Dr. Ndubuisi 'Andy' Egwim (founder of MoneyWiseDoctor.com) warns that investing without tax efficiency wastes returns. He introduces ISAs (Individual Savings Accounts) as a key tax-efficient tool for UK investors, outlines four ISA types (briefly dismissing innovative finance ISA), and explains cash ISAs (savings-like, tax-free interest) and stocks & shares ISAs (favoured for investment because they shelter capital gains taxed at 24% outside ISAs). The video includes his background and target audience (doctors).
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Investing without tax efficiency is like pouring money into a leaking pocket. Even when your investments do well or you get good returns, you still lose. Why? Because you've not been taking out the time to be tax efficient. And I'm going to be explaining that clearly in this video. I'm Dr. Andy Gwim. I'm the founder of MoneyWiseDoctor.com I was formerly a salary JP until three years ago. After achieving financial freedom following 20 plus years of investing, I left my salary job. But then I got restless and started money wise doctor which has been really fulfilling, has helped up to 4000 doctors make smarter financial decisions. A lot of people jump into investing without understanding taxes and that's a big mistake because there's a low hanging fruit. You know, you can just pluck a little hanging fruit if you're tax efficient before you even start taking more risk with investing. And it's not just about ISAs. The problem with this is that most doctors find out a little bit too late. An example is when you talk about distance, people think about ISAs. But ISAs are only the start starting point. So I'm going to start from there. Number one is your ISAs. Of course you should know ISIS by now. I've made 166 videos about ISAs. I've written many guides about ISAs. And still I still come across people who misuse the ISAs or don't understand how they work. ISAs are basically tax wrappers. They are tax efficient accounts and there are four main types. I wouldn't bother with the fourth one because most people don't find it very effective or useful. The fourth one is the innovative finance isa. I'm not going to bother about that. Number one is the cash isa. Just think about it like a regular savings account. It's not an investment. I hear a lot of people say I put money in. My ISA is not growing. No, your cash ISA is just like a savings account, except that whatever interest you get on that savings account is tax free. There's no tax on it. Number two is the stock and shares isa. You already know that's my favorite isa, that's for investing. So usually, as you know now, if you've been following my videos for a while, if you invest in stock and shares or any investment you make, even property, if you make any profit on it, or what we call capital gains, if the value of your investment goes up, you've got to pay the government some tax. And currently it's 24% capital gains tax in the UK. So if you did that investment through a stock and shares. Isaac, you don't pay any tax. Think about the implication of it. If we invested together and my capital gains is 100,000 and your capital gains is 100,000, you get to pay 24,000. If it's not inside an ISA and I pay zero, that means we're not in the same game. So it's really important to understand that. So check if you're making any investment in stock market and you're in the uk, you're a UK resident, is it in a stock and shares isa? So that's number two.
