Beating Rising Costs: Timi Merriman-Johnson & Laura Ann-Moore Answer Your Money Questions

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

**NOTE: DEGRADED TRANSCRIPT.** Buzzsprout returned an SRT-style block transcript for this episode with every line labelled speaker “Unknown” – there is no real diarisation between Sammie, Timi and Laura. Timecodes below are taken from the SRT blocks as-is (frame component treated as /30s). Speaker turns cannot be reliably attributed from this source; treat all text as an undifferentiated panel discussion until a better transcript source is found.

[0:00]

The cost of living crisis is the cost of chicken crisis. I feel like I feel like more needs to be done. Sometimes the pain of debt isn’t strong enough for people to really make the sacrifice. Says try not to go to extreme. It’s a little bit like dieting. You know, when you’re like, feeling really fat and you’re like, you know what? No carbs, no bread, no chips. And within a week, you’re like, that’s it. I’m ordering a takeaway. Yeah, yeah. Binge. Just like binge or straight binge drink. And that can happen when you click through that last week. Yeah. Like. Yeah. Yeah. You’re not supposed to say this, but, like, money isn’t real. What this podcast and we as this podcast where we really brought it to the ground this week Money Gains Podcast. Hello, guys. Welcome back to another episode of Ask Me a Money Question, which is a little subset action where we have two absolute legends in the building. Timi, on the ones and twos, you’ve got 15 seconds. Who are you, bro, this is so much pressure. My name is Timi Merriman-Johnson. I run that Mr MoneyJar and I’m a financial educator, speaker and qualified financial advisor.

[1:05]

Vibes, vibes. Laura, let’s do this. I am Laura Ann-Moore. I am a money mindset expert, financial speaker, educator, content creator, and the host of the Mind Money Soul podcast. But if you don’t know what me by now, then just go and look at the About Me section on the page because if you want more information, because I can’t be all the time, I’m joking. I can’t really, I talk about myself all day long. It’s my favourite topic. Yes, exactly. It really should. It should be in your life right now. I personally feel like. Should be anyway. And you do like the right. Yeah. Whatever. We don’t edit on this podcast is all natural. So I came across this phrase that has been mentioned recently due to problems in Nando’s and I need, I need some I need some love about this. To me. What what what’s been going on in Nando’s recently? Oh, yeah, I just I just feel like it’s just not cheeky anymore.

[2:08]

It’s not cheeky. It’s not what it used to be in 2018, 2019. You could actually get a Nando’s and like before that, but now it’s it’s super expensive. I feel in many ways the cost of living crisis is the cost of chicken crisis. And I feel like I feel like more needs to be done to bring the cost of chicken down. Yeah. For people all over the UK. Okay. I think the government need to get on it ASAP. Yeah, yeah, maybe like a like they’ll like chicken. Yeah yeah. Hey hey chicken benefits. Yeah. No chicken benefits. Wow. But yeah like over the, over the last few years we’ve seen like prices go up. And I think one of the things that, can be confusing for people is that, like inflation rates rise as well as full, there’s supposed to be two, but we had double digit inflation in late 2022.

[3:03]

But it’s always going up. If inflation falls, it just means it’s going up less quickly. Yeah I think people get that. So yeah stop man. Like it’s now hundreds of percents in some cases more expensive than it was. Than it was. Yeah. 10% that they’ve been saying. Oh 2%. It’s not the way it is. That’s what it is this month. All this time that they’ve recorded at that increase, which is crazy, right. Yeah. No. You know, I always think about, you know, when you go out for dinner. Yeah I live in London. Gavin of your mates, you know, that’s four of you. It’s like 100, £150, right? Just for a mill in like 20 years, you go out for dinner and like, the bill will be like 700 pounds and you want to. Oh, yeah. That’s normal. Like, do you know, I mean, like, it’s going to be weird when we’re, we’re adults right now. We’re experienced in spending our own money. And I feel like for me personally, this is like the first time where I’ve started to, I guess, acknowledge the impact that inflation is having on my money as an individual, whereas that back years and years ago, you know, when you’re like in your mid-teens, you’re like, I don’t know what that’s doing.

[4:06]

But we’ll continue to notice it as we get older. So you know what? Now, when people like 20, 30 years above us are like a food shop for a week, used to be 5 pounds and you can’t get your head right. Oh, I can’t get my head around that. I’m a cheap 5 pounds. I have food shop like that just gets me a pack of eggs now. Yeah, it’s going to be so weird to think what it looks like in 2030 years time. Not fair. Longer because hopefully everything’s will rise in alignment with that. But it’s just a weirdo. Well, yeah, but I mean, the way that the system is designed is for things to go up in price on average by about 2% per year anyway. So that’s the Bank of England’s target inflation rate. And the reason why it’s 2% is that that’s an amount that is deemed to be manageable enough, whereby wages can increase by like broadly the same amount or more so that you can afford things. And I think you’re kind of like not supposed to say this, but like money isn’t real.

