Get Your Finances In Shape: Timi Merriman-Johnson & Laura Ann-Moore Answer Your Money Questions

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This transcript was generated from the episode’s YouTube captions (Buzzsprout has no transcript for this episode). Speaker labels are NOT available; all turns are unlabelled.

[0:00]

I do think that Building Wealth is mostly about tax efficiency we are taught to when we have money to give it away to other people as quickly as possible plus debt but you can actually retain that money and use it to pay yourself over time when you find out about a trend even in the stock market usually it’s too late but also it it creates this sense of fomo 80 to 90% of your Investments or wealth should be in things that are a bit safer 10 to like 15% or 20% is things that are more volatile so if you had the choice of an investment app right now what would did you pick and why and what do they do apps like trading 212 they’re good for it’s a chopping the tree down you’re keeping the tree and you’re living off the apples which you can of course do indefinitely I love a metaphor officials let’s wrap up the episode hello and welcome back to the

[0:48]

Money Gains Podcast we are back with a completely different episode today it’s a little bit different you might see a couple of familiar faces on the couch but going to go with Timi first, Timi, introduce yourself man you got 15 seconds gun to head what do you do goodness um I’m Timi Merriman-Johnson, I’m a financial educator qualified financial advisor and Mr MoneyJar, and I’m big fans of both of you I think you’re both great oh you’re still alive you’re still alive and Laura hi everybody my name is Laura Ann-Moore and I am a money mindset expert SL Financial speaker educator content creator and podcast coast and soon as you said it I am a big fan of you both a I can’t not that would be so out of yeah but I do mean it I mean I probably am because you guys are sort of sitting here yeah be weird if you

[1:36]

weren’t would it yeah that’s okay but we’ve had lots of input from outside and you know what this episode is really designed to like properly help people because it’s like they’re actual questions cuz like we guys all make content there’s all this content out there and it’s actually like massive overwhelm for people and they just don’t actually get their actual questions answered so it’s been amazing like over 30 people wrote in and we’ve got lots of different types of questions a few really juicy stories coming up as well like we love juicy oh some of the stuff that people do in this world it’s just very interesting um so we’re going to go back in a little round we and also just to kind of show different opinions as well because we’re all different with the way that we think the way that we create content and hopefully we can just kind of give that person the best possible answer for them without it just

[2:25]

being like I think this and so they feel like they have to do it that way um so that’s what really designed to be um and also guys if you are listening to this and you want to get your questions answered there’s an email in the description below and you can email in your your stories if you got a crazy money story or you’ve just got a question please write in and we will do it on the show have you ever interviewed two people before no this is really I was just just just thought from my head I was like who’s he looking who’s he going to look at how would you choose cuz we’re both just like staring at you like hello you know it’s cuz I’m on the other side and you to like I was sweating and now I’m profusely sweating as you should right so I’ve just got I’ve got to be on the board haven’t I it’s going to be intense yeah okay we love intense I might just pick you and then just stare at you the I’ll just be

[3:12]

like this third third reing yeah yeah yeah oh my life story yeah no no speech just yeah she going to sit eye contact yeah literally just stare me you told me right look first question we had a guy called bearded Chef I mean beard Chef is jokes I mean I literally was like he has a beard and then he was like oh yeah fair so he started by saying how can you make money in the short term if you have £5,000 to invest I’ve never invested before and I really want to learn let’s start with Timi, how do you feel about that I mean the way that I personally

[4:00]

invest is I just I use index funds like tracker funds so uh for people don’t know what they are that’s a type of asset that tracks the broad stock market and various investment platforms will let you pay in monthly almost like a bill or a subscription and you can take that pot of cash and you can decide okay I want to split it into 55,000 a month put it into um an index fund and one of the benefits of that is because the stock market um has it UPS and its Downs if you average your way in it’s called averaging it means that you don’t put in the 4 five and just see it plumet you do it like piece by piece he wants it in the short term though which worries how short are we talking yeah he said a year he’s got a

[4:48]

year I’m not a big fan of that I’m very much my attitude is like there is no such thing as like getting rich quick like even when it comes down to like making money I do think you can OB make some money in the short term but it’s like if you look at what we do we technically can make money quite quickly but we’ve had years of building up to that so it’s like when it comes to the stock market and investing I’m like you’ve got to be thinking in my opinion 10 years minimum that’s my personal opinion I think like it’s something you put in and you’re growing it for the long term like I don’t know obviously how much this guy wants or this person I don’t know just said five grand to invest I agree with Timi’s approach oh no I agree with the approach but I think if you’re thinking you’re going to make like you’re going to put that 5K in and it’s going to 10x

