Simple Steps To Start Investing: 7-Day Challenge

Investment comes with risk. And that's part of what we're learning in these seven days, how to manage that risk. 73% of doctors and healthcare professionals that don't invest. The biggest challenge, they say, is that they see investment as risky. Being able to invest means you can actually take advantage of the pension options and invest by yourself through a sip.

I hope it's something that you talk about. If one is over 40, what are the options for the ISA?

So if you're above 40, you can have a cash ISA. That's one of the types of ISA. And why the ISAs, they are more tax efficient. One of the mistakes people make is they just put money in the stock and shares an. But they don't invest it. Right. Okay, so I'm looking at the charts. What one word would you say? Someone said art. I love that Daniel D Said art. So it's an art, not just science. Eno said security.

Okay.

And Seb said planning. And if I said future. Raymond said that this is overwhelming, positive. You know, the last session, master class, if it is actually on YouTube now, some people said things like ne. Someone said excited. So at least there was that one. Okay, I think we can kick off now. If anyone is joining now, hopefully. Well, we can still get them along. How many of us got the email I sent today? If you got the email about the exercise for today, did anyone get it? No. Okay, you got it. Excellent. Okay, fair. Got it as well. Okay. And so far, if you went through the list of seven. Yeah. What, what did you find?

I haven't gone through it because I was at work.

Fair enough. Fair enough. We'll go through it as well. Okay. So has anyone gone through it at all? Do you have like. Yeah, okay, enough. Wants to go? Yeah. Great. I saw what you shared in the group. Yeah.

Yeah, thanks. Good evening. I went through it. I think it was just number one and the last one that I. I could say I could see, hopefully for number two.

Yeah.

I mean, when you say know your numbers, if it means know how much I'm owing or know how much I'm earning.

Yeah.

Know how much I have in my account now. I know that, but there are other numbers that I'm confused that I. I need to know about that. I don't know, like, for example, things like that were discussed this evening, like sipp, you know, those are numbers that. Exactly. And then things like ise. I've had those things, but I don't have any clue about how to. To work them or things like tax return. You know, so those are numbers that I have no idea about.

So I'm sure.

Yeah, thanks.

Well, well done. Well done. These are some of the things we're going to be addressing in this session. Yeah, well done. 7.

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

Right. Does anyone else. Have you looked at the numbers? There's something else you want to share before we delve in. Yeah. Has anyone looked at the seven things? I kind of like have that framework. Yeah, please go. Yeah, please.

Yeah, I looked at the seven. Yes, I would say I'm doing one, so I could take one. I, I'm not even sure what a personal financial audit is, so.

Okay, I like that. That would be where we start. Okay.

Yes, please. I would appreciate that.

All right. Okay. Yeah, thank you so much.

And I ticked seven, number three and number seven.

Okay. Well, at least it's not zero. You've done one or two there. That was a boost, Brandon, because once you've done one or two, then this is what I need to do next, basically. And then some of people from our last year master class, they, they just started investing now. They did the master class in September, but they started investing now because they needed to tick all those boxes. Why? Because we wanted to make sure that before you start investing you want to sort of like have the basic foundation and so that you're safe. That way even if the market is rocking or shaking or the market is crashing, you're not sort of taking emotional decisions because you've laid the foundation. So thank you for that, doctor. Peace. Right, anybody? Anyone? Just one more person and then we can dive in. Does someone else want to share if they looked at the list? Daniel, yes, Daniel, please. Go for it.

Hi everyone. I've run through the list and I could think of some of them, but for some of them I'm can only take a half. Like, yeah, I wouldn't see. I'm very, very financially literate. So the number one, I'm making efforts, but I don't think I'M there yet.

Right.

Number two. Well, I think I know my numbers fairly well. I have a fair idea of how much is coming in and how the funds are living.

Yeah, yeah.