[4:59]

What this cost is this podcast where we really brought it to the ground. It’s like money. Money is is relative. It did actually used to be based on real stuff. Yeah, gold. But now it’s largely debt and stuff just goes up in price. And I guess the that’s quite an abstract thing to say. So the thing that I want to say that’s useful is you instead of valuing money purely by the number of zeros behind your salary, you need to value it based upon what it can actually buy you. Like how many people can the salary actually support? How many? How much groceries can you actually buy with the money that you have? That’s the real value of your money, not just the numbers. The issue I have with inflation is that’s what they are telling you. And actually your personal rate of inflation by will be higher you that could be lower or it could be higher.

[5:52]

And so you need to work out what things are actually costing you physically yourself. And that’s going to differ. If you’re a London Manchester, Norfolk who wherever over the world is going to be completely different to you. So like looking at that figure and going, oh, 2% more expensive may not actually be one be true. Because personally, I think they may inflate those figures to suit political narrative. And two, it’s probably different for you as well. Yeah. The other thing I would say is that the cost of living crisis, I think I some they called it that for like SEO purposes, chicken crisis. Now chicken. But I don’t know if something is happening for two years. That’s not a crisis. That’s just the way things are now. Yeah. Yeah. So I think that we’re going to have to get to a point where we stop talking about how expensive everything is and how we actually grow the economy, because, as we just said, prices are very unlikely to come down to where, they were coming down. Are they? Although deflation does happen. Yeah, but that can be that can mean the economy is not working as well.

[6:56]

We need to grow the economy, and we need to make it so that people have more cash in their pockets to actually afford things. And businesses are growing and bridges are growing and that sort of thing. Yeah, yeah. And also what can happen, I think sometimes on a mental basis, like an emotional basis, especially if all your reading in the news. And now I know that global news is going to be more bad than it is good. It’s just how it works. But every time you say inflation at all time, high cost of living crisis, now it’s not to say those things aren’t happening. And on impacting people in real time, all it does is create a scarcity mindset and it makes people like, I need to get money quick. They might end up making financial choices or taking risks that they wouldn’t usually. And I think it can have an impact on you and the way that you end up showing up and you move away from having like an abundance mindset and believing that there’s opportunities and resources and money available. And it puts you in this mindset where suddenly and then you end up doing things that maybe aren’t best for your financial health.

[7:48]

So it’s like finding the balance of not being naive or ignorant to it and acknowledging that it’s happening, but also being like, what direct impact does it having on me and as an individual, what can I control? Yeah, 100%. Like, you know, you it’s it’s real. Yeah. Like things cost more. Not totally. So what you can do about it, that’s why I see it. Yeah. Like instead of going oh there’s you see that go okay. Stop my. Please save me. No. Like think about yourself. What he can do for you. Your family, what is in your circle of influence and how can you directly impact and change your life to them? Perhaps either make yourself have a little bit more money to be able to do the things that you used to do, because that’s a reality that a lot of people face instead of. So like just acceptance of that fact right now, like we’re not there’s no one coming to save us. Yes. So we do have to make a change every now and then. But first question. Okay, but. Daran dasa dasa I know I honestly haven’t I don’t know any Darren’s. And I don’t think I’ve ever met a Darren. I know three, you know three.

[8:55]

I don’t know anyone who does free does this. Wow. Three does. AIS does, if you will. Just as I three does. I sounds like I have dragons okay. Yeah. Yeah. Well it does I, I said to us, I have no idea what to do when it comes to my money. I have 350 pounds to put away each month, which is separate to my savings. I don’t know whether to add it to a pension. I already have a workplace pension. Or do I open a stocks and shares Isa? Any ideas? Guys, I think when it comes to thinking about what to do with that extra money, one of the first things you need to think about is accessibility. When do you want to be able to access that money? Because pension, workplace pension is great. Like I remember hearing this thing once, I can’t claim it as my own, but it was said that a workplace pension is like a meal deal. So you put your money in and that that’s the sandwich, and then the drink is the employer with that contribution, and then the snack is what’s come in from tax relief.

[9:55]

So it’s like you put one bit in that you’ll get into actually you know, some bonus. Great. But obviously you can’t touch that money until a certain age. Whereas if you’re putting your money into something like stocks and shares ISA, you’re investing on the stock market, it’s a lot easier access because you have direct money to sell or liquidate your assets, and then you have the kind of thing in the middle with like property, for example. Whereas yes, you have there’s no age limit on when you access that money. However, it’s I guess, less liquid able. Yeah. So yeah, I would say really sit and think about first off, what do I want my future to look like? When would I like to retire? What does my retirement look like? And the key thing I would say about retirement is retirement is not based on, age. It’s actually based on financial independence. And like planning, it’s the number that you have available within your assets that you have access to that allows you to retire. That’s why you have people retiring the like in the 30s and 40s, because they’ve built up enough money to give them an income for retirement. So yeah, I would say really does have a think about what your what you want your retirement to look like when you want what that looks like, how much that’s going to cost you because that is going to then indicate where you then put that money, because it might make more financial sense to put it in a pension.

