Title: Rebel Finance School 2026 — Week 8 Thursday Transcript
Session: Make Your First Investment: Platform, Account and Fund | Rebel Finance School Week 8
YouTube link: https://www.youtube.com/watch?v=DDOyho8cMDs
Course: Rebel Finance School 2026
Creators: Alan Donegan and Katie Donegan, Rebel Donegans
Canonical page: https://rebeldonegans.com/finance/rfs/course-notes/week-8/
Course hub: https://rebeldonegans.com/finance/rfs/course-notes/
Website: https://rebeldonegans.com/
Copyright notice:
Copyright © Rebel Donegans. All rights reserved.
This transcript is provided for personal educational use as part of Rebel Finance School. You may read it, search it, download it for your own learning, and use it to help you understand the course. Please do not copy, republish, sell, scrape, or redistribute this transcript as your own content.
Attribution:
If quoting or referencing this transcript, please credit Rebel Finance School by Alan and Katie Donegan and link to:
https://rebeldonegans.com/finance/rfs/course-notes/
Disclaimer:
This is financial education, not financial advice. Rebel Donegans are not regulated financial advisers. You are responsible for your own financial decisions.


0:011 secondand welcome to Rebel Finance School week eight. The UK specifics. [laughter] I feel I should be wearing my Morris
0:088 secondsdancing outfit or something. Something very, very British.
0:1111 secondsHow can people tell we're British? That does happen regularly in America where we're hanging out at the moment in California. People say, "Are you from the UK?" And I just look at them and go,
0:2020 seconds"How can you tell? Is it the clothes I'm wearing?" Uh, which does make me laugh. [laughter] It just makes them awkward.
0:2828 secondsLaughing at your own jokes. That's happy days. We've heard YouTube's working.
0:3232 secondsYouTubers, are you there? Uh, we think Simon is here. Fireman69 as always and Chris, are you here? YouTubers, uh,
0:3939 secondsthat's awesome. Okay, we are good to go on YouTube. Let's get straight into this
0:4646 secondscuz tonight is about organizing your freedom fund. Yes. We've got to make sure it's organized. Monday gave you three decisions.
0:5555 secondsYeah. So we looked at the fund, the account and platform and gave you that framework to help you to understand and to think because people always are like
1:021 minute, 2 secondswell should I invest in my pension or an index fund. It's like well you're talking about two different decisions there. The pension and it being the account and the index fund being the fund.
1:101 minute, 10 secondsTonight we make it extremely British.
1:131 minute, 13 secondsThere will be UK tax, UK accounts, UK pensions, UK platforms and slightly awkward conversations. That is very British.
1:211 minute, 21 secondsThe UK adds three question at least Steve last and I joke. No one else did.
1:261 minute, 26 secondsUh giggled internally.
1:271 minute, 27 secondsThere'll be three questions. What free money is available? Cuz free money is important. Yes.
1:331 minute, 33 secondsHow much tax can I save? Cuz tax is the biggest bill you will ever face in your life. And when can I access my money? So
1:411 minute, 41 secondsin terms of the map that we had at the start, we're on the investing bit and this kind of transitions all the way to
1:491 minute, 49 secondsFreedom Island at the end. So, because these accounts going to last you all the way through your life. So, we're going to look at three different elements. And
1:581 minute, 58 secondsthis is what I think my freedom fund would look at like if it was visualized.
2:022 minutes, 2 secondsIt's like my pirates gold. Uh you're going to have your state pension in there.
2:072 minutes, 7 secondsYou're going to have your workplace pension or your private pensions.
2:112 minutes, 11 secondsAnd you're going to have your accessible investments like ISIS and different things. And we're going to go through each one of these and explain them and
2:172 minutes, 17 secondsbring them all to life because different money unlocks at different times.
2:232 minutes, 23 secondsHence why you need those different things in your treasure chest. So you've got your state pension at whatever age you will access that DC defined
2:312 minutes, 31 secondscontribution pensions, workplace pensions and SIPs and then stuff that you could get to now which is ISIS and your general investment account. So just
2:392 minutes, 39 secondsto say those come at different times which is why you might want to have different accounts.
2:432 minutes, 43 secondsYes. If you want to retire before state pension age, you need money outside there. Okay. So, tonight we're going to organize it. We're going to show the UK
2:512 minutes, 51 secondssystem, state pension accounts, platforms, and funds. Organize your money into the different accounts that protects it and then take action and get
2:592 minutes, 59 secondson with it. And this will be the time to unleash the horses.
3:023 minutes, 2 secondsOh, before that, a message from our lawyers. Have lawyers.
Chapter 2: Understanding the UK system
3:083 minutes, 8 secondsThis is not financial advice. We're not financially regulated. We are not trained. We will not sell you investments. You make your own decisions. We're sharing our opinions and ideas. These ideas may or may not
3:163 minutes, 16 secondscontinue to work for us. Are you? You are 100% responsible for your financial future. Yes, you. There are no guarantees here except
3:243 minutes, 24 secondsthe money back guarantee. If you don't like the course, please see Mark F for a full refund.
3:283 minutes, 28 secondsUh if you paid to come tonight, something's gone horribly wrong. Please message us. Investments can and will go up and down. It's at this point uh we
3:383 minutes, 38 secondsalso say we are not sponsored by Vanguard. We do not get any money from them or anyone else. Uh, do we get
3:453 minutes, 45 secondscommission? No, nothing. I'd quite like some, but no one gives us money.
3:503 minutes, 50 secondsAlso, on these weeks of the course, if you're watching on YouTube, you might see that there's some ads that are related to platforms or funds or
3:573 minutes, 57 secondsdifferent providers. We don't choose those ads. If you see a St. James's Place ad, it's not because we have asked them to advertise. We don't choose or necessarily condone any of the ads.
4:064 minutes, 6 secondsAnd lots of people say, "Does Rebel Finance School make money?" Short answer, no. Uh, we lose money putting this on, paying for all the
4:134 minutes, 13 secondssubscriptions. Uh, that QR code links to an article Katie and I just did that shows you the finances of Rebel Site School and how much money we have lost
4:224 minutes, 22 secondsputting it on over the period. Worst business model ever. Someone should shut us down. Move on. If you're watching on
4:304 minutes, 30 secondsZoom live, please use the Q&A feature that makes the ninjas able to see your questions. If you're on YouTube, hello YouTube, we love you. uh please put it in the chat. There's ninjas in the chat.
4:404 minutes, 40 secondsOr if you're on catchup, put it in the comments. We really like seeing them.
4:454 minutes, 45 secondsAnd if you are on YouTube, please hit like and subscribe. It gives the YouTube gods a little tingle and makes our stuff go further. Now, tonight there's going
4:554 minutes, 55 secondsto be a lot of new information. There's going to be terms that are perhaps new to you. And just remember, when you learn a new language, you don't expect
5:025 minutes, 2 secondsto be fluent from day one. It takes repetition. It takes just going over it multiple times. So as you go through this, just remember to breathe, relax.
5:125 minutes, 12 secondsThis is recorded. You can come back and watch as many times as you want. Hit pause, hit rewind. Go away and think about it. Come back. This resource is
5:195 minutes, 19 secondsavailable for you and will be up for many, many months to come until around March 2027. So you have time. And by the end [clears throat] of tonight, we will
5:275 minutes, 27 secondsgive you here's the options we think are good options.
5:315 minutes, 31 secondsBut the purpose of the main bit of tonight is to teach you to think for yourself so you can make your own decisions because we're not financial adviserss. I want you to decide for
5:395 minutes, 39 secondsyourself. I definitely do not want the responsibility of telling you what to do. I want you to be able to make your own decisions. And that's what we're
5:485 minutes, 48 secondsgoing to do. But before choosing accounts, let's work out what the UK might already provide for you in
5:555 minutes, 55 secondsretirement. H. So there's this little thing called the state pension which can be part of your plan. Not the whole
Chapter 3: Choosing investment accounts
6:026 minutes, 2 secondsplan, part of it. Let's go into what happens. How much actually is it? What do they give you? Well, it's currently
6:106 minutes, 10 seconds£24130 a week and it goes up by inflation each year. So that is £12,500ish
6:186 minutes, 18 secondsa year. That's the full state pension for this year. You can look up to see what you're entitled to on the check
6:276 minutes, 27 secondsyour state pension forecast page on the.gov website. The QR code links there. It's actually a really good
6:346 minutes, 34 secondslittle system that they have created. I did mine to show you. Uh here's my state pension forecast. If I contribute for
6:426 minutes, 42 secondsanother four years, I'll get £24130 a week. If I stop now and don't contribute
6:496 minutes, 49 secondsanymore, I will get £217.78 a week in my state pension.
6:546 minutes, 54 secondsAnd when you say contribute, it comes from how much national insurance you're paid or your national insurance record. Exactly.
7:017 minutes, 1 secondRemember the state pension is individual. So, if there's two of you, like Laura and Lee, sitting on the couch
7:097 minutes, 9 secondstogether, if there's two individuals, you have two national insurance records, and you potentially get two state
7:167 minutes, 16 secondspensions. So, that could mount up to 25 grand between the pair of you at that age, which is not insignificant.
7:267 minutes, 26 secondsYou got to check three things. First thing I want you to check is when does it begin? Because the age is going up.
7:337 minutes, 33 secondsIt's 68 for me. I'm 47 years old, so I've got 218 years till I can get there.
7:397 minutes, 39 secondsAnd for younger people, it's higher. Uh for other people, it's less. So then second thing, check the amount. What do
7:467 minutes, 46 secondsyou forecast to receive? So use the checker to work out how much money is coming in.
7:527 minutes, 52 secondsAnd then finally, your record. It shows you how many years of qualifying, how many qualifying years that you have, and
8:008 minutesit might show you gaps. You might be able to fill those gaps. Whether you choose to fill those gaps, that's up to you. But just to know that you can do
8:078 minutes, 7 secondsthat and look at what you've got already. The way we see it is if later on in life you wanted to spend
8:168 minutes, 16 seconds40 grand a year, for example, we made that number up. It's different for all of you. Well, your state pension is going to cover a chunk of what you need
8:258 minutes, 25 secondsin retirement. So, you only need to cover the other amount. So, if the state pension covers £125,000, well, you need to cover £275,000.
8:388 minutes, 38 secondsUm, does that make sense? The way we're thinking about it, like it covers some of what you need. Excellent. Thank you for the thumbs up. Uh, you got to have
8:478 minutes, 47 secondsif you want to retire before the state pension age, you've got to have some money outside of it, which is called bridging the gap. And we're coming on to
8:538 minutes, 53 secondsthat next week. But your fund may not need to cover all of your expenses forever. So before pension age,
9:029 minutes, 2 secondsif you want to retire, your freedom fund would have to cover the whole amount you want to live off. But after pension age,
9:099 minutes, 9 secondswell, you only need to cover a certain amount of it with your freedom fund, and it goes down from 68. But that all depends on what age you want to retire.
9:189 minutes, 18 secondsAnd this is the bit you have to reach the state pension. So if you want to retire before then then you need investments elsewhere in different
9:269 minutes, 26 secondsaccounts. So your pension, your workplace pension. And if you want to stop working before you can get to your workplace pensions or your SIPs, then
9:349 minutes, 34 secondsyou're going to need to have stuff outside that what we've called accessible investments. That's ISAS and general investment accounts.
9:419 minutes, 41 secondsAnd we'll be properly covering bridging next week. Um lots of people then say, "But will the state pension exist?" uh
9:509 minutes, 50 secondsto which Katie and I say we cannot know for future government policy. No one knows what the government will do. Uh so
9:589 minutes, 58 secondswe got to test it. Uh if you're close to state pension age, you can pretty much guarantee you're going to get it. If you were 18, you might get less cuz who knows what'll happen in 50 years time.
10:1010 minutes, 10 secondsAnd when you say test it, you mean look at how it would affect your own circumstances, your own finances. What I mean is do a forecast for your future
10:1810 minutes, 18 secondswhere you go I'm going to get the full amount or do a forecast for the future where you go I think maybe I'll get 50%
10:2510 minutes, 25 secondsof it or if you can do a test where you get zero state pension and can you look after yourself with it. Um but we're
10:3410 minutes, 34 secondsgoing to do the maths of retirement next year. Next week. Next year. Next week.
10:4010 minutes, 40 secondsIt's been an intense week. It's felt like a year since Monday. Uh and also when Alan said, you know, do a
10:4610 minutes, 46 secondsforecast, we did this forecasting workshop last year, which uh is a tool that you can use to do those tests.
10:5610 minutes, 56 secondsYeah, it was one of the most highly rated workshops of last year. We were very proud of it. Uh the link is there. The ninjas will put it in the chat.
11:0311 minutes, 3 secondsYouTubers, the link is in the description if you need it or it's on mission control so you can find it.
11:0911 minutes, 9 secondsOkay, so that's the first part of the UK tax system is state pension. Now, we're
11:1611 minutes, 16 secondsgoing to move on to uh the workplace pensions, the private pensions, and the accessible pensions.
11:2211 minutes, 22 secondsAnd we're going to do as we go through tonight, we're going to always use that framework that we talked about on Monday, which was the platform, the account, and the fund. So, now we're talking about the account.
11:3211 minutes, 32 secondsYep. Now we're on account level. And I spent a long time trying to figure out how to communicate this in a succinct way. We'll see what you think.
Chapter 4: The freedom fund strategy
11:4011 minutes, 40 secondsAre there some superheroes coming up? Well, you know what else would there be?
11:4311 minutes, 43 secondsUh, should I open a joint ISA or a joint SIP account? Lots of couples say. Well, it doesn't exist. There is no such thing
11:5111 minutes, 51 secondsas that because you each get individual tax allowances. So, you each need a SIP.
11:5711 minutes, 57 secondsYou each need a nicer. You want to use your individual allowances. In some platforms such as Vanguard, you can link
12:0612 minutes, 6 secondsaccounts if you want to. And that means that you can see the other person what they've got and they can see what you've got and they become your beneficiary.
12:1412 minutes, 14 secondsSo is it like a readonly access thing? I can see what you've got. Yeah. You can't spend my money.
