Your ISA Strategy Is Broken. Here Is How To Fix It

I've been investing for 20 years now. Over a period of time, the trajectory is high. If you are buying the right things, stock and shares. ISA is for investing. You want to invest in the stock market. If you want to buy bonds, you want to buy gilt. Gilt is just bonds. If you hear guilt, don't let them confuse you. It just means bonds. You buy a 30 year fixed bonds. What you're going to get is, if they say it's 4.38%, you're going to get 4.38% for the next 30 years. Let's say you bought 20, 20,000 with the bonds. At the end of 30 years they will give you back your 20,000. So you've gotten back your original money and you also got interest. Right. So I'm going to stay and answer as much questions as possible. So don't worry. Now the question is, where should I save my emergency fund? I prefer the cash ISA. I simply prefer the cash ISA. Why? Because of the question. Remember the question Dr. Kyrilos asked? He said, oh, do I have to now have to tell HMRC if I get a Kobo or a dime anywhere I get it? No, but when is the cash isa? All the money that comes from it, whether it's interest, whether it's dividend, whether it's return on investment or any of those things, they don't necessarily have to be. There's no tax on them. So you don't really need to declare anything. It's just in your Cash ISA. Okay, Cash ISA is one of the ISAs. There's Stock and Shares ISA and there's Lifetime ISA and there's Innovative Finance ISA. Now, to understand the ISAs, you must think of them like a big pie, a secular pie. And that circular pie is 20,000. Everything that goes into it is £20,000. Okay, good. Now, no matter what you do, you cannot go above that 20,000. If you go above 20,000, you can still invest. Like there are many years that I have to go above the 20,000. I decided I want to invest more, but I will not get any that ISA benefit because I've gone above 20,000. Now, number one is the simplest. It's cash ISA. Cash ISA is basically a savings account. You put your money, you save your money. The only difference between cash ISA and other types of ISA is that if you get savings in a savings account and you pass the savings allowance, which data gate we said was 500, right. For a higher rate taxpayer, 1,000 for the basic rate taxpayer. So the difference is that in cash isa, if you get any interest or not, you don't need to declare it. There's no tax on it. It's not even mentioned because the cash ISA I think is a good place to save your emergency fund. Obviously, if your faith is different and you're thinking around interest is different, then you don't even have to, you know, you don't have to use a cash isa, you can just use a regular account. But the problem with that is you then need to then start dealing with interest, declaring it and messing about with it. Okay? So that's why cash isa, think of ISA more like a tax protector. So anything you want to do, if you put it through an ISA before doing it, then you have already protected it from. Okay, right. Now, number two isa, we've talked about cash Isaac. Number two is stock and shares isa. My best ISA by far, Stock and shares ISA is for investing. If you want to invest in the stock market, if you want to buy bonds, if you want to buy gilt. Gilt is just bonds. UK bonds, they call it, a fancy name is gilt. Let's not go into the history of the paper, the gilded paper, how it became called guild. But basically, if you hear guilt, don't let them confuse you. It just means bonds and what bond size like bonds are a fixed asset, they are fixed income assets. So remember, if you buy shares, you can go up, you can come down, you can go up, you can come down and maybe, obviously stock market have been investing for 20 years now. Over a period of time, the trajectory is high. If you are buying the right things, if you are buying, maybe if you're buying a well diversified index fund or you're buying good companies. Bonds, on the other hand, it doesn't go up and down, it's fixed to buy UK government 38 fixed bonds. What you're going to get is if you say it's 4.38%, you're going to get 4.38% for the next 30 years. Let's say you bought 20,000 with the bonds. At the end of 30 years, they will give you back your 20,000. So you've gotten back your original money and you also got interest.

I've read over 250 books on personal finance and business. Not one of them explains specific issues that affect medics like NHS pensions, financial anxiety, investing, student loans and much more. Hi, I'm Dr. Andy Egwim. I'm the founder of moneywisedoctor.com for over 21 years I've been investing and studying personal finance. In fact, three years ago, I left my salaried NHS GP job after achieving financial independence. Since then, over 1200 medics have joined our tax efficient investing masterclasses that are totally free. And much more than that. 10,000 doctors and healthcare professionals have used my content to make smarter financial decisions and avoid costly mistakes. That's why I wrote the Money Wise Doctor. The Money Wise Doctor is a step by step guide. It's a book to simplify the path from confusion to clarity for medics and to help you make smarter financial decisions and avoid costly mistakes that can affect your future. We've already helped thousands of doctors learn how to save smarter, invest tax efficiently and finally feel in control in charge of their financial future. Now, if you're ready to gain clarity, confidence and control with your money, tap below to join the wait list for the Money Wise Doctor book so you can get all the fabulous benefits and the bonuses for the first readers.

