The AMASS Rule That Changed My Finances Forever

Tax avoidance is legal. If you avoid paying taxes, tax avoidance is legal, but tax evasion is illegal. It's a jail term. If you feel that you need discipline to be good at managing money, you're doing it wrong. You don't need to be disciplined. You need a system. For my point as an investor, I don't want to sell my shares if things suddenly, if I need money suddenly. Once your cash is hit your savings goals, you're not to save indefinitely. Saving is beautiful if you only say, we all agree that the value of ten pounds, what it could buy ten years ago is not what it can buy today. So that's why you need investment. Yeah. Okay, so after feintal, then we go to Elizabeth. Okay, sorry, sorry.

My question is a very simple one. It might be funny, but I just wanted some clarification. So in terms of the trash isa, is there like a platform of a cash ISA that you don't have to see every day, that you don't have to see or you don't have easy access to? Like, if I open my phone, for example, I can see my cash isa and there's tendency to wanting to remove money from it. So is there some that I can just be putting like, money into a cash ISA and I don't. I'm not able to see it, you know, I can't see it, or I don't really have easy access to a cash isa. But that's just my question.

Thank you. That is a good question, because a lot of. Thank you for that question, Dr. Ganyu. A lot of issues around money is not just mass, it's psychological. A couple of things you can do. Look, I know I talk about investing, but sometimes I don't look in. I don't look at my stocks and shares for like three, four, five months. If I'm very sure or I feel quite confident. It can never be 100. If I feel quite confident in the investment decisions I've made, I might not look at them for like months. Oh, the market is down. They are red. Okay, fine. Two years later, they're like times three or times four. Fine. The same thing with your savings. And what I want to ask you, Dr. Ghani, how do you put money or cash ISA? Do you transfer it every month or is it automated?

I transfer every month.

That explains it. I. I thought as much. Now, if you've got a pen or anyone has got a pen, can you write these words out? I'm going to spell it for you. Write it down. It's really important to save you A lot of stress. And I've been using it for many years, maybe for more than 10 years, almost 10 years. Even when I was a house officer. Write it down. Before I framed it into a framework and I started writing about in my blogs, it's A for Alpha, M for Mike, A for Alpha, S for Sierra, and s for Sierra. Dr. Faint. Can you pronounce that for me?

I didn't get it.

Good. I'm spelling it again for you now. Let's get it. A for Alpha, M for Mike, A for Alpha, S for Sierra and S for Sierra.

That's a mass.

A mass. I've said it a few times, I should say it a hundred more times. Don't save money manually. Okay? Don't save money. And if you are not a value investor, if you are not making investment decisions by investment, if you are just a passive investor buying stocks and shares through index fund and all that, there's no reason for you to do it manually. You want to automate it. You've got a lot to think about. You've got your career, you've got your family, you've got rent. How do you pay your. How do you pay your light bills? Sorry, I'm not picking on you, but you asked the question, how do you pay your light bills?

My light bill is direct debit.

So automated. How do you pay your water bills?

Direct debit.

Lovely. How do you pay for your mortgage or rent?

Mortgage is direct debit.

Yeah. So why won't you pay yourself automatically by direct debit? Now the, the word you spelled amass is activated monthly automated savings scheme. So that is how to save money. You automate everything. It happens monthly. You don't have to think about it. Like in our mastermind, when people say, look, they want to start investing, but they've got credit card debt or they want to start investing, they don't have the emergency fund. We say, no, you need to amass. Amass the money first. What do you do? Look at income expenditure. You want to look at. Can I do 20%? That's the starting point. Can I do 20%? I found out that if 20% of your income goes out every month, nobody would die. Your cat or dog or kid, nobody. You might find out that suddenly you're now thinking, oh, how did I subscribe for this subscription that I've not used for 12 months? You will find that money, then it will force you to find the money. But you've registered in the gym. You're not going for nine months. I mean, it's summer I can run outside that. So it's fine. The money, if you've automated 20 of your income as a landing account. I started doing this even as a house officer. GT bank back in Nigeria had an account called GT Target. The money is landing in your account. You don't have to do anything. 20 is going out into your freedom fund. You're paying everybody, you pay yourself. Now that freedom fund, if you are in debt, is to pay off your debt. If you pay off all your credit card debt, blood sucking credit card debt at 25, 27, fine. Now if you still have, you still have this automated sequence going on instead of now sending it into an account for paying off your credit card debt, it goes into your emergency fund. And can anyone remember where? Easy. The gentleman who spoke earlier on, where did he say the emergency fund should be saved?

