Doctors: Investing Steps You Wish You Knew Sooner

So life does not start at 40. I see people posting on social media. Life starts at 40. Life does not start at 4. So Lifetime ISA does not start at 40. Lifetime ISA is the account where the government can be your daddy and give you an extra £1,000 every year. Just for saving your own money. Just for investing your own money. I've met people who said, why did anyone tell me about these attacks? I've had senior colleagues who've approached and also some younger ones who said, I've saved 50k, I've saved 100k, I've saved like 30k. I don't really know what to do. I'm just putting my savings account like, is that any cash I sound? No, it's just my savings account. Like you're owing HMRC money, do you know that? And this is an investment master class for medics, doctors, dentists, health care professionals. And I'm Dr. Andy Grim, I'm the founder of Moneywise Doctor.com. i've been an investor for 20 plus years, going to 21 years now. And part of what helped me to be able to achieve working people call financial independence was not just work and business, it was also investing on a long term basis. So today what I'm going to be sharing will be sound investing principles, practical things that for you as a doctor or healthcare professional, how you can actually start investing practically. Not just, you know, also we hear, also we hear people put their money even up to like just two days ago someone told me how they lost six thousand hundred pounds in crypto and we've had much worse. So basically this is about how you can actually set up the steps to start investing and then start investing properly. But before we delve into investing, can someone tell me in the chat what is your experience of investing? Can you just tell me what you've invested in in the past? Have you invested in stocks or bonds or real estate or crypto or business? Don't be shy, it does. It doesn't even matter if it didn't work out. All right, if you can tell me in the chat, like it's going to be interactive session, so a few comments. I can see that about Money Box. Yeah, Money Box is a platform. What is the investment? So I can see, yeah, the devil said Money Box. What is in Money Box? Is it life? Is it, was it stocks, was it bonds? Was it, you know, what did you invest in then? My zip said invested in lysa. So Lysa again is a container, it's a tax protective. These are things we'll address to clarify those things. Lisa itself is not an investment, it's just a container for investment. Okay, so I have stock and shares. Yes. So Mazda, we have stock and shares on trading to 1 2. But you think you don't have proper knowledge of stocks. Okay. As they have done cash, Isaac, which is savings, which is an investment. Okay. And I can see a maker, I can see some of us, yeah. Angaza has done real estate, poultry shares in Nigeria. So I can see we are not entirely brand new to the concept of investing. Right. Okay. Just like in the last master class I asked people that attended, when you think about investing, what comes to your mind? Just in one word. If you tell me in the comments that comes to your mind when you think about investing. The last class everybody said different things but when you think about investing, what's the one word that come to your mind? What says capital. Okay, last time I. People say to like stocks. Okay. Money double. Okay. At least nobody's saying, nobody's saying like terror or anything like that. Okay. Quite a few. Let's see what other people say. Lovely. Plan B. I love that. Dami said savings. Yeah. Save is a bit different because you said financial independence. I love that. That's fantastic. So basically we are not entirely new to the concept of investing. Goose says growing your money. Right. So that's all important when it comes to investing. Rosie says retirement plan. That's really important, isn't it? A lot of doctors we find out, having now spoken to thousands of doctors now I found out that most doctors don't even think about retirement when it's getting a bit late. They start thinking about it when they are already closer to retirement. So the best time. Yeah, look, I said early retirement. I love that. Okay, so the best time to start thinking about investing for retirement like in my present case, I don't know why not say retirement might say financially free. I can say financially flexible. But basically what it means is that money does not limit what you need to do. I still don't own a Ferrari, I don't own a private jet. But I just have freedom time, freedom. So investing is sort of looking long time. I agree with all of that and it all sounds very positive. The last time people said things like fear, terror and the rest of it. All right, I think we should jump in now. I've got a few things I want us to highlight on. First of all, when it comes to investing we usually say the most important thing is the foundation. So getting the right foundation is really important. So I don't know how many of you manage to look at the video or if you've seen my presentation. I call 7 things you need to do before you start investing 7 there.

Are 7 steps to take before you even start thinking of investing as a doctor or healthcare professional. Now this is really important to secure your financial foundation before you start investing. Now I've covered these seven steps in a simple guide that I've made available for you in the link in the description. You can download it. It will help you to build a solid financial foundation, avoid common investing mistakes, and also make tax efficient investment decisions. Start your investment journey the smart way. Download the guide now using the link in the description and good luck on your investing journey. Now let's get right back to the.

