayo's side for this buy-to-let. Okay. So right here, I want to pause and drop something. I want you to pause and drop something in the comments. Are you surprised by Bajiole's tax bill? Did the Section 24 surprise you? Did you already know about it? If you own buy-to-let properties, I suspect you already know about it. Have you been thinking about buy-to-let as part of your financial freedom strategy? Tell me below. I read every single comment and I respond. I want to know your questions, obviously. Shape what I cover next on the channel. But for now, let's go back to Gloria and Bayo. What does this huge gap actually mean? 315K here, 640K here, investing exactly the same amount of money, same starting capital, same monthly discipline, same 25 years. So both Bayo and Gloria invested about 181K in total over the 25-year period. At the end of 25 5 years, Bayo's net worth is £315k while Gloria's net worth is £640k. The gap is almost £325k. That is massive. Now let me— let's make those numbers real. Let's compare them to real life scenarios. According to the Retirement Living Standards 2025-2026 published by the Pensions and Lifetime Savings Association, a single person in the UK, if it's just you, needs £13,400 per year for the minimum standard of retirement. So essentials covered, maybe 1 UK holiday, you need £31,700 per year for a moderate standard. More flexibility, maybe 3 European holidays, £43,900, almost £44K per year for a comfortable standard, um, retirement, a few luxuries, maybe 4 European holidays a year. Now here's the context that matters for doctors specifically, okay, especially if you're thinking about long-term goals and retirement and all that. By retirement, most doctors usually have no mortgage, usually paid off, no dependents, hopefully children are grown then, and they have access to NHS healthcare, which removes a significant category of cost. And here's the key point before we look at the numbers: neither the state pension nor the NHS pension is included in any of this calculation, okay? That is not part of the calculation that we're doing here. The state pension alone pays approximately £11,500 per year, A doctor with a reasonable NHS career can expect a meaningful NHS pension on top of that. Okay, that is separate. That income arrives before they even touch their ISA or property income. Okay, so those are not part of the calculation. So the question is simply, what does each investment pot add on top? I mean, ISA and property, stock and shares ISA and property. At the modest standard of 31.7% per year, Bayer's pot of £315k lasts almost 10 years. Not up to 10 years, but almost. If he retires at 65, it runs out at age of 75. Of course, he got the other pensions like State and NHS, but Gloria's pot of ��640K lasts over 20 years. It keeps going up to the age of 85. 10 extra years of financial security. I'll say flexibility. A full decade. So at a comfortable standard, it's roughly ��40K per year. Bayer's pot runs out at age 73. Gloria's pot runs to age 81, 8 extra years. And don't forget, they could decide to retire a bit earlier. And guess, you know who will be able to retire a bit earlier? Gloria. And if they draw sustainably at the 4% rule, spending just enough that the pot keeps growing, Gloria draws £2,132 per month, Bayer draws £1,050 per month. Gloria has over £1,000 more per month for the rest of her life if they live about the same length of time. Every single month, extra 1K. I'm sure many pensioners know what to do with extra 1K. And it was not because she was smarter. It was not because she worked harder. It's not even because she earned more or took more risk. It's simply because she chose a different wrapper, a different tax wrapper, a different approach, a different vehicle for investment, and she stayed consistent. Okay, now what's the whole point of this? I'm going to give you something practical to take away, something I described in Chapter 9 of my book, The Moneywise Doctor. It's a framework that pulls all of this together and helps you evaluate any investment opportunity going forward. I've used it for decades, a couple of decades now. I call it the REST framework. R-E-S-T. REST. Okay, I want peace of mind. It's a filter I built after 2 decades of investing. I use it Every time an opportunity crosses my path, people always pitch me stuff— invest in my startup, invest in this opportunity, invest in this property, invest in this and that. So I use the REST framework without exception every single time. And R from the REST framework is real return versus risk, because risk and return are two sides of the same coin in my opinion. And for most investors, you cannot evaluate returns without looking at the risk, not the projected return. Not the beautiful pitch deck return, okay? Not— you're looking at, you're actually looking