12:1912 minutes, 19 secondsOh sad. [clears throat]
12:2212 minutes, 22 seconds[laughter]
12:2312 minutes, 23 secondsOkay. Moving on quick. So we get this question all the time.
12:2612 minutes, 26 secondsShould I have my money in one place? You know the reason I might want to have a joint account if one existed is I'll pull with my partner so that compounding
12:3412 minutes, 34 secondshappens more quickly. Well actually doesn't work like that. And I'll show show you through an example. If one of you has 100 in your account and the
12:4212 minutes, 42 secondsother person also has 100 in their account and they each grow by 10% say after a year they've each grown to 110.
12:5012 minutes, 50 secondsSo the total that you've got two lots of 110 220. If you had that in a combined account you would start with 200. It
12:5812 minutes, 58 secondswould grow by 10% and you would end up with 220. So it's exactly the same. it like the number of accounts does not
13:0513 minutes, 5 secondsaffect [laughter] compounding. You could technically have 1 million accounts with one pound in each and it wouldn't affect anything. Don't do that.
13:1513 minutes, 15 secondsUm, okay. So, should I have my money in more accounts? No, it doesn't make any difference. You need to use both your
13:2213 minutes, 22 secondsallowances. And we've never had any type of joint account, which is not quite true. We had a joint account for about a month because someone at our wedding
13:3013 minutes, 30 secondsgave us a check to Mr. and Mrs. Donigan and I had to open an account just to be able to get the uh the check they gave us. Thank you for that.
13:3913 minutes, 39 secondsA lot of people asking about accounts for kids. There are junior versions of ISIS and SIPs. We're not going to go into those tonight. We're going to focus
13:4713 minutes, 47 secondson the adult stuff, but the rules are very similar.
13:5013 minutes, 50 secondsPlease just the reason we're doing that, we want to make sure you put your oxygen mask on first. You need to look after your finances so you are healthy so that
13:5913 minutes, 59 secondsyou can look after your kids. Okay, the investments inside all of these accounts can be identical. So you might have a
14:0814 minutes, 8 secondsworkplace pension with a global index fund and then on another platform you might have a SIP, an ISA, a LISA, a
14:1614 minutes, 16 secondsgeneral investment account and all of them could have a global index fund within it. So you might have one
14:2314 minutes, 23 secondsinvestment in many accounts. Now here is the new setup for this section. Uh the
14:3114 minutes, 31 secondstax rules completely change how the accounts work. And I want you to imagine money you are investing today is
14:4014 minutes, 40 secondstraveling to Freedom Island. That's where you're going to retire and live. So you earn money now.
14:4814 minutes, 48 secondsYou invest it. it grows and then you're going to spend it on Freedom Island when you get there. Whatever that age is, I
14:5714 minutes, 57 secondsdon't care. And what we want to do is protect your money on its way to Freedom Island because there is a very evil and
15:0515 minutes, 5 secondsnaughty tax man that will get your money on the way to Freedom Island. And he controls the departure gate, which is
15:1515 minutes, 15 secondsmoney that's sort of entering the journey, controls the growth gate, i.e.
15:2015 minutes, 20 secondsmoney on the journey and he can tax your investments as they grow. And he also controls the arrival gate so he could tax you when you land in Freedom Island.
15:3015 minutes, 30 secondsAnd what we want to do is stop the tax man getting as much access to your money as possible.
15:3815 minutes, 38 secondsPlay by the rules at Ham to make sure that we keep as much as we can for us and compounding for us. Pay the right amount of tax, no more.
15:4615 minutes, 46 secondsYeah.
15:4715 minutes, 47 secondsSo there are certain accounts that block the tax man. we love them. There are certain accounts that delay the tax man, meaning you pay him later, not now. And
15:5615 minutes, 56 secondsthen there's certain types of accounts that let the tax man through. So you got to choose your route carefully to protect your money.
16:0516 minutes, 5 secondsAnd each account has boosts i.e. people adding money to it.
Chapter 5: Defining account guardians
16:1316 minutes, 13 secondsThey also have shields which protects you from tax. Where is the tax block?
16:1816 minutes, 18 secondsand they have locks. When can you reach it? So, I want you to imagine that each account has a different boost, a different shield, and a different lock.
16:2816 minutes, 28 secondsAnd this will help you to understand the benefits and the reasons to have these different accounts, which you could kind of translate to a boost is like free money or a tax break.
16:3816 minutes, 38 secondsShield is when it's taxed and the lock is what age.
16:4216 minutes, 42 secondsIf any of you played computer games, you know what a boost is. You drive over it and you go faster. That's what a boost is. Uh yeah, this is very computer
16:5016 minutes, 50 secondsgameish, which I love. Uh if you've never played a computer game, just imagine you have a shield protecting yourself from the tax man. Uh remember
16:5916 minutes, 59 secondsthis particular section is a map. It's not the entire rule book. Tax rules change, government rules change. Your
17:0817 minutes, 8 secondssituation is completely unique, which makes it difficult for us because we have to give like an overview. So tonight we're going to learn the map and
17:1717 minutes, 17 secondscheck the rules for you. You've got to choose the route. You've got to understand the specifics. To make it
17:2417 minutes, 24 secondseasier, I have designed three AI prompts to help you that are on this page.
17:3117 minutes, 31 secondsThey're in the AI prompt library. Prompt number one is what is this account? So you can say to the AI thing, what is
17:4017 minutes, 40 secondsthis account? and it will use everything we've talked about tonight to explain it to you in the simplest possible terms and help you figure out how it fits to
17:4717 minutes, 47 secondsyour situation. Number two is where should the money go? So that prompt will help you work out for your tax situation
17:5517 minutes, 55 secondswhat should I prioritize and prompt three is the overall map of how you should organize your money for your
18:0318 minutes, 3 secondsfreedom fund. And I've been designing those to try and help you because I know it is super complex with all the
18:1018 minutes, 10 secondsdifferent elements. And my idea was I would love to sit down with every one of you and go through your personal situation and work it out. It's never
18:1818 minutes, 18 secondsgoing to happen with 45,000 people on the course. Uh even if we spent the rest of our life doing it. Could you imagine? I'd have so much fun.
18:2518 minutes, 25 secondsUm but we do think it is possible for you to be able to go through this and work it out. And we're going to make it
18:3218 minutes, 32 secondssimple. And I wanted to design this AI prompt page to be able to help you with that stuff. So, I'm just going to show
18:4018 minutes, 40 secondsit to you very very briefly. Uh, I am going to show it to you.
18:4618 minutes, 46 secondsGot a little screen. Uh, not showing the right thing there. Say something positive. Uh, shall I sing and do a little dance?
18:5418 minutes, 54 secondsTell us in the chat what have you got from tonight so far?
18:5718 minutes, 57 secondsOkay, here is the prompt library so that you can see it. This is the page that we have created with all of the different
19:0419 minutes, 4 secondsprompts on. Uh it has the AI prompts for finances. It has a warning, don't give
19:1119 minutes, 11 secondscomputers your account numbers and sort codes. They might use it against you. Uh and then it has a list of prompts. So
19:1819 minutes, 18 secondsthese are the week one prompts about finding your gap. And each one you click on has a prompt underneath that you can
19:2519 minutes, 25 secondscopy. Uh, and then if we scroll all the way down to week eight, which is what I've just created, turn the UK investing
19:3419 minutes, 34 secondsmap into your next action, and you have the three prompts I've just talked to you about. All you do is click on the one, where do I place my next
19:4119 minutes, 41 secondsinvestment, and [clears throat] it'll open up. You click the button copy full prompt, and it copies all this text into
19:4819 minutes, 48 secondsyour clipboard. Paste it in an AI agent, and then you fill out the bits. So, you would write your age, whether you're in
19:5719 minutes, 57 secondsScotland or the UK, because we have different rules. Scotland or the UK.
20:0120 minutes, 1 secondScotland or England or Wales or Scotland is in the UK. I'm going to get myself in trouble with Derek again. Please protect me. Uh, right.
20:0920 minutes, 9 secondsOwn Scotland. Is that how it works?
20:1120 minutes, 11 secondsShut up. You We are in trouble already, Derek. I love you. Scotland is an individual country
20:1720 minutes, 17 secondsand is wonderful. Right. Uh, we're going to go back to what we're doing before Katie gets me into more trouble.
20:2520 minutes, 25 secondsTrouble. Okay. So, we're going to go onto the introduce these different accounts and we're going to do it through some avatars that Alan has had a lot of fun creating.
20:3520 minutes, 35 secondsSo, we have uh GIA or Giant Man. He's your general investment account. Uh, we have the stocks and shares is navigator.
20:4820 minutes, 48 secondsWe have the lifetime ISA. We have the workplace pension with a lot of armor against tax. And we have the SIP
20:5720 minutes, 57 secondssentinel. So these people will protect your money. Yes, I have just created the guardians of the freedom fund.
Chapter 6: Deep dive into account types
21:0621 minutes, 6 secondsUh so these guardians will protect your money from the journey. She's given it big.
21:1221 minutes, 12 secondsAt least one person's with me. It's okay. Derek's like, "What the heck is going on?" Uh so these
21:1921 minutes, 19 secondsaccounts, these guardians will protect your money on the way to freedom island.
21:2421 minutes, 24 secondsSo the workplace pension, this is this guy, the workplace warrior. His superpower is it gives you free money from your employer, which is a huge superpower.
21:3521 minutes, 35 secondsIn terms of what he got, you've got the boosts, which is the employer contributions and possible salary sacrifice, which saves you national
21:4321 minutes, 43 secondsinsurance. So those are the boosts. The shield, it has tax advantages going in, which is the boosts. It grows.
21:5221 minutes, 52 secondsSo what that means is you don't pay tax on the money that goes in. Yeah. It goes in before you've paid tax.
21:5821 minutes, 58 secondsExactly. Uh it grows. It's tax sheltered. It grows without tax and you usually get 25% taxree at the end. So it's really quite advantageous.
22:1022 minutes, 10 secondsThe challenge with this account is it is locked until pension access age which
22:1822 minutes, 18 secondsyou need to look up what yours is as a broad rule is 10 years before your state pension age but they are changing the rule so depending on when you were
22:2622 minutes, 26 secondsborn it will be different that state pension forecast will tell you when your state pension ages and will that also tell you what when your workplace pension ages as well.
22:3422 minutes, 34 secondsI'm not sure I didn't check.
22:3522 minutes, 35 secondsOkay. So I know that my state pension age is 68 and it's 58 when I can get to these things and and some workplace pensions some
22:4422 minutes, 44 secondsdefined benefit pensions have different ages as well don't they? Sometimes 60 sometimes different ages.
22:4922 minutes, 49 secondsSo you just need to check the ages. Now the workplace pension there is four things to check. One percentage of your
22:5722 minutes, 57 secondssalary is you are you contributing? Two what is the employer adding to it?
23:0323 minutes, 3 secondsBecause normally there's this thing of like you add 4%, they add 4% and you get 8% in your employer pension. And what
23:1123 minutes, 11 secondsyou want to do is take the maximum free money. So what contribution do you put in that unlocks the maximum you can get
23:2023 minutes, 20 secondsfrom your employer. You also want to find out how it works. So do they offer salary sacrifice? Is it done net pay or relief at source? We're not going to go
23:2923 minutes, 29 secondsinto detail of what those mean. Ask your uh payroll HR pension like provider they
23:3723 minutes, 37 secondswill tell you how it works. Now these particular one the workplace warrior has a great superpower but it kind of has a
23:4523 minutes, 45 secondslimited equipment cupboard. What do I mean by that? Well your employer chooses the platform. You don't get to choose
23:5223 minutes, 52 secondsthe platform. You might be stuck with something like Nest. Uh your employer chooses like the fund range might be
24:0024 minutesrestricted. So you might not have access [laughter] to all the funds and the default fund may not fit your mission.
24:0724 minutes, 7 secondsYou can change funds within it but we would definitely say claim the free money and investigate the funds. So they
24:1424 minutes, 14 secondshave a great superpower but a bit of a downside sometimes. Okay, moving on to our second character.
24:2324 minutes, 23 secondsUh this is the selfinvested personal pension or the SIP. We've called her the SIP sentinel. She protects your money.
24:3224 minutes, 32 secondsUh her superpower is personal uh pension tax relief, which is the same as the
24:3824 minutes, 38 secondsworkplace pension. And you get personal control over your investments and everything about it and more or less the same as a workplace
24:4624 minutes, 46 secondspension. Well, a defined contribution workplace pension other than the fact that you don't get money from your employer because these were designed for
24:5424 minutes, 54 secondsself-employed people, but anyone can have them. So a self-employed person is not going to get contributions from their employer. They don't have one. So that's the main difference, isn't it?
25:0325 minutes, 3 secondsExactly. Now the powers of the SIP Sentinel uh you get a boost. So you get your basic rate tax back automatically.
25:1325 minutes, 13 secondsSo you contribute £100, your pension, your SIP provider will go out and claim back the tax for you and it'll get
25:2025 minutes, 20 secondsboosted to 125. You can claim back higher rate taxes as well. So if you're in the 40% bracket or the 45, you can claim those back.
25:3025 minutes, 30 secondsYou have to do that yourself. The platform provider doesn't do that for you.
25:3425 minutes, 34 secondsIt has a shield, tax advantages going in, tax sheltered growth, and usually 25% taxfree later. Exactly the same as
25:4325 minutes, 43 secondsthe workplace pension. And it has exactly the same lock up until whatever age it is you can get there, which 58 for me. So to give you an example of
25:5225 minutes, 52 secondsthis departure gate tax rebate um if you put £100 in the £100 leaves
26:0026 minutesyou and goes to the uh platform you invest that £100 and the tax man gives
26:0726 minutes, 7 secondsyou back the tax you would have paid which is the £25. So actually in this way you actually have put in 100 but
26:1526 minutes, 15 seconds£125 is starting its journey to freedom island. So that's what we mean by a boost. You're actually boosted along the
26:2326 minutes, 23 secondsjourney. If you pay higher rate tax, well, good news. You can claim back the extra tax relief. And what we wanted to
26:3226 minutes, 32 secondssay, do not leave your tax relief at the gate. Make sure you claim it back. Uh cuz it's easy to forget.