[5:35]

within the year that’s where I’m like lower X your expectations 100% but also what I’d say is investing when you start from a small amount of money which in investing terms five grand is quite small um you’re not going to make that much money on your money in the beginning um if you want to make money in the short term then you’re going to have to sell stuff to people you’re going to have to sell goods or services go on um well firstly look look at what you enjoy and what you’re good at and you can go online you can go on um freelancer services and Etsy and eBay and that sort of thing and you can look at what people are already selling if you sell a good or a service you can make money immediately and then you can invest that and I think there’s this there’s this misconception which Laura’s kind of touched on which is you put your money into um an investment and then

[6:25]

within a year you’ve like doubled or tripled it and that that doesn’t really happen that’s trading yeah and I think you have to be really high yeah and you have to have a really high risk tolerance like my tolerance for risk is quite low so I’m like slow and it’s boring and where you get all of like that goodness from investing in the stock market is compound interest right and when you look at all the graphs that show you how your money grows over time compound interest like kicks in at like the 15 to 20 year mark so it’s like that longterm thing yeah exactly so I think you can invest it but you just got a lower expectation I think if you want money in the short term yeah you got to take a different route and it’s not investing in the stock market it’s like finding a way to actually bring in more money yeah I agree and to build on that I would probably say hey yeah you got we were talking off camera about how to not talk over people

[7:13]

so we we we know that one timy like that one um to build on that one um I wouldn’t invest it at all I wouldn’t even touch it in the stock market if you’ve got one year at all and I wouldn’t even do it if you’ve got three years or four years I would possibly 5 years for me or less would go in a high interest savings account I think just simply because you cannot predict what can happen there was a study done like 46% chance of losing money in one year and that number for me is way too high for me I need the 90 plus and that’s when it’s 10 years or more um so the Schroders study, yeah, the Schroders study, exactly, yeah I think I’ve said it in like 50 videos now because I’m just like it’s such a good representation of like how long you need to think you have to think in decades thinking in one year

[8:02]

it’s not an investment for me in things do you agree guys yeah yeah don’t don’t get me wrong like we’re we’re very lucky there’s lots of different investment platforms you can invest from very small amounts yes so within the course of 12 months you can get started but if you want to start seeing sums that you can live off for like that will exceed the amount that you put in then you’re going to have to invest for a long time yeah and to build on that I would say figuring out what your actual goal is it’s so everybody wants more money like that is just fact like everyone is I could always do have more money like what does that actually mean because if you you never know depending on what your actual goal is putting it in a high interest savings account might be the enough of like a bit more money that you need but if you’re talking like like I said a minute ago you want a 5 extra you want a 10 extra money you’ve got to look

[8:50]

at different Avenues and it’s really interesting because I always find that whenever I tell people about investing in the stock market and you talk about compound interest everyone is like oh my God that’s amazing how how do I do it quicker yeah and it’s like no no it’s a bit like when you look at someone’s success like if you look at Michael Jordan and you’re like oh my God amazing like what he does you don’t just get all of his success and all of the goodness and all those amazing deals without the 10 15 20 years of like hard work and patience and all of that that he puts in so you can’t extrapolate one part so like when it comes to Growing your money in the stock market you think long term if the bigger goal is like big amounts of money quicker then you have to look at different Avenues but increase your contributions is the only way you can make it to the number that you want faster but then what what would also say is um like why why invest there’s a lots of different reasons why but when I when

[9:39]

I speak to people the thing that I say that resonates with them is that with money because we live in um like a a consumer Le economy we’re taught from a very young age that use money to buy things like clothes holidays whatever and then obviously the things that you need what a lot of people don’t realise is that you can use money to buy income as well so in the UK there are about 4,000 Isa millionaires these are people with as name suggests seven figures or more in their Isa accounts I think the average balance that I saw was something like 1.7 million or something if these people take this is what we call the principal sum if you take this principal sum and then you invest it in an asset that can produce income so that can be a fund that pays a year it could be a

[10:30]

rental property or something you can live off the money that this money produces and this why I think a lot of people lot of people know that they want to be financially independent and that they want to have Financial Freedom but they don’t know the actual mechanics of how you get there so what I say to people is you’re trying to chopping the tree down you’re keeping the tree and you’re living off the app off the apples which you can of course do indefinitely love that yeah metaphors man I love a metaphor officials metaphors the episodes we got a lot more okay I love this guys um let’s stick on this investing hype because we’re in Allison Smith has written in best investing apps to buy index funds in

[11:17]

2024 start with Laura on this one um I think it depends if you also want to invest in other stuff so like when I first started investing I got Trading 212 because I was like I want to do stocks and I want to be able to invest in like individual things and as time’s gone on I’ve kind of been like kind of don’t want to do that I’m kind of like just down for index funds so I think it depends like obviously you have the classic like Vanguard which like so many people use um and is very reputable but then you have things like InvestEngine that can be great for just a range of like ETFs and they’re probably yeah the three that I would say that I recommend um but if you’re specifically just wanting index funds and ETFs Vanguard is great InvestEngine yeah they’re probably my favourites nice feels like I’m making a favourite I’m like oh

