Feeling Behind? It's not too late to start investing

Do you ever feel financially behind for your age? You've worked incredibly hard, you've done everything right, and yet somehow you still feel like you're running out of time financially. You're not hitting the goals you were hoping to hit. Honestly, you're not alone. In a recent Moneywise Doctors Survey, 72% of medics, doctors and healthcare professionals, said they're worried about their financial position relative to their age, and 68% said they sometimes worry that they won't have enough money to retire comfortably in their 60s. Now think about that for a second. These are highly educated professionals like doctors. We are kind of like highly skilled, trained for many years, and we're trusted with life and death decisions every single day. And yet financially, many of us quietly feel anxious and a bit overwhelmed. And after speaking to thousands of doctors over the years, I see the same pattern constantly. Now doctors saying things like, I wish someone taught me these things a bit earlier, maybe 10 years ago. Or after attending some of our investing masterclasses or some of the tax workshops, I hear things like, I wish I learned this 10 or 20 years ago, I would have been far better off. Now, because medicine has a way of delaying your financial life, and that could happen for a lot of people in medicine, you spend years, decades studying, surviving exams, working nights, sacrificing your 20s and your 30s, some people even their 40s. Then one day you wake up, you're 35, you're 40, you're 45 or 50, and you suddenly realize, well, I've earned well, but I still don't actually feel financially secure. And that's where quiet panic starts to set in. I start getting desperate, the fear that maybe I've left it too late. Now, but in this I want to challenge that idea completely. I honestly believe that many doctors are not nearly as behind financially as they think they are. They just haven't figured out their plan going forward. That's all. In fact, your 40s and 50s may even be one of the most important financial decades of your life, especially if you're in your 40s. Now, if you're new here, I'm Dr. Andy. I'm a former salaried NHS GP. I've been an investor for 20+ years. I'm the founder of Moneywise Doctor. I'm also the author of a bestseller on personal finance. The Moneywise Doctor. So our platform has already helped thousands of doctors and healthcare professionals make smarter financial decisions and avoid costly mistakes that has helped them to avoid losing tens of thousands, whether it's around investing, pensions, tax efficiency, and financial well-being. And one emotional theme that comes up again and again is regret. Now, regret about not starting earlier, but the biggest financial mistake is not just about starting late. It's not just about the timing. The biggest mistake is believing it's too late. Therefore not starting at all. Let's not do anything about it. Because even if you didn't start as early as you would have liked to, you can optimize other areas. There are still things you could do. For example, you can double down on consistency. So you start now and you, you're consistent. Behavior, structure, tax efficiency, and avoiding costly mistakes— can double down on all those things. And doctors have a lot of advantage in some areas: high-earning career, stable income, and the ability to invest meaningfully later in life. So the problem is not usually not the income, okay? The is lack of structure. It might not be the highest earning in the country, but decent income. I've met doctors, senior doctors earning $100K, $150K, $200K, $250K who still leak taxes more than half of it. I've had a doctor who said I paid almost £100,000 in taxes last year. That was about 50% of her income. But because they have no system, no clarity, there's no intentionality behind it, there's no strategy. So the money comes in, it goes out years and years and it's disappearing and it's not compounding, not growing. And that's far more common than most people realize. Because we don't even stop to think about it. Now let me just share this thing that is important. Your goal is not to catch up emotionally. Don't try to catch up with your old schoolmates. That's where people make dangerous decisions. Your goal is to make your own plan and work according to it, okay? So that you don't start falling into fly-by-night schemes, crypto hype, trading nonsense, speculation, start trying to make up for lost time by taking unnecessary risks. Now that usually ends up badly. I know that from having spoken to hundreds of doctors who have found themselves in some hairy situations like that. The goal is to become intentional. To have a clear strategy, to have a clear plan. You become intentional with debt repayment if you have debt, saving, investing, pensions, whether it's ISAs, tax efficiency, and even enjoying your income. Okay. So having a plan in place because financial freedom is rarely built through one magical investment. It's usually built through a well-designed system repeated consistently for years where you're not leaking. You're not leaking taxes. And that's where compounding happens. Honestly, that should encourage you because it means that your financial future is probably more, probably brighter than you think. But it's only if you see the moment, seize the moment now and start building it intentionally. So don't forget rule 1 of the Moneywise Doctor. Rule 1 has always been you are the chief financial officer of your life. You're the CFO for your family. So you can outsource, but you're still in charge. So you've got to act like it. It doesn't mean you have to spend all your time learning finance, but at least an hour a year is not too much. So you're not expected to learn everything. You might hire help, accountants, advisors, coaches, solicitors. But at the end of the day, you're still the one in charge. You're the one calling the shots. You're the one in the driver's seat and should take charge of your financial future. Now, before we continue, I'd love to ask you something, okay? Just humor me for a minute in the comments. What age would you ideally like to retire, or for work to become optional for you? Not necessarily full retirement, okay, but financially secure enough that work becomes more of an option, more of a choice for you if you maintain your lifestyle. So if you drop it in the comments below, I think the answers will be really interesting, okay? Now, here's something else many doctors misunderstand. Now, many doctors misunderstand that wealth, a lot of wealth, destroyed. It's not by mathematical investments or calculations. It's due to behavior, attitude to income, taxes. Is that something you deal with? Or other areas would now be lifestyle inflation. You might see people with less formal education, like my plumber back then in Cornwall, was a very wealthy guy. Less formal education but financially intelligent and behaves very carefully with their money. And that's why financial systems matter so much. They have systems in place that make sure they don't overpay taxes. They earn a good income, but they're also very careful with how they invest in it, One area that could actually help you, especially if you are already in your 40s or 50s, is automating things. Automating your investment, your savings, your debt repayment. It removes willpower and discipline from the whole process. Because I think many doctors quietly, you know, you are busy, there's a lot going on, but you're still feeling that pressure, that guilt, a bit of shame, especially if you are a bit, you know, behind. You feel behind, you feel confused about investing, you feel embarrassed about asking questions. You feel you should know now. You might be comparing yourself with entrepreneurial friends or tech workers, and you're quietly thinking, I've sacrificed my youth for this. Please hear this carefully. You're not behind. You, you've not failed. Medicine frontloads sacrifice. So there are years of training, years of delayed gratification, years of putting everybody else first. And because medicine consumes so much mental bandwidth, many doctors postpone financial education for years. That does not make you stupid. It