Episode because what tends to happen is that people start investing, but if they haven't had that proper background, they tend to then get to the point where if there are opportunities to, you know, capitalize when the opportunity invest, if they haven't got a proper emergency fund, they haven't got a proper investing education, there's that risk of them saying, oh, I don't really know what's happening, I'm gonna sell or even under exposing themselves to opportunities. For instance, January, the stock market was down. How many people bought anything during January? Just give me a thumbs up when the stock market was done. I'm not saying it's the best time to buy. My stock market was down. Okay, right. So a few people. Yeah, a couple of people. Okay, right. So you see a lot of times people, we tend to do the opposite. Like when the market is crashing and when the opportunities to buy undervalued stocks, we tend to flee. Because that's human nature. We're like, oh, scared, what's happening? Oh, it's all red. But most times where I've been quite fortunate was doing the exact opposite. Now that doesn't mean I buy everything that is going down. Because remember, sometimes people think they are buying the deep or they are buying a fallen knife. And then for some other people who I think are the majority of us here today, we're not interested in whether the market is down or up or down or up. You want a consistent investing strategy and that will be people who do passive investing where you invest a particular amount of money, maybe dollar cost average or pound cost average, you invest a particular amount of money for a period of time consistently and then look at it compound over time. So we are going to delve into all that. I'm going to take questions at the end of the presentation is that all right? I think for, for some of us, I, I suspect you might have seen a couple of our videos and even if you haven't, don't worry. We're going to delve into the principles of investing practically and then we'll have opportunities to ask questions. We're going to cover things like, okay, what do you need to do? What are the foundations you need to set up before you start investing? How can you be tax efficient in your investing? Because there's a lot of, there's a huge difference. If I'm investing tax efficiently and you're not, we're not going to get the same results. Even if we get the same investing results, I'll be going home with much more money. And after a while, the space is very large. Look at things like how to do due diligence. War is not an investment. Sometimes people do trading and someone said, okay, if you give me your money, I'm going to put it into this crypto and then it will double or triple and then I'll give you back some of those things. Any investment you don't understand, you don't want to do. Right. So a little about me. So I'm Dr. Andy. I've already done that introduction. These are some of my social media. Yeah, this is lovely. My social media handles Moneywise Dr. You can follow Moneywise on Twitter as well, or apps they call it these days. Or you can follow me on Instagram. So basically I started Money Wise Doctor to share my experience, my investing journey. And I started Money Wise Doctor after a few months, after I've left my salary job and I was free. And I was just thinking what's next thing? Jump into AI. I bought like chat GPT Dr. GPT Dr. AI. I still own that domain. But along the line I realized, look, for the last more than 20 years, right from medical school, I was that guy that was teaching my consultants how to invest. I can see some of my medical school classmates are here at this moment. Some of them are consultants or my JP's. They will tell you that right from medical school I was teaching investing seminars, being on tv, radio, running seminars and all that. Most people wouldn't even know that I was a student or even imagine I was a medical student. So I've always been interested in personal finance and it's something I do with joy. And most of my friends would usually call me to say, what do you think about this deal? What do you think about this investment? I was spending several hours doing it, but along the line I got married. I know why my wife thought why are you spending all this time doing this thing? Maybe she just did like for real, like write a blog and if someone asks you a question you just do a blog and share the information there. So I thought oh, that was a good idea because I've been a blogger right from 08. I just blog generally. So I started moneywisedoctor.com anytime someone asked me a question, I explained it to them. Then I went to write a post about it it. But we built up about 120 articles that were being visited by thousands of doctors which led to the newsletter. Obviously as someone who has had a background in e commerce, the next thing was to build up a list newsletter. And then of course people from all they started emailing me to say, oh, it'd be nice to have a podcast. Do you do videos and all that? And I, I hate videos. You might see 500 videos of mine on YouTube but normally I don't like to do videos. But it turned out, look, it's helping, it's helping to get the message out. And at the end of the day I'm not talking to 4,000 people. I'm talking to you, one person. So when I look at the videos I'm thinking I'm sharing this with my friend, like easy. I'm sharing it with them, maybe kike. So I'm not thinking of 4,000 people. So that way it seemed to resonate. And all of our videos have been watched by a few thousand people. Like the NHS pension, should I still leave ISAs, the ultimate guide and all that. Okay, so that's a little bit about me. Yeah. So now why I again as usual, why I say that is to give you the. Just to reassure you that your investment of time is worth it. Now the next thing about me I haven't said is that as, as I've been an investor in the stock market for 20 plus years, but just being an investor is not good enough. The results are really important. And for some of you in our moneywise doctor community, I've shared some of my investment returns and you can see the screenshots. So last year we did 87% returns. It depends on where you take the screenshot. You take it from February, February 2025 back to February 2024, that was 87%. And if you take the screenshot from May backwards is 71%. Now in case you don't understand what that means, The S&P 500 had one of its best years. Last year it was 25% returns. So that, that's I think is a fair, decent returns. I've had similar returns for several years now. Again, we don't say that to brag, it's just to justify that. You as a doctor, healthcare professional, you're investing 90 minutes of your time to listen to a random guy on the Internet on a Wednesday evening. So want to make sure it's worth your time. Right. Okay. Now the goal for this master class, the main goal is one, I want you to understand basics of investing. I want you to understand what could be actually a practical approach for you to invest, especially as a busy medic. I want you to understand what is an investment and what is not an investment. I want you to understand all the tax opportunities you can utilize, especially if you are based in the uk. I mean I know some of you have joined from Canada and U.S. but when it comes to tax efficient investing, no country beats UK at the moment. Of course those of you in the us, you have your Roth IRA and Canada also has a sort of account similar to our stock and shares isa, but it only allows for you to put a maximum of $6,000 which is not a lot of them tax relief compared to ISA. ISA allows you to put up to £20,000. Yeah. So your UK has some opportunities for tax efficient investing. Look, investing and tax is different but if you combine them together you can actually generate quite powerful returns. In the UK there's also sip, your self invested personal pension. You've got actually your pension as a whole. You can make up to £6,000 deposit into your pension in a whole year, including your workplace pension. And it's all counted as, you know, tax free for the moment until when you start to cash it out. So there's a lot of opportunities. So these are the areas we are going to be delving into. Yeah, so I'm just going to jump right into it now. So what, what makes this different? Why, why is it important for you to be in this? There's multiple people, there are multiple people out there including 17 year old youtubers who are out there teaching investing and you know, with AI now anyone can generate content and people can read books or watch other content and then you produce. In fact we've had people take our content, reproduce it and just change the name of the author and we say we don't mind. Limitation is, how do they say it is the highest form of flattery, isn't it? Yeah, so we don't mind. But, but what makes this difference is not the content. Content is Everywhere. Now anyone can do content. It's the context.