[12:04]

my God who have I missed out that should have said I do that all the time I’m like whoever Timi says, me I also agree with that as well um if you so to to build the one Laura said if you want to keep things fee free trading 212 M um for the lowest um monthly contribution that you can make into an index fund monthly um uh Hargreaves Lansdown down they let you invest from £25 a month with Hargreaves Lansdown you can invest in like funds stocks ETFs so the whole Supermarket for funds only but to keep your fees low Vanguard Vanguard has a00 per month monthly contribution or500 lump sums but what I would say ultimately is which need to start the account don’t you 500 gr to

[12:52]

start open the account is the first thing for Vanguard right um based so I I can’t actually open a God account cuz I was born in the US and so I’m like a dual like tax Citizen and like the yeah the IRS will probably come for me at some point so IR be but um my my understanding is you can start with the 10000 pound a month contribution or with the 500 lump sum and it’s similar with HL you can do the £ 25 a month contribution to start or the 100 lump sum but what I would say to Ellison Smith is I don’t know why I full named her like that um ISAs um is that um there there actually there are lots of different platforms and that’s great because it means that there’s accessibility but it does also

[13:39]

make it um a bit overwhelming so just find a platform and just go for it I feel that a lot of people that invest for the first time it’s like um trying to explain all the different phone networks or someone they all fundamentally do the same thing yeah such a good point and as you oh look I’ve got analogies for days and so as you build up your confidence you’ll find platform that works for you now one of the changes that we made at the start of the tax year that we’re now in that began on on the first on the 6th of April sorry is that you can invest into multiple stocks and shares ISAs within the course of the year as long as you don’t invest more than 202,000 into all of them right so you can start small try a platform see how you find it and then decide which one you want to stick with I love that you said that man that’s such a good point

[14:27]

about the phone contract is it you can call you can call people and send texts you can buy funds and buy stocks it just depends on who and the difference between them is how much they cost yeah and the fees really and like that’s probably the biggest thing for me is when you’re out there it’s like well it’s actually a combination of two things is like I would usually say to people is like one how big are the fees like that’s why I struggled with HL and I actually moved mine from HL to trading 212 not Financial advice by the way but I did that because of the fees that I was getting on HL for like individual purchases stock purchases so fees were a big thing because they add up massively over time and then the second side of it was like what is available to me and what type of investor I want to be um

[15:16]

the very best like no one ever was, word, yeah clearly that was a Pokémon reference by the way oh was it didn’t get that not Pokemon the only one I always got to catch him off you got it that’s a theme song to Pokemon prod sing it to us I want to be the very best like no one ever brli yeah sorry to interrupt you good this is good this is way better I have an additional analogy actually okay on the old phone network what I always say to people is what makes you shop at the supermarket you shop at why do you shop at a cardo over marks and Spencer over like sabd it’s like the way that the parking is the way that the stuff’s laid out the style of like the shop like some people shop at Lidl because it’s

[16:04]

cheap, but it’s Lidl, it’s ugly in there right but some people don’t care whereas some people want to go to Marks and Spencer’s and it’s all laid out nice and it’s like there’s so many factors that are individual to you that doesn’t mean you’re going to get any better or like I guess different quality sometimes different quality same fun it get same results yeah exactly so it’s like deciding on those things and like when it comes to picking a platform it’s like does it have the investment options available that you want are they the ones that you’re interested ing what are the customer service reviews so I think that’s a big one huge um and what’s the what’s the layout of it does it have an app does it have a deskop is it like desktop only like because let’s be real trading 212 was aimed at Traders and it isn’t the prettiest but if you’re more confident with using it when you get used to it it’s okay whereas something like the other ones that are online like

[16:50]

a HL or a Vanguard they maybe a little bit more user friendly but it’s like there isn’t a right or a wrong and I think some people get so hung up I know I did when I first started inv it took me ages to pick a platform and now the whole multiple stocks and shares I I think helps remove that cuz you’re like if you do one and then you’re not happy of it just open up one yeah we good I like stick 20 quid in three yeah and then play around with them for a bit and then okay cool the one you don’t want you take the money out it’s good they made that change cuz they they made stock they brought the ISA accounts in line with pensions CU there’s no limit on the number of pension accounts you can have as well yeah yeah which is Wild by the way we’ll get on to pensions later I’m on track to have over £ 5.5 million in retirement and I’m not saying this to brag guys I’m saying this because I am an everyday person just like you so what does that actually mean

