The #1 Risk Investors Ignore (and How to Avoid It as a Doctor)

Whether you know about investing or not already, inflation is working against you. Unfortunately, people lose money. I've seen doctors. The most I've seen was someone who lost about £1.2 million. And this was in a life conference. Somebody who'd lost 60k, felt better about themselves. By the way, that lady I talked about last year that she, she lost 60k in the last 3 years ago investing in different stuff. She's now started investing. She attended investment masterclass last year, the four weeks program. If you're a doctor or healthcare professional and you're worried about investing and you get confused about investing things, you worry that is risky and you worry that you lose money. But you know that you should be investing and you don't understand concept. When you hear things like ISA stock and shares, isa, it gets you confused. Then you want to watch this video. This video is a live recording of a live Q and A session with almost 100 doctors and healthcare professionals with burning questions around investing, Lifetime isa investment that doctors could do even above 40 years of age, as well as how to avoid the dreaded 60% tax trap and much more. So if you're interested in those topics and you like to hear the answers we discussed and the questions that we addressed, then you want to dive into this video. And if you are new here, I'm Dr. Andy Green, founder of Moneywise Doctor.com I'm an ex salary GP, an entrepreneur and investor. And on Moneywise Doctor.com we help doctors and healthcare professionals make smarter financial decisions. Dive in. If you, if you're not an investor already, if you haven't started investing, can you tell me in one word what is stopping you or you can use more than one word, what's stopping you in terms of, Is it knowledge, is it a fear or not knowing where to start or what to invest in? Knowledge. Okay. Lack of knowledge. Yeah. OBD said knowledge. Justice said lack of knowledge. Uncertainty, fear of losing money. Fair enough. Said you have losing money. Okay. Yeah. Capital. Henry said capital. That's an interesting one. We're going to look at it. There's a lot of times, okay, lack of knowledge. A lot of time people say capital. And I, I think, well, my first investment was a thousand naira for those of you from Nigeria. You know, a thousand. Well, it was money, but it wasn't a lot of money back then. About 20, almost 21 years ago. Okay, excellent. So I'm just going to jump right in now. We've had enough time to warm up. I'm Dr. Andre Grim. I'm the founder of Money Wise Dr. If he's first time of meeting, I'm delighted to meet you. I started Money Wise Doctor two years ago and that was about two, three months after leaving my salary job when I achieved what people call financial independence and retire early. So I still don't own a Ferrari or a Bugatti and I still don't fly a private jet. I'm like a regular bloke. The only difference that I decide what I want to do, I've got like total time freedom. I think the last time I was in a regular job was December 2022. It's nice to have that time freedom. But at some point, the first two months, it started being a bit depressing. You know, you wake up, I call this sad S A H D Stay at home dad. It's not bad. But you wake up and you say, oh, let's go to the beach. Oh, I'm at work. You want to ring this person, I'm at work. All your friends are out. And I became restless. So I started Money Wise Doctor which was just building on some things I've been doing in the past. You must have seen something I shared today about inflation. The inflation rate has gone up again. Basically it's gone up quite high this time around. And I shared something, said, what cost 50 pounds in 2015? So I came to UK around 2015, what cost 50 pounds now cost 68 pounds. The same. The same 50 pounds. So it's a big change in purchasing power. And if you're a Doctor, you're earning 100k or you're earning 120, 130 and you're still feeling poor. It's part of it is because the money that you're earning now is not worth what it used to be. So there's something called inflation, which I've mentioned basically is when the prices of goods are going up but your money can't buy. I want us to discuss things in late terms because I spent the last three days with London. In cities of banking and finance we're talking about, they like big terms, but inflation is basically, you have hundred pounds, you could buy this 10 years ago. Now if you want to buy the same thing, you need 68, you need more than 100, 136 pounds. Has any of us experienced that quite recently? Has anyone noticed? Okay, I can say yeah, but okay, if you have experience, can you give me a thumbs up? Have you noticed that when you go to buy stuff. Okay, CC has experience in Rafael. It's quite a lot of Us. Excellent. So I'm, I'm talking to the right here. So the implication of that is if you leave your money just lying in a bank account, if you leave your money in a bank account without doing anything about it, the value is simply going to go down over time. We're going to have time for questions. I'm just going to go through the presentation and then we'll take questions. So that's why whether you know about investing or not already, inflation is working against you. And doctors, we very good in working hard. We think, okay, what we're going to do is that we're going to work hard, do an extra shift, we'll invest in this, we'll do that. And unfortunately people lose money. I've seen doctors, I think the, the most I've seen was someone who lost about £1.2 million. There's a doctor and you know, you know how. And this was in the live conference. I was speaking in the conference and when he said other people look like somebody, somebody who lost 60k felt better about themselves. By the way, that lady I talked about last year that she, she lost 60k 3 years in the last 3 years ago investing in different stuff. She's now started investing. She attended investment master class last year, the four weeks program. She started a very sensible investing plan I plan to have on the podcast. She understands everywhere she made a mistake, but boy, wouldn't it have been nice not to have lost the 60k in the first place. So we're all about common sense, building a foundation, making sure your risk approach, you have your risk management in place. One of you said risk management is how you look at investing. And then when you start investing, you're not getting too worried or panicked. For instance, when the market is crashing, some people are selling. Why people like us are sort of going into the ruins and looking for bargains because that's the best time, a lot of time to buy. And there are people that their strategy will not be that way. Your strategy might be, I don't care what the market is doing. I'm just going to put a certain amount into the market at a certain time every month. And I'm just going to compound into an index fund. And after 20 years I know that I'm going to perform very well based on historical data. 