makes you human. Now, here's the encouraging part. Your 40s can actually become one of your most powerful financial decades because by this stage, your income is kind of stabilizing. Your is usually higher than when you were 25. Your judgment is better, your emotional maturity is stronger, and your tolerance for nonsense is much lower— like nonsense investments online. You become more intentional, and intentional investing is incredibly powerful. Now, practically speaking, if you feel financially behind, there are 4 things you could focus on to help you to leverage up. 1, stop trying to get rich quickly. Desperation destroys discipline, and suddenly you're sending money to a 17-year-old in Dubai standing next to A Ferrari, claiming to be a multi-millionaire. Two, tax efficiency. You need to really, really, really dial in your tax efficiency. Make sure you're not losing money due to your tax structure. Look at ISAs, pensions, SIP, even your pension, your NHS pension. See how they work together to save you taxes. Three, automate as much as possible so that you don't have to always be thinking about it or remember. And number four, define what enough actually looks like for you because financial freedom is not always retiring at 36 or 40 or owning a yacht or becoming a millionaire influencer. Sometimes it's simply being able to reduce your sessions or spend more time with your family or protecting your health or sleeping properly again and having more control over your life. That is still freedom. That's a level of freedom. So that may be the version for you, and that is the version many doctors are searching for. Now, if you're right there and you're thinking, I should already know what to do with my money, I should already— I should have learned this by now, please stop punishing yourself. Nobody taught us this in medical school. You've learned anatomy, physiology, biology, biochemistry, pharmacology, and all that. But nobody taught investing, pension, stock, financial planning, behavioral finance. So don't confuse lack of exposure with lack of intelligence. You're obviously a bright person and you're not late. You're just becoming aware. At my place, we have a saying that when you wake up is your morning. Awareness changes everything. Now, 60% of UK doctors say investing feels too risky or too complex. Not 60% of the general population. 6 out of 10 doctors. Now, these are highly skilled professionals trained to read evidence, weigh risk, make life or death decisions every single day. And yet 6 in 10 of us find investing too complicated to start despite being very hardworking professionals. But this is a different ballgame. Now, if that's you, you're not alone. Before you tell yourself this is just a money problem, let me show you something. Of the 1,600 UK doctors who completed our MedScan, our financial wellbeing scorecard, 78% said they save money regularly and 61% said they have enough savings to cover 3 difficult months. So the money is being set aside. It's just, it's not being put to work as hard as you are. So I've seen this story for years. Doctors who have been saving diligently for a decade, maybe in a regular savings account, Or even in a cash ISA. They open the ISA, they pay into it faithfully, and they leave it sitting all in cash because investing felt too risky and they were not sure what to do. Sometimes it might even be a child junior ISA or junior investment account and it's sitting in cash. Meanwhile, inflation is quietly taking its toll. And for some doctors saving in their regular account, they're actually paying tax on interest, which most of them don't even realize. I see doctors with a SIP, a personal pension. They never invested, just cash sitting there, or even an ISA slowly losing value to inflation. This is not a savings problem. It's a financial education disaster. And the cost of that education gap is massive, and it's visible everywhere in the data we've got. 72% of doctors are worried about their financial position relative to their age. 68% are worried they won't have enough to retire comfortably at 65. 2/3, 66%, don't regularly invest in stocks, bonds, funds, or at all. Smart, hardworking doctors saving They're worried, not investing, stuck, and unclear. Maybe you've tried to invest yourself and you got burnt. A clear example is a GP in our community prior to attending my masterclass last year, prior to even seeing any of my content. He had lost over £100,000 on a property deal that quietly collapsed. Another NHS consultant lost over £40,000 to a crypto scheme. Another SaaS doctor is facing a £24,000 capital gains tax bill that's completely avoidable, but nobody told her that she could have invested inside a tax wrapper. Another example is a resident doctor who lost more than £3,000 thousand pounds in a couple of weeks chasing gold and silver from random tips on a WhatsApp channel. So for you, you might be on the other side. You've never really started. You've listened to podcasts, you've attended a free masterclass, watched YouTube videos and all that stuff for years. But every time you open an investment platform, the fund names look like a different language. They sound like Greek. So you close the tab. You tell yourself next week. Next week becomes next month. Next month becomes next year. And before you know it, another decade has gone and you've lost that opportunity to compound. Has slipped by. Whichever group you are in, whether you are in the group that is investing without understanding or you haven't started, we all know that doctors are really hardworking. But the truth of it is that without a system, you probably end up in the same place. But here's what most doctors run into. Everyone says the same thing: just buy an index fund. Just buy an index fund. There's a 17-year-old millionaire on TikTok. He says it. The guy standing in front of Lamborghini on Instagram says, "Oh, just go ahead and buy an index fund." Your colleague on WhatsApp also says the same thing. It sounds simple until you open an investment platform. You discover 870. Options. S&P 500, FTSE 100, NASDAQ 100, MSCI World, FTSE All-World. You see accumulation, distribution, TER, ETF. Suddenly you're not sure what to do. So you tell yourself you'll go back to it later. And before you know it, several months pass, maybe a couple more years, and you miss the gift of compound interest. By the end of this video, you understand clearly exactly which steps solves which problem, and you have a system you can apply straight away. Of course, this is not financial advice. This is education. Don't take any steps without taking proper advice. So earlier I mentioned a few examples. Let's come back to some of those examples that we mentioned of doctors who've made these financial mistakes. There was Dr. Rima, GP partner, experienced doctor, brilliant clinically. But for years, every time she received a brown envelope from HMRC, she shoved it under her bed unopened. That's what she shared with me. She told me she had been looking for someone for years to help her understand finances for more than 15 years. The cost of that avoidance was huge, as you might expect. When she did manage to save, she put it in a cash account and spent enormous energy shopping around for the best interest rates. That's a losing game. Long term, she was losing the game to inflation, and she missed out on decades of compounding. Now she feels that she should be stopping work at this point, but she still has to keep going. Okay. Dr. Ola, NHS consultant, He had over £100K sitting in a regular savings account because he thought he was being safe. You know, he was afraid of investing. What he didn't realize was that the interest on that account was being taxed at 45% because he's an additional rate taxpayer. He was overpaying around £2,250 in tax every single year for doing what he thought was responsible. Additional tax. And Dr. Mo, locum GP, he had actually been investing consistently. For about 5 to 6 years. He had built up around £100K in capital gains, but he was investing it through a general investment account with no tax protection instead of a tax-protected account. So when he attended my workshop and learned about tax-efficient investing, and he realized, he went