at the real return after tax, after fees, after maintenance, after voids, after inflation, after your own time is costed. Let's say a patient goes and starts planting marijuana on the roof, then you have to ask, does this beat a passive global index fund inside my ISA or my SIP, my pension? Okay, look at Beyer, for instance. Gross rental income: $235K. Real return after cost and tax: only $132K, a 43% reduction even before he gets to the exit, before he sells. Gloria's return, her real return after fees: $459K of growth on her $181K invested. Tax bill: zero. The real return question alone should give any careful investor a reason to pause and consider carefully. Now the next thing is E, effort. Every investment has an ongoing operational cost measured not just in pounds or dollars but in hours and decisions, the effort. A global index fund inside an ISA or SIP takes near zero effort. Set up the direct debit, review it quarterly or once a year, and that's it. A buy-to-let with an agent, even with a good agent, requires medium effort. Even with a good agent, okay, you still need to take calls, make decisions, sometimes handle the maintenance, tenants, renewals, regulation, compliance. If ever a tenant refused to leave or refuse to pay, you may end up in court with them as well. So effort is not automatically bad. We are not saying no effort, but it should always be chosen intentionally, not stumbled into. If something demands time you do not have, it's not an investment. It's a part-time job he did not apply for. So Bayo worked for his investment, he worked for his property, while Gloria's investment worked for her. Okay, two different things, two different things. Now, this is remove the emotions, remove the emotions and just look at it logically. Okay, now S in the REST framework is stress. Okay, stress is the hidden cost that no spreadsheet can capture, but it's very real. Ask yourself honestly, How would you feel if a tenant stops overpaying? Or if a repair bill arrives at the worst moment? Maybe you need to fix the roof or the boiler. Or if interest rate spikes and the yield collapses, okay, how would that make you feel? Or if a rule change like this, this Section 24, which was like a monumental change, rewrite the economics of your property that you bought years ago, okay, so how would that make you feel? Again, if an investment occupies your thoughts on the night shift, if it steals from family time, if it amplifies your anxiety, an anxiety that a medical career already brings for some, that price is too high. Some returns are simply not worth the mental load. Okay, don't forget about the 5 notorious T's of property. They are not just a memorable phrase. If you've been a landlord like I've been, These are like a stress checklist. I've been fortunate as a landlord, but I've heard some terrible stories. Tenants, toilets, termites, taxes, trash, and your house could be trashed. Now the last thing in the REST framework is obviously the T for time. Time is really important here because compounding works with time. How long is your money locked in, and does that match the time horizon of the money you're using? Basically, will this money be available when you want it back? If you want it back in 20 years, are you going to get it? If you want it back in 10 or 15 years. Let's say you choose to retire at 57, can you get your money back? A Stock and Shares ISA is liquid within days. Gloria could actually have accessed her money at any point in 25 years she needed to, as long as she's gotten to 55 years. Okay, okay, a SIP 55 years, but, um, Stock and Shares ISA anytime. But buy-to-let, if you want to sell it, you have to put it up for sale. It's dependent on the buyer's mortgage availability. Maybe it's in a chain or something. Availability, market conditions, and factors outside their control. It's not click a button. And in January 2023, with CGT at 24% and the annual exempt amount at just ��3k, buyer will be a motivated seller at this point with very limited control over when and how he sells. Okay, because you can't just click a button. So run every investment opportunity through the REST framework before you commit real return versus risk, effort, stress, and time. If it fails any one of these 4, the answer is no. Not slowly, not apologetically. I just say no. But there's a bigger lesson in this. There's a bigger lesson. I want to be clear because I know some of you are thinking, Andy, are you saying buy-to-let is always wrong? No, there are other ways to do it efficiently. Maybe do it as a business inside a limited company. But that's not the discussion for today. We're just comparing both investments done by individuals. Property has made serious wealth for serious people over a long time, and I know some of them. Some have been on my podcast. In the