26:3826 minutes, 38 secondsI'm thinking it's one of those airport announcements where it's like, please do not leave your baggage unattended.
26:4326 minutes, 43 secondsPlease do not just leave pots of money waiting around when it could be going with you on the journey. There are a few rules about SIPs. Uh contributions. Tax
26:5226 minutes, 52 secondsrelief is normally limited by your earnings. So it's like your PAY earnings is what you can claim back what you can contribute.
27:0127 minutes, 1 secondWhat you can contribute there. This is the annual allowance. So you can it's up to £60,000 a year or up to your PAE your annual earnings.
27:1227 minutes, 12 secondsSo let's say you earn 40 grand a year.
27:1527 minutes, 15 secondsWell, it would be really cool if you could put all of that 40 grand in a year. That's the maximum you can put in. You can't put all the way up to 60 in.
27:2227 minutes, 22 secondsAnd the reason that might become relevant is say you had a windfall or inheritance or something. Then you might be thinking, oh, I can use up my SIP
27:2927 minutes, 29 secondsallowance will only up to the amount that you earn through PAE up to a maximum of 60 grand. And there are a few
27:3927 minutes, 39 secondsinstances where you may be able to use up to 3 years of previous allowance. Um, but you need to have a check about that because there are a lot of rules around
27:4827 minutes, 48 secondsit. Uh, access, it's your personal pension age. Uh, exceptions,
27:5727 minutes, 57 secondslower limits for what you can contribute can apply. If you're already drawing down your pension, you can't contribute
28:0428 minutes, 4 secondsas much or some higher earners get lower limits as well. Uh you need to check the current rules for you and the account
28:1328 minutes, 13 secondsexplainer prompt that we just showed you from the AI prompt library. You could use that and it is trained to go and get the answer from HMRC in the.govuk
28:2328 minutes, 23 secondswebsite. Uh and it's trained to use official government resources. So that's SIP. So, so far we've done workplace
28:3128 minutes, 31 secondspension and SIP. We're now going to introduce the individual savings account, the ISA navigator. Uh, she looks badass.
28:4028 minutes, 40 secondsShe does. Superpower, maximum flexibility and tax-free at the end.
28:4928 minutes, 49 secondsThere are no upfront boosts. You [snorts] put in £100, you've got £100.
28:5428 minutes, 54 secondsThe shield it is completely tax sheltered growth and taxfree at the end which is amazing.
29:0229 minutes, 2 secondsAnd the one of the best bits about it there is no padlock. You can get to it whenever you want. So if you want to
29:0829 minutes, 8 secondsretire at 45, 50, 55, there's no lock. You can just get to it.
29:1529 minutes, 15 secondsOne thing we did want to say, accessible doesn't mean you just [laughter] spend it all tomorrow. I know what you're thinking. I'm just going to blow it on
29:2229 minutes, 22 secondsLego. Don't do that. It means future you can reach it when you need to and it buys you freedom before pension age. So
29:3129 minutes, 31 secondswhat are the rules with stocks and shares ISIS? Well, you get a very generous $20,000 allowance for each and
29:3929 minutes, 39 secondsevery adult. That's the current allowance in this tax year. As we said, this is an individual thing. There's no such thing as a joint account. And why would you want one? You each want to use
29:4729 minutes, 47 secondsup if you can and if you're able to save that much. 20 grand each is a really chunky generous allowance. Uh access
29:5529 minutes, 55 secondswithdraw is allowed at any age. Amazing transfers. If you want to transfer an old ISA into a new platform, please use
30:0430 minutes, 4 secondsthe official ISA transfer process. Do not sell it, take the money out, and put it into the new one because then you're
30:1230 minutes, 12 secondsusing up this year's allowance. So, transfer it within that. You can check current rules, use the account explainer which will help you from this.
30:2130 minutes, 21 secondsI wasn't listening but did you mention cash isers as well because I know a lot of people have been saving a lot into cash isser
30:3030 minutes, 30 secondsand that same thing that Alan just said applies of make sure you do it through the official transfer process. Don't take it out to then put it back in. Uh
30:3930 minutes, 39 secondsplease do it. They do it for you kind of behind the scenes. We got a couple of questions as well that perhaps we can address. I wanted to say to you the plan
30:4630 minutes, 46 secondsis we're going to review the different accounts, give you the pros and cons, the superpowers, the boost, different bits, and then we're going to do a race
Chapter 7: LISA and GIA explained
30:5430 minutes, 54 secondsto Freedom Island, and we're going to show you who would win, i.e., which account gives you the most money by the
31:0231 minutes, 2 secondstime you get to Freedom Island. So, we have that coming. Katie has done the maths and we have some charts, uh, and we are going to explain it all as we go.
31:1231 minutes, 12 secondsWe're just slowly working through them at the moment.
31:1431 minutes, 14 secondsCouple of questions. What happens with higher rate tax when you pay into a salary sacrifice SIP? I don't think there is such a thing as a salary
31:2131 minutes, 21 secondssacrifice sip. The salary sacrifice is normally done through your employer.
31:2531 minutes, 25 secondsThat means that you get to save national insurance. SIP is a private arrangement that doesn't have anything [clears throat] to do with a employer.
31:3331 minutes, 33 secondsSalary sacrifice is the process of getting like from your salary into a pension. Um, so it might go into a SIP
31:4131 minutes, 41 secondsif it takes employer pension, employer contributions or it might go into a uh workplace pension. But we're coming on
31:5031 minutes, 50 secondsto how does salary sacrifice like what's the effect of salary sacrifice in a moment?
31:5631 minutes, 56 secondsAnother question. If you have a few pension pots from old workplace pensions from previous employers and they are not high performing, can you move these into
32:0332 minutes, 3 secondsa SIP? Yes, two thumbs up. You can absolutely move old pensions that are not performing into a new SIP. Take control yourself.
32:1332 minutes, 13 secondsGet it well invested and that will really really help. Okay. So, we've met uh workplace warrior,
32:2132 minutes, 21 secondsworkplace warrior, sentinel sip and iser navigator. We are going to do the next one which is a strange and quirky character.
32:3132 minutes, 31 secondsIt is Lisa or Lysa lifetime individual savings account or meet Lysa the lock keeper. So she has a lock because she is very well locked up.
32:4232 minutes, 42 secondsUh superpower you get a 25% boost on the way in and it's taxfree on the way out.
32:4932 minutes, 49 secondsWow. Um so the boosts are incredible.
32:5232 minutes, 52 secondsYou basically get the tax your basic rate tax effectively returned. So £100 becomes 125 and it's [clears throat]
33:0033 minutesshielded from taxfree growth and you can get qualifying withdrawals taxfree like it's a super account which leads us onto the lock doesn't it which is the downside.
33:1033 minutes, 10 secondsWhat does qualifying withdrawals mean?
33:1233 minutes, 12 secondsWell, either using it to buy a first home or when you get to age 60 and some
33:1933 minutes, 19 secondsother qualifying circumstances. If you're like terminally ill or terminally ill or different things, you can get access to do it earlier. But
33:2533 minutes, 25 secondsyour money is locked up until 60. Uh you got to be careful with this one. If you don't follow the rules, like it's
33:3333 minutes, 33 secondstaxfree at the end if you use it for your first house or you get to 60. But if you leave early for another reason, you have to pay back all of the bonus or
33:4233 minutes, 42 secondsthe boost they gave you and there's a penalty fee.
33:4433 minutes, 44 secondsAnd I think I'm right in saying that the uh value of that first home is limited as well, right? It's there's a certain limit as to how much the home is worth
33:5333 minutes, 53 secondsthat you can use to use your license towards.
33:5633 minutes, 56 secondsThere are some rules. Uh so the rules to check opening it, you have to be under 40 to be able to open it. If you are 49
34:0534 minutes, 5 secondsand 350 days, uh, put a pound 39.
34:1034 minutes, 10 secondsIf you're 39 and however many days, put a pound in now to get one opened. Uh, I missed it. Katie didn't. So, I am very
34:1834 minutes, 18 secondsdisappointed. I'm with Andrew, who was giving a thumbs down to age 40. Uh, exactly the same for me. Contributions.
34:2634 minutes, 26 secondsYou can put four grand a year in up until age 50 and you get 25% of that
34:3334 minutes, 33 secondsback. So up to a grand a year back. So your four grand turns into five which is massive. Now it does count towards your
34:4134 minutes, 41 secondsoverall ISA allowance. So if you put four grand into your LISA, you have 16 grand left in your stocks and shares
34:4834 minutes, 48 secondsISA. And look, I know a lot of you are beyond 40. Perhaps the young people in your life, you can tell them about these
34:5534 minutes, 55 secondsaccounts cuz they are really good way of saving for later. Yeah, the nieces and nephews, tell them.
35:0235 minutes, 2 secondsWe also do have a license series on YouTube that Katie created when she was opening her license, so you can check that out. Okay, the next character we're
35:1035 minutes, 10 secondsgoing to meet is this guy. He's huge. He is the general investment account, the
35:1735 minutes, 17 secondsGIA or giant man. Can you see what I did there? Lisa smiled like half a smile.
35:2535 minutes, 25 secondsUh, okay. The superpower of GIA man is unlimited room to invest. You can put as much money in as you want. However, there are no boosts.
Chapter 8: General investment tax rules
35:3735 minutes, 37 secondsUh, the shield is very weak. You have your normal tax allowance. There's no special protection. Uh, and but there's
35:4435 minutes, 44 secondsno lock. There's no contribution ceiling. And it's accessible at any time. So the basic overview of this guy
35:5135 minutes, 51 secondsis unlimited capacity but very limited tax armor.
35:5735 minutes, 57 secondsSo with tax protection, no boost, you pay tax on dividend income even in accumulation funds,
36:0536 minutes, 5 secondswhich is where the dividends are automatically reinvested. You never see the cash, but you still have to pay dividend tax
36:1236 minutes, 12 secondsand you pay tax on the growth when you sell it. Taxed does not mean terrible.
36:2036 minutes, 20 secondsSo if you're using a general investment account, you need to keep good records.
36:2436 minutes, 24 secondsSo what you've bought, all the purchase statements and things, what you're selling, the contract notes and sales statements, the income, which is the
36:3336 minutes, 33 secondsdividend and distribution, distribution just meaning what you take out.
36:3836 minutes, 38 secondsYeah. Which your platform should give you all of these and your annual documents. You need to keep that. But
36:4536 minutes, 45 secondspaperwork, having to do paperwork is not a reason not to invest here. Do not leave long-term money idle. To which
36:5436 minutes, 54 secondsthen we have a bit of p panic. People go gia tax paperwork.
36:5936 minutes, 59 secondsI don't want to do any of that. I don't want to pay any tax. I don't like paperwork.
37:0337 minutes, 3 secondsShould I leave it in cash? Katie, I would say no. If it's money that's for your freedom fund, don't leave it to one side. I guess one small caveat. If it's
37:1137 minutes, 11 secondsa smaller amount and you're about to get into the new tax year and you have your new allowances refreshed, maybe you hold off a little bit, but in general, get
37:1937 minutes, 19 secondsyour money invested. Let's see how the tax works. Well, we've got this with the benefit of our lovely friend Gloria, who we met in previous weeks. Gloria has 10
37:2837 minutes, 28 secondsgrand she wants to invest. She's used her very generous Iser and SIP allowances. Perhaps it's because she had a windfall or an inheritance. So, she
37:3637 minutes, 36 secondswants to invest in a general investment account. So, she's put that 10 grand in.
37:4237 minutes, 42 secondsSome time has passed. Let's say she had the cash dividend of £160 and her account has grown to £11,000.
37:5037 minutes, 50 secondsShe is jubilant. And the next tax year rolls around. So, she's got brand new allowances. She's got her new Iser allowance, her new SIP allowance, and
37:5837 minutes, 58 secondsshe says, "Okay, I'm going to sell what's in my taxable account and move it to my Iser." This is known as a bed and Iser. It just means that you're taking
38:0638 minutes, 6 secondsmoney from your general account, lifting up that freedom fund pot, and pouring it into your ISA. So, she favorite animation of the day.
38:1438 minutes, 14 secondsShe wants to move that 11 grand over.
38:1638 minutes, 16 secondsYou're like going, "What? You're going to sell?" The Donigan said never sell.
38:2138 minutes, 21 secondsIt's okay to move money to a tax efficient account. You sell it, you move it. Yes, you're selling, but you're also buying again as soon as you can. So, you
38:2938 minutes, 29 secondsdon't have much time out the market. And that's the whole point. minimize time out in the market, but get it in a tax efficient account.
38:3738 minutes, 37 secondsSo, you go, "Okay, I'm selling 11 grand.
38:4038 minutes, 40 secondsDo I pay tax on that whole 11?" No. How's it work, Alan?
38:4438 minutes, 44 secondsOkay, here's how it works. Your 10 grand grew to 11. So, you pay tax on the growth, which is just the,000 that it grew by. That's the bit you pay tax on.
38:5738 minutes, 57 secondsSo, there's two taxes when it comes to general accounts. There's dividend tax.
39:0139 minutes, 1 secondSo that dividend that she received of £160, you pay dividend tax on that, but you get an allowance of £500 taxfree. So
39:1139 minutes, 11 secondsthere's no tax there. But small little caveat, it does count towards your income. So it could it could push you up into different rates. For example, if
39:1939 minutes, 19 secondsyou are you get 20 grand from your job and then you get £500 from your dividend, like it counts as income in
39:2739 minutes, 27 secondsterms of your bands. I didn't explain that very well, did I?
39:3039 minutes, 30 secondsuse the AI prompting to explain it to you. And we're going to keep going and if it doesn't make sense, we will answer questions and we will support you.
39:3839 minutes, 38 secondsThat was a little bit of a nuance that I probably didn't need to mention.
39:4139 minutes, 41 secondsCapital gains tax is the tax on the growth. You know, that £1,000 growth she got. So, she grew by £1,000. She's got to pay CGT capital gains tax on that.
