Timi Merriman-Johnson (Mr MoneyJar) on ISAs, Side Hustles and Personal Growth

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:00] Sammie Ellard-King: Hello and welcome to another episode of the Money Gains Podcast. This is your host, Sammie Ellard-King, and today my guest is Timi Merriman-Johnson, aka Mr MoneyJar, who is one of the UK’s top personal finance influencers, podcasters, and authors out there. I’ve been buzzing about getting Timi on a podcast for quite some time now, and we unpack everything to do with UK personal finance from building up your income to salaries to investing. So much more. It’s such an amazing conversation. But what I will say today, if you’ve been enjoying the podcast and you’ve been listening for some time, please do share it with a friend. It really does help the show grow. It helps us get more guests on. And if you’re listening on YouTube, you know what to do. Hit that subscribe button. And if you’re listening on Spotify or Apple, please do whack the follow. Listen back to our back catalogue of episodes. It really does help the show. But for now, let’s get started on the Money Gains Podcast.

[1:09] Timi Merriman-Johnson: Let’s make some work. Hey Timi, welcome to the Money Gains Podcast, man. How are you doing? You well? Very good, Sammie. Thank you very much for having me. No, I have been so excited about getting you on. I know we’ve been back and forth. We’ve met at an event in the meantime. And uh yeah, look, I sat through your presentation and you know it inspired me a lot to do some really cool stuff. So yeah, your your view on personal finance is is incredible. And uh I you know I’m really touched that you you’re on today. I think it’s going to be really valuable for the listeners. But really quickly, would you give them a quick 4-1-1 into yourself? 4-1-1. I haven’t heard that for a while. Um yeah, my name’s Timi Merriman-Johnson. I run Mr MoneyJar’s uh financial education company in the UK. And I talk about personal finance, get getting on the property ladder and investing. And as Sammie has just said, we both met at an event in I want to say June, July, um on in in Regent Street. Really cool venue, Loxutan. And um, yeah, very cool to be um presenting to audience for like 30, 40 people with Sammie. And yeah, I’ve seen your podcast on the socials, lots of great guests, so really pleased to be one of them.

[2:33] Sammie Ellard-King: Ah, thank you, mate. Yeah, no, it’s been uh it’s been a couple of months. That event was amazing, um, really well put together. And uh yeah, Cash French, who joined us on the on the panel as well, was uh a brilliant guest to have. I love her approach. Um but yeah, I had a quick look into your background, and I suppose coming into personal finance for you, you’ve not gone the traditional route. I had a look, you studied graphic design at university. Um what what’s driven you to start Mr MoneyJar? Where’s this come from? All right, so it’s interesting that you, from what you got from my uni experience, is that I studied graphic design because I actually didn’t. Um I ran a graphic design company. That’s like the second ever business I did. I actually studied law, but I always had that entrepreneurial spark in me from back in uni. And I kind of struggled with money at the time. So I used to do graphic design to essentially like supplement my student loan, which which wasn’t really that much. Um, and in terms of in terms of why I started Mr MoneyJar, I had questions about money as a young person, but I also worked in a financial PR company. So uh that was my first job out of uni, and I had lots of financial clients like banks and insurance companies and investment houses, and I just wanted to get better at my job. And then obviously, the times we’re living in now, money’s become front and center for basically everyone. The pandemic was a huge catalyst, I think, for many people on both sides of the spectrum, people who were having positive money experiences, people having financial challenges to just pay attention to what was going on with their finances.