[17:37]

well it means that it’s actually possible for you to build life-changing wealth too no matter where you’re at on your journey your age your knowledge or even your Current financial situation so Sammie, how do I sort that out well I’ve created something super cool which literally takes one minute of your time I’ve left a link in the show notes to a free money personality quiz which will provide you guys with a free tailored content plan based exactly where you’re at on your financial Journey once you filled it out you sent the steps to start getting you results from day one and then once you’re ready you can then move up to the next step very easily too it’s not judgy in any way it’s totally free to do and it’s actually really good fun too simply head down to the show notes and click the link there where it says to do the quiz and get your free money action plan right now now back to the show so if you had the choice of an investment app right now what would you pick and why and what do they do okay so

[18:26]

apps like trading 212 they’re good for fee free investing and buying individual like stocks but they also offer funds on there as well hell is the UK’s biggest um investing platform and so you get the full breadth of products that you can buy so you’ve got stocks funds ETFs bonds you also have the full Suite of accounts as well so Gia which are General investment accounts, stocks and shares ISAs, pension accounts and the junior variations of stocks and shares ISAs and pension accounts as well but Vanguard is a good low fee platform if all you want to do is just stick money in every month and pay into funds um I believe they have the lowest uh management fee in the UK and super friendly as well as well from what what I’ve used it for and I think they just launched an app they have yeah they did

[19:15]

I heard good things yeah I’ve heard good things actually as well haven’t downloaded though no neither why I don’t use it for that I invest into Vanguard funds but I don’t use Vanguard to buy the funds all right it’s cheaper if you do it through them interesting interesting don’t say that to me timy because I just had to like fig I just figured out moved everything over I I’ve just done a video on that as well great good scrap that be ringing that back sorry Daniel I was going to be quite a lot of cheap it’s cheaper if you do Vanguard funds through Vanguard yeah okay y thanks sorry look the facts the facts in my bubble I’ve written the whole script okay well that’s good to know I’m not out wrong information which is yeah definitely some FCA problems in that let’s move on to another question

[20:07]

um it was from Dale rig love Dale yeah a great name I know who’s another famous Dale I see like a no one oh so like Dale Winton Supermarket which by the way every time I go around the supermarket because I now either do little shops or I shop online because I live in London if I ever go to a big Supermarket every time I’ll pretend I’m on Supermarket Sweep every time it’s such a remind me please my brain’s gone fudge isn’t it like two people there’s like two teams multiple teams there always two people you run around and reds and the no that’s ready steady cook that’s ready steady cook no you go around a supermarket and you have a trolley and it’s like go find this item this item you have to go along and people are running around a supermarket it’s crazy and it’s thrilling it’s really old schol very 90s really 90s I probably was about you know I think it’s one of them I’ve got to see it again

[20:55]

yeah got see in my head I’ve got the peppers and the no that’s definitely ready steady cook which you will do after you’ve bought stuff in the supermarket then you’ll C cook it hopefully you go mate the 90s TV man just the 90s full stop bring it back back just bring it back yeah yeah I would actually love that you know what like making they’re making remaking Art Attack guys yeah but Neil Neil is sadly passed, RIP I know who are they going to bring back in place well there’s a lot of rumors about romish and everyone went mad about it oh he’s not an artist is he no controversial yes so yeah anyway sorry 90s shows Dale Rigby bring all down if you had 20K saved up where would you start to turn

[21:42]

it into Financial Freedom not really the best and easiest of questions but I think we get the gist right so Timi, what would you do yeah I guess we we touched upon this in the previous answer which is um you can use use money to buy stuff so you can use it to buy goods and services M but you can also and you can use it to buy things which take money out of your pocket so if you buy um I use a PlayStation for example you buy the PlayStation but then you also need to buy games and controllers and there’s microtransactions and stuff so in financial terms we would call that a liability because it takes money out of your pocket over time time there’s nothing wrong with stuff taking money

[22:31]

out of your pocket over time it’s just what it does you you obviously get enjoyment out of the PlayStation as well but you can also use money to buy things um that put money into your pocket over time and we call those assets so what you want to do with that and that’s a really great sum to have um saved up is to put the 20K into things which appreciate in value and pay you to own them and a few of these things could be a savings account that pays you interest it could be a fund that pays you a yield it could be a rental a rental property that um cuz I mean I don’t know if like 20K is enough for like a property deposit Doncaster or something so you can you can put it into property and then you you can rent the property out and then

[23:19]

that pays you money yeah so it’s just a different way of thinking about money because we are taught to when we have money money to give it away to other people like as quickly as possible plus debt and that serves the people that are trying to sell us things but you can actually retain that money and use it to pay yourself over time and then that money grows and grows and grows and then after a while you’ll be able to live off the money that your money is making and that is what we call Financial Independence I mean do we even need to follow like probably not I’m not sure what I can add to that uh you could give it to me brush that brush and Laura will put money in your pocket s out to my