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. So does anyone here know if you've attended a previous event or seminar? Does anyone here know any of the several steps I suggest before you start investing? Anyone who knows you could just. Okay. No one. Okay, that's fine. I think there must be one or two people. Yes. Getting an emergency fund. Wow. Okay. Excellent. Julius. I love that. So you get an emergency fund. Okay. Financial health assessment estimate. I can see Savannah said have an emergency fund. Okay. So we, we already know these things. The question most times someone said to me, it's not about the knowledge, it's about practicalizing it, putting in practice. And that is part of why we have things like accountability, the financial coaching program. We have a community where you see people every day, they're talking about their finances, they're learning about tax changes and all that. So there are several steps and I'm just going to run through them. Number one, obviously in the seven steps we suggest before you start investing, one is to invest in yourself first, which is what you're doing here. You're attending an investment seminar, investing the time. I know some of you have actually gone in to do a four weeks deep dive program that turns it from zero investor to become an experienced, you know, not experienced per se, but get your good grasp on investing. But basically some of you have actually bought books, you've done different things. That is called investing in yourself. That's number one. Now number two, we say conduct a personal financial audit. I think someone in my team will find a link to a personal financial audit. Basically, it's a scorecard. It will tell you where you are. It's a financial audit, financial health quiz for medics. You can go through it. It takes you three minutes and it walks through. Okay, where are you at the moment and is there something you need to fix before you even start thinking about investing? Number three step is build an emergency fund. We've said it again and again asking what is an emergency fund? Basically, it's money for emergency. That is what it is. And what that means, technically we recommend to keep three to six months worth of your living expense. So not your salary, your living expense. Number four is establish a financial defensive strategy. So number four is you Want to make sure that you have a financial defensive strategy. What do I mean by that? I mean that I said investing does attack, attack, attack. There's also defend, defend, defend. So what does that mean? Things like your income protection. You want to look at things like your life insurance, are they in place? You don't want something to happen. Let's say someone falls sick and you now need to sell your investments to, you know, and it might be a time when the market is down, you now need to sell it. No, if you need the emergency fund, use it. But if you have your income protection, which is basically money you get paid. If at some point you're not getting an income because you're unwell or anything like that, I don't want us to go to the Pinto income protection so that we can cover the rest of the stuff. But what I'll say is that we have a full guide on income protection if someone from my team will share it in the chat and again, if you need it and you haven't seen it, chat in the, you can chat in the chat box, send a message and someone will get it for you. So have a guide. Life insurance and income protection for doctors. It's also a money wise doctor homepage. So it's one of the guys can actually go through and walk through, you know, income protection, life insurance. To understand it clearly. If you bring out 10 minutes, you can understand clearly what you need, what you need to buy. You want to make sure that you're not over, over, over investing or sort of putting too much money and insurance. Now number five is eliminate high interest depths. I'm not, I'm not going to spend too much time on this. I've already explained to you if you have high interest debt, credit card, I mean at some point when I was thinking, oh look, interests were so high, or I think, you know, we're going to buy a car and another can. Then you look at the interest rate. I'm thinking, no, why do I have to pay somebody 12% interest? It's quite difficult to get like guaranteed 12% from a zero risk investment. I mean with the stock market. For instance, last year S&P 500 returned 25%. In our own investment portfolio we did quite all right, we returned 87%. So we've had quite good returns in previous years. And those of you in the community, I've shared some of my results and shared the screenshots and all that. Obviously in the four weeks program you're also going to go through my portfolio. So this is very important. You want to eliminate high risk debt. This is one of the seven steps. Then we talked about defining your clear investment goals. Again this is one thing that we talk about. You want to understand what type of investor are you? Are you a value investor like me? Value investors, we get very happy when the market is. We're not saddest but when the market is down we're able to find bargains easily. So value investors, my goal as a value investor is that I want to buy £1 for 50p. So like I gave an example when I bought Meta. I give example because most of us know Facebook and we use it every day. Around 2022 November it was down. People didn't like it because they thought the company made some decisions, their