[4:19] Sammie Ellard-King: Yeah, it’s crazy times right now. But digging into that, obviously, clearly you’ve got you know background in law. Sorry, I missed that. Don’t know how where where I saw that, but I saw graphic design. I was like, It’s really interesting that that was what you you got there. Yeah, yeah, because I saw University of Warwick and it’s uh underneath that, I think it said graphic design. So I was like, oh cool, something to ask you about. But obviously, this kind of leads into my next question perfectly. So you set it up well for me, Timi. Thank you for that. Um I was gonna ask you about this entrepreneurial spirit that you’ve clearly got. Like this it goes deeper than than just having you know a nine-to-five job. It takes a certain type of individual, and and what what do you feel like that is? I think that’s a great question. That’s a really, really good question. I think that the word entrepreneur has been glamorized because basically a lot of people hate their jobs, and so the way you escape that is by setting up your own business and doing your own thing. But I actually think that work is a positive thing. I think that we wouldn’t have anything really if it wasn’t for people, you know, working and taking their time to build stuff and solve problems, everything from the microphones we’re using to the computers we’re using to communicate with each other, to our phones, to our food, to our clothing. Like people it’s people’s jobs to make all of this stuff, and so I don’t think work is a bad thing. And I also don’t think it matters whether you do a nine to five or whether you work on your own thing. Like you either have one boss in a company, or you have hundreds of bosses if you run a company, um, or you’ll have a smaller group of clients. So I don’t think it really makes a difference. And so I don’t think there’s a particular type of person that’s an entrepreneur. Really, all you’re doing is you’re solving problems for people, either at a small scale or a large scale, and you’re being paid to do that. Now, where working and being an entrepreneur do differ is that when you work for a company, you’re selling your time largely. So you can be in a company and kind of shirk responsibility and maybe like not be super engaged or whatever, but your salary will still remain the same. But if you are running a business, if you don’t work, then you don’t get paid a lot of the time. And if you sell a bit more, if you work a bit more strategically, then you can make more money. So there’s that kind of risk-reward situation. So I think your decision to do either will boil down to like your temperament, your attitude to risk, and where you are in your life. I definitely recommend everyone to work in a nine to five, particularly earlier on in their career, because it’s the stuff that I’ve done in all of my jobs up until this point, which is the reason why I’m able to do what I’m doing today. So I’ve worked in PR and marketing, so I understand how marketing works. I’ve worked in financial organizations, so I understand a lot of the jargon and the terminology. And I’ve also worked as a finance manager in a small organization, in the charity. So running my own business, it’s like I have the experience of sending invoices, managing cash flow, this, that, and the other. If I’d just gone straight into content creation, yeah, you you know, I’d have a pretty Instagram page, whatever the case may be. But in the back end, there’ll be chaos. I wouldn’t really know what I was doing. So I really like nine to fives. I’ve made those are great relationships in my jobs. People have gone on, people. I literally, you know, maybe I worked on the same floor as them, and we just kind of smiled at each other in the lift. Or maybe we met after work drinks at some point, um, have gone on to recommend me for stuff, have gone on to become paying clients. If you’re an entrepreneur, particularly in the industry we’re in, you’re just in your house by yourself. You’re not making relationships, you’re not building relationships. Relationships are really important. I said in my um presentation that relationships are a form of wealth. They absolutely are. And working a job will enable you to meet hundreds of people, you know, over the period of um many, many years. But then, you know, I worked for a few years, three, four years after uni, but then it just got to a point where every day I was going into my job. I didn’t hate my job. The last job I had before I like quit, because Mr MoneyJar was my second business. So when I quit my job to launch my first business, which was a fintech app, um, I had the best manager ever. She was awesome. Um, a woman called Louise Turner. Um, but I told her, I was like, look, I just have to start a company. Like I feel it inside me. I have ideas which I want to execute on, and if I don’t do them, then I’m gonna regret it. Because I like to run everything in my in my life through a kind of regret minimization framework. I I ask myself all the time, like, would you like to get to your deathbed and have having not tried this thing, you know, whether it works out or not, you know, would you like to have tried it? So um the reason why I’m an entrepreneur, and that’s a bit of a long-winded answer, but the reason why I’m an entrepreneur now is because I don’t really feel like I had a choice. Like I just had to try this, and thankfully it’s worked out.

[9:46] Sammie Ellard-King: Love that answer. It was a well-rounded answer. You know, I think I agree with you in a lot of ways. There’s um no, in fact, I wholeheartedly agree with you. I believe that everybody should go out and and experience the world. And, you know, I was I worked in bars when I was 16, actually started as a kitchen porter at 14, and just getting to know the ins and outs of an industry, or it or within equally as well, like how to deal with people, how to deal with authority, um, you know, how to have discipline, getting to work on time, all of these little traits that these build up in a person to then be able to go and launch themselves into a business later down the line is so important, you know. Leaving school at 16 and starting your own business, amazing, but you are going to make a lot of mistakes along the way, and you’re gonna need some fantastic mentors and a great team around you to be able to kind of do the things that you don’t know how to do because you don’t know how to do them. It’s really that simple, you’ve never done them. Um, and so I love that. What do you uh looking looking into it a little bit more with this kind of lens of um, you know, for me, I see it a lot at the moment, and people are putting themselves under a lot of pressure to create a side hustle, start a business. And yes, look, they are all fantastic ways of of creating life-changing wealth along the way. But for somebody who hasn’t figured it out yet, what would you say to them?