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Well, so I could tell you how to analyze companies from morning till night. I mean things we did when we're in our 22s when I was like 22, 23, run after company 10k like run after their books and try to analyze it, attend every investors call, go to shareholders meeting and try to get. Yeah, but you, but you're a busy doctor, right? You're a busy dentist. Yeah. Busy physiotherapist. That's not what you do. That's not what you do. So we're talking about context and context. Hey, a fellow doctor. So it's not like I'm not telling you, I don't think you need to go to Wall street or go to anything, do anything. Fantastic. So it's not about the content, it's about the context. Let me give you another example context. Someone in the US could tell you about investing and that's fine, but do they understand the tax context? Because basically just just, just to give you the massive implication, if you invest in a regular investment account, you put in £20,000 over five years, you've invested £100,000. Okay, £100,000. Let's say you're a wonderful investor, you've been fortunate and your £100,000 gives you a hundred percent returns. That means that in five years you've accumulated an extra hundred thousand on top of your hundred thousand. So you've got £200,000. Right? Excellent. Let's assume that. Okay, let me give an example. Let's say that Chioma here, my co host, let's say that Choma also did the same, was fortunate and got exactly the same returns as you. So you both have made a grand total of A hundred thousand in returns, which is fantastic. Brilliant investors considering the father, Warren Buffett returns roughly 26%. And when someone said maybe I, maybe we'll have the stage of Devon, I'm like, don't compare. He's done it for 80 years. You know, he's done it for so many years. So if we managed to get decent returns for the past 20 years is not to be compared to the sage of Omaha. But let's say you got 100 returns. So you did better than even Warren Buffett. But obviously he's got a giant company. And Chama did her own investing through a stock and shares isa, you know isa, but you did your own through a regular investment account. Now the implication of that is you've got to pay 24% of that, your investment return as tax. It's called capital gains tax because you've made a hundred thousand in capital gains. Now you need to pay £24,000 as tax. But Choma doesn't have to pay any of that. Now imagine stretching it out over 20, 30 years of investing, your whole life investing, and one person is paying tax, the other person is not paying tax. There is no comparison. There's no comparison. Okay, someone says, but the hundred percent in five years, that's about 20%. Yeah. I'm looking at what we call cumulative return. So not, not your annual return, let's say over five years, your cumulative return has been 100. Yeah, that was a sharper, sharp observation. Yeah. So we're looking at cumulative returns. Remember, when you invest in your eyes or your pension, you're not often checking what is happening yearly. You're checking what happens at the end. Okay, Right. But the example, the key takeaway from there, that someone at that point who wasn't paying tax is going to take home 100k. You're going to take home 76, 000 pounds. Now guess what? Choma now has another hundred thousand to invest, but you now have only 76,000. Replay this a few more times and you see why the difference will be so wide. So I was talking about context. The tax context is really important. So that's what makes it different. I'm telling you from a practical approach we've now had, I think this is about a thousand doctors have passed through our master classes. We've got a community of doctors, money wise doctor community. And I've got a mastermind. I usually take only 30 every, every six months. Currently there are 427 doctors on the waiting list, doctors and dentists. So it's just to give you a bit of context, it's practical, it's not something that we talk about and it's hanging in the air. Right, okay, so now the next thing to look at to be. Yeah, so I've already mentioned the context. We're looking at things like ISO optimization, cash ISA stock and shares isa, how to use them in the right way, in the right combination, tax relief hacks. And of course you look at what we call the seven steps to take before you start investing. For doctors, healthcare professionals here who are already falling into the 60% tax trap. We're going to touch on all those things. And of course your financial protection strategies, things like your mortgage life insurance, putting your life insurance in a trust and that how that affects your overall investment approach. Okay, so these are all the areas we're going to touch. So let's jump right into the session. One, Tax optimization, ISA optimization. How many of us here, I know some people have already mentioned they've got ISA accounts, but who here maxed out their ISA last year? If you just give me a thumbs up. You maxed out your ISA because you were able to use all the 20K. Excellent. Hetty did. Yeah. Hetty is a lovely Z. So I've seen four people, I think, Hetty, I've seen your comments on our YouTube channel. You, you, you question on our YouTube channel. Yes, some very detailed, insightful questions. That's lovely. Right, so a few of us have mastered our ISAs. Now, who here doesn't know what we're talking about when we talk about maxed out ISAs? Don't be shy, don't worry, you get to answer all the questions. Okay. A couple of people. Okay, so there are three or four people that don't understand. Yeah, I want, I just want to make sure that we don't fly things over your head and we pitch everything in a way that it will be beneficial. Okay, we'll have a few people that don't understand what I mean. So start from isis, because there will be no need for me to go and start from fundamental analysis, how to analyze a company income statement balance sheet. So we're going to start from the basics. Okay? Right. So ISAs. Can someone who's marked out their ISIS, who is feeling up to it, just tell us briefly basically what they put in the ISAs, or why they decided to use the ISAs, or in summary, just tell us what the ISAs are. Anyone at all, you need to speak.