back to check if he could sell it, he now saw that he had a £24,000 tax bill. Now, none of them had a clear understanding of how the system works. None of them had the financial education they needed. These are intelligent doctors, right? Today, I want to give you that system and that clarity so understand it clearly, and that could help you avoid these costly mistakes. Now, the framework I'm going to walk you through is from a method I teach in my book. In chapter 6, I call it the SCRUBS method of investing. It's a framework I shared in my book, The Moneywise Doctor. Now, the full SCRUBS framework has about 6 parts. You can read all of it in my book, basically, or you can check my channels to get it. But today, I'm focused on the 3 steps that directly stop the financial leak And help you to start your journey to financial independence. So number one, diagnose. You want to find your tax advantage. Number two, structure your investment. Number three, you want to sort of build the system before you then automate it. So let's go. Number one, you want to start with the diagnosis. Where exactly are you in this SCRUBS framework? Okay. Before you invest a single pound or dollar, you need to know where you stand on tax. So I've done videos around this, SEEP or ISA and all of that, because investing without understanding your tax position is like pouring water into a leaky bucket. It's like putting coins into a pocket with a hole. You might not notice the loss. You might not notice it in real time. But when you need it, it's not there or some of it is gone. Here's what most doctors miss. If you earn between £100K and roughly £125,000 in adjusted net income, you are in what we call the 60% tax trap. I've done videos on it here. Even if you earn less than £100K, there are other benefits you can miss out if you don't understand your adjusted net income. For instance, if you earn above £60,000 in adjusted net income, you start losing child benefits. Okay. At that point, at £80K, you've lost everything. Now, here's how the 60% tax trap works. For every £2 you earn above £100K of adjusted net income, you lose £1 out of your £12,570 tax-free allowance. Start losing that. By the time your adjusted net income hits about £125,140, your personal allowance is entirely gone. Now, the effect is that on every pound earned in that window, you're effectively taxed at around 60%. That feels rough. Most doctors don't even know this is happening. They just feel like their take-home isn't getting any better, even though they are working harder, doing some extra sessions. And here's another one most doctors miss. PSA. Okay, if I say PSA to a doctor, the brain goes straight to prostate-specific antigen. But in personal finance, PSA stands for personal savings allowance. If you attended my masterclass in the past, you know this. It's the amount of interest you can earn on cash savings before HMRC starts taxing your interest. So if you're a basic rate taxpayer, your PSA is £1,000. If you're a higher rate taxpayer, your PSA is £500. And if you're an additional rate taxpayer, your PSA is zero. So every pound of interest in your Your regular bank account is taxed. That's why Dr. Ola was leaking about £2,250 a year. He didn't realize his PSA was zero. And one more thing that's worth flagging here. If you have a limited company through locum work, private practice, or anything else, a limited company can actually be used to contribute directly to your pension. That can reduce your corporation tax. It's a powerful tool for any doctor who has a limited company. But of course, if you haven't got a limited liability company, carry on with the rest of the video and you can still see other useful areas that you could use. So step 1, before you invest, First, diagnose your tax position. Where are you? What's the best option? What's your adjusted net income? Which tax band are you actually in? Is the 60% tax trap pulling money out of your pocket right now without you even knowing? Is your PSA giving you no protection on your cash savings because you've exceeded it? Could a limited company structure help with your income? Now, there's one lever that fixes most of this 60% tax issue, and that's pension contributions. Obviously, it can reduce your adjusted net income. Of course, claiming professional expenses and charity contributions could help. What doesn't help is ISAs. Contributing to ISAs doesn't help to help you come out of the 60% tax trap. That doesn't mean ISAs are less or not great. Whatever gains you make in ISAs, as you know, is not taxable, and the dividends are not taxed. The capital gains are all protected. But ISAs don't fix the 60% tax trap. Only pension contributions and a few other levers do that. So you want to first of all find out what's your situation before you set up a structure. So structure is the next step. So you start looking at building your investment blueprint. So that's the structure. What should you be investing in? Most UK doctors have 3 tax-efficient containers available for them. So that's part of your tax structure: your NHS pension, your personal pension like your SIP, your self-invested personal pension, and of course you've got an ISA. Most doctors use one of them, usually the NHS pension by default, and ignore the other 2. Now the NHS pension is what you call the defined benefit pension. You don't actually invest anything inside it. It's a calculated number based on your years of service and your pensionable pay, of course adjusted Inflation, so there's inflation-linked growth. For someone like me and for many doctors joining the NHS today, the NHS pension age is like 68 years. So that means you have to wait until you're 68 before you can assess your NHS pension benefit in full. If you're a doctor who wants more options earlier in life, you want financial freedom, you want the ability to step back from work if you want to, the ability to take a break, the NHS pension is a great safety net, but it's not what gets you there. Not if you want to do it earlier. Of course, this doesn't mean abandoning the NHS pension. That's not what I'm saying. saying here. This just highlights the need to create more options. Once you understand your options, the total annual allowance for pension contribution across all schemes, that's both your NHS pension and your SIPP contribution, is still the same. It's £60,000 for this tax year. So if your NHS pension input amount is, say, £40,000, you still have £20,000 of headroom left. So that £20,000 could go into a SIPP, or you could get tax relief on top of the marginal rate. Okay, so you don't want to cross £60,000. So if you're a 40% or 45% taxpayer, you're going to get tax relief at 40% or 45%. 20% happens automatically. The rest you claim through self-assessment. So here's roughly how it works. If you contribute money to a SIP, the platform automatically claims 20% of the gross from the government on your behalf. That arrives as basic rate relief. If you're a higher-rate taxpayer, you claim another 20% via self-assessment. Then there's ISA. 20K a year after-tax money you can invest. The money grows tax-free. The dividends are tax-free. The capital gains are tax-free. And when you withdraw, under the current rules, they're tax-free. Here's something most doctors with families also never calculate. If you and your partner both use up your ISA, that's £40K. That's £40K. If you've got the money, great. Now, if you still have money to invest before you go and do a GIA, if you've got children, they've both got like £9,000 allowance each. So if you've got 2 children, that's an extra £18K. That's £58,000. Of course, there's also Junior SIP. Your children could have an allowance of up to £3,600 gross per tax year. Now, for doctors in our MoneyWise Doctor community who are using this stack quite properly, they've been able to grow their finances without having to do too many crazy shifts just to feel like they're moving ahead. The doctors who don't use this system, they accumulate gains inside the wrong container, and they lose a huge chunk of those gains to capital gains tax at some point. So the second thing is just about structure. Know your containers, know which one to fill first, and know the right order. And of Of