Wasting money like subscriptions that I don't need. Yeah, yeah, I've done that quite sensitively. I think I've got an emergency fund in place, but I. I have just life. What's it called now, I've not. I've not sorted income protection yet. I've only got a life insurance policy then. Yeah. I don't think I have any depths at the moment. I can't say I understand SIPPS and tax benefits a lot, but I have a fair. I'll see almost the beginner's knowledge of ISAs, which I'm trying to explore. And, yeah, I've sought professional guidance a couple of times and of course it's part of that effort. That's why I'm here, trying to learn from the boss himself.

Well, I'm not a boss, but thank you so much for sharing and congrats, Daniel. Daniel has joined the Royal College of jps. Thank you. Swansea last weekend. Yeah, fantastic. Congrats. Yeah, thank you. That's really quite good and it's quite insightful. ISAs, SIP and all of that is all part of it. We're all going to deal with them, we're going to go in depth. It's really very much more important now, especially with the taxi coming to an end by April 5th. But before we crack on, I thought, okay, you might have been hearing fragments. Are you hearing different things? Yes. People mention oysters, mention sip, mentioned different things. I think is most, most importantly, we need to understand, why do you even need to bother investing? Obviously, if you're in Canada, I'm having a lot of doctors from Canada and last month I was in the us, I had doctors from the US speaking to me about investing. So for them it's obvious, but for you in the uk, like, why the bother? Because some people think, well, I've got NHS pension. If I've got NHS pension and there's the state pension, shouldn't that be enough? Shouldn't that take care of everything? So it's becoming more and more obvious to more people with inflation rising and everything, and more people are trying to have alternatives in terms of understanding their own financial future, making a financial plan, and even if you turn out to have NHS pension, which is a great pension, basically, it's salary for life. But some people just don't want a bit of control. They want to be able to control how they invest. And again, for senior doctors here, or even any doctor in above 100,000, you know about the 60% tax trap. I've been writing about it for a couple of years now. So being able to invest means you can actually take advantage of the pension options and invest by yourself through a SIP. And even if you don't use the SIP, knowing how to invest means you can use the ISAs and not make sort of the kind of expensive mistakes a lot of doctors make, like investing outside the ISAs. But also in the next seven days, we're going to look at it like risk management, understanding asset allocation and all that understanding. Basically, okay, if you want to invest, how do you start, where do you go? And definitely towards the last day, we're going to do like hands on session. Obviously some of you who want to skip along can also do hands on session if you want to open an account and invest your first dollar or first hundred dollar, whatever you want to do. And of course there's going to be opportunity like this for Q and A's. We're not going to be meeting for Q and A's every all the seven days, but all the seven days I'm going to send you the step by step what to do and then we'll chat on the WhatsApp group. So if you're not on the WhatsApp group, you want to join the WhatsApp group, but midway, I think by Friday we'll catch up again for a webinar like this so that we can ask questions. Right. Before I go into the 7 10s, does anyone want to ask a question at this point?

Yes. Good evening.

Yeah, good evening. Please.

So, okay, I'm, I'm, I know you said you're going to talk about things like the isa, but I just wanted to find out something about age like that. I think something called the lifetime isa.

Yes.

And the something about age, the age at which you can do it.

Yeah.

So for people that are over 40 is, I hope it's something that you will talk about. And if, if One is over 40, what are the options for the ISA? And then one last thing is I also heard something like a friend was telling me that, okay, my first child is turning 18 this year.

Yeah.

And if we're telling me that I can get my child to pay me rent and it help, help my child invest that money. So I know that this is not about kids. So I just wonder if you can also touch on that.

