Why Stocks Beat Property Every Time (Proof Inside)

There's no way. There's no comparison. When you zoom out 20 years, 30 years, the stock market beats real estate all the time. I invest in startups, but I don't put 100% of my investable assets in startups. I might have like 5% of my holding in something like crypto, but it's not from the bulk of my investment. Someone said, oh, I invest in stock and share that. I'm like, no, there's no stock and shares. I sell investment. It's just a tax protector. So you put your money through that stock and shares. Isa, and then invest what you invest, whether it's an index fund or whether you buy individual stocks or whatever, or bonds using stock and shares. Isa, you can actually invest capital gains tax free. That means you never, as long as we know you never have to pay a tax. I can't tell you the number of times people called me and said, it's my 40th birthday in a few days. I've been hearing about lifetime. I said, what do I do? What do I do? And it's usually when the taxi is around the corner. Don't be that person.

Ngozi is next.

Right? Because it's. Because it's next. I can see a hand.

Yeah. These are the financial seminars you talked about. In terms of educating ourselves, are they advertised on any particular platform? How do you find out? How do you know?

Yeah, that's a fair question. It's just like CPDs, right? The CPD that you attend. Yeah. Okay, so thank you. Yeah, you had it on before. So you said Financial Assembly. How do, how do, how is it advertised? Let me ask you, how did you find out about this one?

Well, I think maybe you said from newsletters and excellent.

Newsletters. One of it is blog. That's why I said if you follow a newsletter, a podcast, you probably know when this is happening. If I ask other people, they might say, oh, I saw it on the different platform. Oh, my friends send it to me. Yeah, I think you've done something right by even being able to make it here. Many people wanted to attend. They couldn't make it right because we had to close the list at some point. Yeah, so that's one way. Of course. The other ways, I would say, though, be very careful because sometimes there are seminars that actually, how do I explain this? I've said it before. There are big organizations. I obviously get myself into trouble because I say everything again. I'm not employed by anyone, so I'm not too worried. There are big organizations that organize sales Events, big medical organizations, they organize an event and they might actually say, oh, this is financial education. But there is one big organization, they're selling products, trying to sell you insurance and trying to sell you, oh, use our financial advisor and all that kind of stuff. So you want to be picky. That's why you need to learn for yourself. This is one way. Basically learning about these things, you can read a book. That's one way. And obviously, if you obviously follow the podcast, attend them an event like that.

Okay, that's why I asked the question because I know there are loads and loads of stuff like that and you want to attend the genuine one. You know.

I don't, I, I, I hope this one feels genuine enough.

Of course, of course, yeah.

