Investing for Beginners: 7 Steps to Take Before You Start.

Before you start investing as a doctor, healthcare professional, there are seven things that you need to do before you start investing. Now, not doing these seven things could actually put you in financial risk. Hello, welcome to moneywisedoctor.com my name is Dr. Egwim and I'm the founder of moneywisedoctor.com and here we teach doctors and healthcare professionals how to take care of their finances to ensure that they do not make costly financial mistakes. And we show them how to build their finances without taking unnecessary risk. Now, recently in a group of 144,000 doctors online, I shared my investment returns for 2023 and that caused quite a bit of a rumble and my DMs are now a mess. I've got influence messages, people asking how did you manage to get 74.9% returns in 2023? But hang on, before you jump out and invest in the stock market, I'll tell you a bit about my background. So I so I started investing in the stock market when I was about 19 and I've been able to learn how to analyze stocks. Even at that every year is still a risk. Every year I still approach with caution. I'm still very careful. I don't imagine that just because I have done it once, I don't imagine that I can do it again. So what I suggest is that if you're going to invest in the stock market, one of the first things you need to do is to secure your financial future. First, I think you should build a baseline foundation and I'll tell you seven simple steps to that. You can go around doing that. Now for those of you who follow moneywisedoctor.com on the blog, you probably might have read this on the blog already because I published it before this video. But I'm going to go through it one by one with you. Seven steps you need to take before you invest even a penny in the stock market. You ready? Here we go. Number one, I'll say invest in yourself first. So in our recent money wise doctor survey that we did, we had over 170 doctors who 74% of them said that they do not invest at all in the stock market or in bonds or any alternatives. And another 55%, yeah, 55% of this same group said they considered investment to be risky. Now the truth of the matter is that if you have not invested in yourself, if you don't have investment, if you don't have the knowledge, if you don't know how to analyze investment, if you don't know even what an index fund is if you don't know how to save money. If you don't know how to invest automatically, investing is going to be quite risky for you. So the first place you start is to invest in yourself. And when I say invest in yourself, I've said this in a number of videos in the past. There are three simple ways a doctor or healthcare professional or anyone at all could actually invest in their financial IQ to boost their financial iq. One is read at least one to two good financial books. And if you're thinking what book shall I look to read? Look at our next video. We're going to list at least 12 solid financial books. I think you should start to boost your financial iq. So one way is read one or two good financial books every single year. That would help you to improve your financial iq. Number two, attend the financial seminar. At least one every year. If you attend one good financial seminar or conference or webinar, that would help to boost your financial IQ. Last week we had almost 250 people signed up and then quite a number of them attending our first financial Ask Me Anything for doctors and healthcare professionals. So the Financial Intelligence seminar. And it was amazing because people came up with all sorts of questions, they asked all sorts of things that we addressed in that seminar. So number one, invest in yourself as an investor. First of all, you need to invest in your own education, attend a financial seminar, read a book and follow at least one blog or one podcast or a website that provides financial insights, even a newsletter. Of course, if you ask me which one I recommend, I always go for moneywise. Doctor.com. it might have something to do with the fact that I'm the one who is writing it, based on my own experience of investing over the last 19 years and also managing my own finances, doing side hustles and helping thousands of doctors as well. So that's the first thing before you go ahead to invest any money. Invest in yourself. Now let's go to number two. Do a financial audit on yourself. You've heard about companies, you've heard about businesses doing audits. Now you as a person, you need to do a financial audit yourself. Look at your finances. Sit down. What are your expenses? What are your income? Do you have any debts? Do you have any investments? Are there. Some of your debts are actually costing you more, basically because their interest rates are so high. Have you got a mortgage? Have you got a life insurance in place? Have you got income protection? If things were to go wrong and you're not able to work, will you be covered so this is a financial audit. So before you start to invest, do a proper financial audit. You might even find ways to save money that you've never thought about. That is, number two, do a proper financial audit. Now, if you're thinking of how to start doing a financial audit for yourself, you're thinking, how do I start? Today is your lucky day. You can head over to Moneywise Doctor on the homepage or head over to our MoneywiseDoctor Quiz Scorecard. You can go there and get a quiz that you can actually do within three minutes. It can help you to check your financial health score and shine the light on areas that you need to improve and areas that actually need quick improvement. If you look in the show notes, I'm going to put a link to that quiz so that you can take it. We've had like several hundreds of doctors take that quiz and they find it really insightful. So, number one, invest in yourself. Number two, do a personal financial audit. Now let's head over to number three. Number three is a favorite topic. I keep talking about it. I said, it's important to do this before you start investing because when you invest in the stock market, your investment might go up, it might come down. Sometimes I need to wait a while before you make any money. Like when people look at my results from last year and said, oh, you made almost 75% returns. I've had worse years. I've had better years. But one thing is key. If you suddenly have to sell your investments before they are, before they are due, if you have to sell them during the bad market, if you have to sell them suddenly because you suddenly need money, then you are less likely to capture the best returns. So. So that leads me to number three, build an emergency fund. Now, if you've listened to our videos and if you look at that short video here, that's. If you look at that short video, click on it or go to our shot. You see where we talked about building an emergency fund? What's an emergency fund? Emergency fund is basically saving three to six months worth of your expenses. So if