[24:07]

investing no no but no but the thing is actually you go no I was just going to cut you up that’s not how this works no but if if you if you pay for Education that’s education’s an asset I was going to literally that was my one thing lad that that was to say say you could invest it in yourself yeah you could but that look that does look different for everybody I do think like you could it’s a hard run right because you could potentially take some of that money or all of that money and invest it into setting up your own business if you have an entrepreneurial mind or you have a skill that you can sell and that 20K could be an amazing amount that would then bring you so much more money in the future but just as any other kind of investing there’s risks involved yeah but yeah investing yourself I think is important so here’s I’m going to

[24:56]

break this up a little bit going to give a little different answer let’s say I had 20K I’d put 10K in a higher interest savings account for example I’m just going to give an example what I would do with it if I had it 10K I’d call that my emergency fund in my head it doesn’t exist 5K I’d invest into myself to then bring back more money coming in so courses books personal development and I tuck five grand in index funds and I think by doing that I’m giving myself ability to attract more money securing myself and moving myself forward all in one fou swoop rather than most people just kind of leave it sitting in one account diversification at its finest yeah will there’s something I know elements of you guys there’s something I know you can definitely speak to Laura which is when you’re investing in

[25:44]

yourself and deciding what to learn like iky guy yeah like if you could yeah yeah iy guy is good I I do think that when it comes to investing in yourself whatever that looks like people don’t think enough about what their actual wires with money like why are you making money what is it you want like don’t let the focus just be the money like let the focus be what money can do for you and then that will help indicate how what that split is of that like really understanding like what are the things that I love what are the things that I can make money from what are the things that people need what are the things that make me happy like that combination I don’t think we sit down enough and actually sit and think about that and actually there is a sweet spot and I do think as well like I’m a big believer that not everybody should be like business own and not everybody should be entrepreneurs and not every but we’re so lucky that we live in a world now where

[26:33]

with access to the internet that’s kind of can be you can’t you can’t and it doesn’t it could be on the side it doesn’t have to be a full-time thing it could be a part-time thing but I think really just taking a my moment to be like what do I actually why do I want to do more with this money like what even does Financial Freedom mean to me yes we can understand it on a numbers basis I need this much to live and therefore I need this much in an assets but like what does that actually mean to me like what does is it being being able to work three days a week so you can pick your kids up is it like for me mine is to be able to go traveling and work at the same time like cuz I love my job but I also want to see the world so I have to make sure that my money does Laura like out in full girl summer so that’s been this year yeah no it has yeah every time I’m like where is she now like there another fun I’m into it I’m into it I think a good thing as well like I I came across

[27:22]

this video from Scott Galloway I Scott Scott Galloway I don’t know what the study was but but basically it was talking about like once you hit a certain threshold of wealth you don’t actually get any happier but he was saying that your happiness exponentially increases up to a certain point of wealth yeah um so that that he’s talking about the hedonic treadmill there so that’s it and there’s a great documentary on Netflix called happy which kind of talks about this so the difference in happiness between someone who earns probably have to apply inflation to it now but the documentary the difference in happiness between someone who earns $5,000 a year and $50,000 a year is huge but past that it’s like how much more fancy can your jeans get how and particular technology technology has been hugely democratizing for people because now we probably use

[28:10]

the same phone as like the richest person on the planet because like an iPhone is an iPhone yeah yeah yeah so I’ve got the same phone as Elon yeah yeah really it’s really like weird weird time to be yeah so um yeah so definitely when when you’re first um making money it’s about getting yourself up to that point where your quality of life is of a certain standard and then past that you just you got to focus on happiness and and just living the life that you want to live I think yeah and I saw this really interesting podcast I don’t know who it was but it was an older woman and she’s like totally a billionaire like she sold and met like so many businesses so successful someone was like you know how does it feel to be this wealthy and she was like the most wealthy I felt wealthy wealthy wealthy was when I was however old and I’d made like a

[29:00]

good amount of money and I walked into a bookstore and I didn’t have to look at the price of books and I bought 10 books and it felt amazing she was like that’s the most wealthy I felt she was like it got to a certain point where all the extra numbers were just extra zeros in my bank account and it hasn’t made me feel any different she was like you know I can go to fancier places that I can hire an island instead of hire you know just hiring her in a room in a hotel but it’s this idea of there is I think a plateau there is a threshold and if you swap all of your time to make more money you don’t end up being any happier and you run the risk of it going the other way because you have less time for leisure and the things that make you happy which is like outside of what is actually you’re doing with your time so I think like I love you said that because like a big thing for me which I spoke about with Anna actually just now recently on on another episode you’ll have to tune into that one gas