course, there are other vehicles too. EIS, SEIS, like the Seed Enterprise Investment Scheme for doctors investing in startups. It has its own tax advantages as well. Okay. That's not where to start. So which one to fill will depend on your income, your goals, your risk tolerance, your capacity to bear risk. And that's exactly what we'll walk through in our workshop. Okay. Now the next thing you want to look at is automation. So you set the system to run without you. If you've got other things to do in life, right? Not monitoring stocks. So step 3 is the one most doctors skip and it's the one that actually makes the whole Investing is not about willpower. I know this from experience after 20 years. It's not about timing the market daily. It's not about logging in every day to check your portfolio prices. You're going to have anxiety. If you're doing those things, you've turned investing into a part-time job that nobody's paying you for. And the data shows that the more you check, the worse your returns get because you're more likely to make an emotional mistake when the market moves. It's greed and fear. So here's the principle I teach that I've used, sort of like many doctors have also used. It's called AMASS, Automated Monthly Allocated Savings System. It's direct debit from your income into your tax-efficient investing account, set up once, it runs on its own. Both pointed at broadly diversified, low-cost index funds in the right containers. If you don't want to spend any time doing this, this is your approach you could consider. So that in itself could be where to start so that you keep things Simple, straightforward, is automated. Now, the index question. People say, well, I logged in, I don't know which index fund to buy. Is the FTSE 100 enough or do you need something more global? What's the difference between MSCI Global, MSCI World Fund, and MSCI All Country World Fund? Is accumulation better than distribution? I get these questions every day. In fact, someone has just asked that in the community. What's TER? Am I paying too much? And here's the one that that most doctors get caught out by. Your platform might offer the same underlying fund under multiple different names with different costs depending on the share class. So even when you've picked the right fund, you might be paying more than necessary for the same thing. So identifying apples to apples is harder than it looks to compare it properly. So once you've done step 1 and step 2 properly and you've understood the fund landscape, and step 3 is what lets compounding to do job without you interfering, without you having to check every day. Now, the doctors who quietly build wealth are not the ones who pick the best stocks. They are the ones with the most boring, automated, passive investing system. Boring stuff compounds. Shiny and clever things don't often do well, as we've seen again and again. Now, if you've been following along so far, those are 3 steps: you diagnose, you structure, you automate. These are all part of the 6 steps in the SCRUBS method for investing, for The full framework also covers things like building your safety net, removing high-interest debt, understanding asset allocation, underwriting your risk with protection so that when the markets fall, and it will fall, you have a strategy in place that helps you to keep sleeping at night without selling your investment at a loss. If you've ever decided you wanted to start investing, maybe that's one of your goals this year. You might have heard the popular online advice, whether it's on TikTok or YouTube: just buy an index fund, just buy an index fund, just buy S&P 500. So off you go. You went, you downloaded the app, and you logged in and opened it. You typed S&P 500, and suddenly you found yourself staring at 47 different funds that all look the same. A bit confusing. You don't know what they do. If that's you, this video is for you, and I'm going to share a cheat sheet at the end that can help you to understand these things quickly. Without getting overwhelmed. Now, I taught about 4,000 doctors tax-efficient investing, and I see that even very smart doctors struggle with this thing. And it's not because investing is complicated. Um, so they go in and they just get overwhelmed. They don't know where to start. That's part of why they come to my classes. Before they come, they watch another video, then another video, and 6 months later, sometimes they haven't even done a single thing. Maybe it turns to 6 years. And here is the irony. Of course, you know, doctors, you, if you're a doctor watching this. You're obviously smart. You can interpret scans, run cardiac arrest, you know, sessions, make life decisions. I am a doctor myself, so we spend a lot of time studying. But when it comes to investing, we get overwhelmed. Okay, we feel like, oh, are we going to make a big mistake? I've been an investor for over 20 years. I'm a former salaried NHS GP. I'm also the author of The Money Wise Doctor, which was a bestseller on investing and personal finance. In fact, over the last 2 years, I've run about 2 dozen masterclass And I've taught 4,411 doctors tax-efficient investing. So what I've seen is that choosing the fund is rarely the problem. The real problem is understanding what you're actually buying and how it aligns with your risk and your goals. But by the end of this video, you'll understand not just what an index fund is and how it's different from an ETF, but you'll also understand how to think about diversification to reduce your risk. And I'll also tell you the 4 things I check before investing in a fund and how to stop overthinking And finally get started. If that's what you're here for, let's dive in. First, what's an index fund? Let's use football. Let's use football to describe index funds. Imagine that I asked you to predict who will win the next Premier League. You could spend hours or days and resources trying to pick the best striker, the best defender, the best manager, the best club. Maybe you're right. Maybe you might pick Arsenal. I don't know. Or maybe you're wrong. Maybe your star player gets injured. Maybe your chosen team has a terrible season. That's a little bit like stock picking. Not Exactly the same, but quite similar. So trying to identify the next Apple, the next Nvidia, the next Amazon—can it be done? Of course. I've had experience investing over 20 years, and I've done quite well with both individual stocks and funds. Now, some investors do it exceptionally well, but it requires time, patience, research, analysis, boundless patience. And honestly, most busy doctors have neither the time or the desire to spend evenings building DCF valuation models and reading annual reports. Reports. Now imagine instead you bought the entire Premier League rather than trying to predict which one will win. Every club, every player, every winner, and of course every loser. Now you no longer need to predict who wins because whichever team wins, you own a piece of the pie. You own a piece of them. That's essentially what an index fund does, especially if it's broad and well diversified. So instead of trying to find the winning company, the ones that are going to do well, you buy the entire basket, thereby reducing your risk. One purchase, you get hundreds, even thousands of companies in that basket. And that's why index funds became so popular since they came out in the '70s. They removed the need to be clever. They removed the need to predict. They removed a lot of human error. You just simply participate in the growth of the businesses. Of course, there's risk, but now diversification is reducing that risk for you. Now, historically, this has been a very remarkable In fact, over long periods of time, most professional managers, they fail to beat their benchmark index, which means that average turns out to be surprisingly powerful. And when average is combined with low costs, tax efficiency, and decades of compounding, average becomes extraordinary. Now, the numbers are all out there if you look at the reports. But why do people still get stuck? Because when you search for index funds, you discover that it's not just one. Okay, there are hundreds, thousands, and sometimes they sound identical. You hear