Yes, fair enough. Yeah, we can smash that out now and Then we'll jump into the rest. So basically with ISAs I have a lot of people who say I'm above 40 now so I can't get an ISA. And I said no, you can get all the ISAs apart from one if you're above 40. So probably some of you have seen my video on my blog where I would say life does not start at 40, so lifetime ISA does not start at 40. So if you are above 40, the only ISA you can't get is the lifetime ISA. You can get the rest of the ISA. So you can get the cash ISA, which is for saving. Obviously. I've already written about the risk of saving in a regular savings account. You're generating interest which is likely going to be tax liable if you exceed the savings allowance. Okay. And we've already mentioned that this is not for that this session is for investing. But we've already talked about that. If you save in a regular savings account and you generate interest above the savings allowance in the UK is 500 pounds if you're a higher rate taxpayer and it's 1,000 pounds if you are a basic rate taxpayer. So if you generate interest above that amount in your savings account. For people who think I'm just going to save money, if you put in a regular savings account to generate interest, then you've got to declare it your self assessment and pay tax on it. If you don't do that, there may not be an issue straight away until in the future. Maybe if HMRC investigates or something comes up, then you probably will need to pay that same amount plus a penalty plus the interest on it. So that's why I would always suggest saving a cash ISA. So yes, you know, if you are above 40, you can still. I'm approaching 40 now, so I basically need to double check what's happening. My cash, my life ISA and all that in place. So if you're above 40, you can have a cash ISA. That's one of the types of ISA. Two, you can have a stock and shares, Isaac, which is basically just for investing. But one of the mistakes people make is they just put money in the stock and shares isa, but they don't invest it. Nothing is going to happen to the money. You've got to invest it, right? So you can have both of them. And why the ISAs? They are more tax efficient. Any dividends or capital gains? So when I mean capital gains, I mean when there's a rise in the value of the share, any capital gains is tax free. Okay, so that's the Benefit of the iss. Right. Okay. I hope that sorts out the question.

Yes, but what about the one for my child?

Right, okay. So. So I am not a rent expert. Even though a clear rent, if you decide to invest the money for them. Yeah, that could also be done through. If your child is less than 18 and you want to open an account for them, the Junior ISA which gives your child up to £9,000 tax free, could be a place to start. But also some of the doctors in our mastermind, their children are above 18 years. So they open a proper Lifetime ISA for their child. Because with the Lifetime ISA the government gives you 25% bonus on whatever you save in the Lifetime ISA. So that will be two ways to go about it. So it doesn't necessarily have to do anything with rent or no rent. Because while you could give your child, you could ask a child's parent and invest it for them or you could give them the money to invest or if they work and raise some money, they could invest it. It doesn't really necessarily matter how the money comes about. What's really important is that if it's being invested or saved, it goes through the right type of account to make sure that it's tax free. Okay. Right. Okay.

So I'm going to ask you 25, is it per annum?

Yes. Okay. Is there someone else that doesn't understand the lifetime isa? So we can deal with it now before we crack on the lifetime isa? If you give me a thumbs up. If you don't understand it, then we know. Okay, something that we need to deal with now. If not, we can pack it and come back to it. Yeah. Because we've got seven days. I want to keep to the program. Okay, so there's. Okay, we've got busayo and there's inner, obviously. Okay, Right. Okay. So quickly, what? The lifetime ISA is one of the types of isa. So there are four types. I rarely talk about one because most people need to deal with the first three before they start dealing with the other one. The fourth one which I really talk about is the innovative finance isa. ISA is basically more like a business financing isa. So it's got more risk in it and it's not where most people start. So let's leave that by the side. The first three that I do talk about is the cash Isaac, which I've already mentioned. The cash ISA is basically where you save money tax free and you can withdraw it anytime you like. And then there's a stock and shares Isaac, which you can invest money through and you're not charged a capital gains. So you can imagine some people have been investing through the capital Stock and shares ISA for 10 years, 20 years, 30 years. And even if they went from 20k when they started to 1m, they're not required to pay capital gains tax, which is currently I think 24% in the UK depending on whether it's brought to your stock and shares. I think labor government recently increased capital gains tax in the uk. So basically, normally if you had an investment and you had a return on it, you do, you do have to pay a tax on it. So normally if you invested, let's say you bought something for, let's say you bought something for 20,000 and when you sold it it was now like 40,000. So you made 40,000 from that share you bought. So you made 20,000 because you bought it for 20, you sold it for 40, your profit, as we call it profit. But the term is capital gains. The capital gains is 20k. So you do need to pay a percentage of that as tax. As of 2031st of October, the lower rate of capital gains tax was increased from 10% to 18% while the higher rate went from 20 to 24%. What that means is that in the past if you made any money, you had to pay 10% of it as capital gains if you were a lower rate taxpayer. So your rate of tax is a different discussion. Now if you're a higher rate taxpayer, you have to pay 20% of your gain. Okay? Now from 31st of October, for those of you who read my email on 26th October or so where I said I was selling my shares because they were going to increase this capital gains or I thought they were going to increase. It turns out I was right and they increased it and it applied immediately. So that would have meant I would have been paying more tax, but that saved me several thousands of pounds. So with an isa, you don't have to deal with all of that. Okay? With the stock and shares isa, you don't have to pay any capital gains tax. Again, capital gains tax now is 18% for those on a lower rate tax tax regime basically. And for higher rate taxpayers, which you're here, you know yourself, if you're paying 40% and above, your, your tax rate has gone basically higher. It's gone up from 20 to 24%. All right, so that's stock and shares ISA again for a recap is cash ISA, stock and shares ISA. And number three, we'll call that lifetime ISA. That's one Nino was asking about lifetime ISA is basically if you save any money up to £4,000 every tax year. So you know it's every taxi, so April 6 to April 5. So if you save any money up to £4,000 every tax year, the government sort of gives you 25% of what you save. That way you get sort of free government money. It's hard to come by.