[29:49]

um basically like for me once I hit this like but I don’t want to look at how much my shopping was and also can I get someone to come around and clean my house and those two things for me and was like if I get to that point pretty happy and I probably smashed in in my eyes and that was what I set myself like seven eight years ago and then that happened recently and I was like well done for you I just felt better do you know what I mean and then weirdly though you get to that point and then you go what’s next next you’d be so surprised it’s really weird because you get to goals and goals move yeah I think it’s okay for goals to move as long as you are aware that part of the enjoyment comes from the process one

[30:37]

when you get there you actually are grateful for being there you don’t hit it and then you’re already on the next thing you get there and you go this is cool check me out and you bask in it for a bit and then you go I would like a minute and then you say I would like I’m ready I would like a new purpose or you know a new goal and you’re aware it’s coming from a place of not like I must have it I’ll be happy when it’s like oh well I might as well have something else to work towards however I’m really happy with the situation that I’m in so it’s like that’s where I think the differences because if you just hit a goal like now hopefully you’ll live for quite a lot longer mate so what I’m going to do with myself exactly sh just shop and have someone clean your house yeah um I think the awareness of like practicing gratitude for when you reach those places um is really important so if we bring this back to the original

[31:24]

question money is a tool my guy I’m thank you money is a tool that enables you to live your life okay yeah live the life that you want to live to use it yeah and love the journey and know what you’re working towards and know what you’re working towards round up okay uh sharima has asked I’ve just got a big pay rise well on Sha BOS I’m very happy for you sha well done I’ve been working so hard for many years and I’m so happy with my new salary which is 100k damn 100 slay I know well done slay yes I am however worried about the tax brackets what advice would you

[32:13]

guys give on this I’m not person to speak to about that I’m doing my financial planning diploma currently I haven’t got to the tax section so okay so I’m basically looking at Timi right now all right so um yeah so when it comes to tax bra brackets the first 12 1 12K that you make you don’t pay any tax on then between 12 a half and and 50k you pay a 20% rate on on on that amount of money and then between 50 and 125 you pay um a higher rate of tax which is 40% and then anything over 125,000 is 45% so 100K after tax you’re taking home home um I think it’s about 60 Grand a year it’s like five five

[33:02]

grand a year take home so if you want to retain um the money that you’ve made from the pay rise then the simplest way to do that is to pay more into your pension MH so there’s a a phenomenon called lifestyle creep which is where you get paid more and so you bring your expenses up to meet the amount that you’ve been p uh your pay increase but the way that you actually build wealth over time is by locking in your lifestyle and then the more money you get the more you save and the more you invest 100% and the great thing about if if you can take some or all of that pay rise and put it into things like can Investments or pension well particular pensions you you actually get to keep all of the tax CU pensions are are

[33:49]

highly tax efficient that’s salary sacrifice right to put it into your pension or just paying more into your Pion just paying it more into your pension um cuz when when you pay into a pension you get you get tax relief so why have there been a lot of conversations recently say someone’s earning £105,000 and they want to bring their salary down and is that due to child care and problems there or so um there are some benefits that you lose when you earn over that 100K limit but what happens when you earn over 100k is that for every two over 100k you earn you lose a pound of your personal allowance and so for some people it’s like that between the 100 and 120,000 um kind of earnings thresholds the tax is quite aggressive so some people just choose to sweep it all intervention yeah fair enough I

[34:37]

would too well look a massive shout out to sharima well done on that pay rise and if you want to take any advice that Timi gives because me and Laura know buger all about that bit actually R in bug all don’t push it I know a bit I wanted to I just wanted to see you know what I wouldn’t have been able to put it I did know what it was and I definitely would have mess up and I didn’t put it never would have put it as inqu is to me and also it’s actually wild when you like dive into tax and the way they break it down like you know there’s all like these different sweet spots for like oh but if you earn this you might as well not earn this you might as well just earn below or just earn over or put more so it’s like I do think that Building Wealth is mostly about tax efficiency yeah it’s like just learning and understanding that yeah ISAs baby, ISAs baby, 100% okay so now we’re going to do a story that was sent into us

[35:28]

um and it’s a bit of an interesting one to be honest with you um okay are you guys ready for this I’m locked in okay when we’re definitely G to have to cut that okay guys are you ready for this great were you about to say something no I just open my M oh thir Time Lucky okay guys are you ready for this yep brilliant when my partner and I split up I didn’t know what to do with myself I made cryptocurrency Investments and after the Cris after the crash I panicked and sold losing £5,000 after that I felt overwhelming