things like FTSE 100, FTSE All-World, MSCI World, S&P 500, NASDAQ. Then you hear terms like accumulation, distribution, ETF, index fund, and suddenly your brain says, I'll come back to this later, which usually means never. Or maybe come back in 6 years' time or 10 years. You've lost that time. But the good news is that all funds fall into a small number of categories, and I've prepared a fact sheet that can help you with that. Now, once you understand these categories, the confusion disappears. I'll tell you how to get it. Now, think of investing as moving from concentrated bets to broader baskets. So at one end, there's NASDAQ 100, mostly large US technology companies. There's Microsoft, Apple, Amazon, Nvidia. Fantastic when technology is booming, painful when technology is struggling. You're making a concentrated bet by doing that investment. Next, look at things like FTSE 100, largest UK listed companies, the top 100 banks, oil, pharmaceuticals, consumer goods, but still limited to one country, one market. It's more diversified than individual shares, but still relatively concentrated by location or geographical location. S&P 500, the top 500 companies, the top largest companies in the US, is broader, more diversified, but still just one geographical location, one country. So many people think S&P 500 is the world. Yeah, it's quite large. It's a big part of the world market, but still limited. You know, it's America, but it doesn't have massive companies like Taiwan Semiconductors. Yes, America is a big country and it's powerful, but it's still one country. Then there's MSCI World. Now you're investing across multiple developing and developed countries. There are thousands of countries. They're like FTSE All-World. They are now looking like a broader perspective. The FTSE All-World looks at both developed markets, emerging markets. There are thousands of companies you can buy with one purchase. Maximum simplicity. Usually like large and medium-sized companies, but it's broad. Now, the less dependent you are, you become on one single country or one sector, one company, the more diversified, the less risk. Now, there are also other categories because some people want to buy thematic funds, thematic funds like AI funds, semiconductors, healthcare, clean energy. So instead of just buying one company that does that, you're buying the index. You're buying like a whole basket. So there are also value-based funds. There are ESG funds. So environmental, social, governance. Of course, there are faith-based investing. For example, I've got like Muslim doctors in our community that prefer Sharia-compliant funds. Now, the important point is this: your investment should fit both your financial goals and your personal values. And of course, your time horizon and your risk. So let's look at ETF versus index funds because that's one thing that some people People find confusing, and it's not really that big a difference because the internet makes it sound much more complicated than it really is. There are some differences, but what's relevance? An index fund just basically describes what you are buying. An ETF describes how it's packaged. Think of it this way: if index investing is the destination, an ETF is simply one of the vehicles that gets you there. So ETF exchange traded fund can be traded multiple times. Index fund maybe once a day or twice a day. So ETFs trade throughout the day like shares, while traditional index funds are usually priced once daily. So for long-term investors, does it really matter? The difference matters far less than most people think. The bigger questions are, what does the fund own? What is inside that basket? How diversified is it? And what does it cost? What is it costing you? And will you be able to stick with it long-term? Again, another thing that confuses people is accumulation versus distribution. This is actually more important. Most funds come in 2 versions. So there's the accumulation and there's distribution. You might see ACC and DIST. Accumulation funds automatically reinvest your dividends. You don't see the money coming out. It quietly compounds in the background. Distribution funds pay out dividends as cash. Same companies in the basket, the same investment, just different treatment of income. For a doctor, for instance, investing inside ISAs and pensions for long-term growth, route. You might want to consider accumulation because it keeps things simple and you reinvest, so it helps compounding to happen quicker. Now, there are 4 things I look out for before I invest in a fund. I'll share them with you. Number 1, what does it track? Is it global or a country like US or UK? Is it a sector like technology or healthcare? Number 2, cost. It could be TER, total expense ratio, or OCF, ongoing So these costs can compound over the years and over the decades. They might look small, but costs matter. And don't forget platform fees. They are often more important than many people realize. Some platforms don't charge a fee, so that's great. 3, accumulation or distribution. How are the dividends treated? Is it being reinvested or paid out? Number 4, obviously, is tax efficiency. Are you using the right tax-efficient pot like your ISA or SIP? Most people spend too much time trying to find the perfect fund. But what is really important here is once you find what you need to invest in, consistency Consistency, tax efficiency, and give it time is the best approach. So the biggest mistake is never investing because you are trying to choose the perfect one. So you spend so much time. Now, perfection could be expensive, but progress is actually profitable. So what should we do next to make it practical? If you're feeling overwhelmed, don't start by looking for the perfect fund. Start by investing in your own financial education, your goals. Figure out your time horizon, your risk tolerance, your values, then choose a sensible, diversified fund when you learn what you need to do. Because the best fund in the world does absolutely nothing if you never invest it. Now, I've prepared something special. I've done a one-page index fund cheat sheet that can just give you a quick glance and you can see the different funds, what they do, and a bit of like, um, key jargon buster below here where we explain the terms. So you can download it totally free of Just check the link in the description, click on it. I can download it. I hope it helps you with your journey. 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 two years? 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 rates, the real tax treatment, the real cost, the real exit, because who has Do you have 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 incumbents, 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 to assess 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, 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 to 25 years of investment? Tell me below. We'll come back to that comment. We'll 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. 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 In a sense, paying down the monthly mortgage month by month is 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 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 That most comparisons conveniently leave out. So before you make any investment decision, this stuff says 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 moneywise doctor dot com forward slash MedScan. Scan, or you can check the link in the description to get it. It's 3 minutes, real clarity, free. 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 2 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. Victoria, 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. Bayo 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 a £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 Bayo rents the property out from day one. He never lives in it. He's a landlord for 25 years. Dr. Glory, 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, we invest it in an ISA, okay? Same starting capital, same monthly commitment, same 25 years. The only difference is the vehicle, okay? The same about £570 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 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 at £7,000. 