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So it's 25% of whatever you save. Basically, if you save £4,000, you get £1,000. And I mean, this is a quick hack. We are in February. The tax is ending in April 5th. Assuming, and this is an example I give, assuming that you, you've got a nice lifetime, Isaac, your partner has got a lifetime. I say your wife or your husband, or your spouse, whatever. I've got like 4k in that lifetime Isa, you get a thousand pounds, your partner gets a thousand pounds. Let's assume you're saving to buy your first home, because the lifetime ISA can only be used for your first home or for retirement. So basically, if we're in February, put in a thousand pounds, four thousand pounds, and your partner puts in four thousand pounds. In a separate lifetime, Isaac, you get a thousand pounds, your partner gets a thousand pounds. Okay, that's just the beginning of the story. By April 6, you've entered a new tax here. You can just do it again. You can just do it again. You put in £4,000, your partner puts another £4,000. So rather than saving your money in a regular savings account, especially if you're planning to buy your first home or you're investing for retirement, doing that automatically means that you just get like 25% from the government, totally risk free. Okay, does that sound good? Who likes 25%? I like 25%. There's some downside to lifestyle. Myself, I've done a video about it, sort of like the downsides of lifetime ISIS on our YouTube channel. The problem with the Lifetime ISA is one, obviously, you know, we've talked about this already, you can't open it if you're above 14. 2. You can only use it for two things. The other ISIS, you can get them anytime you want. But this lifetime isa, if you use it for anything other than your first home or for retirement, you get a penalty. You, first of all, you lose that 25% bonus that the government gives you. And then depending on the platform, some platforms also charge you maybe a fee or something. They might charge you a 3%. I know some that charge as high as 3%. So that's the downside of lifetime ISA. The second downtime of a lifetime ISA is that. Okay, still talking about the first. If you use the Lifetime ISA, you can only buy a house as450,000 pounds or below. You can't go above that price. So if you've been saving the money, let's say you live in London. Where do you live? Patrick, where about you?

In Wolverhampton.

Wolverhampton, okay. Lovely, lovely Midlands. So I don't know if anyone here lives in Lond or southwest like me or whatever. I know it's quite difficult to find a house that is 450k in some areas. So what was it like in wolves? With 450k, what can he buy.

To buy you? A mansion?

Maybe like a, a, a good four or five bed, depending on the area. Yeah.

Wow. Okay. You both live in wolves. Wow. Okay. Did you know each other before?

I don't know who is speaking and.