Or do you want it to be tight?

Please, please speak.

Okay, so there are different ISAs the cash ISA is a savings ISA where you can, where we typically put in our emergency fund, that is our six, three to six month expenditure. So it's a tax efficient way of saving money. So that.

And it yields a little interest.

So if you have an emergency fund in a, in a cash isa, the next is a stocks and shares ISA where you can do some stock market investing.

Yes.

And then there is a Lisa Again, some of us are not big fans but there is a license lifetime ISA which is for retirement or for people with their, for their first homes.

So the allowance for last year was.

£20,000 and it can be split amongst these three ISA.

So you have to divide per year.

So you can divide 20,000 into the cash ISA, stocks and shares ISA and the Lisa up to 20,000. And if you have a spouse, your spouse also has a separate 20,000 allowance. So you can, if you are rich enough, you can double it to 40,000 in a home.

And if you have, and if you have two children, well, you can add the junior ISA to have children.

But I wasn't rich enough.

Unfortunately you are rich. You've done your best. This is amazing. Yeah, thank you so much. You can see he, he understands it clearly. Just a little secret. Two years ago when I first decided to do my first set of one on ones before I just published on the blog, I didn't have time to do one on one session or to do any coaching and people always write to me emails to say I don't understand this. Do you offer appointments one on one sessions? So is it. Here was my first one on one session. And this is a professor. Yeah, it is very interesting and he's been following the journey all along and he's been a big support as part of the community. So thank you for that explanation.

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 tax 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.