Basically the financial seminars, okay, this is one way. Obviously being in a groups like we've got a moneywise doctor WhatsApp community where we share information. Maybe UD, if you could share the link to the community, the Moneywise lecture community. We obviously announce stuff like this there and they get the links and everything. But we're not the sole keepers of knowledge about finances. Hopefully. Like I said, last three days I've been with London Institute of Banking and Finance and there are lots of good, excellent ones. But there are a few pointers to look at. One is the person trying to educate you or sell you a product. By a product it means buy my life insurance or come on, you know, give me your money, let me invest for you. Is that really education? The education has to empower you to now make your decision. That's one thing to look for. The second thing to look for is that who are the other doctors? For instance, an advisor. Who are the other doctors or people like you, let's say Dr. Sometimes it might not just be a doctor, it might be an img I think in have they walked the pathway? Do they understand like issues like black tax? Many financial advisors don't know what that is. Who knows what black tax is here? Can you just give a thumbs up? This is how to get financially smarter in just five minutes. Sometimes the difference between making smarter financial decisions and costly, horrible financial mistakes is having the right information at the right time for the right person. So every week the I write the Moneywise Doctor weekly newsletter. It's an email newsletter packed full with valuable financial insights and updates to help you make smarter financial decisions and avoid costly mistakes. Some of the areas I've been covering over the last 70 weeks include actionable tips on tax strategies, pensions, investing side hustles and several other financial areas. Now Join thousands of medics who subscribe to the Money Wise Doctor weekly newsletter to receive it straight to your inbox. And it's totally free. Don't miss out. Subscribe now using the link in the description. And now let's jump right back to the episode. And yeah, it's okay if you don't understand. I can see. Okay, thumb is up, of course. Okay, you know about Black Tax. So basically understanding the context, because content is everywhere these days. The context, yeah. So this is one thing to look at. Okay, how does it fit into my journey? For instance, I remember last year, December, we had a seminar for this cardiothoracic surgeons, quite a few of them, about 100 of them and many IMGs. And one said they have to send money back home and then also they spend thousands of pounds on Visa and all that kind of stuff. Ilr. So basically you want to understand, okay, how does that context map to your own context? But the final thing I want to say is when you're looking at financial education, is your own gut, your gut instinct. Okay, Most times we have warning signals going off. Like everyone I've spoken to who has lost a huge chunk of money in investing, maybe they've invested in something. Like two days ago, someone in LIBF was saying how somebody went to put in like over a hundred thousand of business money from his family and all that in a cryptocurrency called. I don't know whether it was Luna or something. Obviously it put in so much money, I think they cleared out their savings and all that, which is something. Would never, would never suggest that. Basically because that's part of risk management. When we talk about risk management, we talk about things like allocating your assets. For instance, I invest in startups, but I don't put 100% of my investable assets in startups because startups can go quite well and do 100 times, or they can be quite risky. So I have startups that approach me and okay, if I look at it and I think, okay, they've got a future and I invest, I might have like 5% of my holding in something like crypto, but it's not from the bulk of my investment. Again, it goes back to your financial goals and understanding your risk appetite and your risk tolerance. So someone might say, okay, if you have a financial advisor saying, okay, this is what you have to do. You should only do invest in real estate, should only invest in stock market, and that has to be through me. If you don't give me that money to invest, that means you don't know what you're doing. Alarm bells keeps going off. By the way, real estate is good. Nothing wrong with real estate, but there's no way. There's no comparison. When you zoom out 20 years, 30 years, the stock market beats real estate all the time. Like quite well. If you look two years, three years time, okay, it's fine. Real estate might do okay because stock market can go up and go down, but they are very different, different assets. And when I talk about it, I'm not thinking about real estate as a job because some people, when I invest in Facebook or Berkshire Hathaway or any of the companies I'm invested in, I don't go there to check what they are doing. I don't go to clean it and also to get things going. So obviously real estate is part of what you do and it could be a diversification. I also invest in real estate both directly and in real estate developers. So understanding all those things matter. Angie, we've gone off on a tangent, but I hope I answered your question, Dr. Ngozi.

Yes, thank you.

Okay. All right. Okay, so let's take the next one and then we'll dive into the yes one.

If you could post a list of the books, that would be really great then. Secondly, I'm ignorant about a lot of things. When you talk about the personal saving allowance, is it the interest on the savings that is the 500 pounds that's taxable or is the savings itself?

Okay, so first of all, I'm going to share this books. I'm going to. Let me get it up. Okay, so 12 unlock financial freedom with 12 powerful books. These are just starting books. So they'll give you. If you read only those books over the next 12 years, you're still going to be all right. At the end of the day, you don't need to know everything. And one of them is the Psychology of Money. So for those of you in the money wise doctor Mastermind that joined last year, a lot of you got Psychology of Money from me. So that was the book. I think I gifted out that book to 30 people last year. The Psychology of Money is a good book to start from. There's obviously read that for that, which is also a very good book. Some people might not like the author, but I opened my eyes to look. So this is. These are some of the books I've mentioned there. Have a look at them. Okay. If you've got a question, please join the queue. And then, yeah, we've got a moderator that will coordinate it. So that's that's the 12 books. I posted the link there and have a look at it and of course I might update them as well. But if you start from one or two of them and as you go you might read other things like I read different things now. I still read books about business. I read a lot about history. But you read stuff. I think last year I did 53 books on different aspects, business, finance, investing. 53 or 57, I'm not able to count anymore. Right. So now when I talk about what is being taxed, it's called PSA Personal Savings Allowance. What is being taxed is the interest, not the savings, is the interest you make. It's funny but the government keeps reducing that amount which it taxes. Just like the dividend rates the dividend. The dividend amount you get that is tax free. So no, it's the interest. If Your interest is above 500 and you are a higher rate taxpayer, that is going to be. You need to declare it in self assessment. You need to declare it to HMRC in self assessment and then pay tax on it. Does that. Is that clear? Yeah.