[11:10] Timi Merriman-Johnson: Who hasn’t figured out what they want to do with their life? Yeah, like you know, they could be sitting here, man, and you know, they might just be sitting in a nine to five, and it’s slowly dawning on them that they want to go out and do something with themselves. And they and they’re thinking about this, and they’re sitting there at their desk listening to this at lunch, and they’re going, Man, like I really need to do something, but I don’t know what to do. I don’t know how to tap into that. All right, well, okay, fine. For the person who’s in a nine to five who’s listening to this, you are doing something with your life in the sense of you’re working, you’re helping someone else in their business, you’re earning a wage, you’re paying for your mortgage or rent, you’re paying your bills, you’re supporting yourself and your loved ones. So you’ve already done something with your life. I’m not going to buy into this narrative that like everyone needs to become an entrepreneur to be to become something, or that people need to achieve conventional success to become something. That’s just, you know, it’s a capitalist lie. Um, existence is actually enough. Being a nice person, being a kind person is actually enough. However, if you have an idea or you have a dream, or you have a thing that you want to try, you should absolutely do that because you only live once. And like if you go your whole life not getting the idea out of your head and into reality, that would have been a massive, massive shame and a massive disservice actually to everyone else who could have benefited from your idea. Like you could potentially solve a huge problem or change the way that we do things or make them more efficient by putting your thoughts, essentially, you know, what’s in your brain, out into the world. And so I absolutely think that you should. Now, there’s kind of two ways to do that. You can do it the jumping off the cliff way, you just hand in your notice. You finish listening to this podcast, you hand in your notice, and you’re like, okay, so what am I gonna do? Definitely don’t do that. That’s very, very stressful. I’ve done it. It just the world doesn’t work that way. Just because you’ve quit your job today doesn’t mean your business is gonna work out tomorrow. Um and I I saved up like a bunch of cash. Um, I want to say I had 10k probably in savings quit. It’s like I have a year to make my business, my first business, which was called Luna. It was a um convert a subscription management app. That was the idea. Um and then it didn’t work out like because a business isn’t just gonna take off in a year just because you want it to. There are lots of other factors. So, what I have found is a more sustainable way to do that is to see if you can reduce your working week to four days a week and then work on your business one day a week, evenings, and weekends. That’s why I did the second time around with Mr MoneyJar. I was working for a year and a half for a charity as a finance manager. Um, and then I was building Mr MoneyJar on the side. Now, I was able to do this in part because it was a business support charity. So I joined as one of their entrepreneurs. So it was in their interest and they were very supportive of me building my own business. Not all employers are like that. So, you know, obviously be sensible with it. If you can’t reduce your working week down to four days a week, then yeah, it’s just gonna have to be evenings and weekends. Um, but even like annual leave. Like when I when I was first starting a business, I took like two weeks of annual leave off. And I know we normally think of annual leave as okay, great, I’m taking time off, I’m gonna go on holiday. You don’t necessarily have to do that. You can take time off and just remain in the UK or wherever you live and just get that breathing space. You know, work is really tiring. You wake up, get ready, go into work. Well, this was back in the day, I know there’s more, we’re more flexible with working from home now, but working takes up a lot of bandwidth. You’ll be amazed what actually happens to your brain when you take time off to just do nothing and the snow globe settles and the ideas start coming in and you you feel creative and stuff. So um, those are all opportunities that are available to you. But if you’re able to do the reduced to four days four working days per week thing, the beauty of that is that all of a sudden you’re not trying to replace 100% of your income. You’re actually trying to um use your side hustle to replace 20% of your income. That is far more sustainable, far more palatable, and gives you the space to kind of build something out and try things and stuff. And if it doesn’t work out, then you just go back to five days a week. You know, the best decisions in life, even though they’re scary, are reversible ones. Ones where if you if it works out, great, I’m steaming ahead. And if it doesn’t work out, then I’ll just go back to what I was doing before. Reversible decisions um are the best decisions.

[16:04] Sammie Ellard-King: Hey guys, Sammie here. Just a quick one. If you wouldn’t mind heading over to upthegains.co.uk, hitting the subscribe button in the top right hand corner, and entering your email into the box. For your troubles, you will receive a free net worth calculator worth £25. Now, this net worth calculator, if you enter your assets and your liabilities, will tell you exactly how much you are worth today. Now, what you can also do is set yourself some financial goals and track your net worth along the way using this tool. It’s totally free. So head on over to upthegains.co.uk, hit the subscribe button, pop your email in, and it’ll be sent straight to your inbox in a matter of minutes. Now, back to the podcast. I completely agree with you. That’s such a great answer there. Great advice for anyone, really. I I did this, I did it recently, you know, I jumped off the cliff. Um, but I did go down to two days a week on a day rate because that’s what I needed to cover my mortgage, my rent, my bills, and any real like minor expenses. It meant it would be tight, but um, you know, I was fine, and so I could work three days on my business. But I’d been building my business in the in the background, like you to me, very much like you know, weekends, evenings, taking annual leave so I could work on it full-time. And it it’s just what we needed to do to get the businesses off the ground. But only did I take the jump when I was like, okay, I’m ready to scale now, um, and there is some money coming in, thankfully, and and we can, you know, keep the lights on at home.