I don't know the person. Patrick and Oyenda Mola. Good. So you find your neighbor, maybe you start a mono wise doctor club in wolves. Right, okay, thank you for that. Right, so again, it's. Some people got cut out, they've been saving all this money, they want to buy their first home. Then house prices went up and then the house is maybe 500k and suddenly, oh wow, another person. Whoops. Diary. And then they suddenly find themselves, oh, the house is now above 450. And they don't live in wolves, they can't buy a mansion. Right. So wherever they leave, they suddenly, especially London or the southwest. And now this can't use the lifetime isa, so they are getting a penalty. But they were planning to use the house, the money to buy the first house. So that's some of the challenges in lifetime isa. The final thing with the lifetime Isaac, which again, I found a way around it. The final issue is after 50 years of age, you can't put any more money in the lifetime. I saw. Guess what? When you can't put any money, you don't get the 25%. Right? Because it's in.5% is just dependent on whatever money you put in. Then the government gives you 25% of it. Does that make sense? Say yes. Yes. Okay, good. Now, at after 50, you can't put in any more money. Right. If you're just doing savings, which is not what we're doing here, we're talking about investing. If you're just putting the lifetime is that you're just saving the money. Because there are two types of Lifetime ISA, okay? If you're just using the Lifetime ISA cash, it's just savings from 50 years of age till 60 where you can cash out the money. That means your money is just sitting around in a savings account. You might get a bit of interest here and there, but nothing spectacular. On the other hand, if you're like me, are you using the lifetime ISAs, token shares. Now don't confuse that with the stock and shares isa. It's a different type of isa. I'm talking about the lifetime isa. If you're using the lifetime ISA stock and shares, then you could actually leave the money there because it's being invested anyway or you are investing it anyway. So it's not like it's money just sitting there. It's money that is in the market. Obviously, if you're using lifetime Isaac, I share the money is not just in cash, you are investing it in the stock market. So even if you are not putting any more money, but it's not sitting around, obviously investment comes with risk and that's part of what we're learning in these seven days, how to manage that risk. Money is in cash. The risk, you know, is inflation money. In investment, there are more opportunities for growth, but there's also a risk of loss. All right, does that make sense so far, you know, and anyone else who is interested in lifetime Isaac, does that make sense? Yeah, lovely. Don't worry, we've got like seven days. If you show up in the group, show up in the charts, I'm sure we can sort of like at the end, at the end of seven days, you'll be clear on basically not just how to invest, but how to do it in the most tax efficient way. All right. Okay. So I'm just going to look at the charts real quick. Okay. Here in our lifetime, so I can share for the first time. Excellent. Daniel. So many people don't know there's a lifetime stock and share that. So that's one of the benefits of this session is so that there are some of those things, they're out there, but no one really comes to doctors and starts saying, oh, yeah, you need to do this or you can do this. Basically, it's not. It's not financial advice. It's getting the education. Sadly, a lot of what is packaged as financial education turns out to be people just selling products or trying to get you to give them money to invest and all that kind of stuff. That's not really financial education. Financial education should give you the options available, and then you can make your choice. Because people, even after they get financial education, like after four weeks, master class, some people started investing by themselves. There are still some people who needed an advisor for different reasons, but at least you need to get that education, and then you're empowered to make your decisions. Lovely. Right, okay, so who else has a list? Who else had a list of seven grateful for? I've seen enough. And then, Daniel, I think someone else. Who else shared what their list showed? You've gone through your list of seven and you found. Okay, did anyone get seven over seven? You're doing all the seven things. Anyone? Seven over seven? Right? Nobody call this brilliant. Doctors, physiotherapies, medics, plus. Okay, did anyone get six over seven? Still to the very high bar. All right. Okay, how about five over seven? Oh, no. Okay, no problem. Anybody got four over seven? Okay. Okay, well done. All right, Daniel. Okay, excellent. You got. You got that four by seven? Yeah, actually, you