Cash isa.

Cash ISA automatically. It's going automatically now if your cash isa. This is where people miss it. Now I met like a very senior doctor, has been in the UK, born in the UK. He said it's hard like money going to scash Isa for 10 years now. Nothing is happening to. It is not moving forward like nothing will happen to you. It is a savings account. That's where a lot of people make a mistake. Once your cash is hit your savings goals, you're not saving. Definitely. Saving is beautiful, but if you only save inflation. Basically we all agree that the value of ten pounds, what it could buy ten years ago is not what it can buy today. It's not what you can buy in the next 20 years. So that's why you need investment. But before you invest, you want to have that cash as the cushion to be able to sort of like be the cushion and make sure that when things go wrong in your life or let's say things, your boiler blows up. Believe it or not, just two days ago I talked to this lovely couple. They told me how their boiler blew up and they had to use the emergency fund. Some people is their roof for startleaking. They need to change something in their car again. I thought I talked to someone recently who, who needed to make those changes and they had to go to the emergency fund. So you want to separate yourself and crisis. You can have better sleep. Not everything turns into crisis. But for my point as an investor, I don't want to sell my shares if things suddenly, if I need money suddenly, I don't want to sell them. Because when you are selling them might be like in January when the stock market dropped. Sorry, was it in February or March when the stock market dropped. That might not be the time to sell when people like us are hunting for bargains and you're selling because you need to fix your freaking boiler. No, that's not what we want to do. That's why you have that savings is your emergency fund and you put it in a cash isa. So for Interler, automate the process. Once you automate it, you can delete your app. If I automate the process, I don't need to see the app. Okay, thank you for the thumbs up. I think it's clear now. Once you automate the process, I don't need to, I don't know you tomorrow. What am I doing there? If you feel that you need discipline to be good at managing money, you are doing it wrong. You don't need to be disciplined, you need a system. Just like if I want to lose a bit of weight, I don't want to have cake in my house or so many shortbread and whatever and I'll say, oh, I'm disciplined. No, no, no, they're not going to be there. I mean it was easier for me when I wasn't married. I could decide what happens. But basically you can say, I'm just gonna have this, have not have this and that. If you get hungry by 2am, what are you going to see? Cake. Yeah.

Choma.

You are a fitness and yeah, you're into fitness, right?

Yeah.

Probably understand what I'm saying more. So if you need, if you need a snack by 2am, are you going to lose all your gains or maybe all the weight you lost? Are you going to get into like your car and drive out to go and buy McDonald's? No. You eat the nuts and the broccoli and the kale and by the time you wake up in the morning you congratulate yourself. The same with personal finance. Automate your saving, automate your investment, automate all of that.

Now this is very crucial topic. Have you secured your family's financial future? Many times you're busy as doctors and healthcare professional, that's fine. But if we overlook our life insurance and income protection until it's too late, you're taking a bit of a risk here. I mean, nobody can predict the future. You need to protect what matters most. Think about life insurance and income protection. This is really quite important to protect your most valuable assets. Now if you're not sure about what you need or how to go about it, check the link in the description. I have a free guide that can help you step by step. Let's get Back to the episode.

Okay, lovely. Let's take the one more question and then we'll move forward. Okay.

Elizabeth, do you want to ask yourself.

Yeah. Yes.

Yes. No, I just wanted to know the difference between. Well, not the difference, but basically how to access the cash. Lisa versus the stock lights. Because the platform I use, I've never really noticed that there was an option to choose one or the other. It's just the lifetime ISA and that I don't even know what. You know which one it is right now.