39:5139 minutes, 51 secondsBut you get three grand worth of capital gains free a year. So, there is no tax
39:5839 minutes, 58 secondsto pay there. So, Gloria doesn't pay any tax on that. So, you shouldn't be quite as afraid of general accounts as we are
40:0840 minutes, 8 secondsafraid of them. Now, there are times when you would be paying tax, but the allowances mean that you might not pay anything. But look, if you are paying
40:1740 minutes, 17 secondssome tax, it means that you're making money. It means your investments are going up. So, it's better to have a big chunk of some of that growth or most of
40:2540 minutes, 25 secondsthat growth than it is to not have the growth.
40:2840 minutes, 28 secondsExactly. Uh very quick bit on dividend tax. Dividend earned in a taxable account where you will pay dividend tax.
40:3640 minutes, 36 secondsWhether you get them from an income fund or an accumulation fund where they're reinvested, you still have to pay the
40:4440 minutes, 44 secondstax. That's why we say in a general account, choose an income unit so that you know what dividends you're getting
40:5140 minutes, 51 secondsand you have the cash to pay that tax because you're liable for that tax even though you haven't received it in an accumulation fund. Exactly.
40:5840 minutes, 58 secondsCGT the valuement of your investment increases you have to pay capital gains
41:0441 minutes, 4 secondstax only if and when you sell which is called crystallizing or realizing the
41:1241 minutes, 12 secondsgain the uh they like to use fancy words if Gloria doesn't sell well then there's
41:1941 minutes, 19 secondsno capital gain it's only when you sell how do I apply this to ISIS and six Alan no you do not apply it to ISIS and SIPS,
41:2841 minutes, 28 secondsthey are tax protected, which is why we say use them.
41:3141 minutes, 31 secondsYeah. So, with an ISA, there is no dividend tax. With a SIP, there is no dividend tax. With an ISA, no capital gains tax when selling. With a SIP, no
41:3841 minutes, 38 secondscapital gains tax when selling, moving investments around. There is income tax to pay when you withdraw it. But that's only when you withdraw it from the
41:4641 minutes, 46 secondsaccount. You can do whatever you like within the account without incurring any tax. Now, that's not to say move things around willy-nilly, but just to say, you
41:5341 minutes, 53 secondsknow, if you want to change what you have inside your SIP, inside your pension, there are no tax implications of doing so. So, that's general
42:0142 minutes, 1 secondinvestment account man, giant man. He has unlimited room to invest. And those are the guardians of the freedom fund.
42:1142 minutes, 11 secondsThose are all of the tax advantage accounts you can use in the UK to protect your money. Different accounts, different superpowers, one freedom fund to rule all freedom funds.
42:2342 minutes, 23 secondsNow, let's get to the race. This is the race. You're going to send £100 racing towards Freedom Island. Who gets the
Chapter 9: The race to freedom island
42:3042 minutes, 30 secondsmost money across the finish line? So, this is the way the race is going to work. Current you gives up £100 of take-home spending powers. Like £100
42:3942 minutes, 39 secondsgoes into the account or is what you would have to give up. which account delivers the most to future you on
42:4642 minutes, 46 secondsfreedom island and the winner depends on your tax rate today. So we're going to do two races. Race one is for basic rate
42:5442 minutes, 54 secondstaxpayers and race two is for higher rate taxpayers. So the competitors in the race are the ISA the lyser pension
43:0243 minutes, 2 secondsand sip and salary sacrifice if it's offered by your employer. So we're off to the race. You put in £100 to each account. So you have £100 in each count.
43:1443 minutes, 14 secondsNow we get a departure gate boost. What does that mean? So with the ISA, you don't get a boost. That's money you've
43:2243 minutes, 22 secondsalready paid tax on. You don't get any tax relief. With a stocks and shares LISA, you put in 100, you get £25 from the government. Thank you very much, government.
43:3043 minutes, 30 secondsSo you've got £125, but that's left on the journey, which is amazing. Pension and SIP, it's the same. You get that 25%
43:3943 minutes, 39 secondstax back. the 20% tax, the 20% tax, £25 on £100. And then salary sacrifice, you actually end up
43:4743 minutes, 47 secondsgetting £39 in there because you've avoided national insurance and
43:5443 minutes, 54 secondsincome tax. So, in terms of what you actually get in there, salary sacrifice is winning at the moment. Um, they all
44:0144 minutes, 1 secondpass through the growth gate because they're protected on the way except GIA man. He gets stopped by the tax man and taxed on the way.
44:1044 minutes, 10 secondsSo tax rappers protect your compounding whilst it happens. To which then people say, "Yeah, but don't I pay tax when I
44:2044 minutes, 20 secondswithdraw it from my pension? Is it that good, Katie?" Well, let's look at what happens at the arrival gate. So, we're going to assume
44:2744 minutes, 27 secondsthat future U is in the basic rate when you get to withdrawing the money from your pension. So, with an ISA, that's that £100.
44:3644 minutes, 36 secondsThere's there's no extra that's gone in.
44:3844 minutes, 38 secondsThere's no arrival gate tax. That's your money. With a LISA, you've got the £100 you originally put in. You got to keep that 25. And there's no arrival gate
44:4744 minutes, 47 secondstax. You don't have to pay tax on the money that you withdraw from your LISA.
44:5144 minutes, 51 secondsSo you have £125 that arrived at Freedom Island. With the pension and sit, you do have to pay tax on the way out. Uh so 25
44:5944 minutes, 59 secondswent in, 19 goes back to the tax man, but you've still got a six bonus. So you get like this 6% bonus to your money which is still better than nothing.
45:1045 minutes, 10 secondsSalary sacrifice. You put that £100 in and you do pay tax on what comes out. So you got that uplift from having saving
45:1845 minutes, 18 secondsthe tax and the NI. Some of that goes back to the government and then but you're still left with £18 bonus free
45:2545 minutes, 25 secondsmoney. So who won the race? uh the stocks and shares lifetime ISA uh wins the race cuz you get 125 at the end.
45:3545 minutes, 35 secondsIt's the most tax efficient journey at the lower rate. Salary sacrifice came in at number two. You get 118 back and
45:4345 minutes, 43 secondsthat's probably the one that's relevant to most people that are doing rebel finance school cuz we it tends to be people here that are beyond 40. So not
45:5045 minutes, 50 secondseligible for a LISA. So salary sacrifice is a great option if that is offered by your employer. And on YouTube, Green Tango says, "Turn 26 tomorrow. I'm very
46:0046 minutesgrateful to be learning about this now." Yes, you should be. Use your Lyser allowance. Happy birthday.
46:0546 minutes, 5 secondsHappy birthday. Uh, SIP and Pension, you get £106 and I say you get 100 back on the 100. Uh, so that kind of explains
46:1546 minutes, 15 secondsthe different accounts and who wins the race. What did you did that make sense to you? that section like what you put in what get to freedom island what did
46:2446 minutes, 24 secondsyou learn from it I mean if I was to summarize the key message I'd want you to get it is use taxfree allowances use
46:3246 minutes, 32 secondsthis the salary sacrifice if you can use your license if you can use your pension if you can that's the whole purpose of
46:4046 minutes, 40 secondsit and yes it's a stocks and shares ISA not a a cash ler a cash ISER
46:4746 minutes, 47 secondsyeah and we didn't include any employer contribution in those examples because it differs so much between different people. So if you're getting free money from your employer, take that first.
46:5746 minutes, 57 secondsThat is amazing. That's like an immediate boost that you get. Yeah.
47:0147 minutes, 1 secondUm and I just wanted to clear up said don't understand the difference between selling and withdrawing. So what we're talking about there in if you're
47:0947 minutes, 9 secondsthinking about like the the account and then the fund in our model of platform account fund. So say we're talking about
47:1747 minutes, 17 secondsan stocks and shares ISA. So when we talk about selling, we're talking about changing the fund inside. So you're selling the investments you have in that
47:2547 minutes, 25 secondsfund and buying a different fund. When we talk about withdrawing, we're saying, "Okay, I'm going to my platform. I want to take some money out of my Iser to
47:3347 minutes, 33 secondslive off or to have for whatever reason." That's withdrawing. Selling is what happens kind of within the account, changing funds, moving the investments.
47:4147 minutes, 41 secondsWithdrawing is taking the money out. Yeah. Love it. Did that help, Anna? Tell us.
47:4647 minutes, 46 secondsAnd Freda on YouTube says, "I'm shocked that the Lysa won. I thought it would be salary sacrifice." It is great. It's just that it has that lock, doesn't it? So, you have to wait
47:5447 minutes, 54 secondstill you're 60 or use it to buy a first home.
47:5747 minutes, 57 secondsSo, for those of you who are on uh higher tax rates, let's do race number two. Exciting.
48:0448 minutes, 4 secondsSo, we have the same competitors, Isa, Lysa, Pension, Syria for race number two at a higher tax rate. Here's the race.
48:1348 minutes, 13 secondsuh the cost to you £100 at the start gets you £100 and every that's the same.
48:2048 minutes, 20 secondsSo let's do the departure gate. What boosts do you get? Your ISA doesn't matter. You don't get a boost whether
48:2748 minutes, 27 secondsyou're whatever tax rate you're in. Your stocks and shares LIS, you only get that 25% back. It doesn't change if you're a
48:3648 minutes, 36 secondshigher rate taxpayer. Your pension and your SIP, you get your higher rate tax back. So you actually get £67 back. So
48:4648 minutes, 46 secondsyou contribute 100, you've got £167 going into your pension and sit, which is amazing.
48:5348 minutes, 53 secondsAnd then salary sacrifices even more. So you save that little bit of NI national insurance that you're paying. Uh so actually you get like a £72 equivalent
49:0249 minutes, 2 secondsas if there's free money to you. Yeah, this is where uh those accounts of workplace pension and SIP really shine through is at the higher rate of tax.
49:1249 minutes, 12 secondsNow they all pass through the growth gate except JIA man he gets stopped tax rappers protected compounding but then
49:1949 minutes, 19 secondson the arrival gate what happens what we have assumed is that when you are drawing down you are in the lower rate
49:2749 minutes, 27 secondsof tax that what happens to most people is they're in a higher rate of tax when they're earning and then they're under the lower rate when they're spending. So
49:3649 minutes, 36 secondswe've assumed that to show you the difference it makes. Isa 100 in you don't get any bonus but then you don't pay any tax on the way out. So
49:4549 minutes, 45 secondsyour 100 I mean obviously it will hopefully grow to more than that but when it comes to take out £100 you get £100.
49:5149 minutes, 51 secondsExactly. Stocks and shares LISA just the same as before 100 with 25 on top and you don't pay any tax on it. So you get the whole £125.
50:0150 minutes, 1 secondNow this is the difference on this example the higher rate. So the pension and the SIP, you had that 67 kind of
50:0850 minutes, 8 secondsuplift tax break. You get to keep £42 of that. £25 goes in income tax when you are withdrawing that money from your
50:1650 minutes, 16 secondspension or SIP. And then you get to keep £42 extra, which is phenomenal. And then the salary
50:2350 minutes, 23 secondssacrifice version is even better. uh you you get 47 pounds of it to keep 26
50:3050 minutes, 30 secondspounds of it goes to the tax man in the exit gate tax. This is why every time someone says like I'm in the higher rate
50:3950 minutes, 39 secondstax bracket or what account should I invest in and we ask are you in the higher rate tax bracket we say go for salary sacrifice or pension or sips
50:4850 minutes, 48 secondswhich the only difference between salary sacrifice and pension salary sacrifice you're doing through your employer so you get to save that national insurance
50:5550 minutes, 55 secondspension if you don't have salary sacrifice or sip uh they both get the income tax back
51:0351 minutes, 3 secondsso salary sacrifice is our winner. Uh pension or sip comes second. Stocks and shares LISA comes third and then an ISA
51:1251 minutes, 12 secondscomes fourth in the race to freedom island. Uh so if you are a higher rate taxpayer does that make sense of why you
51:2051 minutes, 20 secondslike contribute to those SIPs contribute to your workplace pension if it's got a good fund and good fees start there.
51:2851 minutes, 28 secondsYeah. Well, I'd say even if it does have good fund, even if the fund and fees, average employer contribution, you're getting the free money and as much as
51:3751 minutes, 37 secondsyou can to minimize those fees and get as good a fund as possible. And look, it's not binary either. It's not one or the other. You can also put money into a
51:4551 minutes, 45 secondsLISA if you're eligible and into your ISA. And we'll come on to why you might do that. Uh we had a message on YouTube
51:5251 minutes, 52 secondsfrom Present Group says, "Do you do salary sacrifice if you're self-employed?
51:5851 minutes, 58 secondsUnfortunately, not. If you're self-employed, you would open a SIP and contribute there. So, if you're in a higher tax rate, you would still get
52:0552 minutes, 5 secondsthat amazing relief, but you can't avoid the NI as selfmployed.
52:1152 minutes, 11 secondsOkay. Uh we will go back to the next section. So, the thing here is take the free money from your employer. That is
52:2052 minutes, 20 secondssuch a great boost on the way in taking sending that money all the way to Freedom Island and get the tax breaks. It would be rude not to.
52:2852 minutes, 28 secondsIt would be rude. Alan, don't be rude. Take the free money.
52:3152 minutes, 31 secondsSo then you go, okay, do I put everything into my pension? Pensions are so tax efficient. They are so good. Do I just invest exclusively in a pension?
52:4052 minutes, 40 secondsThey have strong boost. They have strong shields, which is amazing. However, your money is locked up until a certain age.
52:4852 minutes, 48 secondsThat's why you need a team. So you have money that's accessible before the age you can get to it. What's the best account? depends on your tax rate today.
52:5852 minutes, 58 secondsIt depends on your tax rate in retirement. It depends on how much money the employer is giving you and when you
53:0553 minutes, 5 secondsneed access to it. There's a lot to it, but we've given you a guide or a map to what's out there. You need to then apply
53:1353 minutes, 13 secondsthat map to yourself, which is why we created the AI prompts and the three prompts to be able to help you to do that. That was a big section on
53:2253 minutes, 22 secondsaccounts. That is all I have to say on accounts at the moment. Um, please react to let me know that you're alive
53:3053 minutes, 30 secondssomehow. Wave at me. Uh, show me some kind of symbol. Yep. A few people are waving. Some people are giving a thumbs up. If you're on YouTube, please give us
53:3853 minutes, 38 secondsa like. That makes us very happy. Uh, and shows us that you're alive. Abby, I love it. Yes. Keep um, what's his name? Olaf.