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 rent Rental income is a landlord, right? Over 25 years by your collected rent, he's using real. So if you use UK market rental market data across five-year periods because the rent did change over time in 2001 to 2005 average £450 per month. So in 2006 to 2000 obviously 2010 is different and all the way to 2021 to 2026 average was £128. 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. Buyer 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 years. 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 we need to pay attention to. 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 higher rate taxpayer, you are losing here. For a higher 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 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 Minus income tax of £34,600. 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 costs and tax. Let that sink in. Almost half of it— rent, rental income, tax, and costs. So Bayer collected £235,200 in rent. 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 assess 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 those same 25 years. What has she been up to? Gloria, Dr. Gloria, let's just switch lanes entirely. While Bayo was Filing 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. 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 Bayo 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 Bayo put in as a deposit for the house. She chose one simple passive fund, the MSCI World Net Total Return Index. Index is 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 Bayo 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. They 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. So if Gloria had checked her ISIN 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 enormous when the recovery came. Now, the middle years were between 2003 to 2015. Obviously, that 12-year period, markets recovered in 2003. Gloria Daisa 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. 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 2027. From 2015 onwards, Gloria Dyson moved into what I'll call compounding acceleration phase. Obviously, there were the tech companies like Apple, Microsoft, Amazon, Alphabet, Nvidia. The global technology sector became the dominant driver of MSCI World returns throughout 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. 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. 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, and similar providers were offering MSCI World tracking funds at 0.12% to 0.2% per year. And this matters because Gloria was not in a fancy high-fee managed fund by a wealth manager. She was not paying a fund manager or financial advisor to pick stocks 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. She 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 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 costs 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 drag over 25 years would be £104,000. Not £25k, £104k gone in fees, more than times 4. At 1.5%, it would be £149k. At 2%, it would 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, managed fund, 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 it when I publish it. This is tea, as Gen Z would 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 a TER of 0.22%. She basically does nothing extra. Her automated monthly contributions to her fund happen without any intervention her, and it just follows the market average returns, possibly. 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, together, you're getting ₦640K. Now, the total money Gloria actually put in 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 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 Bayo 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 assets— you sell your shares, I sell my property— and they decide to do this in January So both buyer and Gloria decide to access their money. Gloria exits the screen. 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 our 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 ours, 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 live 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 £12K 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, the 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 check to HMRC before buyer sees a single penny of the property gains. Now remember that TR 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 £25,000. If it's a passive fund, buyer 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 £640,000. 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. So his accumulated rent, and when you deduct because it's got about $132,000 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 wanted to pause and drop something in the comments. Are you surprised by BioStack Bill? Did the Section 24 surprise you? Did you already know about it? If you own a buy-to-let property, 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 one 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 costs. 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 That income arrives before they even touch their ISA or property income. 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 share ISA and property. At the moderate standard of 31.7% per year, Bayo's pot of £315,000 lasts almost 10 years. Not up to 10 years, but almost. If he retires at 65, it runs out at the age of 75. Of course, you got the other pensions like state and NHS, but Gloria's pot of £640,000 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 the comfortable standard, it's roughly £40,000 per year. Bayo's pot runs out at age 73. Gloria's pot runs to age 81. 8 extra 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, Bayo 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 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 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. 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 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 Bayer, 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. Her real return after fees? $459,000 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 decision-making. The effort. A global index fund inside an ISA or SIPP 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 refuses to leave or refuses to pay, you might end 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 you did not apply for. So Bayo worked for his investment. He worked for his property while Gloria's investment worked for her. Okay. 2 different things. 2 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 rates spike 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, rewrites 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 a 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 phase if you've been a landlord like I've been. Um, 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 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, it's SIP 55 years, but, um, stock and share rights at any time. 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 your control. It's not click a button. And in January 2026, with CGT at 24% and the annual exempt amount at just ₦3K, buyer will be a motivated seller at this this point with very limited control over when and how he sells. Okay. Because he 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 £12,300 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 Bayo. 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 share this in my masterclasses 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 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. 