[36:16]

grief and thought I could make it back bought back in at the end and ended up even losing more by the end of it I have now lost over 28,000 this has hurt me my pride and I’ve stopped living properly because I haven’t known how to deal with the situation I never gambled before in my life and I was susceptible to a lot of psychological elements that make you go back in I’ve talked to my family but set but this setback has me feeling so ashamed about it I feel as though I’ve made one of the biggest mistakes in my life and losing £28,000 it just made me feel awful I feel foolish and immature wow he’s going for it I don’t know in an adult life that £28,000 should ever be missed but it really does okay I’m not going to cut that bit please cut that

[37:04]

bit um So currently I really need help with financial planning and putting that money into the right kind of perspective I don’t feel like I deserved or live to I don’t feel like I deserve or enjoy life anymore because of the losses that I’ve made and it’s been pulling me apart what would you guys do oh that’s [ __ ] oh I don’t know if I can say that you can’t oh that’s [ __ ] sorry mate yeah can I touch on like the emotional like psychologically part first before kind of go into the numbers I think that the way that we view money has a massive impact on the stories that we then tell oursel which is what keeps us stuck in that energy obviously it is not ideal to lose 28k nobody wants to lose any money at any point and it probably feels I guess harder knowing that it was a conscious chice putting that money in

[37:53]

seeing it drop versus buying a house and then maybe the you know the housing market crashing and you selling at the wrong point and losing 30k it’s it’s it probably feels different because of the connection to it but I’m a big believer that like anyone’s Financial journey is not a trajectory lineary it is not a tra a linear trajectory let me say that again I believe that anyone’s like Financial Journey does not have a linear trajectory so you’re not just going to make more save more invest more you’re going to make mistakes the best thing that you can do is learn from it but we can never shame ourselves into better Habits Like The the guilt and the shame that he’s probably feeling around what’s happened is only going to reduce confidence in doing anything that’s going to then progress like help you

[38:40]

progress financially so I think there’s a huge piece around like working on your relationship with what happened to be able to be like it’s happened what can I learn from this and like anybody could have been sub like subject to that like there’s so many factors involved that like you said you know the psychological element around like jumping back in and in my opinion something like crypto it’s higher risk it’s a lot more volatile it’s lot you know it’s got It’s got gamified element um and it does tap into your psych yes yeah so I think the key thing before even like stepping into any kind of financial plan is working on your relationship with what happened and being okay like coming to terms with it yeah and forgiving yourself because not forgiving yourself you’re not going to you’re not going to be able to progress in any healthy way yeah yeah I would say I completely agree it’s it’s just such a

[39:30]

like I’ve seen it happen so many people like literally multitude of different friends have lost similar amounts just from like going for it on crypto and jumping in when it’s in the news and then it’s at the top and then them losing out and then them doing more because they make Dave down the pubs said this brand new all coins come out and they need to go into it and these things are just so extremely highly volatile that putting all your eggs into that basket or that bit you know I’m not going to say a name of a cryptocurrency but a coin or whatever that might well be just then it’s exactly the same with the stock market I do see it but then just with cryptocurrencies it’s just like a lot more volatile yeah um like if you just put all your eggs into apple and apple has a bag day you’re you’re up

[40:18]

shits creek without a pad at so it’s like for me it’s like understanding that process and then diversifying and having a selection or a section of your portfolio a total amount that you’re kind of happy with it being high risk and you’re willing to lose that rather than thinking if I put 20 grand and I’m going to be sitting on a beach and I beef with 250 Grand sitting in my account because that’s really not the case for majority of people yeah um so yeah what do you think, Timi? Yeah, I agree with everything You’ both said I think when we do things that we’re ashamed of we can sometimes internalize that but I’ve I’ve found um Brené Brown’s work around shame really useful for this I don’t know this she’s amazing she’s done a series of TED talks but she’s she’s almost like an an expert in shame and and the way and what she says

[41:06]

is that you need to divorce the thing you’ve done from um who you are so you might say like I did an imature thing but that doesn’t make you an immature person because you’re not reducible to any one thing that you you do you’re like this multifaceted complex person that will constantly live and grow and evolve so I’d say watch Brené Brown’s TED Talks the second thing I’ll say and I will name a cryptocurrency it’s the first one that was ever created which was Bitcoin if you read the Bitcoin white paper which is like 12 pages long you see that the the Creator or creators of of Bitcoin were trying to make a form of money I.E something that you use to buy things and what’s happened since it was created is people have realised hold on if I buy it and I hold on to it then

[41:55]

I can sell it to someone else but crypto um is is fundamentally a nonproductive asset so all that means is once you have it the only way you can make money off it is by selling it to the next person for more than what you bought it for and as the prices go up and up and up it gets to the point where the next person doesn’t want to buy it from from you anymore and then you have to sell it at a loss so and then this leads into a third thing I’ll say is the person who asked the question may have lost that money that’s now a lesson that they can learn and take forward to make sure that they don’t do that again and over the course of their lifetime they can make back 28 grand and then some yeah from the lesson they’ve learned and from and from the education