53:4653 minutes, 46 secondsOlaf. There, right, platform. We've done platform. Uh, sorry.
Chapter 10: Selecting a platform
53:5153 minutes, 51 secondsWe've done platform. We've done account we're going to move on to platform.
53:5553 minutes, 55 secondsSo this just to show you again we're talking about that model of you got the account you got the fund the investment that you own within the account and then
54:0354 minutes, 3 secondsthe platform where you get the account and fund. So just we've done account and now we're coming on to platform which is basically where you host the
54:1154 minutes, 11 secondsaccount and we're going to give you answers. We like answers answers not just more hold your horses.
54:1754 minutes, 17 secondsNot just more hold your horses. We're going to release some of the horses by the end of the night. uh your platform has two jobs. You remember we introduced
54:2354 minutes, 23 secondsthese phases. The build it phase, the bridge it phase and then the live off it phase.
54:3054 minutes, 30 secondsBasically what we're going to come to tonight is you need one type of platform for your accumulation phase which is the
54:3754 minutes, 37 secondsbuild it and bridge it and you might want to swap to a different platform for your live off it phase because some of
54:4554 minutes, 45 secondsthe free platforms just don't help you do live off it very well. or a tool, right? Or a tool. Yeah.
54:5254 minutes, 52 secondsSo during the build it phase, the platform needs to offer the account you need, offer the chosen fund or ETF,
55:0055 minuteswhich we're coming on to. It needs to accept your required type of contribution, so personal or employer.
55:0755 minutes, 7 secondsUh it needs to help you automate, needs to be understandable, regulated, and cost very little, hopefully free. on the
55:1555 minutes, 15 secondsway there on the live off it phase you have different requirements. So your platform now becomes part of your income
55:2355 minutes, 23 secondssystem. So when you're investing like the money just acrews there but it doesn't do anything when you're living off it. It has to pay you an income which is why you need different pieces.
55:3455 minutes, 34 secondsI only just noticed that tap with the money going out in a pineapple dude in a deck chair. That's genius.
55:3955 minutes, 39 secondsThank you. Uh, so you need you might need flexible pension withdrawals, reliable payments and tax administration. They got to get your tax
55:4755 minutes, 47 secondsright. You might need human support. It needs to be resilient and work for you because you're living off this money. So
55:5655 minutes, 56 secondsyou want it to be available and accessible monthly. And it helps to have a clear beneficiary
56:0456 minutes, 4 secondsprocess. I.e. If you die, does your partner get access to it or where does it go? What does it happen?
56:1256 minutes, 12 secondsThey said get access to it monthly. It could be more ad hoc than that as whenever you want to get it.
56:1656 minutes, 16 secondsThat's true. Now, you do not need a forever platform. What you need to do is choose a platform for today's job and
56:2456 minutes, 24 secondsthen review the job. Review before the job changes and change the platform if you want to. Don't be scared of changing platforms. You don't need to fall in
56:3256 minutes, 32 secondslove with one platform for the rest of your life. You don't need to do that.
56:3656 minutes, 36 secondsYou can change platforms. Uh this is not marriage. Can you change marriage as well?
56:4356 minutes, 43 secondsLet's not go there. Uh you want to choose a fund that can travel. Well, Katie is going to do the fun section in
56:5056 minutes, 50 secondsa moment, but basically the highlights are you want to choose a fund that's available on your build platform and available on your live live off it
56:5956 minutes, 59 secondsplatform. So it travels well between the two. The reason and I'll give you the example. Let's say you had trading 212
57:0757 minutes, 7 secondsfor your build it phase and you had a SIP with VWRP which is an all world global index fund.
57:1557 minutes, 15 secondsLet's say you had that.
57:1657 minutes, 16 secondsWe're going to come on to what these letters mean shortly. Yeah, Katie will translate it. If you want to Google it, you can. But VWRP is an all
57:2357 minutes, 23 secondsworld index fund. Uh let's say in the live off it phase ETF. Thank you.
57:2957 minutes, 29 secondsuh live off it phase. You want to have Vanguard as your platform so you can get it out easily. Well, you can transfer
57:3657 minutes, 36 secondsVWRP and a SIP directly to Vanguard and you are never out of the market. You can do what's called an inspecies
57:4557 minutes, 45 secondstransfer and you will never be out of the market which is awesome. It makes your life so much easier. So what we
57:5257 minutes, 52 secondswanted to say on the platform side, choose a platform and a fund that will travel well between the build it phase and the live off it phase.
58:0058 minutesThat's not always possible, but that's something to think about, isn't it? It's not always possible to do that.
58:0558 minutes, 5 secondsIt's not always possible. It can be done, and we've got examples that show you it.
58:1158 minutes, 11 secondsSo, back to the platforms. Uh the platform market has changed massively this year.
58:1758 minutes, 17 secondsThere's more free accounts, there's more competition, there's more choice, and the last year's answers are out of date.
58:2558 minutes, 25 secondsShout out to Chaz who has been helping us a lot with figuring out what all these new platforms are, what the different accounts are, and the charges and fees. Thank you.
58:3458 minutes, 34 secondsAnd I haven't quite got the platform picker tool ready yet and the articles, but we will write those after the course for you as well. But this workshop
58:4258 minutes, 42 secondsshould give you enough to be able to get going. One slight warning as we go. Uh, I love this. Cheapest is not always
58:5158 minutes, 51 secondsbest. If you buy the really cheap tacos from the street stand, well, 3 hours later, it might be a bit of a mistake.
58:5958 minutes, 59 secondsBut cheapest is not always best. It can be terrible value. However, free is brilliant if it does the job, and that's the key.
59:0859 minutes, 8 secondsAnd there are free platforms that do that. It's just a warning, isn't it?
59:1159 minutes, 11 secondsFree doesn't necessarily mean best. Now in the build it phase you can definitely get a free platform. The way it's
59:1859 minutes, 18 secondschanged this year is amazing. While you're building we use a suitable free low cost platform that supports the
59:2759 minutes, 27 secondsaccounts the contributions we need the investment type and then before we come to live off it we'll review it and work
59:3559 minutes, 35 secondsout if it does draw down withdrawal support and all the other stuff we need for when we live off the fund. and we might change to a different platform when we live off it.
59:4459 minutes, 44 secondsAnd that's just pensions, right? Because that's where the complexity comes in because there's these intricate tax rules. Whereas with an ISA or a LISA,
59:5259 minutes, 52 secondsyou don't it it doesn't matter. You can take that money out whenever you want from an ISA. Um so yeah, we're talking about pension withdrawals.
1:00:011 hour, 1 secondYes. Now, this is the bit you've been waiting for. Specific recommendations in the build it phase. Free trade offers free.
1:00:111 hour, 11 secondsDo we give recommendations?
1:00:121 hour, 12 secondsNo, we don't give recommendations because we're not financial adviserss, but this is specific things actually.
1:00:171 hour, 17 secondsSo, Free Trade gives a free ISA, SIP, and general account, and it has everything you need. Trading 212
1:00:251 hour, 25 secondsreleased just a month or so ago, is a brand new free SIP. It gives everything you need for the build it phase, a SIP,
1:00:321 hour, 32 secondsan ISA, and a GIA. And invest engine also has a completely free SIP, ISA, and
1:00:411 hour, 41 secondsGIA, which most people don't even need the GIA, right? Because of the very generous allowances, but that option is there.
1:00:461 hour, 46 secondsSo, those are the most incredible platforms. You can be free on your journey to Freedom Island. when you're
1:00:531 hour, 53 secondscoming to live off it. Here's where there's two different thoughts or two different platforms that will deliver
1:01:001 hour, 1 minutefar better because Invest Engine doesn't even do draw down yet. So, you have to change platforms
1:01:081 hour, 1 minute, 8 secondsand that yet is key, isn't it? These platforms are developing so much that in 3, five, 2 years, who knows when, they
Chapter 11: Global index fund strategies
1:01:151 hour, 1 minute, 15 secondsmight also offer the draw down functionality. So, but as it stands, they do not. So, we're going to need to keep checking back. So when you come on
1:01:231 hour, 1 minute, 23 secondsto live off it, that's when you've got the two solid winners we've talked about many times. Vanguard simple, you only
1:01:321 hour, 1 minute, 32 secondshave Vanguard platforms uh funds. It has a capped fee which is awesome. Uh and
1:01:391 hour, 1 minute, 39 secondsVanguard is a very solid, safe, reliable one for live off it. And the second option is interactive investor. Uh that
1:01:481 hour, 1 minute, 48 secondsis a very solid safe choice for the live offit phase. And you might be going there's only five platforms on your list
1:01:561 hour, 1 minute, 56 secondsAlan and Katie. What about other platforms? Well, there's lots we haven't mentioned for many reasons. We didn't mention Hargreaves Landown because it is
1:02:051 hour, 2 minutes, 5 secondsexpensive for sips and things like that. However, it has an asterisk because it is a good option for
1:02:131 hour, 2 minutes, 13 secondsa Lyser or a junior ISER. It's actually very good for those. Uh AJ Bell, Halifax
1:02:221 hour, 2 minutes, 22 secondsdidn't make it on Moneybox, Pension B, Nutmeg, Wealthify, Plum, Monzo, Dole, Quilter, or SJP. Boo. None of these
1:02:301 hour, 2 minutes, 30 secondsthings make it onto our platform list cuz they all don't have great funds or charge you more than you need to. So, we
1:02:371 hour, 2 minutes, 37 secondsonly wanted to talk about the five on this list cuz we think they are the best options for people in the UK currently.
1:02:471 hour, 2 minutes, 47 secondsUh let's go on to the next bit because Lindsay has asked a very timely question saying, "What about platforms that you can pay in through a limited company
1:02:541 hour, 2 minutes, 54 secondsinto a SIP?" Okay, so this is talking about how your money will arrive. Is it a personal contribution, i.e. you're moving money
1:03:021 hour, 3 minutes, 2 secondsfrom your bank account in there or is it an employer [clears throat] contribution i.e. the money comes directly from your employer or a limited company.
1:03:131 hour, 3 minutes, 13 secondsNow this changes everything because not all of the accounts accept employer or limited company contributions
1:03:211 hour, 3 minutes, 21 secondsand actually this is not relevant to most people right because this is if you have your workplace pension it will have the platform that's provided by the
1:03:291 hour, 3 minutes, 29 secondsemployer. This tends to be only for, you know, very small companies where they might be just contributing to your SIP
1:03:361 hour, 3 minutes, 36 secondsor where you are a company director of your own limited company and you want to be able to contribute to your SIP as
1:03:431 hour, 3 minutes, 43 secondswell. So, this doesn't apply to like workplace stuff, right? So, accepting employer contributions, Interactive
1:03:511 hour, 3 minutes, 51 secondsInvestor does it. They are a very solid platform. There is a free one out there called Prosper that does accept employer
1:03:591 hour, 3 minutes, 59 secondscontributions and is free. Comes with a slight caveat. We have spoken to them on the phone and they've said they don't
1:04:061 hour, 4 minutes, 6 secondsknow how long it will be free for. We don't know their strategy and we've heard some reports that their customer service is not great. So, that one comes
1:04:151 hour, 4 minutes, 15 secondswith a warning, but it does it. If you're doing it from your own limited company, Vanguard will accept limited
1:04:231 hour, 4 minutes, 23 secondscompany contributions, just not employer contributions. And then the three ones we talked about, they don't do either of
1:04:311 hour, 4 minutes, 31 secondsthem. They don't accept employer or limited company contributions, which is why you have to talk about different funds if you need to do that.
1:04:391 hour, 4 minutes, 39 secondsUh Gary has informed us that Investor Engine does do draw down, but you can't do it online. You have to do it by email and paper. I assume what is the 80s
1:04:481 hour, 4 minutes, 48 secondsassuming it means post or like scanning stuff in and things. Okay.
1:04:521 hour, 4 minutes, 52 secondsAnd they're probably building out the systems as we speak and who knows how it will develop in the future. Thank you Gary. You are awesome. Right. So your
1:05:001 hour, 5 minutesplatform mission is find a platform that offers what you need account and fund keep the total fees low and make sure
1:05:081 hour, 5 minutes, 8 secondsit's trustworthy, usable and boring. And the other little addition is can it accept the contributions that you want to put in it?
1:05:171 hour, 5 minutes, 17 secondsStephen asks that we've talked a lot about Vanguard in the last few weeks. It felt as that was related to the build phase. Are we now saying that freight
1:05:251 hour, 5 minutes, 25 secondsfree trade trading 212 or investor engine some of these free ones? Are we saying that those would be best for the build phase?
1:05:311 hour, 5 minutes, 31 secondsWe've talked about Vanguard in relation to funds a lot and this is the bit where you get the different levels. We've talked a lot about the Vanguard funds.
1:05:391 hour, 5 minutes, 39 secondsThe Vanguard platform is excellent, but it's not free. So, if you're in the build it phase, let's say you were 20,
1:05:461 hour, 5 minutes, 46 seconds30, 40 years old, uh I would take a free platform so that I would save as much of
1:05:531 hour, 5 minutes, 53 secondsmoney as I can for retirement and then I would change later to a Vanguard or an interactive investor that's better for
1:06:001 hour, 6 minutesthe draw down. That's given what's available in the market today. As you've seen, things are changing very quickly over the years.
1:06:101 hour, 6 minutes, 10 secondsAnd there is something to say here, you know, should we absolutely minimize fees? How does it work? There is a balance between minimizing fees and
1:06:191 hour, 6 minutes, 19 secondsspending all your time trying to figure out where to go, what to do. Now, look, it depends on your situation. So clearly if you're investing, you know, £1050 a
1:06:281 hour, 6 minutes, 28 secondsmonth, a4 pound a month fee, which is the minimum fee that Vanguard charges, clearly that's a big chunk of what you're putting in, and you wouldn't want
1:06:351 hour, 6 minutes, 35 secondsto do that. So just thinking about your situation, thinking about is it worth the time, effort, energy, and is the
1:06:421 hour, 6 minutes, 42 secondsamount of the fee substantial enough compared to what I'm putting in or what I already have that it would make sense to move to one of the free platforms or start from one of the free platforms.