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 Ts, 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. And then 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 If 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 helps you think more clearly, share it with someone who is currently weighing up this exact decision, or share it with a colleague. I'm sure many people have interesting opinions, and I'll be interested to hear what people have to say. What if I showed you a perfectly legal way to increase your money by 20%, 40%, or even 60% before you've even bought a single investment? It sounds too good to be true. Not true stock picking, not crypto or anything like that, not property, not market timing. This is without taking any additional investment risk. Would you at least want to understand how it works? Most intelligent doctors would. Now, before you rush to the comments, I'm not talking talking about investment returns here. I'm talking about tax relief as it relates to your pension. And there's a catch. Not everyone qualifies. Not every doctor should do it. And in some situations, it could actually be the wrong thing to do. That's exactly why understanding this clearly matters, because the difference between doing it correctly and doing it incorrectly could reward thousands of pounds, sometimes tens of thousands of pounds, could be a costly mistake. Now, this is money you could have invested, money that could have compounded, Money that could have actually brought forward your financial independence and help you either to retire earlier or at least to have options. It's nothing shady, it's nothing exotic, it's nothing HMRC doesn't already know about. I've used it myself. In fact, many doctors already have access to it, they're just not using it correctly. So before we go further, let's just look at SIP. What is it? It's basically self-invested personal pension. Of course, you can have a personal pension which a wealth manager or advisor or a pension company manages strategies, but I use a SIP. I do DIY investing. So SIP is basically Self-Invested Personal Pension. It's a pension wrapper that gives you more control over how your pension money is invested. So different from the NHS pension. But this is where many doctors get confused. A SIP is not an investment, just like an ISA is not an investment. A SIP is basically the container. Think of it like a suitcase. Inside that suitcase, depending on the provider, you may be able to hold different things. You might be hold index funds, you might be able to hold ETFs, you might be able to hold investment trusts, shares, bonds, and cash. And with some providers, you might even be able to hold commercial property. But the SIP itself is not the investment. The investment sits inside the SIP. Okay, just like in your ISA. The same is true of an ISA. An ISA is not necessarily an investment either. It's also a wrapper because people say, I'm going to invest in my ISA. No, it's just a tax wrapper. That's why saying I invested in an ISA ISA is a bit incomplete. Better question is, what did you invest inside the ISA? And what was the— and was the ISA the best tax wrapper for that money at that point in your life? Because the wrapper determines the tax treatment, and the tax treatment can change everything. This is really something that is important to understand. Now, again, it's important to see why SIPs can be really, really powerful and why you should understand them. The big attraction of a SIP is obviously tax relief. It can be massive. For a basic rate taxpayer, if you pay £80 into a pension, HMRC adds £20, and £100 goes into your pension. For a higher rate taxpayer, additional rate tax relief may be available through self-assessment as well. So you get the 20%, can claim another 20%, obviously for a higher rate taxpayer. For additional rate taxpayer, it could even be higher. And for someone caught in the 6% tax trap, pension contribution may also reduce your adjusted net income and potentially store some or all of your personal allowance. This is why I opened the video talking about 20%, 40%, or even 60%. Again, this is not an investment return. The investment hasn't done anything yet. This is just basically the tax system actually helping out here. This is why tax-efficient investing matters so much, because if you save tax before the money is invested, you're already starting from a stronger position. That makes sense. It's maths. Okay, now let's go back to our GP who obviously invests invested this money already. She was earning around £118,000 in adjusted net income. Basically, she had £20,000 available. She put it into a stock and shares ISA. Now, obviously, she's a higher rate taxpayer. The ISA might grow beautifully over time. It might be invested in a low-cost index fund, whatever she's invested in. It might be well diversified. It might be sensible. But if that £20,000 had also gone into a pension instead and invested in the same 3 things might have happened. First, her adjusted net income may have come down. So potentially from £118,000, it could come down to £98,000 if structured correctly. Secondly, she may have restored her full personal allowance. That will be worth around an extra £5,000 in tax saved. Third, she may have received pension tax relief on the contribution. Again, as a high rate taxpayer, it's 40% gross. So when you combine those effects, the net cost, basically looking at that £20,000, it dramatically looks much more attractive than putting it in an ISA. This is where the difference can be worth several thousands. In some cases, it could be as much as £12,000 difference. But again, the point is not that everyone should use a SIPP instead of an ISA. The point is that the order matters. The sequence matters. You have to think about these things. The same investment in the wrong wrapper at the wrong time can quietly cost you a lot of money. Thousands of Okay, so basically enough. If you've made this mistake, I don't want you to feel bad. The other taxi is coming, you can learn it. This is the part that many doctors miss. That GP was 56 years. So when people say, well, pensions are locked away for years, yes, that's true. But in her case, the money wasn't being locked away for 30 years because basically she was already eligible to draw it. She was already at an age when pension access was available, basically, because it's 55 now. So your SIP is basically— you can access it at 55. And of course, it's changing in the future. From 2027, it will be— 2028, it will be 57. If she was younger, that would be totally different. If you are 32 and you need the money in the next couple of years, the SIP may be completely inappropriate. In fact, you shouldn't be investing money you need in the next couple of years. Saving for a house deposit, school fees, an emergency fund, maternity leave, relocation, or anything you might need soon. A SIP may not be the right place because basically it's pension. In fact, if you need the money in the next 1 to 2 years, that money should probably not be invested in the stock market at all. That is what I believe. It may need to be in cash basically, or even sort of like short-term, you know, sort of like debt, things like bonds or treasuries. A SIP is usually retirement money. So yes, a SIP can be powerful, but only when they match the purpose. Good. So does that mean every doctor should go off and open a SIP? That's not what I'm saying. Absolutely not. You need to understand these things clearly. This is where TikTok, social media often gets people into trouble because someone hears tax relief, pension contributions, extra £12,000, 60% tax trap, and suddenly decide, oh, I'm going to rush off and go on a platform and open one. It might be, it might not. It depends on your situation. A SIP is simply a tool. And like every other tool, whether it Helps depends on the job you're trying to accomplish. So let's look at it. Who might a SIP actually help? Who might it suit? One, a high earner, especially if your adjusted net income is over $100K and you're being pulled into the 60% tax trap. That's a way to come out. For some doctors, pension contributions can be one of the most powerful tax planning tools available. That's exactly why this lovely GP, her situation caught my attention. However, you must check that you still have unused annual allowance so that you don't exceed the annual allowance and incur a penalty from our friends at HMRC. 2, if you're a locum doctor or private doctor working through a limited company, particularly if you don't have access to NHS pension, a SIPP might be great. If you're operating through a limited company, employer pension contributions into a SIPP can sometimes be very tax efficient because the company may be able to make pension contributions as a business expense. Business expense, but this is subject to rules and circumstances. 