mentioned it. Three over seven. I'm sure many of us got three over seven. It's easy. If you guys get, like, investing in financial education, you. You've got your life insurance, income protection, you've got your emergency fund. Yeah, okay, and did anyone get like two over seven, maybe? Right, okay, that's brilliant. Okay, Right, so I'm just gonna crack on now. I talked about the 7 10s, and for those of you who are. Who got my email, I attached it as well. So there's an attachment in the email. If you didn't get it, don't worry. Give me a shout in the. In the WhatsApp chart and I'll share. The document is a free document. It's basically like a guide. Seven steps you need to take before you start investing. And that was the exercise today. Said, number one, invest in yourself. Which obviously, there are many ways to invest in yourself. One of them is by studying. One of them is by attending sessions like this. One of them is by hiring someone, a coach. One of them is Attending seminars, there are multiple ways. But your doctor, most doctors, physios, healthcare professionals, you're really, really, really busy apart from your job. You've got family, you've got stuff and all that stuff. If you haven't got kids, obviously you think you're busy, but once you get kids, it takes up to the next level of stuff. I've learned that, so I'm a young dad myself. So you don't want to waste all your time because you've also got cpd. You don't want to waste all your time trying to read everything. Of course, if you're a nerd, knock yourself out. I did like 53 or 55 books last year. I enjoy it. I do many of them as audiobooks. But I say for doctors and healthcare professionals, all you need is one book. One book, one book every year. If you read one good book every year, that means that think about your life over the last 12 years, you would have done like 12 solid books. If you read one good solid book every year, that's one. Two. If you invest in your own financial education by attending sessions like this, if you attend a seminar or a conference or a workshop on finances every year, I mean, make sure it's something high quality, not just people gather together, want to sell stuff. If it's really something high quality, good financial education, one every year. So one book, one event. And the last one, number three, is a little bit self serving for me to say because I've got a weekly newsletter. But if you've got a weekly newsletter, a weekly blog or a weekly podcast you follow, that will just give you like five minutes. A bit of. Little bit of. Yeah, please. There was no attachment. You can write it on the WhatsApp group. We'll share it later if you didn't get the attachment. Also in the WhatsApp group, we shared there. Right. So if you just got like those three things, one weekly podcast or email newsletter or blog you follow, I'll give you like three to five minutes. What's going on? Are there changes in the taxes? There's something I need to be thinking about. Not every day. You don't have to be every day checking your accounts and all that stuff. Number two would be like one book every year. And number three is obviously attend a workshop or seminar. So that's basically investing in yourself, the way I see it. Okay, I'm interested to know right here, I know this is February in the last 12 months. Can you tell me in the chat box any book you've read? Any book on finances or business. And you know, if you want to mention a book you've read and if you haven't read a book, tell me a podcast that you listen to or a session you attended. Yeah, okay. Psychology of Money Peace. Excellent. Every single person in the Mastermind, money wise Dr. Mastermind received the Psychology of money. Okay. Some people received one different book. Yeah, I think it's an excellent book. The Psychology of Money. Okay. Is there any Dr. Peace that was reading that has been reading anyone else? Okay. The Richest man in Babylon. Excellent book. I read that book at 17. It was very good book. It's sort of the basics, paying yourself first. Enoch said, the Richest man in Babylon. That's a popular book. I recommended it on my channel as well two years ago. So that's an excellent book. The Chest man in Bubble is one of my top 12 books. Okay. And the principle is about paying yourself first. Okay. Right, okay. And for the rest of us who have not read any finance. Don't worry, you have the time reach that poor dad. That's an excellent book. Opened my eyes when I was about 18. I read most of the books on your list. Wow, that's brilliant. So you've read the 12. Well done. Yeah, Brahma. Yeah. So maybe you've done the first list of 12. I'll introduce you to the rest of the 256. I will go from there. But well done. Manual, doctors, podcast, medics, money. I've read books. Novels. Not financial books. Excellent. Alex channel on YouTube. I love it.