1:06:511 hour, 6 minutes, 51 secondsExactly. Uh there is one other caveat I did want to say is the free platforms in general don't do telephone support. In
1:07:001 hour, 7 minutesgeneral, you do the chat thing through the website. So if you actually want to speak to a human, you normally have to pay for that service. And Vanguard and
1:07:091 hour, 7 minutes, 9 secondsInteractive Investor are very good at that. So it does make a little bit of a difference. It depends on your situation, whether you're comfortable with the tech, whether you want to speak
1:07:171 hour, 7 minutes, 17 secondsto a human. There's a huge amount of different bits there.
1:07:211 hour, 7 minutes, 21 secondsAnd Kirsten says, "Does the size of your pot make a difference to platform choice in the build phase?" Well, if it's a free platform, no. Um, between Vanguard
1:07:311 hour, 7 minutes, 31 secondsand Interactive Investor, am I right in saying Interactive Investor tends to it's better for bigger pots because it doesn't have a cap or cheaper for bigger pots, not better cheaper.
1:07:411 hour, 7 minutes, 41 secondsA few questions on these free platforms like how do they make money? Is there a risk that they're new? they're not going to be sustainable and and how are they
1:07:491 hour, 7 minutes, 49 secondsfree because you know we talked a lot about platform fees and things before uh they rely a lot on people trading on the platform. So a bit like a credit
1:07:571 hour, 7 minutes, 57 secondscard a credit card some people spend it and carry balances and that's how the credit cards make a lot of the money and
1:08:051 hour, 8 minutes, 5 secondsa credit card also um makes money every time you buy something from a commission from the store you buy it from. But
1:08:131 hour, 8 minutes, 13 secondsyou're not, if you don't ever carry a balance, you're not paying for it. So, if you use the free platforms in the way
1:08:201 hour, 8 minutes, 20 secondswe talk about, which is buy an ETF, hold it forever, well, they're not going to make much money out of you. They'll make a little bit, but they will make lots of
1:08:281 hour, 8 minutes, 28 secondsmoney out of the people trading and doing other weird stuff, which is why they will continually offer you crypto and weird investments that we say don't
1:08:361 hour, 8 minutes, 36 secondsbother getting involved in. Does that make sense?
1:08:401 hour, 8 minutes, 40 secondsKind of. And the SIP with trading 212, is it trade 212 now? I checked and their website still says trading 212. Anyway, trade 212. Um, the SIP is very new.
1:08:511 hour, 8 minutes, 51 secondsThey've only It's literally a month or so. So, it's literally just launched. Uh, they are a huge company with a lot of backing.
1:08:581 hour, 8 minutes, 58 secondsThey're very stable. Um, so it seemed like it's a good place to go. So, there's a lot on platform. We're going to keep going uh because we need to do
Chapter 12: Fund selection and structure
1:09:071 hour, 9 minutes, 7 secondsfund next. Uh so please uh give us a like, put a thumbs up if you're still alive and you're ready for for the funds section.
1:09:141 hour, 9 minutes, 14 secondsAnd if you're not or not, if you're not still alive, that's absolutely fine because you're probably investing like a dead person.
1:09:211 hour, 9 minutes, 21 secondsAlways invest like a dead person. Don't bother doing it.
1:09:241 hour, 9 minutes, 24 secondsAlive or dead? We've got options for you. Okay, we're going to come on to funds. So remember, we have these three decisions we've talked about. So at the
1:09:331 hour, 9 minutes, 33 secondsvery beginning, we talked about account, what account to have. We just talked about platform. Now, we're going to talk about fund because those are the three things we're talking about.
1:09:411 hour, 9 minutes, 41 secondsAnd this is where we get specific as well. So, you have exact recommendation. We don't recommend anything.
1:09:461 hour, 9 minutes, 46 secondsWhat are you doing with these recommend words, Alan? Come on.
1:09:491 hour, 9 minutes, 49 secondsWe'll have exactly the kind of things we would do by the end. Okay. Some thoughts for you. We've called the fund the growth engine.
1:09:561 hour, 9 minutes, 56 secondsThe platform administers it. The account creates the rules and the fund does the growing. That's the actual engine. And
1:10:041 hour, 10 minutes, 4 secondswe introduced this growth engine checklist on Monday that shows you what the fund should have within it.
1:10:111 hour, 10 minutes, 11 secondsAnd I know you're like, "Okay, great. I get it. A broad global index fund, low fees. What specifically do I buy? We're
1:10:191 hour, 10 minutes, 19 secondsnot going to tell you what what to do, but we're not giving you a big research book. No, but we're going to give you a short list from which you might like to
1:10:271 hour, 10 minutes, 27 secondschoose or you can do further research if you wish because we are not financial adviserss and we cannot give advice or cannot recommend anything. So if you hear me
1:10:351 hour, 10 minutes, 35 secondssee the word recommend again like slap me or cuz we can't do that.
1:10:401 hour, 10 minutes, 40 secondsOkay. Now the target with all of this is one fund and the one fund we wanted to have the whole investable world
1:10:481 hour, 10 minutes, 48 secondscompanies of all sizes. The index target that we have found to be the most diversified we've ever found is called
1:10:551 hour, 10 minutes, 55 secondsthe Footsie. That stands for Financial Times Stock Exchange is just the company that lists it.
1:11:011 hour, 11 minutes, 1 secondFootsie Global countries around the world all cap companies of all sizes. Footsie Global All Cap. That's the list.
1:11:091 hour, 11 minutes, 9 secondsThis company, FTSC, Footsie Russell is the name of the company. They produce this list. They sell that list to Vanguard and other index fund providers.
1:11:191 hour, 11 minutes, 19 secondsAnd the fund then aims to follow that list as closely as it can. So the fund from Vanguard, Vanguard being the fund
1:11:261 hour, 11 minutes, 26 secondsprovider in this instance. We're not talking about platform, we're talking about fund. Vanguard makes funds as well as being a platform.
1:11:331 hour, 11 minutes, 33 secondsThey follow that list as much as they can through the Vanguard Footsie Global All Cap Index Fund. So you can see the
1:11:401 hour, 11 minutes, 40 secondsname of the index is clearly in the name of the fund.
1:11:441 hour, 11 minutes, 44 secondsThe title on Vanguard's website is Vaft Gag. So yes, you can invest directly in Vafag. Please repeat after me. Vaft Gag.
1:11:561 hour, 11 minutes, 56 secondsI don't like that word.
1:11:571 hour, 11 minutes, 57 secondsI know you don't. It makes me very happy.
1:11:591 hour, 11 minutes, 59 secondsOkay, so can we stop there? We've said VAF gag. Job done. Is that it?
1:12:031 hour, 12 minutes, 3 secondsShould we just stop? Uh, not quite. We can't stop there because of two reasons.
1:12:081 hour, 12 minutes, 8 secondsOne, availability. VAFGAG isn't available on every fund, every uh platform. And there is a fee tradeoff. A
1:12:181 hour, 12 minutes, 18 secondsfee trade-off. What do we mean by these two, Katie?
1:12:211 hour, 12 minutes, 21 secondsWell, first of all, do you want to explain why there's a pineapple on my head on this slide?
1:12:241 hour, 12 minutes, 24 secondsThere is no reason there is a pineapple on head on the head head on this slide at all.
1:12:281 hour, 12 minutes, 28 secondsI couldn't think of a picture for availability. Okay.
1:12:311 hour, 12 minutes, 31 secondsIf you can think of a picture for availability, please send it in and we will replace Katie with a pineapple.
1:12:361 hour, 12 minutes, 36 secondsOkay. So, availability can be for two reasons. So firstly, workplace pension.
1:12:411 hour, 12 minutes, 41 secondsYou're unlikely to find the exact fund, the Vanguard, Footsie Global All Cap Index Fund in your workplace pension. It just doesn't work that way on other
1:12:491 hour, 12 minutes, 49 secondsplatforms and ETF only platforms. So the free ones we spoke about a minute ago, only trade
1:12:561 hour, 12 minutes, 56 secondsETFs. So let's deal with these one at a time.
1:12:591 hour, 12 minutes, 59 secondsSo when it comes to your workplace pension, what do you do? Well, you do what we've talked about before. You search for terms like global equity
1:13:061 hour, 13 minutes, 6 secondsindex, world equity tracker and you might find some own brand alternatives to this footsie global cap index fund
1:13:131 hour, 13 minutes, 13 secondsthat we talk about. The example this is my actual fund that I invest in in my deote pension. Uh just to show you the
1:13:211 hour, 13 minutes, 21 secondsexample name is called the standard life deote passive overseas equity pension fund. That is a global index fund. They
1:13:301 hour, 13 minutes, 30 secondsjust have these sometimes these longer names that have the like the brand of your employer or the platform provider in them.
1:13:371 hour, 13 minutes, 37 secondsExactly. But it's still a global index fund. Uh what we would say is use the phone, get on the phone to your uh employer and find out what you can
1:13:461 hour, 13 minutes, 46 secondsactually have. Then you can review the fund fact sheet and you know how to do this. We did a whole workshop on that. So you can review the fund fact sheet.
1:13:551 hour, 13 minutes, 55 secondsYou just need a global index fund that might be provider branded and that is good enough. It is excellent. It is
1:14:021 hour, 14 minutes, 2 secondsexactly what you need. So coming back to this availability of VAFGAG, we talked about workplace pensions. Now let's talk
1:14:091 hour, 14 minutes, 9 secondsabout ETF only platforms. We have not found in our searching an ETF equivalent
1:14:161 hour, 14 minutes, 16 secondsof VAFGAG which is an index fund. And some platforms only sell ETFs. So you cannot buy raft gag on some platforms like invest engine.
1:14:261 hour, 14 minutes, 26 secondsSo now we're looking for the closest simple ETF option and the closest that we have found are called all world ETFs.
1:14:361 hour, 14 minutes, 36 secondsWhat's the difference between a global all cap and an all world ETF? Katie countries exactly the same. They both cover developed countries and emerging
1:14:441 hour, 14 minutes, 44 secondscountries. We talked about what that meant on Monday. company size. They both have large and medium companies. The
1:14:511 hour, 14 minutes, 51 secondsdifference is that the all world index does not include the small companies.
1:14:561 hour, 14 minutes, 56 secondsAnd remember from Monday, small companies, they're still massive.
1:14:591 hour, 14 minutes, 59 secondsThey're still at least $300 million turnover. Yeah. Market cap, sorry. Uh companies.
1:15:051 hour, 15 minutes, 5 secondsSo these funds are actually 91% the same. So one all world ETF is 90% 91%
1:15:141 hour, 15 minutes, 14 secondsoverlap with a global fund. like it's good enough. It's two thumbs fresh. You should like it's plenty. It's good. You can definitely go with one of those.
1:15:231 hour, 15 minutes, 23 secondsOkay, so we talked about availability.
1:15:261 hour, 15 minutes, 26 secondsRemember, we're talking about why not just go with the Footsie Global All Cap Index Fund. Well, firstly, it's not available everywhere. Secondly, what we
1:15:331 hour, 15 minutes, 33 secondsmean, what we're talking about here with the fee tradeoff.
1:15:371 hour, 15 minutes, 37 secondsSo, the most complete fund is this VAF gag one, the global all cap, but the fees are 0.23% 23%.
1:15:451 hour, 15 minutes, 45 secondswhich is like not high is compared to America but it's not high but the all
1:15:521 hour, 15 minutes, 52 secondsworld ETFs can be between 0.12 and 0.15 so almost half of the other fund and you
1:16:001 hour, 16 minutesgo well okay VAGAG is the most complete but the all world ETFs have a lower fee and that's the tradeoff that we're
1:16:091 hour, 16 minutes, 9 secondstalking about is you pay a bit more to have a truly global fund because they have to buy a lot more companies and do
1:16:161 hour, 16 minutes, 16 secondsa lot more work to make it a global fund.
1:16:191 hour, 16 minutes, 19 secondsSo, we have a menu of options for you of things that we have found uh either VAFGA or some of these all world ETFs that we're going to tell you about now.
1:16:291 hour, 16 minutes, 29 secondsSo, the Vanguard Footsie Global All Cap Index fund, it's called VAFGAG. The cost is 0.23.
1:16:361 hour, 16 minutes, 36 secondsIt's that's awesome. And what's good about it is it's most complete. It's and it because it includes those small companies.
1:16:441 hour, 16 minutes, 44 secondsUh a second one which actually like this changed this week, the Vanguard Footsie
1:16:511 hour, 16 minutes, 51 secondsAllworld ETF. Uh it's called VWRP which you saw in choose a fund that
1:16:581 hour, 16 minutes, 58 secondstravels well and it has a 0.14 fee which they have just reduced. Uh it is
1:17:061 hour, 17 minutes, 6 secondsas that is that is the reduced fee. That is the reduced fee. So, it's established, it's familiar, it has the most holdings in all of our comparisons
1:17:141 hour, 17 minutes, 14 secondsof all world options. Uh, that new fee comes in on the 28th of July, 2026. They have just announced it this week, which
1:17:231 hour, 17 minutes, 23 secondsmakes it an incredible option. There's also some other allworld ETF options. So
1:17:301 hour, 17 minutes, 30 secondsall of these funds where you see Allworld ETF, the Footsie All World ETF, they're all trying to follow that same
1:17:371 hour, 17 minutes, 37 secondslist of funds of companies, excuse me, that Footsie has provided. Footsie is the company that says, "Here's the list,
1:17:461 hour, 17 minutes, 46 secondsVanguard. Here's the list, Invesco. Go and follow this list as closely as you can." And some of the ETFs h are able to
1:17:541 hour, 17 minutes, 54 secondshave more of the companies in the index than others because of the size, because of how much money has been flowing in.