So he's actually tied a ribbon around it and made it very neat. There are three types of ISAs. Basically there's a cash ISA, the stock and shares ISA. In fact there are four ISAs. We don't waste too much time on innovative finance ISA, because the innovative finance is for a little bit of risky investment. It's not in the scope of this discussion. I mean for some of us in the money wise Dr. Mastermind, we discussed some, some more. A bit more adventure, should I say adventurous investments. For instance one in one of my sessions someone wanted to know which. Why I was investing in startup companies and which type of account I was using to be tax efficient, like seis eis. But that's not usually where you start from the beginning. I think ISAs are good. So as I said, cash ISA, stock and shares ISA and lifetime ISA. I'm going to start from lifetime ISA basically because the time is not on the side of some of us here. What I mean when I say time is not on the side, it's not. Doesn't have to do with your age, but it does have to do with what age you are eligible for the ISA. So life does not start at 40. I see people posting on social media, life starts at 40. Life does not start at 40. I know because I'm approaching 40 and I don't feel like my life is just starting. What about it is I've done. Are you going to discount them? So Lifetime ISA does not start at 40. Once you cross 39, get into 40 years of age, you can't open the Lifetime ISA anymore. Why is that important now? Lifestyle is the account where the government can be your daddy and give you an extra £1,000 every year just for saving your own money, just for investing your own money. And I've met people who said, why did anyone tell me about this? I meant a very nice, you know, a E consultant, young, 40 years and maybe four weeks. We had our first one on one in 2023 and she discovered that she had been saving money for seven years to buy her house because she wasn't sure where she was going to get her consultant job and she could have been putting it into a lifetime. I would have netted her a good £7,000 over that period of time, just £7,000. But she had put it in a savings account which meant that she didn't get that money. One then secondly, she had to pay tax on her interest in that savings account, generated enough interest that she needed to pay tax on it. Some of you don't know that your CVS are generating enough for it to pay tax. I've had senior colleagues who've approached and also some younger ones who said, I've saved 50k, I've saved 100k, I've saved like 30k. I don't really know what to do. I'm just putting my savings account. Like, is that any cash I saw? No, it's just my savings account. Like, you're owing HMRC money. Do you know that? I will explain it later, but basically the lifetime I saw is one of the ISIS I talked to you about. If you are less than 40, lifestyle is really important that the next thing you should be thinking about. It has pros and cons. If you're above 40, don't worry about it. There are many other ISAs you can use. There are two of them that you can use quite effectively. So the lifetime ISA one is for buying your first home or for retirement. So you can actually put up to £4,000 into your lifetime, Isaac. And the government will actually give you 25% of whatever you put in the account. So if you put £1, you get 25p. If you put a thousand pounds, you get like £250. If you get the maximum, you put £4,000, you get a thousand pounds. Okay, so that's the lifetime isa. Now, you could actually use it for your first home or you can use it for retirement. And when I say retirement, the age is 60. You can cash it out at 60 years of age. I know, I know 60 years sounds very far, but just think about it. Maybe 20 years ago, where were you? What were you doing? It doesn't seem that far. It doesn't seem that long ago, especially for me. So basically, that's what the lifetime ISA is for. You can use it for your first home or you can use it for retirement. Okay, now the second thing about the Lifetime ISA that I usually stress is that there are two types of the LifeStyleMe ISA cash and there's Lifetime ISA stock and shares. No, no, don't confuse it to the stock and shares isa. They are both Liza. They act in the same way. You have to be up to a certain age to open it. That's 18, 18 years. I can open it between 18 and 39. You can put a maximum of 4,000 and the government can top up to 25%. But one of them can be in cash and the other one will be in stocks and shares. So when you're buying your first home, I usually say that it doesn't make any sense to put your lifetime ISA in stocks and shares because the market can go down, it can go up. It might be that way. You are ready to buy your house. I've had people approach me, said, I'm saving money to buy my house. Can I put it in this stock or should I put it in crypto? I'm like, that tells me that you don't understand what investing is all about, you know, because that means that the, the good frame, the framework is not there. It's not, it's not anyone, it's not their fault. Nobody actually taught them, went to med school all these years without residency training, all that. Nobody actually teaches us these things. And that's why money wise Dr. Exists in the first place. So lifetime Isa, if you're, if you're saving for your first term, what you want to do is you leave it in cash, lifetime ISA in cash. Now, if you bought your first home, I don't understand, but 73% of ISA holders in the UK have it in cash. I'm like, really? Have you heard about inflation? So if you bought your first home, I don't see the point of keeping the money in your lifetime isa in cash and waiting till you are 60 years to get it. Mind you, even if the government is topping up 25% for you on your lifetime, Isaac, when you hit 50 years of age, you can't put any more money in the lifetime. I said, you can't put any more money your lifetime once you hit 50 years of age. So your money is going to lie, follow from 50 years to 60 years. 10 years is a lot of fun. People make enough money to retire in 10 years. Yeah, if you're fortunate. I've invested properly, even for some of you. I've got people in my mastermind who are in their 50s, but they come in, they're serious, they do everything, they learn everything, they start investing. Many of them are still on track to be able to retire maybe in 12 years, 10 to 12 years. So imagine that for your lifestyle master is going to be lying fallow from 50 to 60 years. So if it's in cash, not there will be no additional income on it. So that's why I look at it from that point of look, if I'm buying my first house, lifetime ISA should be in cash. But if, now, if I bought my first house, now I'm waiting for retirement, lifetime ISA should be in stocks and shares. It doesn't mean that that will be your only retirement plan. Of course, there's sip, which we can touch on as well, that you can collect at 55 years. And also there's obviously stock and shares that you can collect at any age that you like. Okay, so that Lifetime ISA, that is an excellent, excellent explanation by EZ. So that's Lifetime ISA. Some of the problems with Lifetime ISA that if you want to buy your first house, you cannot buy any house above 454.450k. Now if you live in Leeds or like Choma, you might be able to. Can you find house at 450? You can find. Nice. Good. Can you find a 3 bedroom detached home in Leeds for 450k? What are houses like in Leeds?

Yes, you can, you can, yeah, you can, thank you.