So if you hear debt market, debt market is, is bond. You are borrowing money, the government is owing you money, the government is in your debt. So if you buy sovereign bond in your country, in the uk, in the US or any country that is sort of like is that the government borrowed money from you, you lent money to the government, that's bonds. Okay? Now if you are buying stocks or bonds, if you buy them through an isa, then you don't have to pay any tax on the gain you make in the stocks. Remember in stocks you can get capital gains tax because the value of the stocks go up. So if you sell it, you have to pay capital against us, you don't have to pay any interest on, you don't have to pay any tax on dividend. Remember I like me sometimes companies will give you dividends, which means that you are getting money as part of the owner of the company are getting shares of a profit. Normally you're supposed to pay a tax on the dividend. Obviously there's also a dividend allowance which you exceed. Don't worry about it, it's only 500 I think. I don't know what it is now, but they keep reducing it. But basically if you are investing in an isa, then you don't have to pay tax on the dividend. So that's the stock and shares isa. So so far we've talked about cash isa. Secondly we talked about stock and shares isa, which is just for investment. And number three, ISA is the lifetime isa. So if you read one of our articles, our videos, we say life does not start at 40 and lifetime does not start at 40, of course, I appreciate some img. By the time you've come to UK, you've already passed 40 and some we are closer to 40. Now, if you are closer to 40, you need to listen to this one. You need to lean in and listen to this one. Lifetime ISA is a special account you can open the between 18 years and 39 years. If you have a Lifetime ISA, any money you save in that Lifetime ISA, the government is going to give you 25 of whatever money you save for free. If you save a thousand pounds every tax year, the government is going to give you £250. This is basically free money, okay? Now if you save £4,000, the government is going to give you a thousand pounds. So this is lifetime isa. Now, there are some issues with the lifetime isa, you should know. There's no free money. There's no free money. I'm sure you already know that. If you're able to save the maximum you can get that 25% is £4,000. Above £4,000, you don't get that 25% anymore. So if you can say that's why I know some people. I know a couple I've met, actually three or four couples. Say we are reading your blog, we are looking at your videos. Once we get into uk, we open the lifetime isa, we started saving the both husband and wife, they were getting their 4k annually so that they can get the full 1k. So they're getting 2000 free per year. Okay? Now if you go above 4k, you don't get the money. If you're above 39, you can't open the account. And the downside of that account is that you can only use it for two things. Two things. One is for buying your first house and the second one is for retirement. So if you have already bought your first house, you can only use an isa, a lifetime isa, for saving towards your retirement. We are back to retirement again because Dr. Gates said a lot of people want to discuss retirement, pension and all that planning. So this is one of the tools you can use towards planning for your retirement. We mentioned the NHS pension, we've mentioned now the lifetime isa. And of course the third one will be your private pension, which could be sipp, SIP or sas. That's another discussion altogether. We can get there when we get there. We're on ISAs now, so so far, can somebody who is bold tell me the three ISAs I've mentioned so far? That way I can sip some tea in the process.

The cash ISA the stock and share and life Isa lifetime.

Isa thank you so much for gate.

So Andy, for a question to clarify. So you recommend the best and safest investment we can do at the cash and stock either. Of course. Yeah, that I could correct. And then studio.

Okay. So I would. I don't recommend specific investments. I can tell you what I do. I can't basically because everybody's circumstances is different. So I wouldn't be able to tell you exactly because some people are paying off debt, some people have some extra money, some people inherited money. So we're all different. Now for me what I believe that once I've saved my emergency fund and is in my cash Isa sorted my next level is to invest money. And for me to invest I go through the stock and shares Isa and.

How much do you recommend to start with? Because there is like a risk of losing money, correct?