Yeah. Thank you.

Excellent. Right, should we take one more? What do you think?

Moderator Please can you kindly clarify whether car mortgage needs to be paid up completely before one can start investing?

Okay, that's a fair question. Is that, is it a Benny, A Bella? Yeah, Isabella here. That is a very fair question. I don't know if she's here so that we can get some context on the car.

Yes, I'm here. Good evening.

Hi. Hi. Okay, excellent. So basically when you say the car loan, are we looking at something like 50,000 or maybe thousand that that really matters? No, no.

Like 15000 to P in three years.

Three years, okay. Yeah. But the interest, is it like high, high interest or. I, I suspect it'd be less than 10%.

Yes, it's less. Yeah.

Okay, fair enough. Thank you so much. I just. There's some context so you can see if there's a car payment, you're driving the car obviously and you're paying the interest. This is my personal opinion, but obviously everyone needs to sit down and make their own plan. We don't own any. My household no longer have any cars that need any car payments. But we're all at different stages of our lives. So if you own a car, you're paying over three years and let's say the payment you are making is. Yeah. Not. Not to ask a lot of details from a. More details from there, but let's say payment, you're making is 250 or 300. I can afford that. That sounds reasonable to me. You're just going to count it as part of your expenses. The same way you have expenses in terms of let's say your cancel tax, your counter expenses. Why? Because you have the car, you're driving the car, you can sell the car and get some money. It's almost like it's a secure debt. It's not the same as I take my credit card just like I've been in Paria and I go and finish shopping in different fancy shops in Paris, which is nice. I have nothing against that. I'm just saying it should be a plan in place. So yes, if there's a car payment, I don't think if there's anything wrong with just carrying on your payment, there's a payment plan but it's very different. Like I spoke to a JP recently who used to inquire a bit of money, almost 200,000 but is now almost 200,000 per year but then the locals dried up. He's in depth for maybe £80,000 now and a lot of a lot is happening. So in that case I'm asking which car can you sell? Because you've got like two cars. Can we sell one or two? Okay. You've got any expensive watches? Because the depth is now hooking him and some of the companies are now threatening to, you know, put him in default to damage his credits written if he loses his house then he's now going to find it difficult to rent. So that's very different and in case some of us may be surprised, but it's actually very common. I see it. It seems to be more common with doctors in over 100,000. A lot of times I can't remember any Doctor any below 100,000 I've talked to that was in depth. That's how it is. I've seen one or two but majority I can remember clearly usually like GPS consultants been around in the UK for many years. Some of them didn't know some of these tax traps and now we are seeing people coming into the UK and maybe from the year one year to they are learning some of these things and they're making plans in place, they're saving their money, they're starting to invest in. They're starting to invest. Their financial journey is usually quite different because they now have like a very clear roadmap. Yeah. So I think, I think it's quite reasonable to just keep paying it. Don't miss your payments obviously if you have Extra money to pay it off. Fine. If the interest rate is like 5%, I won't worry too much about it. Especially if the average market returns I'm getting from the stock market is about 10, 15, depending on what you're investing in. Did that help? I hope that helped.

Yes, it was. Thank you very much.