But I live in Devon. It's a little bit difficult to find a house at 450k that maybe you got a garage and all that kind of stuff. You can. But house price is a bit higher in the South London and itself. So you've got to find out where you are, make sure that. Okay, if you're going to use lifetime isa, you're not going to end up by the time you're ready to buy your houses above 450k. And now if you don't to buy your first house, you either have to wait for your retirement, which is 60 at least it's earlier than NHS pension retirement. If you cash out the Lifetime ISA before the time there's a penalty, you're going to lose that 25 that the government has been adding for you. And some platforms, I don't want to mention names because last time I mentioned names, some of them weren't too happy. Some platforms, and some of you have mentioned some of the platforms in the chart here, some platforms actually will charge you an additional fee in addition to that 25% when you decide to cash out your Lifetime ISA. If you don't cash it out for those two purposes, buy your first home and retirement. Okay, so that's the Lifetime ISA. Now if the lifetime is what I've explained about lifetime is not clear to you, can you just give me a thumbs up so I'll just call you? Because once you understand the lifetime isa, we can just move on to the next ones. Okay, it seems it's pretty clear. Okay, lovely. Now, as they talked about cash ISA again, the cash ISA is basically a savings account. A simple way to think about this is to think of your ISA as a tax protector. A tax protector. So whether it's cash isa, your savings, interest, stock and shares isa, it protects your capital gains tax, your capital gains from tax and then of course a lot. So even if you save your money, you're just saving it, you're not using it yet. You want to put it in a cash isa. Why? Because there's something called PSA for doctors here. I'm not talking about prostate specific antigen or for healthcare provider. The PSA is not prostate specific antigen. It's personal savings allowance. Now whether you know it or you don't know it, in the uk, when you save your money after the money has been taxed that you put it in your bank account. If you save it and generate interest, the government says you've got to pay tax on that interest. If you don't know about it, fine. If you have any issues with hmrc, they will request for your account. If they request for accounts, they might notice you've not actually been declaring it and paying it. How do I know? Almost. Yeah. I write back and forth letters with HMRC. Last year HMRC came up with the idea that I was owing 11000 in taxes. 11,700 or 900. They wrote me a letter, brown envelope love letter. I wrote them. But I said no, we settled this in 2021 and you guys gave me a check for 1001 because you really want to hear me. A lot of back and forth. They write me back, said okay, they've added interest. It's now £12,000. And I'm like no, you can't add interest. We haven't settled data. There's this back and forth. It's taking five months, four months. And then they brought in a senior examiner, investigator or whatever who wrote a letter to me as well. And then they requested for my account. So in case you don't know hmrc, I request for all your accounts and they question for my accounts. And after everything it came back from 12000 to. Because I wrote to them to bring it down to the original amount of 11000 which they did eventually and the case was settled after almost eight months. And do you know how much some of you in my mastermind might know how much tax I eventually paid. You know how much out of that that penalty they were asking for or tax? 000. And guess what? If I had just agreed and paid then they said okay, you can go into a payment plan. I'll still be paying the money till now. So it's really important to understand your tax situation and understand that it's not the job of HMRC to save you tax. It's your job. Remember rule one of the money wise doctors and the money doctor reward is that you are the chief financial officer of your life, you are in charge. It's not your accountant, it's not your financial advisor, it's not me. You have to be in charge. Understand just enough. You don't have to know everything, but understand just enough. Why I stress that is that taxes, sometimes you don't even know that you're owing tax. Then suddenly you make some money, they fall into the 60 tax trap and they will never call it the 60 tax trap. They will say you've lost your personal tax allowance and then they charge you more. Okay? So that's why it's really important. So cash isa, if you're going to save, you want to save it in a tax free account. If you save in a regular account, you are liable to pay tax on your savings. Now not everyone pays tax on their savings interest. If you are a higher rate taxpayer and higher rate taxpayers here you already know yourself you are paying 40% and above. Basically your income is above 50k or thereabout, you're a higher rate taxpayer. Then the allowance you allowed is £500. Once the interest in your account exceeds £500, now you've got to declare that excess and pay tax on it. I know it comes as a surprise to many people, but if you're a basic rate taxpayer, you're lucky you're paying 20%. Then the allowance is £1,000. Recently my one on one, the doctor in the 101, he's got like private practice and does all that kind of stuff. He's a, he's an additional rate taxpayer. His own allowance is zero pounds. So if he saves money, any interest he gets, he's got to declare it and pay tax on it. How to avoid it? If you use a cash ISA and you put it in a cash isa, remember what I said? ISA is a tax protector. Then you don't have to pay any tax on this interest. Okay, I think that's basically clear. Why this is important is that one of the several steps to talk about before you start investing is to have your emergency fund. And for some people here the emergency fund might be up to 10,000 or 20,000 or whatever it is. Okay, if you don't understand emergency fund, I'll explain it in a minute. So if you just leave the emergency fund in a regular account, it could actually be generating interest that you then eventually have to pay tax on. But that doesn't mean you should put it in an account you can assess. You need to make sure that you can assess that account. If you put it in the cash isa, the Most important thing about emergency fund, you should be able to assess it within 24 hours. Okay, so I'm going to pause at this point if anyone has any question around. The things I've asked so far, I've explained so far. Yeah, feel free to ask. Before we crack on, there are some.

Questions in the chat box.

Right. Okay.

When you say you have 20k tax free, does that mean you apply for tax refund at the end of the year since you already paid tax on your income? I think that was when you were talking about at the earlier stages.