[17:42] Timi Merriman-Johnson: And I think I I’d be interested to see if you feel this way or felt this way, Sammie. But even though it’s hard, what we’re talking about here is like you’re working, but you’re also building something on the side, it is difficult. Well, I would compare if if you if you’re passionate about the idea and you’re getting some traction, you don’t just want to be banging your head against a brick wall for ages. If you’re getting a little bit of traction, then it’s actually in a very it’s very similar to when you’re in a new relationship for the first time. It’s actually quite exciting working on something new and seeing like getting customer traction, getting feedback if you’re on socials, getting the engagement, getting the validation of your idea. So it may it may be a lot of late nights, and you may uh have to forego certain social experiences or um certain luxuries, but there is a lot of excitement and a lot of kind of um you know forward momentum that comes with starting something new. And uh I wish I wish that for everyone.

[18:43] Sammie Ellard-King: I completely agree. I mean, I likened it the other day to my partner’s playing playing Xbox. What I’m doing is my my, you know, I would have sat there for three hours in the evening playing COD or FIFA, um, and I loved it. Like I absolutely loved doing that. That was really good fun. I was I I loved adventure games, and I’d go deep into one player mode. And uh you I could sit there for 48 hours, no problem. But what I did was replace that with this, and it gave me the same kind of dopamine hit really that I was actually getting from the games is I was actually now putting into a business, and I I I used that that that time wisely to do something. Um, but it’s not for everyone. One of the one of the big things that I loved about your talk when we met um was you know, everything is investing focus, you know, you need to think about retirement, you need to do all of these things, and you took a really different approach to one bit of that, and this is something that I don’t uh since uh just think is is is actually the better route. Um educating yourself. You you you really do bang that drum. What why and rightly so, but but why?

[20:42] Timi Merriman-Johnson: Yeah, so I I I say in my talks that you know the official you know office for national statistics definitions of wealth are you know it’s pension wealth, it’s properties, it’s financial assets, it’s physical wealth, but wealth is also your health, your relationships, um, like your memories and and and skills and uh and your education. And it it has to start with education because if I was to liquidate all of the assets in the UK and distribute the wealth to everyone equally and go away and come back in ten years’ time, that wealth would have found its way back into the hands of the most financially educated in the country, either the people who understand how to set up businesses to persuade people to spend money with them, or the people who know how to keep wealth and then put it into assets that increase in value over time or or pay them. And then everyone else would just be like, oh, I want to buy stuff or I want to just give my money away or or what have you. Um and there’s nothing wrong with buying stuff, like we’ve stopped buying stuff, the system collapses. So it’s just about having a it’s that for most of us, we think we don’t get a financial education. We absolutely do. We just get an education in how to buy things. We’re all very, very sophisticated consumers. We know where to shop and when to get the best sales and the best discounts and this, that, and the other. Um, but we don’t get a holistic financial education. So you need to be educated in all of my money and all its uses: saving, investing, borrowing, um, you know, donating money, passing money on when you when you um passing money down when you when you die, uh retirement, these are all like ways in which we’re going to interact with money over the course of our lives. And it’s a lot more than just buying things. Um so that’s why I focus on education. If you tell someone how To do something and then leave them to it, then they’re self-sufficient and they’re capable. But if you just give someone a bunch of money, it’s gonna slip through their fingers. You hear these stories about people who win the lottery and then within a decade they’re back to square one. Yeah, it’s just they don’t they never they never understood um they they never learned money management. It’s not their fault, but they never learned money management, and so even with a large amount of money, it still ends up um back in the hands of people who know how to manage money. And uh if you just take some time to learn the basics, I know that that there are more things in the world to learn than there are than there are hours in the day to learn them. So you’re not gonna become an expert in everything, but if you can just learn the bare minimum you need to be competent in an area, then that’s enough. And then you can go to subject matter experts when you want to find out something specific, um, if you if you need to. So that’s why I talk about education. It’s perhaps the most important thing. Where did you go to educate yourself about these matters? I I went to books primarily. You can see my my bookshelf behind there, color, color uh coded bookshelf. Um books, yeah, because I know um there’s some people who um don’t uh reading is not for them. And this is a this is a legit stance, by the way. You know, there are different types of um the different types of learners, visual, um, audio learners, read-write learners, kinesthetic learners. We all take in information in different ways. And a book is a huge time investment, you know. Um it can probably some of the bigger books I’ve read have taken me like a month of like reading every single day. So I I get it, but books remain the highest fidelity way to convey complex topics, and I think have given me a huge advantage in terms of the information I’m able to share and the knowledge that I have. I don’t just read the headline, I will read the report behind the headline. I don’t just read the quote, I’ll read the whole book. I won’t just read the stat, I’ll read the survey that the stat came from, and I’ll read the small print. That’s what I do. And then I also know how to then take that and break that down into something that’s a bit more digestible. But if not books, then podcasts are very good, but also workshops and events like the ones that we that one that we spoke at are very good as well. And that latter one is great because you get to ask questions. You can’t necessarily do that when you’re listening to a podcast or reading something. At a workshop, you can actually ask questions and speak to the speaker at the end, and you’re in an environment with with other learners in it. So that’s that’s where I went.