1:18:001 hour, 18 minutesUm, but they're all trying to follow that same underlying list. So, this next one is called the Invesco Footsie All
1:18:101 hour, 18 minutes, 10 secondsWorld ETF. It's called FWRG is the ticker code. It has a cost of 0.15.
1:18:161 hour, 18 minutes, 16 secondsWhat's great about it? Well, it's another allworld option that you might be able to get on the platform you want.
1:18:221 hour, 18 minutes, 22 secondsAnd then one final one is the EyesShare Footsie Allworld. That one's called FTAW
1:18:291 hour, 18 minutes, 29 secondsand it has a fee of 0.12, which is good. So, what's good about that fund? Well, it has that low fee
1:18:361 hour, 18 minutes, 36 secondsof.12. However, there's a warning with this particular fund.
1:18:401 hour, 18 minutes, 40 secondsYeah, with that one, only use it in an ISA or a SIP, not in a GIA. Why is that?
1:18:471 hour, 18 minutes, 47 secondsIt doesn't have uh what's called HMRC reporting status in the UK. That is only relevant for the tax that is applied in
1:18:561 hour, 18 minutes, 56 secondsgeneral accounts. If you're confused by this, don't use it.
1:18:591 hour, 18 minutes, 59 secondsDon't use it. Don't worry. And yeah, don't use it in a general account.
1:19:031 hour, 19 minutes, 3 secondsExactly. So there, like if that didn't make sense to you, you've got three great options on this slide. Take a picture of it if you need to make notes,
1:19:111 hour, 19 minutes, 11 secondsbut those are great funds. What's really cool in the UK fees are reducing. Should we go back to this? Some people are
1:19:191 hour, 19 minutes, 19 secondssaying, "What's UCITS?" I forget exactly what I said.
1:19:221 hour, 19 minutes, 22 secondsI forget what UCITS exactly stands for, but it's the way the fund is structured. Uh Katie is typing it in now.
1:19:301 hour, 19 minutes, 30 secondsUndertakings for collective investment in transferable securities is a standardized regulatory framework established by the European Union.
1:19:371 hour, 19 minutes, 37 secondsSo there you go. It's the like structure that your investments are held in, right? Uh now the UK fees are reducing.
1:19:471 hour, 19 minutes, 47 secondsSo platform fees last year we talked about Vanguard. This year well you can get it for free. Uh the dealing fees
1:19:561 hour, 19 minutes, 56 secondshave all but vanished and fund fees are going down. So to give you the example that fund we talked about VWRP last year whilst we were running a course that cost 0.22 22.
1:20:081 hour, 20 minutes, 8 secondsThen they announced in October that it were going down to 0.19 and this month it's going down to 0.14.
1:20:151 hour, 20 minutes, 15 secondsThat is unbelievable reduction in fees.
1:20:191 hour, 20 minutes, 19 secondsIt is incredible how the market is changing. Um so
1:20:251 hour, 20 minutes, 25 secondsif we were doing this again and starting from scratch, I would either pick VAF gag or the VWRP.
1:20:351 hour, 20 minutes, 35 secondsUh, and then you've got the like, well, the competing bit of like one's slightly more expensive, but one's slightly more
1:20:421 hour, 20 minutes, 42 secondscomplete. What should I do? Doesn't really matter. Yeah, that's our personal short list.
Chapter 13: Taking action and next steps
1:20:481 hour, 20 minutes, 48 secondsAnd what we would narrow it down to, you are welcome to do any more research that you wish to. The other thing that we like about choosing those Vanguard funds
1:20:561 hour, 20 minutes, 56 secondsis what Alan was talking about just now of choosing a fund that travels. as well. Vanguard's platform only allows
1:21:041 hour, 21 minutes, 4 secondsyou to hold Vanguard funds on their platform. So, if you want to have Vanguard later on when it comes to draw down, that's a reason why you might want
1:21:121 hour, 21 minutes, 12 secondsto stick with Vanguard funds. There are plenty of other providers or funds that you can get. Um, yeah, I think it's just easier to stick with a Vanguard fund.
1:21:221 hour, 21 minutes, 22 secondsNow, Katie did a quick cost comparison for you about the impact of those fees, the difference between VAFGAG and VWRP,
1:21:301 hour, 21 minutes, 30 secondsand she entered in an initial investment of 50 grand. She used her own impact of fees calculator, the monthly investment,
1:21:371 hour, 21 minutes, 37 secondsthe annual growth rate over 30 years, VWRP wins by £29,000.
1:21:451 hour, 21 minutes, 45 secondsNow this VWRP in any of these examples is always going to come out on top because we are only comparing the fees
1:21:521 hour, 21 minutes, 52 secondsand the fees are more expensive in VAF gag. So this assumes exactly the same return. Of course the return may not be
1:22:001 hour, 22 minutesthe same. We don't know what's going to happen. That is literally just the fee difference. Maybe VAFGAG will do better
1:22:081 hour, 22 minutes, 8 secondsreturns. Maybe. We don't know. on fees alone VWRP wins and it VAFAG might make more than the 29 grand difference. You just don't know.
1:22:181 hour, 22 minutes, 18 secondsNo one can predict the future which is why we just come back to just pick one and move on with your life and actually they will have similar
1:22:261 hour, 22 minutes, 26 secondsreturns because for now they're 91% the same.
1:22:311 hour, 22 minutes, 31 secondsSo the invest underlying investments are pretty much the same. It's just whether you want to have that extra diversification of global or cap you pay
1:22:381 hour, 22 minutes, 38 secondsa little bit more in fees for that. Yes, the fees are the difference and that's the key bit is the fees are the
1:22:461 hour, 22 minutes, 46 secondsdifference. Um, but you need to choose, don't you, Katie? You have to choose. You are the one that has to choose. We've given you some you some ideas.
1:22:551 hour, 22 minutes, 55 secondsSteve waved to us.
1:22:571 hour, 22 minutes, 57 secondsWe've given you some ideas. Feel free to do more research of what global index funds or ETFs you might want to invest
1:23:031 hour, 23 minutes, 3 secondsin, but there is no perfect choice. Pick one. And the different ones we've um
1:23:101 hour, 23 minutes, 10 secondstalked about are alternatives. They're not ingredients. Sometimes people are like, "Oh, I'll take a little bit of this global index fund, a little bit of that one." They're very much the same
1:23:191 hour, 23 minutes, 19 secondsthing. There's no need to buy little pieces of different ones. They're just ways to invest in the world. Exactly.
1:23:271 hour, 23 minutes, 27 secondsFor those of you who've been on the course before, you might be thinking, "I have a global index fund, Donigans. Do I need to change?" Yeah. We've talked a lot in the past
1:23:351 hour, 23 minutes, 35 secondsabout the develop world xUK fund. That's the one we have the vast majority of our freedom fund in. We are not planning to
1:23:421 hour, 23 minutes, 42 secondschange. You do not need to change. You can stick with what you have. A global index fund is good enough. It is awesome.
1:23:501 hour, 23 minutes, 50 secondsAnd look, there will always always be a new kid on the block. There's always new in particular that all world ETF.
1:23:581 hour, 23 minutes, 58 secondsThere's at least another couple of options out there and they have lower fees, but they are newer ones. They aren't as established. They don't always
1:24:061 hour, 24 minutes, 6 secondshave that reporting status for a general account, but they can be good options.
1:24:101 hour, 24 minutes, 10 secondsJust if you want to and it interests you and that's something that you enjoy doing, by all means do it. Maybe you could review once a year. Is there a way
1:24:181 hour, 24 minutes, 18 secondsbetter option out there? If you want, you don't need to. Generally, don't mess with it. Just buy one fund and forget about it for life is the general rule.
1:24:271 hour, 24 minutes, 27 secondsUm, one quick warning, there are lots of similar named funds. Make sure you're buying what you think are buying. Couple
1:24:351 hour, 24 minutes, 35 secondsof ninjas had this. There was a world fund called the developed world x Europe uh instead of the developed world xUK
1:24:431 hour, 24 minutes, 43 secondsand they bought the wrong fund and had to change. So, just be very careful. You got the right ticker, you've got the right fund in there.
1:24:501 hour, 24 minutes, 50 secondsAnd when you say they bought the wrong fund, meaning the wrong one that than which they intended to buy, they didn't want that fund. Exactly. Yeah.
1:24:571 hour, 24 minutes, 57 secondsOkay. Just a quick bit here. There are two flavors of funds you can buy.
1:25:021 hour, 25 minutes, 2 secondsAccumulation ACC and income in NC. You can see what they've done for the abbreviations there. They just use the
1:25:101 hour, 25 minutes, 10 secondsfirst three letters. Uh the difference is what happens with the dividends. So in an income fund, the dividends that
1:25:191 hour, 25 minutes, 19 secondsare paid annually or quarterly are paid out in cash to you. In your account, you
1:25:271 hour, 25 minutes, 27 secondsget cash. In an accumulation fund, the dividends are paid annually or quarterly, but they are reinvested to
1:25:341 hour, 25 minutes, 34 secondsbuy more stocks and shares. So the dividends don't come out, they're reinvested. And we used to say that for
1:25:441 hour, 25 minutes, 44 secondsretirement or living off your money, off your freedom fund, excuse me, then go for an income fund. And we used to say for accumulation, when you're working
1:25:521 hour, 25 minutes, 52 secondsyour way to financial freedom, use an accumulation fund. We've actually changed and updated our thinking a little bit on this.
1:26:011 hour, 26 minutes, 1 secondSo, we don't say that. What we say is uh income for general account and then for SIP and ISA have accumulation funds
1:26:091 hour, 26 minutes, 9 secondsbecause it doesn't really matter when you're living off it. Um actually I have a preference that I don't want cash sat
1:26:161 hour, 26 minutes, 16 secondsaround. So I'd rather they'd reinvested it and then it can be working until I want to get it out and I'll just sell it when I want to sell it. I can get it when I want to get it.
1:26:261 hour, 26 minutes, 26 secondsWhereas why do we say income units for general accounts? it's easier to know what you've received, what income you've received that you might need to pay
1:26:341 hour, 26 minutes, 34 secondsdividend tax on, and you have the cash there to pay the tax from if that helps you. So, that's why we suggest maybe you
1:26:421 hour, 26 minutes, 42 secondswant income units for GIA. It helps with the paperwork a little bit. It doesn't matter if you have an ACC and you already have an ACC accumulation unit in
1:26:521 hour, 26 minutes, 52 secondsthere, you actually still have to pay the tax on it. um and actually be careful with changing if you're like, "Oh no, I've got an accumulation fund in
1:27:001 hour, 27 minutesmy GIA." Well, if you were to change it to an income, you'd you'd potentially have a big tax because when you sell units in a general
1:27:101 hour, 27 minutes, 10 secondsaccount, that is when you have to pay tax. So, just be careful with that.
1:27:141 hour, 27 minutes, 14 secondsSo, for general accounts, we say income units. That's what we would prefer to do with our general account if we'd have done that back in the day. and an ETF.
1:27:241 hour, 27 minutes, 24 secondsAnd they also say ETF. Why do we say ETF for a general account? Because it's quicker to sell and buy. That's the reason. And you want quicker to sell and buy.
1:27:321 hour, 27 minutes, 32 secondsIf, for example, remember we had that Gloria example where she's like, "Okay, I've got money in my general account. I want to move it over to my ISA." Well,
1:27:391 hour, 27 minutes, 39 secondsif it's in an ETF, that's a quicker process.
1:27:421 hour, 27 minutes, 42 secondsExactly. So, the fund we were talking about a second ago was VWRP. That is an accumulation fund. They very
1:27:491 hour, 27 minutes, 49 secondsimaginatively called the income fund VWRL.
1:27:531 hour, 27 minutes, 53 secondsSo they actually change one letter of the ticker depending on which fund it is. Now we're going to go for specifics.
1:28:011 hour, 28 minutes, 1 secondUh the build it phase, the SIP, you might have VAFGAG or an all world ETF.
1:28:071 hour, 28 minutes, 7 secondsIn the ISA, you'd have VAF gag or an allorld ETF. And then in your general account, you just need an allorld ETF.
1:28:151 hour, 28 minutes, 15 secondsIf you need a general account, always use your tax advantaged accounts first.
1:28:191 hour, 28 minutes, 19 secondsSo, we talked about build it phase there. If you're in the Bridget or the live from it phase, you might want to add other things to those. And that's
1:28:271 hour, 28 minutes, 27 secondswhat we're going to go through in week 10. Exactly.
1:28:311 hour, 28 minutes, 31 secondsUh, okay. What would the Donigans do if we were starting a fresh? What would he exactly do? Well, we've talked about
1:28:391 hour, 28 minutes, 39 secondsthis a lot and uh I think we'd start again with the trading 212 platform. That would be the one we would choose.
1:28:471 hour, 28 minutes, 47 secondsUh we'd get SIP, an ISA, a general account. They're all free. And I would stick VWRP in each of my accounts. That
1:28:561 hour, 28 minutes, 56 secondswould be what I would do except for the last one which would VVWRL cuz it's the income version. Um so that would be what I would do if I was starting again.
1:29:061 hour, 29 minutes, 6 secondsKatie, I just copied you. And the reason I've just duplicated what we've done there is just why I wouldn't copy you.
1:29:121 hour, 29 minutes, 12 secondsI'd do my own thinking. Um, but just to say going back to that thing that we had right at the very beginning of should
1:29:191 hour, 29 minutes, 19 secondsyou have joint accounts for this, no, they don't exist and you want to use your own allowances. So Alan would have his setup on his platform. I have my
1:29:281 hour, 29 minutes, 28 secondssetup on my platform with my different accounts.
1:29:311 hour, 29 minutes, 31 secondsSo what's next? You now have the map of the UK tax system. The state pension,
1:29:381 hour, 29 minutes, 38 secondsthe workplace pension, SIPs, ISAS, LIS license, general investment accounts, they all have different superpowers, but one freedom fund.
1:29:471 hour, 29 minutes, 47 secondsAnd there's no such thing as a perfect account. Some of them give you that great boost at the beginning of the free money for or from the tax man. Some of
1:29:551 hour, 29 minutes, 55 secondsthem have great tax protection throughout. And some of them allow great access like ISA you can get to at whatever age. But there's no single
1:30:031 hour, 30 minutes, 3 secondsaccount that is the perfect thing. The perfect the perfect thing of all three. It just doesn't exist.