Okay, thank you. So thank you for that question. No, you don't apply for tax relief on your income. Isa. This is really important. ISA is money you get after you've already paid the tax on the income. Okay. Compared to pension, which basically is assuming that, okay, the relief is before any tax. So if you have 20, 000, basically is ISA allowance. It means that if you put the money in an investment, whatever yield the investment returns to you, you don't have to pay tax on it. Normally, and I've invested in different countries now, maybe three or four countries now, normally, if you make an investment, I get a return, it's called capital gains. So if the value of your investment, let's say you bought an asset for, let's say 10,000, it goes up to 20,000, you've made a capital gains of 10,000, you have to pay capital gains tax on it. So you pay tax on it, that's normal. Now if you might get other things like a dividend, let's say you, you got dividends, you have to pay tax on that dividend if it's above the dividend allowance. Another example, you bought a house, let's say, because I'm talking to German now, she lives in Leeds, let's say you buy a house for maybe 300k, then the value of that house goes up to 500k, even if it's in like 10 years, you sell that house, then you've incurred capital gains on that house. I know for those of you in real estate, you might know about pppr, so primary place of residence relief. So if you sell that house, you buy another house within nine months, you don't have to pay it, but let's just say it's the business you're doing, you're flipping houses or just your rental property. If you buy a property and in and the value goes up, if there's capital gain on it, you have to pay tax on it. Okay, that's normal. Now the same applies to stocks or bonds. If you buy any investment and the value goes up, you've generated capital gains, you've got to pay tax on it. That's normal. The same thing if the house gives you rental income, you've got to pay tax on it. So if your stocks and share gives you dividends, you've got to pay tax on it. But if it's all inside an ISA that, this is why I keep explaining the ISA is not an investment, it's a tax container. The tax protection. So if you put the money inside the nicer before investing it in whatever you invested in, that means that there is no tax on it. That implies. That's the best way I can explain. Explain it. You have no business with tax. That's why basically we've got like ISA millionaires in UK now who for years they just put 20k in the ISA and many of them are not doing any, any, you know, they're not doing any fancy value investing. They're not even analyzing companies like we do. They just buy like a broad, well diversified index fund and go to bed. They do it for 20 years. They've invested 400k. Now that 400k is not supposed to be 400k at the end of 20 years. If not things have really gone horribly wrong. Bank they've only put it in the cash ISA then it might be closer to 400k. But if they've invested it properly it should be getting like better return. So normally they are supposed to pay, let's say somebody has invested over that 20 years and has now generated excess returns of up to a million pounds. Just generally speaking just an easy figure to work out that million pounds they've got to pay 24 capital gains tax on it. It's 240k. That's not money to be sneezed at. That's money that could actually help somebody retire a bit earlier. But if they've done it through an ISA then they don't have to pay any tax on it. I, I hope I answered the question. Okay, what we'll do is someone has got a question, we should allow them to ask it so that then they'll be able to confirm if that answered the question. Okay, so who is the next person?

There is the next one says if you used money in a lifetime ISA to buy a house, as if you've already done that and bought a house, can you continue to pay until 60 and still get the 25%?

Lovely. So, so whose question was that? Who was asking?

This was from Tony, but I think I also wanted to ask it because I've I and bought. So I was like, can you still open another cash licer again or Lisa account again?

Lovely. Okay, thank you. So both of you have asked the question. Lovely. This is really important. I've met a lot of people who said yes. Yesterday I met an a former investment banker. Lovely lady, brilliant entrepreneur. She's actually has a new startup. She's a doctor now, but she was an investment banker. Our very first one on one session when she first joined the Moneywise Dr. Mastermind, she thought that if you had an ISA and you've used it once, that's for a lifetime, didn't know you could use it again. So that was part of the reason she was an investment banker. She knew about investment but this tax angle, she didn't know because she was a big, you know, investment bank and a big bank in Europe before she moved to the uk. Now to answer your question directly, yes, yes, yes. It's good news. Even after you bought your first house, you don't even need to open a new one. You can continue using the same one. Remember that every year you get a free another £20,000. Every year. Every taxi you get another £20,000 ISA allowance. So yes, Choma and train. To answer your question, yes, even after you bought your house, you can continue contributing to the Isaac lifetime. I saw and enjoy the benefits as long as you open it before you turn 40. If you turn 40, don't worry about it. You can't do it anymore. I can't tell you the number of times people call me and say, oh, I've got like two days to my 40th birthday. Like I'm on holiday, I'm away. I don't know what you want from me. But somehow they managed to still be the deadline. It happens every year. It happened again this year, I'm sure of it. Right, okay, lovely. Should we take the next question? Let's allow the person to ask.

Okay, someone I think on the back of that same one Jade said, can they. Can you convert cash Lisa to stock and share license?

Okay, that's a valid question. So some platforms allow it. So I think Moneybox does allow it. Not all the platforms offer stock and shares. ISA stock has shared Lisa. So you've got to find out if your platform doesn't allow it, you can open it on anywhere. You know, with the current rules, with the ISA rules I changed last year, you can have multiple lifestyle, you can have multiple cash. I say I can have multiple stock and shares ISA as long as all of them don't exceed £20,000. Yes. So if you can convert it on the same platform, why not just open another one and continue using it? Okay. I hope that helped.

Right.

Okay. Should we ask. Can you get.

Yeah, the next one.

Yeah. Should we get doctor. Doctor to ask.

Yes, I want him to ask his own. But before you go to his. There's one I skipped.

Okay.

I just. This was it. I think that's a quick answer. I said how do we know what the interest is in for your account? Sorry, how? How do you know what the interest in your account is?