[25:38] Sammie Ellard-King: Yeah, it’s so interesting. I’ve changed over the years. I used to read like you couldn’t see me without a book in my hand. Any spare moment I wasn’t speaking to someone I would be reading, and um mainly fiction, but um you know, I was young, and then it changed massively in my mid-twenties, and I discovered podcasts, and actually I realised that I’m an audio listener, uh, a learner, audio learner, and um it changed everything for me because I I I’d stopped reading for a couple of years before that simply because my uh my brain can process and sit down long enough to to stay concentrating. Yeah, and it’s just the way people were uh are programmed, um people listen and learn in different ways. But could I could I challenge that? Sure. Well not challenge it, but just kind of um test that a little bit. Um if you if you are at the airport, you’re going on holiday with your family, and um you get to security, you’ve passed through, you’re at the boarding gate, and then the carrier brings out two pilots and says, Okay, we’ve got two pilots here. One’s um, you know, read books on the subject, they’ve gone to to like flight school, they’ve read books and stuff, and this pilot here has learned how to fly by listening to podcasts. Like, which which pilot would you choose?

[27:01] Sammie Ellard-King: Oh well, uh there’s there’s no question. Um when I when I say audio learning, I do listen to the audio book. Okay, cool. So I’ll be listening to the psychology of money or whatever it might well be if it’s personal finance, or equally with me and my partner, we listen to fiction books together at night to go to sleep. Um and that uh I think that does change it, but you are right. Like when I do sit down and go through a topic in detail and I’m what I’m looking at the words, it does make a complete difference. And that do take care of it. Actually, I think audiobooks are are I massively sleep on them. I should listen to them more. I think they’re a good um kind of uh happy medium between like the the level of detail you need, but then uh a format that’s probably accessible to to more people because yeah, you could be riding a bike, you could be washing up, you could be going for a walk, and you could be getting all the same information from a book. And like I didn’t mean to be like cheeky with that example, it’s just I think when when it when it becomes life or death, or when it’s like the plane either stays in the sky or it could fall out of the sky, or like same with a doctor, like you have a doctor who’s like studied and like read books and stuff, and then you have a doctor who’s like been on YouTube and there’s a lot of like open heart surgery on YouTube, all of a sudden you’re like, Yeah, I’ll take the book one. I’m not gonna play with that.

[28:33] Sammie Ellard-King: No, no, I I agree. There’s certainly different different ways of looking at it for sure. Um something that I uh I really loved as well, just the second part of your talk as well was um was talking a little bit about how people can use their investments to kind of forward and beat inflation. And that’s something that we we talk about a lot on this podcast and in general. But what what are some of the steps that you’re personally taking right now to to beat inflation? To beat inflation. I know it’s difficult, and we’re talking about an average over a long period of time here, but rather than this this exact moment today. But yeah, what what steps are you taking in your own personal finances at the moment to beat inflation?

[29:22] Timi Merriman-Johnson: Um, I mean, I’m a business owner, so you you charge more. That’s not gonna that’s not gonna be inflation in the macro, because actually charging more um increases the amount that I’m paid, which increases my disposable income, which in turn will lead the Bank of England to raise interest rates yet again. And the tricky thing about the raising of interest rates is I read a um uh an article which showed that um actually the traditional way of bringing down inflation by raising interest rates might not be um fit for purpose in this current day and age because way more people are on in fixed rate mortgages than historically. Like historically, a lot more people would have been on trackers. And so you raise the interest rate and you see an immediate kind of hit to people’s finances. But there are lots of people, myself included, who haven’t really been affected by these interest rate rises because I’m in a fix. And when that fix comes to an end, then I’m gonna have to like pull out the extra however many hundreds of pounds a month. But so far, it’s as if nothing’s really happened to me. I’ve not seen um the impact. So I charge more. Uh you know, as a business as a business owner, you you can charge more, but that’s gonna help you more in the day-to-day and in the micro, not in the macro. But the long-term macro way of beating inflation historically has been to put your money into assets which grow at a faster rate than the rate of inflation. We have a target rate of 2%. So that means that um the value of money um kind of falls by a couple of percent each year, basically, under normal um circumstances. But um if you look at property, if you look at stocks and shares, um these are things which grow grow at a rate of um higher than 2% per year. So if you leave your money in cash over the long term, it will probably be able to buy less um than it could in the past. And if you put your money into stocks and shares um or into property, you can expect your money to be able to buy more when you come to use it. That’s the general gist of things. But there’s a third thing I want to say, um, which is that monetary policy is uh gov you know it’s within the remit of the government. And I think we all need to think very carefully about who we want to be in charge because they’re the people who make the rules, they’re the people who decide. Um I know that the Bank of England is independently owned, but you know, in terms of like rules around taxation and um and that sort of thing, there are it’s actual people in power that make these rules and stuff. And if you don’t agree with the rules that are being made, then you should vote um vote accordingly when the next general election comes around.