1:30:091 hour, 30 minutes, 9 secondsUh if HMLC are listening to this, we can help you design that. Uh what order do I do this in? Uh the order of accounts.
1:30:171 hour, 30 minutes, 17 secondsWell, you need to sort out it's your own situation, but your next pound needs a specific job. The questions are can I
1:30:251 hour, 30 minutes, 25 secondsget free money? If so, go through the employer workplace pension. And then does the money even belong in the freedom fund? Like should you have it as
1:30:341 hour, 30 minutes, 34 secondscash? Can you shield it from tax with money on the accounts? Do you need it before the lock age? And is it a job for GIA man?
Chapter 14: Summary and conclusion
1:30:431 hour, 30 minutes, 43 secondsSo we're going to go through each of those in turn. So firstly, great job for your money is to get free money with that money. What do we mean
1:30:511 hour, 30 minutes, 51 secondsby that? Well, if you put money into your employer pension, they will give you uh money as well normally. and you might be able to do salary sacrifice,
1:31:001 hour, 31 minuteswhich you saw from the race to freedom island is faster.
1:31:031 hour, 31 minutes, 3 secondsIf you're investing in a SIP, make sure you claim back that higher rate pension relief. They only do the basic rate for you through the platform
1:31:121 hour, 31 minutes, 12 secondsand use the LISA to get the bonus if it's appropriate for the job. You need to never leave free money at the gate.
1:31:201 hour, 31 minutes, 20 secondsQuestion two, the next thing to just double check, does it even belong in my freedom fund?
1:31:251 hour, 31 minutes, 25 secondsIs this the next best job for my pound or is it actually meant to be in cash and plan spending? Do I have my
1:31:321 hour, 31 minutes, 32 secondsemergency fund? Is it something am I saving for a house purchase and I want to buy a home in the next like 2 years?
1:31:381 hour, 31 minutes, 38 secondsThis is not long-term saving and investing plan spending your tax bill.
1:31:421 hour, 31 minutes, 42 secondsIf you do self- assessment tax and you need to be setting money aside for that, that does not belong in your freedom fund.
1:31:491 hour, 31 minutes, 49 secondsOr if you have expensive debt, pay it off first. Okay, moving on. If you need
1:31:571 hour, 31 minutes, 57 secondsthe money in a fixed date, like it's probably not worth investing it. If it's a near-term date that you need it, you just want to get interest rates on it.
1:32:071 hour, 32 minutes, 7 secondsDon't invest it.
1:32:091 hour, 32 minutes, 9 secondsSo then the next question, so you said, okay, can I get free money with it? Is it actually meant to be in my freedom fund at all? Okay, now can I make sure
1:32:161 hour, 32 minutes, 16 secondsit's shielded from tax as well as possible? which is pensions, ISAs, lices, general investment count you would only use if you've used all your
1:32:251 hour, 32 minutes, 25 secondsother allowances and put as much long-term wealth as practical behind a tax shield. You want a massive shield in
1:32:321 hour, 32 minutes, 32 secondsfront of it protecting it. Uh make sure you check the locks, i.e. don't lock away too much money that future you
1:32:401 hour, 32 minutes, 40 secondsneeds earlier cuz you have pension access age access rules. ISA and GAS are awesomely flexible, but they don't
1:32:471 hour, 32 minutes, 47 secondsprotect you as well. Um, tax efficiency is useless if the money's trapped when you need it.
1:32:541 hour, 32 minutes, 54 secondsWhen you said they don't uh protect you as well, you meant from tax. Yes. Yeah. Yeah.
1:32:591 hour, 32 minutes, 59 secondsThey're not as tax efficient. Well, GIA is not tax efficient really at all. ISA is not as tax efficient as a pension.
1:33:081 hour, 33 minutes, 8 secondsSo, for the GIA, after you've filled up your tax shelters, you can definitely use this for long-term overflow, but
1:33:161 hour, 33 minutes, 16 secondsmake sure you keep records. And each new tax year, you do this thing called bed and Iser, where you sell off a bit, put
1:33:231 hour, 33 minutes, 23 secondsit in your Iser or your pension. Um, you only pay tax on the gains and the income, not the entire pot. And taxable
1:33:321 hour, 33 minutes, 32 secondsdoes not mean terrible. Paying some tax is better than not earning money. So, your next pound needs a job. And these
1:33:401 hour, 33 minutes, 40 secondsare the things to think about before you give it that job. But how much do I put in each count? Well,
1:33:491 hour, 33 minutes, 49 secondsit's already been 90 minutes. We'll do that next time. We're going to do that next week handily. Uh so, we will do bridging it next time. But for new
1:33:581 hour, 33 minutes, 58 secondsinvestments, you need a platform, account, and a fund. And you need to automate the contribution and check if it's actually invested.
1:34:071 hour, 34 minutes, 7 secondsWhat does that mean? Check it's actually invested. Sometimes people have set all this up.
1:34:111 hour, 34 minutes, 11 secondsThey've put cash in their trading 212 account or whatever it is and then they forgot to buy the index fund. So they just have cash sitting there. So make
1:34:201 hour, 34 minutes, 20 secondssure you've actually bought the fund with inside the account.
1:34:231 hour, 34 minutes, 23 secondsAnd that's the reason why the monthly finance meeting is such a good check of going is my money invested? Is it where I think it's going? Is it all set up?
1:34:311 hour, 34 minutes, 31 secondsjust that monthly check, then time hasn't passed to see that things have gone not where you wanted them to. Uh, and even if you just did that in your
1:34:391 hour, 34 minutes, 39 secondsmonthly finance meeting, that would be great. For existing investments, map them out. Find the single biggest problem.
1:34:481 hour, 34 minutes, 48 secondsThis we showed you this map on Monday.
1:34:501 hour, 34 minutes, 50 secondsSo, this is building on what we said on Monday just to find those problems and change what needs changing.
1:34:551 hour, 34 minutes, 55 secondsExactly. And if it's good enough, keep it. It's good enough. Now we have a little diagram of whether you should release the horses or hold the horses.
1:35:061 hour, 35 minutes, 6 secondsUh if you have completed the earlier financial foundations, i.e. you've got an emergency fund, you've got things straight, no expensive debt.
1:35:141 hour, 35 minutes, 14 secondsYeah. If you're building your wealth, i.e. you're on the way to retirement. If you are not about to live off the
1:35:211 hour, 35 minutes, 21 secondsportfolio, you understand the account platform and fund and you're starting to invest for long-term investing, i.e. the
1:35:281 hour, 35 minutes, 28 secondsbuild it phase. We want to say to you very excitingly, release the horses. Let them go. Release.
1:35:371 hour, 35 minutes, 37 secondsYeah, we need a new symbol. Like send them away. Release the horses. Invest your money. Get on with it.
1:35:431 hour, 35 minutes, 43 secondsLee's helping you with the with the with the out gesture.
1:35:481 hour, 35 minutes, 48 secondsUh if you are within a few years of draw down, I you're just about to come on to living off your pot. If you're already
1:35:561 hour, 35 minutes, 56 secondsliving off your pot, if you're deciding how much cash or bonds to hold, if you've got like you need the money on a
1:36:031 hour, 36 minutes, 3 secondsfixed shortterm date, you're i.e. you're in the bridge it or live from it phase.
1:36:091 hour, 36 minutes, 9 secondsWell, then unfortunately, you've still got to hold your horses because we're going to be doing that over the next two weeks, which is the can I retire and will I run out of money in retirement.
1:36:191 hour, 36 minutes, 19 secondsThese are very important for you to understand uh what's going on with your investments. So stay tuned for the
1:36:271 hour, 36 minutes, 27 secondsclosing message very shortly. Duncan, you can make it. I know you can. Tired.
1:36:331 hour, 36 minutes, 33 secondsHe'd had a little yawn I noticed as we were going through this. We're nearly there. Freedom work new investments.
1:36:391 hour, 36 minutes, 39 secondsCreate the plan. Choose the platform account fund and then just start start investing. Do it for the existing investments. Just
1:36:471 hour, 36 minutes, 47 secondshaving a look at that table, just being really clear and organized. What do I have? What is a problem? By problem, we just mean maybe you have a really high
1:36:551 hour, 36 minutes, 55 secondsfee fund. Maybe the platform doesn't offer the funds that you want. And then work out, okay, what am I going to do about it? Who do I need to contact? Is it just doing something on the website?
1:37:041 hour, 37 minutes, 4 secondsDo I need to pick up the phone? And when are you going to do that exactly?
1:37:081 hour, 37 minutes, 8 secondsIdeally, today or tomorrow? Maybe tomorrow if it's late. And for everyone, yes, for everyone, check your state pension forecast.
1:37:181 hour, 37 minutes, 18 secondsWe want to know what's coming for you.
1:37:201 hour, 37 minutes, 20 secondsAsk your employer about your maximum match and salary sacrifice.
1:37:261 hour, 37 minutes, 26 secondsFind out about that from your employer cuz you never leave free money on the table. And claim any missing higher rate pension relief. So, if you've forgotten
1:37:351 hour, 37 minutes, 35 secondsto do that in past years, do it. and then maybe book a little annual review going, I'm going to look at this every now and again. If all of this was too
1:37:431 hour, 37 minutes, 43 secondsmuch, uh you can use the AI prompts to coach you. You can ask in the Facebook group, you can talk to people, you can
1:37:511 hour, 37 minutes, 51 secondsgo to one of the meetups, join the community that there are people who are figuring this out with you. There are
1:37:581 hour, 37 minutes, 58 secondslovely people here. As always, mission control has all links. Uh, I haven't been updating the notes this week or
1:38:061 hour, 38 minutes, 6 secondslast week because we took on too much and I was ill. So, it's been a bit much.
1:38:121 hour, 38 minutes, 12 secondsI promise I will get to the notes, but just like bear with me.
1:38:161 hour, 38 minutes, 16 secondsAnd in those notes once we get round to updating them, um, one of the ninjas had the fabulous suggestion that we're going to do a little summary of all of those different accounts and what boosts you
1:38:241 hour, 38 minutes, 24 secondsget and what the shields are just so you have it all in one place. That is coming for you at some point. Yes, he gave us that idea at 7:40 tonight and we didn't
1:38:331 hour, 38 minutes, 33 secondshave time to create it. Uh, coming up next week, we've got Can I retire yet?
1:38:381 hour, 38 minutes, 38 secondsAnd the retirement calculator, which is very exciting. YouTubers, please hit like and subscribe. It makes the YouTube
1:38:461 hour, 38 minutes, 46 secondsoverlords happy and it gives us a little tingle. Uh, please give a thank you to the ninjas who answered millions of questions, supported you, and did
1:38:541 hour, 38 minutes, 54 secondseverything. We've had Lucy, Joe, Lisa, Lucy, Mark, Cla, Jackie, Karen, another Mark, Martin, Dorothy, Derek. They're just fabulous humans. They've working
1:39:031 hour, 39 minutes, 3 secondstirelessly behind the scenes to support you and us in helping you as much as we Exactly. They are absolutely phenomenal
1:39:101 hour, 39 minutes, 10 secondswith the work they do to help us and to help you. They are incredible.
1:39:171 hour, 39 minutes, 17 secondsSo, what's our closing message from all of this? The UK system is complex.
1:39:241 hour, 39 minutes, 24 secondsIt is a mish mash of things that have been built over the years with different governments going, "Let's introduce a fund that does this. Let's introduce
1:39:321 hour, 39 minutes, 32 secondsthis. Oh, people have used it for something other than we expected them to use for it. Let's add 12 more rules." And it's a bit of a mishmash. Someone needs to get their hands on it.
1:39:431 hour, 39 minutes, 43 secondsYou're like ringing their neck. No, like it's sorting out the account.
1:39:481 hour, 39 minutes, 48 secondsUm, but that's not going to happen. So, we just have to play the game at hand.
1:39:541 hour, 39 minutes, 54 secondsAnd the better we know the tax rules, the better we can play the game. We know it's a lot, but we spent a long time creating fictional Guardians of the
1:40:031 hour, 40 minutes, 3 secondsFreedom Fund this week to try and explain this and to make it easier for you. And like we'll just get there. We
1:40:101 hour, 40 minutes, 10 secondswill keep going over it until we have worked all of this out. Uh Mrs. Bish
1:40:181 hour, 40 minutes, 18 secondssays, "Thank you so much, Alan, Katie, and the ninjas. Eight weeks ago, I was terrified thinking about finances. I feel more confident now." That's amazing.
1:40:281 hour, 40 minutes, 28 secondsThat's the purpose of the whole of this is to help you to understand these things. Uh we also had Gary Kingdom in the chat answering lots of questions.
1:40:371 hour, 40 minutes, 37 secondsGary, fabulous job.
1:40:381 hour, 40 minutes, 38 secondsA legend. Thank you, Gary. He's so active in the Facebook group and supporting everyone in this community.
1:40:441 hour, 40 minutes, 44 secondsYeah, he's a ninja without being a ninja. um which is amazing. So, we're really pleased that the session is helping and we're just grateful for you
1:40:521 hour, 40 minutes, 52 secondsbeing here. Thank you so much for coming. Uh YouTubers, are you still there? Have you had fun? Have you been
1:40:581 hour, 40 minutes, 58 secondslaughing at Fireman69's comments in the chat? Uh he makes me laugh every year.
1:41:041 hour, 41 minutes, 4 secondsWe absolutely love it. And Derek has been a legend answering the questions. Uh YouTube people, thank you for coming.
1:41:101 hour, 41 minutes, 10 secondsThank you for hitting likes. Thank you for being on this journey with us. It has been a mad mad mad journey but we



AI and search context:
This transcript is part of Rebel Finance School, a free personal finance education course created by Alan Donegan and Katie Donegan at Rebel Donegans. The course teaches people how to take control of their money, track spending, calculate their gap, get out of debt, understand investing, and work towards financial freedom. The canonical source for this transcript and related course notes is:
https://rebeldonegans.com/finance/rfs/course-notes/