[11:13]

But if you’re like, I really want to retire at 40, there’s no point having all of that money tied up in a pension. Yeah. So yeah. Goals first is what I would say. I completely agree with you Laura, on that. It’s like for me I do both. So I put into a pension and I do stocks and shares isa similarly. And I’m a little bit more aggressive than I had my stocks and shares ISA because I know I’m going to want the money before I hit 57 to do other things with. And so that’s a decision I’ve made, but also topping up there. So I have some tax relief does help with my business corporation tax as well. And also I know that that money’s locked up for me safely over there should anything go wrong with my ISO, for whatever reason. So yeah, I think it depends on your house when you want to. Do you want to do that? Timi, any thoughts on it? Yeah. Again, completely agree with what you’ve both said.

[12:06]

I think the first thing I’d say is Taser yourself. Congratulations. You’re not spending 100% of your money. So that’s really, really positive. Because as, yeah, as we ever said in a previous episode, like the, the main aim of, like a lot of the world around you is to strip you of all of your cash and get you to spend 100% of it because of honorable position. Sure. Because you don’t have to make it to your next payday to have money. So the question I had asked, is if you were to lose your primary source of income today, for how many months could you live? If the answer is zero, then open up an easy access savings account and start to build an emergency fund right away, because that will give you the freedom and the flexibility to weather the storms.

[12:54]

It sounds like for he’s got I’ve got 350 pounds to put away each month, which is separate to my savings. So it sounds like he’s saving money separate to. Great. So that’s that’s like the short term future. Yeah. For the medium term okay. So what do you want to do or have the time. Want to buy a house to start. Want to go on holiday. Just I want a new car. You can set up a separate bank account for things that you want to do and have. And then of course, anything over and above that can go to longer term investments like stocks and shares ISAs and pensions and stuff. The main difference between a stocks and shares Isa and a pension is largely that the tax treatment. So and unlike the allowance so the stocks and shares ISA you can put in 20 K per tax year with a pension. You could put in 60 K. If you were to like touchwood I hope it doesn’t happen. Pass away. Then your pension will be paid to your beneficiaries as tax free lump sum. But your stocks and shares ISA will be, subject to IHT.

[13:55]

Yeah. Inheritance tax. So for the long term, a stocks and shares Isa is more focused on you and the wealth you want to build for yourself. Your pension’s more like a form of generational wealth that you do use. But I can go on to, beneficiaries and your families and stuff. It’s such a good point to me. Yeah, that’s a really good point. A lot of people forget about that inheritance tax with the stocks and shares ISA that does like forms part of your estate. Yeah. Exactly. Yeah. Which I think people do need to be aware of. And that’s exactly one of the big decisions a plus point for me, splitting up that contribution, even though I am more aggressive with stocks and shares ISA, because kind of banking on the fact I might live, live hopefully out a few more years. But yeah, things go definitely getting go 54. Okay. Anyway, TikTok is a beautiful place. Yeah, but adding is a big factor for me is like, I do want to have some money. Like somebody, you know, I should I ever have kids or or indeed like being able to pass on to my sisters or whatever that might.

[14:57]

Well, being in my pension is important. So. So thank you Darren. You are you legend. Now this one’s anonymous. Oh. So I’m going to call her someone. Should we give her a name? It’s giving Gossip Girl. It’s definitely. It’s definitely. She says she. So it’s definitely woman. Want the name of Laura? Kelly? Yeah. It’s Kelly, it’s Kelly. Kelly. It does feel like it. Kelly. Isn’t it? Yeah. Kelly. Kelly. Kelly says my daughter is 11, and it’s just inherited 25,000 pounds from her grandparents. I felt like it’s a really good opportunity to help grow it. Given that she is seven years away from university and ten years away from 21, which is when I feel like she would actually need it. What are my options in this case and how would you approach this yourself? So, Timi. What was the amount inherited? 25,000 pounds from her grandparents. 25,000 pounds. And she wants the child to be able to access it for uni times. So she is seven years away from university. Your daughter is 11 at this moment in time, so that would make her 18.

[15:58]

Great. So you have a 9,000 pounds per tax year junior ISA allowance, so they can split that money up and over the course of four years, because I guess it would be like nine K9, K9, k, one K. Put that into a junior stocks and shares ISA that can also be put into something like a tracker fund and just grow over time. So you do it with the seven years, seven years. Would you do that? Would you put it into a junior Stocks and Shares Isa with you over the course of seven years? Yeah. Well the the annual allowance is is nine grand. So, you could split it up over seven years, but remember, like, time in the market. So you want to get the money in early and growing early so they could, try not to be prescriptive with this. Max out the nine in the one max out the nine in year two. Yes. Three. And then put the grand the final grant in year four. Separately, you also have a junior pension and sorry, I’ll stick with the junior ISA that will then turn into adult stocks and shares.