That's a fair question. Most platform, they don't show you the stock and shares isa. It's not the first thing they show you till you ask of it. So you can go and check with this platform. You can message them, ask them, do you have a stock on shares isa? They say yes, can I convert? They say no. And you can, look, you can open a stock and shares, Liza, on a different platform. Then secondly, most times you can go from cash to stock and shares, but you can't usually go from stock and shares back to cash. I mean, I'm referring to lifetime. So have a check with the platforms and then if you're not sure, send us a message. I think someone from my team will drop our WhatsApp number. If you're not sure, if checked and you're not sure, you can send me a message and we'll have a look at it. We've got a community as well where people can chat, ask questions about personal finance. So please guys, feel free to share the links for those who want to assess it. That's not the money wise Dr. Mastermind. Anyway, that one is a private groups here. Right? Okay, so I'm going to go into the stock and shares, Isaac, which is if you're talking about investor investing, you can't do that without talking about the stock and shares. ISA is my best isa. Lovely. As an investor, the in stock and shared ISA is my best isa. Basically because it means I don't get to pay capital gains tax. Look, if I say this, Obviously on the YouTube channel, people say, oh yeah, you don't want to pay capital gains tax, you're making all this money and all that. Look, I didn't write the rules. I'm playing by the rules. Someone asked me, how do you say your company made this profit last year and they didn't pay any? I'm like, yeah, because the company made legit expenses if the government has made an opening that a company can actually buy an equipment like company car, electric car at maybe if it's brand new. You don't have. You have to. You can deduct the tax on it. So as capital allowance, there's no tax on. They're not packs on that income. You have to deduct the expense. I didn't make the rule. The government makes the rule. So that's why you, as a doctor, you might be working very hard and you're wondering, I'm doing locum, how come it is that I'm not able to move ahead? A lot of times the system is working against you because you don't understand it. I'll give you an example. Many people didn't even know that they were in the 60% tax trap. They were overpaying tax without knowing it. I mean, they're not overpaying. The HMRC will accept it if you do nothing about it. Tax avoidance, if you avoid paying taxes. Tax avoidance is legal. It's legal, but tax evasion is illegal. It's a jail term. Even here, politicians say, oh, we're going to stop people from tax avoidance. I'm like, oh, really? Are you going to stop ISA because I saw tax avoidance. Are you going to stop pensions because people can use pension for tax avoidance? Legal, legit. I can avoid the 60 tax trap. That article has been read by many doctors. Thousands of doctors read how to avoid the 60 tax trap. As a doctor, I wrote the article last April. Is avoidance legal means but tax evasion sort of like lying or trying to avoid tax in an illegal way. We don't teach any of that. We don't do any of that. We don't do it. We don't encourage it. Okay, Right now, stock and shares isa, again, this is just to expand on what is a doctor eloquently explained. The stock and shared ISA is basically an account for investing. It's your investment account. If you make any investment from it. If you exceed. Sorry, if you get a return on your investment, let's say your investment did well, I get a capital gain. So the value of your investment goes up. You don't have to pay tax on that. Normally you should pay 24 of that, but you don't have to pay pay tax on that. If you get dividends on it and the dividend is above the dividend allowance, you don't have to pay tax on that. Okay.

Right.

So these are the summary of stock and shares isa. What I can say to you that for all the ISAs, because someone sent me a message today to say that they didn't realize they put 4k in their Lisa and then they put 20k in their other ISAs. So they exceeded their ISA allowance and they didn't know about it till they got to the community. They saw people talking about it and they thought, I've made this mistake. Look, your allowance is 20k. 20 is plenty. Make use of the 20. Yeah. If you want more, maybe think about your spouse. Because the best way to look at taxes as a family, you think about your spouse or see whether your spouse, whether you could use up their 20k. And if you, if you're feeling quite good about it, you can use up the 99,000 Junior ISA for your children. If you don't want to go that direction, there are other accounts, there is a SIP account that you can actually use. You can use your pension account as well, like SIP and your NHS pension. So there are multiple ways. Okay.

Right.

Okay. So I'm just going to crack on at this point to look at the seven steps to take before investing and then we'll take a few more questions as well. I know some people have questions around avoiding the 60% tax trap. We'll get to it as well. But I just want to make sure that we touch on the key things. Well, I hope you found that helpful.

And more importantly, I hope it helps you to see investing in a new light. This is just a small section of what we cover in the Flow Masterclass. If you like me to drop more of these 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.