That's crystal. What do you think, Gemma?

Depending on your tax brackets, I guess.

Yeah. Basically you can log into your bank app, you see how much interest is being generated. You get like statements as well. So that would tell you what the interest is. And also if you know the amount of money you have in your account, you've got to check the interest rate on that account. If you've got like 20k in your account and interest rate is 5%, you better. You can bet, you can bet that you're going to get like about a thousand pounds in interest. So yeah, that's how to know what your interest is. Okay, so I'll take a couple more then. Let's delve into stock I shares. I said because we're talking about investing. Right. The answers are just the preambles. Right. So I'll take a couple more, please.

Could you ask your question yourself, Dr. Rajashi?

Yeah.

Hello. Yeah, I. I don't know whether, Andy, you'll have time to talk about.

I have time. I do. Hi, how are you doing?

I'm. I'm fine, thank you. Yes. So my question was basically if you put the money into a junior isa, the only problem is I've heard that you can't touch the ISA until your child becomes an adult. So is there no way we can take the money out before? Because if you're worried that your child will use it for something else, that you didn't intend it. So that's why I was worried about putting the full. Is it 7,000 pounds a year, isn't it?

Thank you so much. I'll tell you what, you are not the only one that struggled with that decision. Right. You're not the only one. That's a question that many people have thought about the question, Dr. Raha. And for those of you that don't understand, let me just give you a bit of background. Last year I made a video which UD from my team has shared he said, how can your child become a millionaire before 18? Or how can you, how can you make your child a millionaire? Whatever. That video was about Junior ISA and genius. So the Junior ISA, just like the ISA, allows you to put £20,000 per year and any returns on it is tax free. You can also do the same with Junior Isa. So you can put up to £9,000 per child that's less than 18 into a Junior Isa account. And as usual, it could be cash or it could be stocks and shares. It beats my imagination, but I understand why most people don't understand what they are doing at that point. That people will put that cash, that, that 9,000 as cash. I'm like, what are you doing? Your child's not going to need the money till they're 18. You've got a long investment horizon for your child. Why would you just leave it in cash, knowing about inflation? Recently I published an article about why 100 pounds that you had 10 years ago in 2015 when I first came to the UK, 100 pounds, what you could buy then, it can only you're going to need at least £136 now to buy the same thing. So £100 in 2015 is equivalent to £73. Sorry, £100 today is equivalent to £73 in 2015. Now that's not a figment of my imagination. I didn't just wake up and dream about those figures. You can check them out yourself from on them. What was, was you can check them out for yourself on bank of England website. You can see those numbers. I know you're a very busy doctor, what am I going to do? Those are the kind of things I like to do. So I go to run the numbers so the value of money actually gets in. You know, with inflation, the value of cash gets eroded. I'm sure we all know that. That's why we are learning about investing. Now Dr. Raha is asking about Junior Isa. There are some rules around Junior Isa. You can invest up to £9,000 for each child. Can you take out the money? No. No. If you invest that money for your child when they turn 18, they automatically get access to that account. It becomes their money. And the other eyes wondering, I don't know, what if the child decides to throw a massive party, sweet 16 or sweet sweet 18 party, or decide they want the Ferrari or decide they just want to travel to Thailand. And maybe you thought that that money will be used for the education. Unfortunately you can't do anything about it. If you invest and this is the same reason why I don't. I'm not breaking with the junior ISA for now. And there are ways around it because you can still open a second Isaac. If you've not maxed out your 20k, you can open the second Isa. If you master your 20k, you've not mastered your partners or your wife or your husband's 20k, you can decide to master out. But once you open it As a junior ISA, no, you can't take it out, Dr. Raha. And when they turn 18, they have access to it. Now having said that, there are a few exceptions, just a couple of exceptions, very limited. And one of them is terminal illness. That's not what we hope or pray for. But if the child becomes terminal ill, you can apply to HMRC to assess the funds early. So that's very rare exception. Now secondly is the death of the child. If the child passes away again, not something we hope for. The funds will become part of the estate. Okay so but other otherwise at 18, when the child turns 18, the Jaisa or Gisa or Junior Isaac automatically converts into an adult Isa in their own name. At this point, the now adult child gains full control and can withdraw the money or continue to invest it, hopefully as they wish under adult ISA terms. Does that fully answer your question, Dr. Raha?

Very clear. Thank you very much, Andy.

Thank you. We struggled with that as well. Thought about it. How am I supposed to know what they're going, whether they're going to be good with money? I don't know what they might decide to do. We're going to teach them and teach them everything. But you know, they might decide that, look, I want a Ferrari and that's what I want for my 18th. Right. Okay. I'm going to take one more question from Elizabeth and then we're just going to go into stock and shares ISA so that we'll have enough time to deal with the other things like several steps before investing. Actually tax 60 and then we'll come back and take more questions Foreign.

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 master class. If you like me to drop more of these clips, just let me in the comments. Comment, invest and share this video as well with friends who may need to hear this 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.

It will 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.