[16:59]

ISA when her daughter turns 18, which can be used towards university or driving lessons, or maybe a house deposit, depending on the growth. Separately, you also have a junior pension allowance of 2,880 pounds per tax year. Tax relief takes that up to 3600, and that works much the same as the junior stocks and shares ISA. But you can’t access that money until pension age. So that’s a very simple thing that they can do. Okay, okay. Anything to add on that. The only thing I would add would be more on like an educational level is like if you do do that for your child, it’s rude. And then they’re going to, you know, essentially inherit the, ownership of that at 18. If it’s a junior, stocks and shares or a junior ISA, is educating them on the power of like holding on to money and not just going, yeah, you’re 18. That 25 grand has now turned into 50 grand or whatever the numbers are. Have a nice time at uni. Oh, I’m off to our bathroom. Yeah. Yeah, as much as we love our better,

[17:59]

But yeah, like a really educating your children on the power of, like, long term investments building. Wow. So that they go. Oh, okay. Well, maybe I could take a small portion of it to support me through university, and I could access that, and I’m going to keep the rest of it to grow towards the future. And I think the educational part is really important, like passing down education to your children. Obviously you need to get it for yourself first is one of the most powerful things you can do. I completely agree, one of the big things that I get with junior ISA content is the fact that the child has access 18, and that it is not the parents money. Yeah, so you do need to be factoring that into how your child may well grow up. Because even if you teach them wow. And they just end up being a nutcase kid, there’s nothing you can do about it. And then that money is probably any more harmful and helpful in that situation. So a lot of parents do worry about that. I tend to on the side of it’s probably a good thing that they could go off.

[18:51]

Most kids aren’t like that. Yeah, that they could go off and take a gap year and go traveling and see the world, or like they have options at that point, which is something that we weren’t all afforded to when we are at that age. So I feel like it’s a better conversation to be having as a positive than a negative at that point. But it’s definitely a positive thing that’s happened. Yeah, yeah, yeah. But the yeah, the education piece is, as Laura said, is like the most important percent. If you if you were to like, liquidate down all the assets in the country and then spread them out evenly between all the people that live here and go away and come back in ten years time, that money will have made its way back into the hands of the most financially educated somebody somehow.

[19:38]

So it starts with education. First 100%. You need to know what you’re doing so she can co-invest with her daughter. Yeah, they can use the apps together and all of that. And then by the time she gets to that age, she’ll have that financial confidence. Yeah, yeah. Maybe if she keeps adding to it over a long period of time, she’s got so much time ahead of other compounding it’s going to be enormous. Yeah. And she won’t have to add as much as what some of us might have had to starting at that age. Like if you’re starting at 18 with already 40 grand. Yeah. Then it’s like, but your contribution over the course of 20, 30 years doesn’t need to be as much to reach the same amount as somebody starting when they’re 18. A great head start in life. What a dream. Yeah. Sorry about your grandparents. Oh, wow. Yeah, that. You know, I’m very sorry about your grandparents day. That’s a great thank you. So that’s just it’s just, I mean, the cycle of life, we all dressed in black, so. Yeah. This is. We tied up. Yeah. This. Really? Sorry. I hope you were lucky.

[20:40]

This person is anonymous. Yes. Can if. Yeah. Anyway, Joe. Sorry. John Marks. Okay. John Marks and, I’m in John Marks as well. Sounds like he is the other half of Marks and Spencer, but, the merger of John Lewis. Yeah. So too is super, super duper. Oh, wow. That would be epic. I’d be I think I would live there. I would move in. Can we can we just talk about Marks and Spencer actually, and how much it’s drastically improved all of the like men’s and women’s clothing. Now, now, do you know why there is a reason for that? I don’t know. The, the top buyer, like, I don’t know what they call the top buyer. Yeah, that used to work for Topshop. Now works with Marks and Sparks because you can get like Reese in there now. So they’ve like that. The person who is doing all of the buying for Marks Spencer had leveled up long ago. Yeah John Marks yeah yeah yeah. It’s yeah it would. Yeah. I would not even look like because it kind of is like John Lewis was supposed to just add like furniture and bits, but you know, it does, doesn’t it?

[21:50]

I actually haven’t been to a John Lewis store in probably about 15 years. I don’t own a house, a house I don’t own a house. I don’t own a house. So everything in my house currently I’m in a rented accommodation with three other women in their 40s. I was it furnished when you got in there? No, but it’s all their furniture, so I just I’ve. I’ve put some nice things up. Flowers and books and stuff, but no real furniture is so well furnished. Like, if you ever move, I can consent because you haven’t got big old vans and, yeah, trips to John Lewis, which I’m looking after. Marks. Marks. So John Marks is said. I’m currently 50,000 pounds in debt. I’m on an 80 grand salary so I can contribute quite a lot to it. But with the cost of living, it keeps getting worse and worse. In fact, my debt just keeps on growing. I’ve done a budget and have more than enough to pay it down, but somehow I just keep on going backwards. I feel like this is something that happens to a lot of people, but I just wanted to know what you guys would do and how you would manage the situation.