[32:21] Sammie Ellard-King: It’s a great point. I mean, you mentioned there obviously investing is a big part of that, and we we love it talking about investing on this podcast. So what are some of the assets that you hold today, uh apart from your business, of course? Index funds. A global index fund, that’s it. Straight up, that’s it. Yeah. Yeah. Because I’ve done I’ve done the reading, there’s a great book called The Little Book of Common Sense Investing by Jack Bogle, founder of Vanguard, creator of the index fund in 1975. And the book makes a very, very compelling case for the fact that if you just track the market, you’ll do great over time. And if you try and beat the market, you might beat it in the short run. But in the long run, the market is way too unpredictable and there’s way too many players in it. Um and those players are not rational agents, they are often irrational. Um, and the market uh you you will end up uh underperforming the market over time, plus you end up paying way more in fees because you are um trying to take an active position. So I just pay into a global index fund every month, and then I uh continue um with with stuff that I can actually control, which is making as much money as I can, growing my business, and and working on myself and educating myself.

[34:52] Sammie Ellard-King: It’s a lovely way of looking at it. I mean, have you ever gone individual stock picking before? And yeah, yeah, earlier on in my in my investing journey, I was very much into individual stocks. I also read a great book called The Zulu Principle and Beyond the Zulu Principle by Jim Slater. Uh, those are two great books. Um massive page turners, actually. I massively recommend them. Um and I really liked them because they are um UK-based. Uh so a lot of investing books are in dollars, but these are actually in pounds and pence. And talking about like back when the body shop was a growth stock and that sort of thing, it’s really fascinating walk down memory lane and stuff. And oh, cool. Yeah, the Zulu principle and beyond the Zulu principle. And um, these books focus on uh I’m getting quite technical here, but these books focus on you know things like um the price to equity growth ratio, which is essentially, you know, if you buy a stock that has had a growth in earnings, a solid track record, solid track record of growth in earnings. I think the time period they said was like five years or more of like increasing profits. If you buy a company as it’s growing and you have an expertise in the industry and you have done your research, then you can expect that um stock to grow really quickly, more so than if you buy an established blue chip stock that’s been around for a long time and will do will grow stably, but isn’t in that kind of um upwards trajectory that a kind of a smaller company would. Um and the and and these um high PEG stocks also have you know relatively small market capitalizations as well, which is you know the value of the company. It’s quite a small, small, small company value, high growth rate equals big stock, big kind of stock growth. So I I dabbled in that for a little bit. Um but then I realised like the note, like I don’t want to spend all my time reading financial reports and following individual companies. I’m just gonna put my money into an index fund and try instead and bet on myself. So I educated myself, and now Mr MoneyJar is the growth company, and I have 100% of the knowledge of it, so it’s kind of like I’m invested in this super diversified fund over here, and then I’m highly concentrated in Mr MoneyJar, but I have full control over how much money I do and don’t make in this in this company, and I and I quite like it that way. I don’t uh sorry if that was quite a long and technical answer, but no, no, no, that was absolutely spot on.

[37:46] Sammie Ellard-King: I mean, I I I adopted quite a similar mind frame, really, other than the fact that I have 80-20. Um so I’m 20 individual stocks, and that’s just because I really enjoy doing it, and also equally I’m doing very similar to uh throwing a few more fundamentals at it than than that. But um, but that really, if a business is small, growing, and is the new Netflix of that industry or or sector, for example, then you can see astronomical gains in one or two, three, twenty f um individual stoicks. It can be done, it’s just it’s a game that you’re playing. While there’s an index fund, you’re basically betting on the world’s economy to fail. So if it does, then we’re all in the big shit anyway. So, you know, that’s that’s the way we’ve got to look at it.

[38:39] Timi Merriman-Johnson: Um and I wouldn’t say, don’t don’t don’t get me wrong, like if with the money that I have now, if I if I saw a company and I was like, oh, do you know what? This is like clearly a growing industry, this is clearly a growing company, then I would consider buying an individual stock to capture some of that growth. I’m not against it at all. It’s just that I think that for 99% of people, they’re just not gonna have the time to do that digging. And so an index fund will be appropriate for them. I completely agree. And as what really with a lot of uh one-to-one coaching clients, they don’t have the time. Yeah, they’re busy people, they’re directors, uh, they’re you know, they’re they’re managers of businesses or in busy teams where they get home, they’re knackered, they don’t have any time to do these things. Um so invest in index funds and and go out and improve your your income and your wealth elsewhere, if that’s that type of individual. Other people are so interested in it, they’ve just never been learned, uh, that they’ve never picked uh any of this knowledge up on the way. And um it’s a different story for these guys. And and some people love having that that exposure to a company that they absolutely adore uh as well. That’s another reason, you know, if someone is obsessed with Apple products, it’s just always a really easy answer. You know, and you you you can’t buy any more Apple products, you’ve got them all, then uh owning the shares is a good way of uh increasing that too. So there is other sides to that. But yeah, I absolutely love your your approach, and I think it’s one of the best approaches out there. You’re improving yourself, you’re improving your business, and in turn, you’re investing nice profits into global index funds, which are then growing over time, and you’re you’re harnessing the power of compound interest in both your businesses and your investments. So yeah, really, really cool way of looking at it. Um I want to touch a little bit on ISAs. Um, I know it’s part of your um your your talk, and uh it I just loved your approach to it. And it’s not something I get asked these questions all the time, and I’d love to um send them to this bit of a podcast. Um we never really covered this in like true detail, and I just wondered if we would could go through a little part of that uh that talk there.