earnings dropped and all that and they sold it. But when I looked at the company, looked at what we call fundamental analysis and for those of you that attended the four weeks program last year, you understand fundamental analysis. Basically I'm looking at their income statement, I'm looking at, not everyone has to do that but basically I'm looking at their cash flow, their free cash flow. And again these are not rocket science. You are doctors and your healthcare professionals. You can learn it. All right, so define your goals. The seventh step basically is educate yourself. So you want to educate yourself continuously. You don't just want to, you know, just let it go. When I say educate yourself I don't mean you need to follow financial times and know what is happening all the time. But there are three simple ways you can keep up to date and keep financially fit without having to spend too much time. One of them is what you're doing now. So I say attend at least one financial seminar every year. At least one you can do more but at least one, as a doctor, healthcare professional, you can attend one financial seminar every year that already helps you to sort of be thinking about things like this year might be thinking about investing but in 20 years I've met a lot of doctors, I spoke in mansa event now and one said to me doctor, I've made a lot of money already. I'm just thinking about trust, how to protect my money, how to make sure that the government doesn't take like 40% of my money for inheritance tax. Like some of you don't know that if someone dies basically the government could actually, you know there's inheritance tax falls immediately 40 of what you own if your assets or your, your estate is over 325000 pounds and for couples is 500000 pounds. So that's inheritance tax, 40% of it. So that's why we teach things like, oh, if you're going to take life insurance or, or anything like that, let's say you have a life insurance policy of 500, 000 pounds and you have a house that is 200, 000 pounds. Already your estate is looking at 700, 000. Don't forget the pension. In October last year, I made a video about the changes that the Labour Government Chancellor brought in. Your pension now is part of your estate. So if you have a pension of 400k gov, guess what? The government says, oh, that's part of your estate. Can we have 40 of that? Of course. That's if the person dies before 75. Sorry, if the person dies, yeah, if you die before 75, it's fine. Your pension is not part of the estate. But if the person lives up to 75 and died after 75, unfortunately now their pension is now part of the estate, which is very funny. Can I give you an example? My dad is quite healthy at 75. He's visiting me now, which is great. But let's assume he doesn't have a pension. Let's assume he had a pension or something. And I say it creates some ulterior motives there. I'm not saying that people are going to start thinking, will it be better for my parents to go now that they're 74 so that their pension doesn't fall into inheritance tax? So basically, if you keep up to date with one seminar, webinar event or conference on finance per year, one book. And if you are thinking of books to start, there are 12 books I've recommended. You can start from last year. I did 57 or 58, I can't remember. But you don't have to do that. You can do one book every year, one good solid financial books. That means that the next 10 is red 10. If you read 10 solid financial books, it's hard for a financial salesperson that calls themselves a financial advisor to confuse you or sell you into product that don't make any sense. And number three is one I think is the most important one. Follow a newsletter or a podcast or a website or even an Instagram page. Writing, I think like newsletters and podcasts are more serious basically because they allow you to, you know, go into details and understand what's going on. So follow a newsletter, podcast, 10 minutes per week or something just to know what's going on. Like today, you know, the government has announced, sorry, the new Inflation figures have come out from the Office of National Statistics. You might not know about that. Like, some of you are just hearing for the first time that your pension is now part of your estate. Is there someone that's just saying that for the first time? Can you give me a thumbs up? Did you all know about it before? Okay, a few people here. Okay. Yeah. Every room I go to, like, if I mention this, people are always surprised. I can see, yeah, quite a few hands have gone up there. So. But that's something that is really quite crucial because basically you're working hard, but you're not just working hard now for now, you're working for the future. And whatever salary you're being paid, it's not your full payment, especially if you're a salary doctor. You're being paid for now, but you also have money that you're supposed to be paid in the future. It's called pension. So it's not, it's not, it's not a gift, it's your money. So knowing what happens to that money is also important. So basically these seven steps, making sure that you're tax efficient, setting up yourself, basically your defensive strategies are all quite key before you even start going into investing. Right? So what I'm going to do is I'm going to pause at this point and I'll take a couple of questions and then we'll go to the other aspects of the seminar, like approaches to investing. Well, I hope you found that helpful and more importantly, I hope it helped you to see investing in a new light. This is just a small section of what we cover in the full masterclass. If you'd like me to drop more of this course clips, just let me in the comments. Comment, invest and share this video as well with friends who may need to hear this. And if you are ready to stop winging it and guessing, guesswork is not good for investing. If you want to learn how to become a confident investor. To learn how to invest properly, check out our investing Readiness scorecard with the links in the description. It will help you determine whether you're really ready to start investing and what you need to do before you even start thinking about investing to reduce the chances of you losing money. And until then, see you soon. Bye Bye.