[22:52]

I mean, I always like to start debt stuff from an emotional point of view, because if John is saying he has a budget and then he’s saying, I just keep going more into debt, then the budget isn’t the issue. It’s the sticking to the budget. That’s the issue. Now. There are things that you can do on a debt clearing basis, like the snowball method, the avalanche method, and laying out your debt so you know exactly what you’re working with. But it sounds like he’s done that, Paul. And it’s more like, how do I stick to this budget? And if, you know, obviously we don’t know what he’s done to get into this position, but if it is of of a lifestyle, you’re then having to not only step your lifestyle back, but take it even further back because you know that money has to be paid off somewhere. So I guess I would say from an emotional point of view is really understanding, like cost of living crisis aside, like, what is my behaviour with spending? What is my behaviour with, how I feel about buying things myself versus get, you know, financially progressing and everybody has a different relationship with money. They’ll be a reason emotionally why he got into debt.

[23:54]

And it’s hard without knowing all of the facts to like, yeah, because if John was sat in front of me, I’d be questioning him as a coach and we’d be able to dive into it. But I think, yeah, I think debt starts with the emotional, because even I’ve worked with clients, even when they’ve cleared the debt, they go back. Yes. Yeah. So the thing is, getting out of debt and staying out of debt, and that comes down to your relationship with money and really understanding your spending habits. Totally agree. Timi, what do you say to that? Completely agree with the the emotional side. I remember leaving uni and being completely in my overdraft. Yeah. And then it’s like interest free. But then when you leave uni, they reduce the interest every year and just just like being paid. But having 0 pounds, I just yeah. Yeah. And just feeling like a, like a failure basically. So completely agree with the emotional side. I think language is very important. I like to say that we have debt. We’re not in debt.

[24:56]

I think it’s actually phrased that way there, isn’t it? He says I am, I have 50 grand in debt, so we have debt. You don’t become to debt. And then, yeah, if possible, you want to get like a list or like a spreadsheet and, and write down all of the different components of that debt. Whether it’s overdrafts, credit card store cards, write them all down. Write down how much the balances for each of them. Write down the apples for all of them. I’ve done this with a number of people and like just the clarity that you get from writing down all the different amounts you owe and all the interest is really useful, and then you can decide to prioritize them so you can, as Lewis mentioned, you can snowball it and you can do it smallest balance first and then minimums and on all the rest.

[25:45]

So you can avalanche it and do highest Apr first and then minimums, all the rest. And moving to the next one, the next one, the next one and it’s all gone. Final, final thing I’ll say is if possible, I mean it’s quite a large balance. Outstanding. So this might not be possible. You can move debt from a, a high interest environment to a low interest environment through things like balance transfer cards and money transfer cards, consolidation and consolidation. Yeah, I’m not the biggest fan of the loans though because of the high monthly repayment. But they’re consolidation as a principal. And also then it clears all your credit card debt and suddenly you’ve got five grand sitting there on a credit card again. And yeah, you can come back to it’s spending habit. Yeah. Exactly. Can I add to that as well? Actually two things. I was thinking that you made me think. Yeah. One, I think that because and he mentioned in what he said he has a high enough salary. He feels he can clear out anything could happen to that salary at any point. And I think sometimes the pain of debt isn’t strong enough for people to really make the sacrifices.

[26:51]

So it’s this idea of like, are you moving away from pain or towards pleasure? And what can happen is when the pain of the debt is really intense, like, oh my God, I’m mean 50 K. What that is, is so this is painful. Click like, can you get into the, you know, the safety zone, but then you’re no longer motivated away from pain. And that’s what pushes people back into it. So as you start to clear it and you start to get closer, find what your pleasure is like when I’m out of debt, what am I going to get to do? What does my life look like? How can I reach financial independence and get excited about the other side of it? Don’t just focus on the clearing the debt. Yeah, because then you’re like, oh, the pain is gone and you run the risk of getting back into that. Now we’re back now with that. Yeah. And also try it in my opinion, try not to go too extreme because what can happen is a little bit like dieting. You know, when you’re like feeling really fat and you’re like, you know what?

[27:40]

No carbs, no bread, no chips, no dressings. No. And you are literally just saying like salad leaves. So it’s not it’s not good for you because what happens is that is very short term like answer. And within a week you’re like, that’s it. I’m ordering a takeaway smash. Yeah, yeah. And and you just send you the other way and you kind of like binge just like binge or straight binge drink. And that can happen when you click through that last week. Yeah. Like yeah, yeah. And if you binge and restrict too much and there’s too many extremes. And if he thinks in his head I could get this debt gone in two years. Yeah. But it’s his lifestyle is too restrictive. At some point he’s going to have a big summer blowout. Yeah, yeah, 100%. You hit the nail on the head that I really like. The way you frame that actually, though, is that I like I can speak from personal things I like. I was 24 grand in damn went for it and it was brutal and but I but you but I managed to do it and actually it was like the educational piece off there as well.