right location, with the right leverage, and at the right point in the cycle, buy-to-let can deliver strong returns with a good operator. But what 25 years of real data shows is that UK tax system has made buy-to-let significantly less attractive for higher rate taxpayers than it used to be. Section 24 changed the income tax picture from 2017, okay? The CGT annual exempt amount shrinking from 12.3 all the way down to 3,000, it changed the exact exit picture when you sell, okay? The 24% CGT rate on residential property changed it even further, introduced in 2024. And throughout all of these, the ISA wrapper has remained completely untouched, okay? Zero tax on growth, zero tax on income, zero tax on exit every single year. Now, for a doctor in the 60% tax trap between £100K adjusted net income and £125K, £140K, every additional pound of rental income makes that situation even worse. The lesson is not never buy property. The lesson is this: the tax wrapper matters as much as the asset itself. Okay, so you have to think about those things. Gloria did not win because she was smarter than Bayer? No, she ended up with more than double. She won because her investment was inside the most tax-efficient wrapper available to UK investors even as we speak, and she used it consistently for 25 years. Okay, so what should you actually do with this? Of course, this is not financial advice. This is just my thoughts and my opinion. Here's what I share in the Moneywise Doctor community. Okay, I shared this in my masterclass as well. The order I'll follow will be: first, I'll prefer to buy my own property. Okay, if you've never been in eviction court, you won't understand. Buy your own home if you need somewhere to live and you can afford to buy where you want to be long term. Buy it. Good. Your primary home is protected by private residence relief on exit. And I'll tell you one of these days how I was nearly evicted and when I had to be dragged to court The mortgage builds equity automatically. This is different from buy-to-let. So that's why I want to own my place, I'm happy with that. Second, max your pension and your stock and shares ISA before you even consider buy-to-let. What you get with that is that you get 40% tax relief on pension contributions, and then you also pay zero tax on ISA growth and exit. For me, this comes first every time, every single time. Third, If you're considering, seriously considering buy-to-let, run it through a REST framework first. Okay, real return after Section 24, after maintenance, after agent fees, after income tax, and consider the CGT at 24% on exit. Now, E, effort. Are you ready for the 5 notorious T's, or can you pay someone who can really manage all of that? Stress. How would this sit alongside a demanding clinical career? So that's S. T: Time. Time is your capital. How long is your capital locked in? Does it match your goals? If it passes all 4, then go in still with your eyes open. If it does not, the ISA or your pension is waiting, and I'm sure there are many other options to be considered. Now back to the question I asked at the start. I don't know if you left a comment or you didn't leave a comment, but if you told me in the comments Whether you thought buy-to-let or the stock market will win over 25 years, go back and look at what you said. Did the data surprise you? Have you changed— did you change your mind, or you're going to do what you want to do anyway? It doesn't matter. Did the data surprise you or confirm what you already thought? Tell me in the comments. I'm really interested in knowing what you think. And if this video helped you, if this video helped you think more clearly, share with someone who is currently weighing up this exact decision or share with a colleague. I'm sure many people have interesting opinions, and I'll be interested to hear what people have to say. Most people are having this debate without actually looking at the numbers. Now you have them. But hey, if you want to go deeper, if you want to understand how to combine building an ISA strategy that works alongside your SIPP or NHS pension, and then depending on your specific tax position, especially if you are a doctor or healthcare professional, I'm running something special. It's a free investing masterclass, 7 Steps to Tax Efficient Investing Even as a Busy Doctor. Over 1,800 doctors have already attended and found it super useful. You can see loads of testimonials on the screen. Yeah, okay, it's completely free. If you want a ticket, we've got like limited slots. If you head over to moneywisedoctor.com/masterclass or click the link in the description. I want to keep it at $250 so that it is still effective. And of course, if you want to get more videos like this, subscribe, hit the bell, and I'll see you in the next one. All right then, bye-bye.