[41:01] Timi Merriman-Johnson: Mm-hmm. Cool. Um so there’s obviously different types of ISAs. We’ve got stocks and shares ISAs, um, lifetime ISAs, cash ISAs. Uh would you mind telling us a little bit about them? Sure. So an ISA is uh a tax-advantaged um type of savings account. ISA actually stands for individual savings account. And they are a family of accounts. Um, when I talk about them in talks, I normally use different colored Pringles cans just to illustrate that they are kind of related and are separate from standard savings accounts. There’s four types there’s cash ISAs, stocks and shares ISAs, innovative finance ISAs, and Lifetime ISAs. There are also junior versions of cash ISAs and stocks and shares ISAs as well. You have an overall limit of £20,000 you can put into an ISA, and that’s across all of them. Apart from the Lifetime ISA, which has its own limit of four grand a year. With a cash ISA, as the name suggests, you put your money into a cash ISA, that money stays in cash and then you earn an interest rate on it. In a stocks and shares ISA, you will typically invest the money into stocks, bonds, uh funds, ETFs. You can also money that’s in a stocks and shares ISA can also be held in cash until you decide what you want to invest it in. So that’s just something to be aware of. An innovative finance ISA is essentially a peer-to-peer lending product. So you essentially are lending money to businesses so they can use that, and then you’ll get a higher interest rate, or you can expect to get a higher interest rate than if you could just put your money into a cash ISA. Um something to note for innovative finance ISAs, though, is because what you’re investing in is a form of debt. Your deposits aren’t protected by the financial services compensation scheme. Um that’s just something worth knowing. And then with the lifetime ISA, there are two types of lifetime ISAs. There are cash lifetime ISAs and there are stocks and shares lifetime ISAs. Um for a cash lifetime ISA, um generally that is more appropriate for saving towards the purchase of your first home because you get a government bonus on the money that you put into a lifetime ISA of 25%. So if you max it out at 4K, then you’ll get an additional grand. And for a stocks and shares lifetime ISA, that’s generally more appropriate for saving towards your retirement your retirement, which is the secondary use for a like uh for a lifetime ISA. Um, and you can access the money when you’re 60. Pay into it until you’re 50, access it when you’re 60. And you need to be between 18 to 39 to own one. ISAs are really cool. I know from my US financial friends that they don’t have them in the States. They’re always really like, oh wow, you have like you know tax-advantaged accounts in the UK. Um it’s like the rough IRA, isn’t it? And the they’re super cool because essentially money that you put into an ISA is completely sheltered from tax. So let’s say it’s stocks and shares ISA, because I get this question a lot. If you put if you max out your stocks and shares ISA in a tax year, which runs from April to March, um, if you max out your stocks and shares ISA, 20,000 pounds, you buy 20,000 pounds worth of Apple stock, and Apple release the most just incredible product, whatever, and then the value of the stock doubles, you keep the 100% gain on your 20k. So you’ve now got 40k completely tax free. And that 40k could go to 60k, 80k, 100k. You keep all of those uh capital gains tax free. And if you earn any dividends in an ISA, you also earn those tax-free. And we have a class of people in the UK called ISA millionaires, and these are people who have maxed out their ISA allowances year after year after year, to the point where they have a pot of money that’s so big that they can live off the interest. And that is uh essentially what we call financial independence, is where the value of your investments is so big that you can live off the dividends or the interest or the yield that these uh investments provide. And when I say this to people, they’re like, oh wow. So if you have a big bit of money, you you don’t want to spend it, you want to invest it and create an income from it. It’s like, yeah, you can do that. Um you want to think about this big bit of money as the tree and the interest or the dividends is like the apples. So if I give you a tree, you don’t want to chop it down. Like you want to grow it, you want to water it so that you can have apples indefinitely. I’m probably the only person. Who ask about ISAs and then I end by talking about apples, but I don’t know. I just I just better the food with you, man. Yeah, I’m yeah, I’m hungry, clearly. Um ISA is also really cool because you can you can transfer money between them. So you might start out in a cash ISA and then um decide that you want to start investing. You can actually transfer ISA balances from the current and previous tax years. You have to transfer everything from the tax year you’re in, and you can transfer as much or as little from previous tax years as well. So it’s just something to think about in terms of you know your long-term financial planning, your long-term saving and investing using an ISA product, which, as I said at the beginning, is different to a savings account. With a savings account, there’s no tax advantage. Um and it’s simply a place for you to put your money and earn an interest rate at various levels of access, all the way from easy access to uh fixed rate savings accounts.