[28:37]

So if you’re like exactly what you said, like I know what’s going to happen once I hit zero, the next phase is about wealth building. Yeah, I’m actually just phasing into the next section of it. Then it’s like, oh cool, now I’m in. Yeah. And it gives you that next spur because it was like an I did this thing where it was like my friend basically asked me who’s like, well, when do you want to retire? And I was like, oh, 50 and is like, when do you want a diet at 80? And he said, well, how much do you earn a year times that by 30? Do you have that? And I was like, oh, I’m sorry, Vogue. I did that like, like and that was my moment. And I was like, well, I’m not just nowhere near like £1.6 million. I’m now I’m -24. So I’ve got a big gap to make up. So like thinking about that too and bringing it all together and sort of phasing it in can be really helpful. Did you were you going to add something to that? No. Yeah. Yeah. Paying off debt. And it’s like the inverse of building wealth.

[29:34]

Yeah, it’s still compounding, but in the right way. Yeah, yeah, yeah, that’s why I say it. It’s like you use it as a net swing. For sure. So, thank you, John Marks. We will see you in the collaboration store of John Lewis very, very soon. No doubt. But I really like this name because this is a money podcast. His name is Tom green. Tom green. Tom, he’s he’s clearly got the memo. He’s got the memo said I have is is a really simple question, but actually one that I’m really interested in you guys opinions on. So he has says I have three cash ISAs and three stocks and shares ISAs. Would you consolidate them all into one? I’ll start with Timi. Three cash ISAs and three stocks and shares ISAs, yeah, well, the thing with the the Isa limit is that if you, take money out of an ISA environment and put it back in, then that uses up your, your limit. So even though it’s 20,000 pounds, if you unless it’s a flexible Isa.

[30:46]

Right. All right. If, unless it’s a flexible Isa, if you take out 1 pound and then put it back in 20,000 times, that will use up your full 20 K. So what you can do is an Isa transfer, which is where you transfer the balances of previously held ISAs all into one and consolidate them with a cash Isa. I think it’s kind of a no brainer because you can transfer, money that’s held in cash ISAs with lower interest into a higher interest paying cash Isa. And that’s fine with the stocks and shares Isa. It’s slightly more complicated than that because that money might be invested. Yeah. You might have bought really low hundreds. And then you’d have to sell those investments and then reinvest them in the new ones.

[31:33]

So with the cash side consolidation sounds fine to me with the stocks and shares ISAs side depending on the assets held, I would keep tabs on that rather than so certain investments when you might not necessarily want to do. Does it matter though? Because I mean, like if you sold, let’s say you bought you bought a global index fund and you sold you bought it really low and you just selling it and then transferring it over and then buying again, you just at the same point on a, you know, well, think of it like the stock. Right. If you buy a stock really, really low, and then you’re forced to sell it, if you then buy at the same level, then your buying level is now higher. Yeah. Yeah of course. Yeah. So it’s the same is the same with the units of a fund. An interesting one for sure. That consolidation piece is tough one for stocks which as I said for sure.

[32:25]

What would you say or anything on that. I think it really depends as well on a how much is like how much, how long have you been added to them for. Like how, how long have you had these and how much pain is it causing you? I do think there’s a lot of shoulds in the whole financial world. Should I do this? Should I do this? Some things make financial sense. Some things make emotional sense, like the pain that you might have to go through to consolidate all of those stocks and shares losses. Is it really worth it for what you think you’re actually getting? With like, you know, to echo off what Timi said, it might make sense with the cash one because you would be able to do the transfer and get a higher interest. But I think forget more. Ask yourself, like, why do you feel you should do that? Because I don’t think there’s anything wrong with having multiple accounts. If you know what’s going on with them and then it’s not stressing you out and they’re all serving a purpose. Yeah. Individual for each person. Yeah, I completely agree. My personal thing is like, why have I what I think’s happened is that you’ve probably taken advantage of like sign up offers.

[33:18]

So in the end, he’s got the three open. And then now he’s, But before you could only pay into one, an ISA, he was, like, adding to that one in that year. And then now he’s opened a new one. And then like the their offers come around every April. And now he’s like, okay, what do I do? And because you can open. So today is quite a difficult decision for him I would imagine. But I think Timi’s under as well. I was spot on there. I haven’t really got much to add to that other than like figure out what your you want it for like cash is. I don’t think you need three of them unless you splitting your money up like this is for holiday. This is for X, Y and z and this is for my emergency fund. Like I can see how that can make sense for you, but you could also just say that 20 grand’s my emergency fund, and five three grand is for my x, Y and Z. And and do it like that too. But, yeah, each to their own.

[34:09]

Some people like having multiple accounts, but it sounds like this guy really doesn’t. Smoke. And I think the answer is consolidation. But let’s see what he’s saying. So Andrew is said if you were given a large sum to invest, we’re talking 100,000 pounds or more, what would you actually do with it? This is a really interesting question. I yeah, I’m going to ask Laura first what you what are you giving a large sum. So 100,000 pounds like today and you were let’s say you were starting from zero. If he’s not actually given any context here and I it’s your someone. Guys, you have to start from zero. Someone gives you 100,000 pounds right now. Like what do you do? I would say, you sure you’re just giving me this for free was the catch?