[42:43]

I think the final final thing I I’ll say is that P four Isaac Newton yes like literally the guy who discovered gravity is also famous for losing lots of money in Investments so even like super super smart people fall prey to that sort of thing it’s the allure isn’t it yeah I think it’s really easy to be pulled into especially if you are around people that have those conversations like you go down the pub and everybody’s talking about it like as a woman I find that whilst the conversation around investing is definitely getting more I I don’t have girlfriends talking about Bitcoin I don’t I know very few women that invest in it anybody that I do have a conversation with about crypto or anything like that is is usually a man totally fine but what I found is even

[43:30]

being in the financial space I’ve had like Finance Bros come up to me and be like you’re stupid why are you invest in the stock market you should be investing in crypto like if you see my Tik Tok that’s like 50% of all the comments gaslighting I don’t actually look at their accounts but I should um but it’s this idea of you feel like you’re missing out on something and it’s this whole idea of jumping on Trends a when you find out about a trend even in the stock market usually it’s too late but also it creates this sense of fomo and like I had it one time where I jumped on remember the GameStop trend oh yeah yeah I jumped on that lost1 not exactly like a big deal but I was like I had the moment afterwards I was like oh I just got lured in because of fomo and I was like never doing that again so it’s like it’s easy to expensive lesson but it’s a lesson in itself exactly even if it’s 28k or 100 exact learn that

[44:20]

lesson yeah yeah and there’s this concept called um I can’t remember what investing company is from but it’s called core satellite so you have the core which should be like 80 to 90% of your um Investments or wealth should be in things that are a bit safer medium to lower risk things like index funds and ETFs and stocks and then the satellite the little bit that goes around the edge which is like the 10 to like 15% or 20% is things that are more volatile that you feel more comfortable with that could be Bitcoin or crypto that could be all it could be Collectibles whatever it is but your majority of your Investments is like in something a lot more sturdy that’s exactly what I do yeah I 8020 yeah so do 80% index funds 20% 5% crypto 15% individual stocks and that’s like the way it set up and as I move into later life I might add bonds into that

[45:08]

but that’s like literally myself right now and it’s done me well nice so but then like you don’t even need to have to do that just buy a global index fund and you could just be fine and crack on with your life because you’re still investing for me that’s like investing in human progress Andrew Craig talks about this all the time and I just think it’s such a eloquent way of looking at it it’s like will humans get better as people if the answer is yes then a global Index Fund solves that for you and you can go on with your merry way and you don’t have to be like this investor picking individual things or trying to find a new coin out there or new hot Amazon that’s going to blow up you can just do that and and crack on what what would you think about that, Timi? Yeah, I’m a big fan of of global index funds as well and um the reason why I choose Global

[45:57]

rather than S&P 500 which is the other like popular like the the US’s index is that different countries shift all the time so 30 year around 30 years ago Japan comprised almost half of the total stock market volume in the world and America comprised about a third now America comprises 2/3 and Japan is like a tiny fraction I think it’s less than 10% so another analogy kind of like you know instead of betting on like one team in in the um Premier League you can just like bit on all of them yeah and then whoever’s top like the the global Index Fund will just reflect that in his composition yeah love that love that okay well look unlucky about the 28k it totally get it but there are some

[46:45]

fantastic ways you can improve it like we did one the other day actually on our financial Horror Story series that we’re doing at the moment and the guy was already doing all the right things and then got allured in and then it took him a while I think he got lured in at 19 and then sorted out by he was 21 so now he’s got like 40 plus years of compounding ahead of him so he’s going to be great but he’s learned that lesson I think this was like 10K I think I think all of us come at money from a position of scarcity like that the 28k is gone forever and by the way I’m not trying to trivialize it because I’ve never lost 28 umk before so but like you have your entire life to make and lose money MH yeah and like especially like when when you run a business like you’ll have like a bad year and a good year so if you if you look to the Future and be

[47:33]

like I can recoup this money back then I think that’s a more positive way to to look at it 100% yeah thanks guys for obviously your input today I think it’s been pretty good fun and really nice to hear like different perspectives of stuff and guys obviously anyone listening to this if you do want your questions answered by Laura, Timi, less so myself as well these two just way better than me at answering these questions there is an email in the description below you can send it in and um we will hopefully answer it if we have time just being honest no but please do send them in and if you got any stories like that as well um we’d love to know uh from losing money anything that’s happened to you um but please do send it in thanks very much we’ll be back next month with another ask me your money questions