I love it.

I love it a lot. I think I know a lot channel, but some of it is just entertainment. When they tell you the 10 top richest people in the world. But that's. That's just entertainment. Excellent. So we're already doing some things. Okay. Read your weekly blogs. Yay. That's good. So we're really doing some stuff in terms of financial education. But this is number one, the seven things. Invest in yourself what you want to do. You want to boost your financial iq. And Byron, it's like Barry Allen wants to make me feel good today because he said he listens to my videos on YouTube. And Patrick as well. Patrick. Yeah. You can see suddenly my head, my earpiece is expanding because my head is getting bigger and bigger. Right Y here, keep it coming. And you keep me here for the rest of the night. So basically you just have a system for educating yourself. That's number one. Number two is a financial audit. Okay. That's what we're going to do. We're going to do a Real life financial audit. Some of you have done it but you didn't really quite pay attention to it. But we're going to do a financial audit for every single person in the money wise doctor 12 months mastermind or even if you do a master class with us. One of the things you have to do is an audit so that you see where your gaps are. We're going to do one life, it doesn't take that much time. Number three basically is to build an emergency fund. Alright, so can you tell me here, can someone tell me here please what is an emergency fund? Does people mix it up with different things? Can somebody explain? Anyone that understands it clearly or anyone that doesn't understand that wants to ask, please feel free.

I mean my understanding from listening to your videos and reading your the different things you send via email, I I think it's having your expenses for three to six months what you normally would spend monthly. You have the cash equivalent saved somewhere. Something that will last you for three to six months. And I think on one of your somewhere I think I saw you recommended putting. You could put in a cash ISA or something like that. Something that you could very easily withdraw. Something like that.

That's amazing. Patrick. I don't have anything to add because that's just the summary of it. It also makes me feel anytime I sit down to write these emails for hours or record the video, I like to, I like to hear that someone actually read them. Currently we've got like 60 something open rate so that means people open our emails. We don't want it to go down. So we're not sending any garbage. We only send something that is useful. But Patrick has summarized it because someone said on my video why do you ask people to not start investing till they have three months of salary? I'm like we're not even talking about salad here. I don't even have a salary. We're talking about three to six months of your living expense. Everybody has a living expense. So if you can save three to six months, if you're living expense, what you need to keep afloat every month is 1,000 or 2,000 or 3,000 wherever you want to have at least three to six months worth of it, I think. OK. Also shared that in the chat box. So three to six months of monthly expenses saved. Not in the market, it's not invested. Don't give it to someone to invest for you or your cousin or someone who has a bright crypto idea. No, no, no. Is saved in an account. And why we say the cash ISA account. You actually spot on there, Patrick is because if you save it in a regular savings account, you can imagine some people here have got like living expenses of 5,000, 6,000. So that means that three months living expense, 18,000 if you put it in a regular savings account and you're generating interest. If you imagine, if you generate interest, let's say you got interest at 5%, 18,000. 5% of it. Even 5% of 18,000 will be worth. Someone help me. I don't want to do public mass, But I think 5% of it should be roughly 900 or so. I think 900. So if you hire with taxpayer, you've already exceeded your savings allowance of 500. So that's why we think it's better left in a cash isa. And that money is for emergencies. Emergency is an emergency. Not like I feel like I need to buy a new seat. It's not an emergency. Let's say your boiler gets blown up or stuff like that. Why is important is that if you have emergency fund is a psychological thing, okay? Because part of the thing that helped me to get to financial independence quicker was that when the market was down, I was able to buy. When I was able to take advantage of market, deep stock market. I didn't do it in 2008. In 2008 I was busy celebrating that I didn't lose any money that I sold before the market crashed. Now looking back, I thought I was a bit foolish then, but I was inexperienced by then. I'd already been investing for like three to four years and that was my first market crash. But basically, if you've got an emergency fund, you've got some safety net. You're not doing things out of a point of fear. And that way you can actually coolly analyze situations because you know that, okay, if the market goes down, it doesn't mean I don't have any fallback plan or I'm going to lose everything. Okay, Another thing about emergency fund, again, it's all about psychology. Amara, you've read Dr. P. Samara, you've read the psychology of money. Money is not just numbers and mathematics. A lot of it is psychology. So I usually say, okay, having an emergency fund will ensure that not everything becomes an emergency or a crisis. If you don't have an emergency fund money saved. I've seen doctors and it's quite shocking. It's consultants, senior GPs who earn maybe 150, 160, 170. They haven't got any money saved. And some of them are actually in quite a bit of debt, deep depth. So the result of that is that any little thing becomes a crisis. Any problem that is 1000, 2000, 3000 could actually be a bit of a crisis. And that affects your overall decision making, including investing. All right, so that's your emergency fund. Okay, now number four is having a financial defensive strategy. Again, we address this during the course of the challenge. Financial defensive while investing is attack. The defensive strategy is sort of like defense. You're looking at things like your life insurance, if you got your life insurance and income protection to make sure that, okay, if things do not go as planned, you're not having to sell your investments. Okay? So life insurance is basically like, okay, you pay some money in terms of. The same way you pay a premium for your car insurance. The Peel life insurance.