[35:00]

No. All so me personally, right now. And if we’re taken into account, like, let’s say I’m starting zero. Not enough. Anything else? I would. I probably put 50, maybe 62, put a high maybe 70% of that I would put into investing for the long term. Whether that was index funds, ETFs like I mean, I say that, but now I have to totally take into account the fact that there’s Isa allowances, and you want to do it in the most tax efficient way. But if we’re just thinking, like if we’re theorizing, I would put a large portion of it into investments. And then I would save some of that, I’d have some in cash and then I would enjoy some of that. I’ll go travel in. Yeah. Like I would basically that’s important, a large proportion to my future wealth and my future success.

[35:51]

Some of it’s I’ve got accessible and then some of it to like enjoy it. I think it can be very easy to fall into this place of being like, everything needs to be saved, everything needs to be invested, and we never, ever enjoy our money. And then you get to 60 and then you’re like, oh, I have no memories and I have no experiences, but I do have 10 million pounds in the bank. That’s like boring. Yeah. Sorry. What have you done? Really passionate about that. Yeah. Yeah. What have you done? Yes. So I think it’s important to find the balance. With. With that, I completely agree. What would you do, Timi? I would tell that person to book a meeting with a financial advisor. Yeah, yeah, because there’s 100 k significant amount of money. Yeah. Charlie Munger. R.I.P 99. He made it to God. I didn’t make it to 100. I know we were in black guys. Yeah that’s right. But he. Yeah, he famously said the first hundred K is the hardest. Yeah. In terms of building wealth. And then from that point on, it gets easier. So I think it’s quite a significant milestone.

[36:54]

Speak to a financial advisor. They will hopefully speak to you about your financial goals, what you’re trying to do with your life. And then they’ll find a way to move that money into the most tax efficient vehicles possible. Such good advice, and just a caveat to that. Yeah, I thought we were far into just me. Yep. It’s him. What would you do? Do not take anything I say. Yeah. Facts on that. No. Because I think it’s important to just, like, get different opinions of what people would do that because then they’re like, oh, I like that, but I don’t like that so much. And I like what he said tonight, which he said, and then you can just I that’s what’s right for me rather than having not one is what I be doing. That’s right. That’s a great point. About 100 K because you’re at this pivotal point and like net worth does actually explode. Once you get past that 100 K turn into a million you can quite few decades. Yeah, yeah. Really interestingly, if you put ten grand a year in at 10%, it takes you 7.4 years to get to 100,000 pounds, but to go from 400 K to 500 K is 1.8 years.

[37:58]

So the difference is getting smaller as you’re growing your wealth. And so the basic once you hit 100 k, the reason why it’s hardest is because majority of the contributions usually are from yourself and not from the interest you make. But as you sort of cross over that 100 K, mark the amount you’ll see your scale of capital is massively different to your initial, contribution. So it’s a pretty significant milestone. So yeah, don’t fuck it up. Okay? That’s not for you. And I think if you get that type of money, you are very much in a position to be like, you can really make it happen. Now, I think in my opinion. But I would 100% be like spending five grand on holiday facts.

[38:43]

This just I just would. Where would you go? Where would I go? I said, Christian, you know, will, I think I just do like mental Southeast Asia. You could do a lot for five grand in Southeast Asia. Yeah, because it would stretch for six, seven weeks and be able to have, like, proper sick experience. Can you go to Moody’s? And it’s like a dead name. Well, the Maldives, I can tell I was like, okay. Yeah. You had you’d live like I got you I loving it. It’s Sam. Okay. So yeah, he says he invented it. So I did. I, brilliant. Okay, guys, we’re going to wrap this up with a little story today. This one is pretty crazy.

[39:38]

I found out a year and a half ago when I tried to apply for my first credit card. It. There were fraudulent accounts taken out in my name. Long story short, I figured out it was my mum. My middle name was. Yeah. My middle name was used to open each of the accounts and I’ve always hated it and never used it. She regularly used one of this in a catalog site and has a really bad spending habit. When I first asked her, she said, don’t you dare accuse me of something like that with a bright red face. So I already knew it was her. When I set up to report it, she did confess. She blamed it on a financial problem due to supporting myself and my brother for uni, all while buying expensive designer things and going on several holidays a year. I wanted to report it, but she trashed my credit score and I couldn’t get any credit for myself and I just couldn’t bring myself to do it. She actually set up a payment plan to pay off, and we didn’t talk for months. And when we were started talking again, she had paid a chunk of it off. That was around 2500 pounds.

[40:34]

I was very naive and wanted to be able to trust her. And so when she told me it was all paid off, I believed her. So I had some inherit. She actually had some inheritance money come in and was buying bags of upwards of 900 pounds a pop. She certainly wasn’t struggling for money, so why wouldn’t she pay it off? I then received a bunch of collections letter and had bailiffs come to my door because she hadn’t paid it off, although she had been on three holidays that year and spent thousands of pounds on bags. When I asked her about it, she said she was being it was being paid off. This was another lie. I told her it was an automated time to pay it or I would report it and she paid it upfront in one go that day. I have since had to cut ties with her, as I completely can’t trust that. And I’ve had to tell my brother and other family members even though I didn’t want to. Wow. Yeah. That’s horrendous. Very heavy. Yeah, that’s really sad. It’s pretty heavy. It’s pretty heavy. That’s. Luckily we’re ahead of this. What would you what would you do in that situation if you had family members like that were doing that to you?