you know what you spend in a month and you save three to six months worth of it, that's the emergency fund. Once you have that by the side, then if things go wrong or you suddenly need money, you will not be tempted or you will not be forced to have to sell off your investments even before they're yielding the fantastic bonuses or the fantastic return that you should be getting. So build an emergency fund before you start investing. Let's head over to number four. Number four is very related to an emergency fund is have a financial defensive strategy. What do I mean by this? What I mean by financial defensive strategies. Before you go out to attack to make money investing, have some sort of financial defensive strategy. And that would include things like income protection, life insurance, will include things like car insurance, which obviously is composite. You have to get it by law, house insurance. Sometimes I even think about getting legal cover so that even if you assume I suddenly have to defend yourself, you can have a bit of COVID Because if you're a doctor, healthcare professional, medical indemnity, like md, those are all non negotiable. You have to have all these things. So make sure you have all those in place before you run out to invest because you don't want to find yourself investing and find out that you have to turn around and have to spend money in a different direction. That will force you to liquidate your investments, which can cost you quite a lot. Especially if you say if you sell out your stocks when the market is down. Right, let's head over to number five. Number five is a risk free investment strategy that can yield you a lot of money, especially if you are in debt. Now if you have high credit cards, if you have high car loans with very high interest rates that you're paying 27%, 30%, it doesn't make any sense to actually be going to look for an investment that will give you returns of 25% which you're not sure of. If you go and start paying down some of those credit cards, if you start paying down some of those high interest loans, there is your return, you start getting returns immediately. Because before you run out to invest in investment that you're not sure of what the returns are going to be by just paying down the debt on your credit card. Especially if you're carrying over debt on your credit card because by paying that down, you already increase your chance, you already not increase your chances, you already get returns immediately. So this is something for you to think about. Now let's head over to number six. Number six, I'll say is tax free investing. Now if you're going to invest or even if you're going to do a business, whatever you're going to do, if you follow this channel, you know that, or follow our blog, we always talk about being efficient with your taxes. We don't want to dodge our taxes, but we don't want to pay more than our fair share. You want to pay just what you're required to pay. Now what if the Government is encouraging you to invest in such a way that they won't tax you on your returns. That leads me to number six, tax free investing with stocks and shares ISA. Now, if you follow our previous video on ISAs, if you look in the shots, I think there will be the thumbnail somewhere here we talked about stock and shares ISA and the different kinds of ISAs. With stock and shares ISAs, the government, if you live in the UK, permits you to invest up to £20,000. Obviously you have to consider your other ISAs. So you can invest up to £20,000 and whatever return you get on the investment, even if the value of the investment goes up, even if you get dividends the value goes up, you are still going to get it all to your account without being taxed. So it's all tax free as long as you don't exceed your isa allowance of £20,000 per year. Obviously, if you have a lifetime ISA order, types of isa, you have to take all those into consideration to figure out how much you can really invest in your Stock and shares ISA. If you're not really sure about ISAs, check out our video. We've got a video on ISA, Lifetime ISA that I've done and our video on stock and shares ISA and other forms of isa and it will help you. So if you're going to invest, make sure that you start first with a stock and shares isa, especially if you live in the uk, because this will help you to be tax efficient. Now let's head over to number seven. Number seven, I'll say you should be thinking about it carefully. Number seven is seek professional guidance. Now, you know my opinion about financial advisors because I think there are very good financial advisors out there, but there's quite a few of them also who are just financial salesmen, financial salesmen, financial salespeople who are going around selling one product or the other to doctors and healthcare professionals that will benefit them when they get their commission. But it's not much use to you. But, but again, sometimes you really, really need good financial advice. Especially if you're starting out, you're not sure what you're doing, need someone to sit down with you and help you to craft a clear financial plan, a clear financial strategy, and that might be to look at something specific like your pension or when you want to retire. There's this important tip I always suggest if your financial advisor's ability to help you is based on their ability to see the future, if they can predict what your investments will do now, the time to pick up your shoes and run away. You need a financial adv so that I can be careful and show you how to stay safe and help you craft an overall financial plan. How to Find a Financial Advisor one. You can go online and search for financial advisors, but I don't recommend that because you're not sure what you might find. 2. You could use our platform moneywisedoctor.com what we do is that we screen financial advisors. We interview them, we sit down with them, we look at their previous records and we'll do a bit of research in the background. We'll find out what they've done and who they've actually advised in the past. Make sure that they're not just selling financial products to you. And when they jump all those hurdles, we get our moneywise.com so you may or may not need the financial advisor, but if you need one, feel free to jump over to moneywisedoctor.com now these seven steps I think are the seven steps you need to take before you start investing that will reduce the chances of you having to suddenly sell your investment, especially when they are not done too well or when the market is down because that could be the cause of disastrous returns. Well, I hope you found this video useful. If you like this video and you like to get more like this, of course. Subscribe Hit the Subscribe buttons and check over our playlist over there for investing. We made a playlist on investing and until the next video where we'll talk about the best financial books for doctors and healthcare professionals to read to level up their financial iq. Alright, bye bye.