Excellent. Right, so I'm just going to do some things about ISAs. Okay. Because it's really important. I don't want us to miss it. So when I talk about tax efficient investing, I've already given you the reason to be tax efficient in your investing. And I said this why? Because if you put in money into your. Let's say we are equal investors, we're very good in investing and we invested. Invested 100k. I invested 100k. Or let's just bring it down. What is the ISA allowance per year? Full ISA allowance for adults in the uk. If you know it, just shout it out or type it in the box or just tell me. Full ISA allowance. I know you know it's 20k. 20,000. Thank you so much. Okay, so it's 20,000 is what you allowed to invest into an ISA or save into an ISA. Okay, so let's say I put in 20k every year. Okay, push 20k her ISA. Joel just puts 20k in a regular investment account. They are buying exactly the same thing. They are buying stocks or bonds or index fund or whatever it is. And okay, does it for five good years. Or let's just say 10 good years. And at the end of 10 years, she has put 20, 000 into her. Sorry, 20,000 times 10. I'm not assuming that everyone can put 20K into the ISA. But let's just. For speaking of calculation, you max out your ISA, you put 20K. So okay, has put in 20,000 times 10. That's 200,000. And Joel has done 20,000 times 10. Okay. Okay. But it's not in an ISA. They've both invested 200,000. Okay, that makes sense so far. Okay. Okay. Let's assume that they invested into exactly the same things. Exactly the same things and exactly the same returns. So again, for ease of calculation, I'm just going to say that okay made 50 return on her investment. I know we all still remember our mathematics. So what's 50 return on 200, 000 over a period of years? 10 years.

Half of it. That's 100. Yeah.