[41:31]

And how can you protect yourself from that situation? Because it’s pretty crazy. Well, I think the first thing for me is like, she’s done the right thing by cutting her off. I think the whole and it must be so hard it being your mum, you know. But I think there’s this whole thing around, you know, family and like, well, but it’s like the whole, like, blood isn’t thicker than water, like just because she’s your mum, the behaviours that she’s exerted. So. Unacceptable. Probably go to therapy. Yeah. Genuinely like go to some kind of therapy because there’ll be some kind of trauma related to that, but both financial and emotional. Yeah. So definitely speak to someone. Yeah. I just feel really bad for her. That’s really hard. When I speak to a man. I think cutting ties is definitely a good thing in regards to how to avoid it.

[42:18]

I’ll be honest, I don’t know how you avoid that. I don’t ask, not my area. Do you know anything about, avoiding credit card fraud? You know, but, like, get, like, with a family member family because is it classed as fraud if if it’s because there’s this whole thing around? Happens a lot in couples where I’ve worked with a lot of women, actually. It’s really sad with like 1 to 1 clients, whereby woman has come to me and she says, I’ve got a lot of debt that I’m clearing. And I’m like, okay. And, you know, we go through this process of understanding what happened. And and it’s come from partners that have like husbands that have gambling addictions and have, you know, done the same thing, taken all the money out of the name, credit cards, loans in their girlfriends name. Yeah. And the the laws around it are so poor. There is really like it takes a lot for family and spouse. Really. Yeah. To to get it back. So I’ve worked with so many women and it’s so sad and I guess it’s a, it’s a form of economic abuse in regards to, you know, like using your name and then because they’re then having to clear the debt and they don’t, there is nothing they can do.

[43:23]

It’s abuse. Yeah. Yeah. So yeah, I’ve worked with lot of women and it’s family or spouse. Right. Yeah. And hundreds of women have this happen to them. Yeah. And like the number, the percentage of people that I’ve worked with, whether it has happened throughout ages as well, is really sad. And I think there’s not enough support for people, like I said. Yeah. Basically, anything to add on that, Timi? Yeah, it’s a form of economic abuse. And I would definitely recommend checking out for people that are in that situation. The, charities surviving economic abuse. They’ve got lots of helpful resources on it. Thanks. Yeah, we we will leave a link in the show notes if anybody needs that. Yeah. There’s a great podcast episode from Money Clinic on it as well. But on the whole topic of economic abuse is I think it was released around this time last year in 2020 there Barrett’s, Claire Barrett’s podcast. Nice shout out. Yeah. Another beer, Claire. Timi, yeah, definitely family counseling. Definitely therapy. And then on a practical point, signing up to the three main credit reference agencies.

[44:30]

Yes, Experian, Equifax and TransUnion. Because at least you’ll get an email to say, oh, pod is just landed on your account. A new form of credit has been taken out in your name. I get those alerts, in my inbox. And that just lets you know what’s happening. In terms of, yeah, your credit. That’s a really good point. Yeah, that’s a really good point. Like, those little updates are probably essential for you over the next few months because it sounds like you’ve got a little bit of a crazy mother, who has her own problems as well. So if you are still, like, in contact with her in a few months, if you let her back into your life, like, maybe some counseling together might be helpful there. Or maybe getting her in some form of therapy. Because if she’s blowing inheritances, spending 900 pounds on bags and holidays while racking up stalking it in your name, she clearly has a problem herself. Yeah, but also what I will add to that is it’s also not your responsibility. But you do feel responsible, don’t you? So I know I grew child in this situation.

[45:30]

Yeah. By the big I am personally I’m a big believer, especially when you become an adult and your parent is an adult while you still have this parent child relationship, just because your parent isn’t educated or whatever it is, there is a level. Of course, if you want to help and you have a good relationship, love that. Yeah, but it gets to the point where you’re absolutely allowed to cut ties off and choose not to have responsibility like you don’t. And I think sometimes the the sadness and the shame and the guilt will make you maybe, lower your own boundaries when you shouldn’t. Like. We have to be selfish sometimes. I do believe that. Yeah, yeah. Completely agree, completely agree. Well, look, that’s been a pretty deep episode. Last line up. Okay? Anyway, this has been really great fun.

[46:16]

Less light out for them. And if you do want to send any questions or you have any stories, perhaps we’ll try and keep it a little longer as the top one in future. But no, please do send in your stories. Is an email in the description below. It’s been real good fun. Again, thanks guys. Always is ever just burgeoning with incredible advice. Yeah, thank you very much. Yeah. Thank you. Yeah, it’s been a pleasure. And, we’ll see you guys next month. All right, all right. Bye bye. Bye.