It's.

Isn't it crazy that some people insure their microwave and ensure their watch and their car, but they don't insure their most important assets, including their life and their, you know, income? So income protection insurance is quite similar. You pay some money to make sure that, oh, even if things don't go as planned. For instance, one of the doctors that came on my podcast, Dr. Roots Machine, she was a radiology consultant. Unfortunately, she developed optic neuritis so severe, it came with severe eye pain. Christmas, December 2020. Basically, she said to me, a radiologist, Andy, a radiologist without your eyes and a good sense of sarcasm. What else have you got? You know? So she's not, she's not going back now. She's no longer working as a radiology consultant. In fact, recently she's retrained as a health coach. But Dr. Ruth Machine did a very important decision when she was younger, in her 20s, she never knew really come up, but it saved everything, basically because she said to me at some point she was thinking they might lose their house because she was the main, sort of like breadwinner, she was a radiology consultant. So she had a lot of income. I mean, relative to her husband, who was a radiographer, had some income as well, but he earned the bulk of the money. So basically, Dr. Rude Machine had income protection that was occupation specific. So that means that when she had that issue, she could no longer work. First of all, she had an emergency fund, which she fell back on. Then after the emergency fund, because she was under NHS pension, she had the sort of like sick pay from the NHS pension, which was for six months. And then for the last few years she had been getting income protection money paid. So they will pay you based on this is your income that you should have gotten. So that's how to explain income protection. Of course, life insurance is on the other hand, if someone dies, then if someone dies while they're still on the premium, while they're still on the life insurance, their dependents will get a payout. Okay, again this is just day one, so scratching the surface here, but I want to make it very important, something really clear. In life insurance, I always suggest that people put it in a trust. So when you do your life insurance, if you use the right insurance advisor and you talk to them, I always suggest an independent insurance advisor and we'll go into the reasons why in the challenge. If you talk to them and say I want it to be in a trust, that way their life insurance doesn't fall under.

Thank you, boss.

I was asking about critical illness cover. So that's what I currently have. Is that, is that of any. I know income protection is probably long term benefits, but I have critical illness cover. Is this useful? Should I consider changing this, this plan to something more long term like income protection? Okay, that's very useful. I don't know, does anyone have a question as well around that area so that we can just deal with it? Income protection versus critical illness. Right. Okay. Right, okay. So thank you for that question. So by what I can't tell you specifically what to do, I can tell you what I did. What I would obviously recommend would be to speak to an independent insurance advisor. But critical illness covers mostly just three things. Heart attack, stroke, cancer. So if someone doesn't have a heart attack, a stroke or a cancer, their critical illness doesn't cover them. So in the case of someone like Dr. Ruth Machin, she wouldn't have been able to assess critical illness. So critical illness is nice, but from my perspective, I had critical illness, but I switched to income protection a few years ago. There's no harm in having more than having both of them. But at the end of the day, insurance is money that you expect to quote on quote on quote waste. Insurance is money that you don't expect to get back. If everything works all right, it's only the money. Obviously don't get your car insurance if you don't crash your car. And if your house doesn't get burned down, you're not looking for your house insurance. So.