It's not a trick question. Thank you. Because. So it's a hundred thousand. So basically, okay, has invested 200,000 over 10 years and her cumulative return. So it's not 50 in one year. Her cumulative return I had compounded return over 10 years is 50. So okay ends up with 300 000. So that means okay has made what we call a capital gains. Whenever you hear CGT's capital gains tax, okay has made hundred thousand in capital gains. Okay, okay gets to take her money in a normal setting, let's say I've invested in the us, China, Nigeria, in uk, normal setting, you should take some of that money and say to the government, thank you for letting me live here and invest and all that. It's called capital gains tax whether you like it or not. I think it's 24 now. The figures keep changing, but I wouldn't worry too much. You can always clarify what capital gains taxes. Somebody can type it in the box. So let's say it's 24%. And those in property, again, it all depends on what type of taxpayer you are. So let's say it's 24%. So if OGE had put the money in an ISA, okay doesn't have to have that conversation. But Joel has also made 100,000. Joel has to count 24,000 and pay it as capital gains tax. This is. Yeah, it's wow. I like the expression I get because it tells me that even if I've said it a thousand times and I repeat it again, we need to be reminded more than we need to be taught. And these are things that now Joel is investing, Oge is investing. They're doing the same job. They're GP partners, they're working really hard. But compounding is working for Oge. But he's working somehow against jail, even though he has done quite well. But now he's going to give 24,000 to the government. He ends up with 276,000. If my math is right, Oge ends up with 300,000. Now it sounds like he's little till you check it over 30 years, 40 years. You know, this is just one area of tax efficiency. So that's why I'm very hot on ISAs. So an ISA is individual savings Account. That's the, the name. But just think of it as a tax shield, a tax protector. So there's the main one, there's the cash ISA, there's a stock and shares ISA. There's a lifetime ISA if you're less than 40 like me, lifetime ISA, you can still get it. In fact, if you are 39, you really need to do it before your 40th birthday. So Lifetime Isaac is a special type of ISA where you can actually save up to a maximum of 4,000 per tax year and the government can top up 25% of whatever you save in your lifetime. Isa, if you're above 40, don't worry, I've got something for you as well. So this one is urgent. If you're less than 40, life does not start at 40. Life does not start at 40. Lifetime, Isa does not start at 40. Also, I can tell you the number of times people called me and said, is my 40th birthday in a few days. I've been hearing about lifetime. I said, what do I do? What do I do? And usually when the taxi is around the corner, don't be that person. In fact, I know I remember a consultant, hospital consultant, who bought her house and just turned 40 and she saved money for like five years because she obviously was thinking I might move when I finished my training. She saved five whole years and she missed out on £5,000. I don't know for you guys, but £5,000 is still a lot of money for me. So obviously she wasn't very happy and there's no need crying over spilled milk. It just happened that she booked in her one on one and we started talking. She joined the community and I asked her, she said, oh, before I joined the Money Wise Doctor committee, I've just recently bought a house and I asked, oh, what happened? So that's just the cost of not knowing. So this is basically lifetime eyesight. It's one of the products if you are between 18 to 39. I know some people in the Money Wise Doctor community whose children are 18, 19 and they already have a lifetime ISA. So whatever money you put into that account, the government will give you 25 on it. Of course there are multiple rules, like it's only for buying your first house or for retirement. That means you can't cash it out here. 60, obviously, if you move abroad to another country, you can't continue paying money into it and you can continue paying money into the lifetime. As I say, yeah, 50 years. So after 50 years you can't put more money. And of course there's lifetime. I start cash, which is the one I tend to think is best. If you are buying your house, you don't want to be gambling with your deposit. You want to make sure that if you save 5,4000, the government gives you 1000. You want to make sure you get the money. And for couples, you can actually do it for both sides, right? I've seen couples who do 4000, 4000, 4000. And they get 1000 each. So at the end of the day they're getting extra 6,000 from the government. About three years. I can do this for four years, five years, six years. As long as the house you're buying is not above £450,000. So that's one of the ISAs. I thought that we should get that one out of the way. So there's lifetime ISA cash and there's lifetime ISA stock and shares. If you have already bought your first home, I don't really see the point in having a lifetime ISA cash, because the cash is going to be sitting around. Remember our friend inflation? You remember? So the cash is just going to be sitting around till when you're 60. So I'd rather have my lifetime ISA and stock and shares. Okay, so that's one. Now the other ISA is the other ISA there. There are three more, but I'm just going to deal with the two that I think might concern most people here. There's cash isa. Basically, cash ISA is for saving. Remember what I said about saving allowance? Remember you're asking me, someone was asking me now how much is that saving allowance? It's 500 pounds for higher rate taxpayers is 101,000 pounds for, you know, basic rate taxpayers. But if the money is saved in a cash isa, basically it's like a savings account, then you don't have to have that discussion. There's no tax affecting it, basically because an ISA is a cash protect, it's a tax protector. So if you save it in the cash isa, that's fine. Now the last one which is really most relevant to this discussion is the stock and shares. Isaac, remember Oge? Dr. Oge and Dr. Joel. One of them was putting her money in an ISA and ended up not having to pay tax. So that account is called the stock and shares isa, so you can invest money through it. A stock and shares ISA is not an investment. Lots of people say, I invest in stock and shares isa. Recently I was speaking to, I think it was a church