There is any investment. There's lots of, there's, there's a risk of losing money. Every investment, whether you buy a house, whether you buy stock and shares, even if you leave it in the bank. Basically banks go bust, some banks close. And also if you obviously if you live in the bank, you're already guaranteed of losing money because of inflation. So you're going to lose money anyway. This the key here is to learn. So there are seven things I say you should do before you start investing. I've shared some of them with you and one of them is to get some education and investment. And one of them is to learn about things like broad, well diversified index fund. Now what that means is that rather trying to, rather than trying to buy one share or two shares or three or four or five. Like someone like me who has been investing for years, you can decide. I don't know which share is going to do well. So I'm going to buy a basket of shares. I say basket but some people will call it index funds, some people will call it ETF Exchange traded fund. How many of us are football fans here? Any Chelsea fans? United. Man United. Okay. Okay. Chelsea, Chelsea is going down. Any Liverpool fans or Baka fans. Okay. I mean there's anybody who is a fan of any club in the Premiership. Arsenal. Thank you. Roslyn. Right, okay. I'm going to demonstrate investing through index fund with Premiership. Okay. Maybe the rest of us are cricket fans. That's fine. So now let's go to the Premiership. Is a number of clubs. You can say I don't know who's going to win the Premiership, but I'm going to put all my money On Chelsea or My United. And Anthony put all his money on My United. Now, if my United wins, he's going to make a lot of money because he was right. But the chances of Man United losing is also very high, even if they're a good team. So there's more risk. But what if Anthony said, I'm not going to only invest in my United, I'm going to invest in all the clubs the previous. Now what does that do? You invest in all the clubs in the Premiership. The chances of one of those clubs winning the championship, not Premiership. The chances of one of those club in Premiership winning the championship is much higher than only the chance of Man United winning the championship. Okay, now that is like the way you look at index fund. They are investing in a broad. No, investing in many rather than one. Another way to think about it, someone could say, well, I don't want to invest only in the Premiership now I want to invest in all the clubs. I want to invest in clubs in La Liga, I want to invest in clubs in Man United, the Premiership. I want to invest in clubs, you know, in all the leagues. Obviously, that would dilute you further. Okay. And that would mean that even if you win, it may not be that great. So basically you are diversifying, but the more you diversify, that means that, okay, you have less chance of losing, but you also have less chance of winning big. So as an investor, because that's how I started, I'm usually in six to ten stocks. That's it. But will I recommend that? No, I don't recommend that for most doctors because you're not going to stay up and start doing the analysis I'm doing. You're not going to attend investment calls. Earlier this year I was in the US for Warren Buffett. You know Warren Buffett, I was in his shareholders meeting. Many of you, you don't have time. I'm glad that you are busy because you're busy doing meaningful work and saving lives. You're doing so many things and as an investor, you might not even like to do that. I enjoy it. So that's why for most doctors, it's better to just buy a well diversified index fund, which there are so many of them. So they might want to buy an index fund. They don't want to buy just the S P 500. They want to buy S P 500. That is ethical. They might want to buy S&P 500. So these are different baskets already exist.

So how do you find this basket? Like it's through, through our bank or.

How to find like okay, that, that is a different question but I want side now how to buy it is true investment platforms. When I started investing at 19, how to buy it is that I take my cash, I go to the store broker and I said please, I want to buy this here. And then he charges me a hefty commission and then later on we'll do bank transfer and we'll call on the phone. But now there are multiple apps. I'll say if you haven't got any training in investing, I don't think you should rush in. There's no rush. First of all, learn the basics. If you're hearing things like index fund for the first time, ETF for the first time, you're hearing bond guild if you're hearing things like risk assessment, if you're hearing things like diversification, if you're hearing things like risk premium if you're hearing asset allocation, if any of these things sound strange to you, don't rush to invest first. Just be saving your money. Save an emergency fund and try to understand these basic things. How can you learn it? I've got so many videos for free on investing you can watch. I've got many articles, I've got a free download which is basically seven things to do before you start investing. I'm going to share that for you to download and I'm also going to share it with them gate to share again in your group for you to to have a look. Okay, so. So don't rush to invest. Don't be pressured. They're not missing anything. Instead of you missing things, they're going to likely make a mistake if you don't understand the basics before you start investing. Okay, so that's it. The financial playbook everyone has been waiting for is coming. The Moneywise doctor Book. Click on the link to pre order your copy. Plus free bonuses.