[46:52] Sammie Ellard-King: Cool. That’s such a I just love the way you approach it because you simplify it. It can be such an expensive topic, and people go very deep into it, and it can often confuse people. So I just wanted to hear that again, because uh the way you explained it in the in the talk, I was like, oh man, like I’d love more people to hear this because it’s just exactly what I’d want to send people to when that when I get asked this question. Um, because I often do it and then I go off and then I remember something about one of the ISAs and I’m off telling them about that one. They’re like, hang on, hang on, hang on, hang on, we haven’t finished the ISA. So um thank you for that to me. I really appreciate it. One thing, uh last question really, uh, here really was um when we get to this kind of uh period, you mentioned about the the the ISA allowance of £20,000. That’s quite a lot, that’s quite a big number for a lot a lot of people. Um and as we get closer to to April, a lot of people start to message me and start to get uh quite uh quite uptight uh about the contribution, I’ve got to max out my contribution. Um only 19% of people actually maxed it out last year in the UK. Um, what I was reading the other day, which is just goes to show, you know, that’s the majority of us are never getting near that. So, what are the steps that people can take to try and max out their ISA as much as they possibly can and without sort of massively?

[48:14] Timi Merriman-Johnson: I think I saw a post from you. Um you’re a bit pissed off actually, going like, can people just calm down with the ISA allowance thing? Yeah. Um because yeah, like if it’s 19% of people maxing it out, then it’s yeah, it’s only people with like essentially 20k to spare that are doing it. Um and I think when it comes to people get really hooked on the allowance figure. I think the important thing is that you’re you’re you have a plan for your money and that you’re putting in what you can, and that you know what the allowance is and and that you have a an eye towards the future of like, okay, I might not have 20k today, but I I aspire to be able to max out my ISA one day. So you might not be able to max out your your ISA allowance in the tax year or in, but that doesn’t mean that you can’t set aside a monthly payment of some sort to go into it, you know. So you you might be able to afford £25 a month or £50 a month or £100 a month. That’s still something. And that’s gonna once it’s in the ISA environment, then it’s it stays in there until you withdraw it. So I would say if if you want to max out your ISA allowance, 20k a year is 1,666 a month. Um if I’ve done the match correctly. Um so if you don’t have that, fine, put in what you can afford after you’ve um catered to all of your other financial responsibilities. You have an emergency fund saved, you’ve paid down all high-interest consumer debt, you’ve paid your bills, and you have a roof over your head. You know, these are all priorities. Um, you know, are you maxing out your pension? You know, because to put money into an ISA, um you uh you get you know the tax advantage stuff, but if you put money into a pension, you get tax relief and you get a company match. So look at all of your financial priorities in the main and then put in what you can and just increase it over time.

[50:23] Sammie Ellard-King: Yeah, bang on. I completely agree. And I think it’s really important for people to hear that because it it can get overwhelming and can get everywhere. And I think stick to your plans, stick to your goals, uh, and go out and get them. And if I can be super transparent, you know, like the life of a content creator is actually it’s it’s really difficult sometimes to know what you should post or to just come up with ideas to post. And the person who’s posting the thing you’re seeing might also agree with everything I’ve just said, or just might be like, do you know what? I just need to get some content out. So just if I’m being real, like sometimes people people post stuff because that’s the thing you’re supposed to post at the time. It doesn’t mean that you need to let it stress you out, or it doesn’t mean that you need to um take it as as gospel. Um we are all here as financial content creators and we’re and we’re trying to help, but we are just one data point in your research, you know? Like listen to your favourite creators, read books, listen to podcasts, watch YouTube, speak to people in real life. Let’s not forget about real life. And everything is like digital and stuff. And then take all of those bits of information in the round and then make a decision for yourself about what you’d like to do with your with your with your money.

[51:54] Sammie Ellard-King: Amazing, Timi. Thank you so much for this. I’ve really, really enjoyed it. Um lots of lessons in there for myself as along the way too. So uh always good, purely from a selfish standpoint, but equally as well for the listeners. Uh so thank you very much as well for your time. Really appreciate it. Thanks for having me. Um, where can people go to find you? Um Mr MoneyJar. Um that’s like a jar of money um across all social media. So uh come say hi. Awesome, man. Thanks very much. Take care. Take care.