in excess. And someone was saying, oh, I invest in stock and shares. I'm like, no, there's no stock and shares. I sell investment. It's just a tax protector. So you put your money through that stock and shares ISA and then invest what you invest, whether it's an index fund or whether you buy individual stocks or whatever or bonds, it's entirely your business. Or maybe the platform you're investing might say, choose this fund, choose that fund, of which a lot of Times we don't really know what is under those funds. So these are the different ISAs. If you use a stock and shares ISA, you can actually invest capital gains tax free. That means you never, as long as we know you never have to pay a tax on whatever your gains you make. Let me paint a picture for you to make it make sense. Let's say you're putting in 20,000, your ISA, over 20 years of your career. Let's say you still have 20 years in your career. I mean, if you go by my current NHS pension, I don't have NHS pension because I'm not a salaried person. But let's say you're a salary doctor, I've got NHS pension and you're going to get it at 65. Say you are 35 now, that means you've got 30 years, you're still working. Let's just say over the next 30 years you managed to put 10,000. Let's just say you didn't manage to max your ISA, but you put 10,000 per year into your ISA. You already have got like 300,000 in there. Okay, so this is stock and shares ISA. Now what this means is that 300,000, let's say you did quite well. Let's say even if the money doubled over that period, obviously if it only doubled that period, it's not a fantastic result. But let's say it only doubles. So you put in 300,000, but over that whole 30 years it doubled, so you end up with 600,000. So this begins to actually take on a bit of weight. If you have to pay 24 or 25% of that 600,000, I'm using 25 for use of calculation as capital gains tax. Because if you sell something, you have to give the government a bit, that's a lot. But if it's not, that means 25,000, 150,000. That's still a lot of money for most people. People, I think it's a lot of money for me and for Yabo, is not it? So maybe for. But if it's not for you, then if you invest outside an isa, that is. This is what can happen. You would have to pay that capital gain stock. Obviously sometimes, most times people think, okay, I've invested 20k, I still want to invest more, then that's understandable. You can then start looking at, you can then start looking at other tax protection strategies that we talk about, like sip your self invested personal pension. Can you put a bit more money into your pension? Everybody has 60,000 pounds pension allowance per year. And even though your employer is putting some money into your pension, most time they don't exhaust it. Let's just say your employer is putting, you're putting 12.5% of your salary into your pension. Your employer is putting 23.7% of the salary. If it's NHS pension, you haven't hit that 60k. So other strategies might be, well, I'm going to put push more money into my pension which is tax efficient and then it's self invested. Then I can invest that extra money rather than invest outside an isa, I can use a sip and you can mask out all those things. I still have other opportunities. Like I gave you examples. I look at tax from the point of family. Okay, I've mastered my 20k. Can I mask out Nancy's 20k? Okay, some of you might have children, you want to do junior. I said you want to mask out their 99,000 each. So basically the idea is look at tax always from a tax, look at investing from a tax efficient point even before you start investing. All right, so we've touched on quite a bit. I'm going to take some more questions, but I think some of you were asking about the four weeks investment deep dive that we do. So this is the last time we did it last year. Most people found it really useful because it was quite helpful for them to get a full grasp. If you want to, I would say decide to take it as a skill. Investing is like driving. I said I learned about investing when I was like a teenager. I started investing. If you want to learn how to invest and make it a goal or something you want to grasp this year, you finish it this year, you understand it, you know exactly what you're doing. It's a skill that you use for life, like learning how to cook. Some of you learn how to cook when you were teenagers, basically better than me who had to learn it as a 30 year old in London. So if you've already learned how to cook very early is a skill you go with. So if you want to actually go, I mean some of you go with what you learned from this investment master class and start investing, maybe you just needed some clarification and that's fine. And some of you might actually use the free videos and guides we put out that you might be able to put it together. But some people want accountability. They want someone, they want a bit of hand holding and they want to be in a group of investors, like investors club, where we're not pulling our money together. To invest, but people are learning together so you might actually benefit from the money wise Dr. Mastermind is a six months program and part of that program is a four whole weeks of investing Master classes and where we actually go into practical steps. I don't know. Did anyone here attend last year? I don't know if anyone here attended last year. They might be able to explain better from their own perspectives because then when I talk about undervalued stocks, over value stocks, discounted cash flow analysis, buying index Fund S&P 500 Global Index Fund, we actually go in practically, you know, work through the accounts and get it done. Send me a message if you want to join Investment Master Classes. The four weeks program in addition to being in the six months mentorship program which covers both tax hacks and different things, but the six months money wise Dr. Mastermind you get to get three one on one sessions with me. So sometimes you need a bit more clarity. You need accountability. You might need someone to say look, you said you're going to pay off your debt, so what's happening? And also setting up systems in place that will make sure you don't need discipline. We don't want you to use discipline to sort out your investment. Okay, 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 Flow Master class. 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 to 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.

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