3, doctors not in the NHS pension scheme. So if you don't have access to NHS pension or workplace pension, a SIP may be one way to build a retirement saving with tax relief, especially if your workplace pension is not that fantastic. 4, doctors already in the NHS pension who have unused annual allowance and want to build additional retirement assets outside the NHS pension scheme. Because despite what many people think, NHS pension versus SIP is often the wrong way to look at it. For many doctors, the answer is NHS pension plus SIP, as long as you have headroom in terms of your unused annual allowance. It's currently £60,000 for this tax year. So these are different tools, they do different jobs. Now let's look at SIP versus NHS pension. Just look at them, their differences. This is one of the most misunderstood areas of personal finance for doctors, and sometimes it It feels like comparing apples versus oranges. So you don't just compare— they're not apples for apples because the NHS pension is a defined benefit pension. What that means is that you're not building an investment pot, you're just building an entitlement for future income. So it's salary for life. In return, you receive some remarkable benefits. One of them is a guaranteed income for life. 2, inflation protection, debt and service benefits, ill health benefits, and you also get the employer contribution. And perhaps most importantly, no investment risk. Your retirement income is not dependent on whether the stock market happens to be up or down when you retire. A SIP works a bit differently, very differently. A SIP is a defined contribution pension. You can access it earlier at 55, basically 57 from 2028, while the NHS pension for me is 68. You build the pot, you choose the investments, the value can rise and fall. The value can rise, it can fall, like any investment. So you're carrying investment risk. So you gain the flexibility and control over the underlying investment, but you also gain the responsibility. So the NHS pension gives security. Obviously, for someone like me, NHS pension will be 68 years, but the SIPP gives flexibility and control, 57. The NHS pension is a defined benefit. The SIPP is more like an invested pot. The NHS pension is not usually something I suggest to people to casually opt out of. In fact, if you are thinking of opting out of the NHS pension, please watch the video somewhere here on my channel about the NHS pension so that you can understand what you may be giving up. Just search for it on the channel. I made a video about it. A SIPP may sit alongside the NHS pension, not instead of it. That distinction matters. But now let's look at something really crucial, the annual allowance. Because currently the annual allowance, how much you can put in your pension tax-free, is £60,000. And here's another point many doctors miss. The pension annual allowance is currently £60,000 for this tax year for most people, but that allowance covers all pension input for the tax year, not just your SIPP, not just your private pension, not just your NHS pension, all pension input. So this can include your NHS pension growth or your pension input amount, your workplace pension contributions if you're doing anything else, employer contributions, personal pension contributions, SIPP contributions, everything. This is where many doctors get caught. They hear you can put £60,000 into a SIPP or into a pension, then they forget about their NHS pension that they may have already used a significant part of that £60K allowance. So some doctors also have unused allowance from previous years that can be carried forward. So that's something to look at. It's called carry forward. You have to look at the carry forward rules. If you have unused allowance that you haven't used up to £60K from the previous years, you can carry it forward as long as you are registered in the pension scheme in those years. You do also need enough relevant earnings to make these contributions, and you need to calculate what your allowance actually— how much you've used. This is why I always say don't guess, check first, make sure. You've checked what is my unused allowance, where's my headroom. Just like a doctor or healthcare professional in medicine, you check before you prescribe. In finance, the same things. Before you rush off to invest or to use a pension, check if you still have allowances. Now let's look at SIP versus ISA because this is another area people try to compare, and I've made a detailed video about that here as well. It brings us back to this GP that we're talking about because the real question wasn't, is SIP better than an ISA? I've done the comparison, head-to-head comparisons. You can check it on the channel here. But that question is too simplistic. The real question was what should come first? Because an ISA, yes, gives flexibility. You can access the money whenever you want and the growth is obviously tax-free. Withdrawals are tax-free. But a SIP gives you significant tax relief on the way in. The money grows lively, sheltered from tax while invested, but it's only when you withdraw it. So withdrawal are taxable as income, but you also have a 25% lump sum you can take under the pension rules tax-free. And access is restricted until the minimum pension age, which is currently 55, rising to 57 in 2028. So is the ISA better? Obviously for flexibility, and the SIPP may be better for tax relief and long-term retirement planning. Neither of them is automatically better. It depends on what you're trying to achieve. So the question is, what job does this money need to do, and how soon do I need it back? Because if the money is for short-term access, maybe 5 years before your retirement age, an ISA might be better. If the money is for retirement and you are paying higher or additional rate tax, a SIPP could be quite compelling. Now, if you are in the 60% tax trap, a pension contribution may be especially powerful in helping you to come out of that tax trap. But if you might need the money soon, locking it into a Pension, that could be a mistake. You don't want to be stuck, which is why when someone asks me, Andy, especially in the master classes, should I use a SEEP or an ISA? My answer usually is it depends. But what does it depend on? These are some of the factors we've already talked about. What's your age? Your income? Are you in the NHS pension or another workplace pension? Are you a consultant, GP partner, salaried, or locum working through a limited company who can contribute from the company? Company into an employer SIP? Are you trying to retire at 57 or 67? Does flexibility really matter to you? What's your tax situation? Are you already caught into this in the 60% tax trap, or have you lost high income child benefit charge? Because without context, you can't really answer this question properly. So this is why the GP story matters, because I like content is everywhere, but context really matters. She did something sensible. She used an ISA. She invested, she took action. But the question was not, was the ISA good? The question was, was the ISA the best next step for her? That's where many doctors lose money, make costly mistakes. Not because you are reckless, not because you're not intelligent, not because you're bad with money, but because you made the right decision but in the wrong order. And a good decision in the wrong order can be expensive. The investment may be exactly the same. The wrapper can change everything. So it's really important to pay attention. She didn't have an ISA problem. She just had a clarity problem. If you have any question around SEB, ISA, NHS pension, or doctor finances, feel free to comment below and I'll do my best to give you a very helpful response. Now, this GP in this video didn't have a tax problem. She had a clarity problem. She didn't have an information problem. She had a a clarity problem. If you recognize yourself in her story, even part of it, then this workshop, the Scrubs Workshop, is for you. Once you understand the system, decisions become clearer. Not always easy, but clearer. And clarity is where better financial decisions begin. All right. Take care.