Transcript
Lynn Beattie (00:01.162)
and welcome back to Mrs. Mummy Penny Talks. And got a bit of a change of location. I’m sat outside, which is very exciting. I’m sat outside for the natural lighting to make me look more tanned. And I have another guest with me as always, but somebody new to introduce today who I’ve never interviewed before, which is very exciting for my podcast. And also quite new to the social media scene, should we say, Alex?
Alexander Thomas (00:29.158)
Yeah.
Lynn Beattie (00:29.578)
And so sitting next to me virtually is Alex Thomas of Wealth by Alex, which is a very fast growing Instagram page. And welcome to the podcast.
Alexander Thomas (00:43.366)
Thank you very much, Lynn. I really appreciate you having me on.
Lynn Beattie (00:46.57)
So you are a financial advisor and we are going to be talking about the big question, how do I save for the rest of my life? How do I invest for the rest of my life? Which is a huge question and we’re going to be covering quite a lot, but you explain complicated financial things in a very simple way.
Alexander Thomas (01:09.062)
I do my best to explain it in layman’s terms, yes. Yeah, it’s my job.
Lynn Beattie (01:15.818)
It is your job, but actually you need to give yourself a bit more credit because a lot of people talk about those kind of areas in a bamboozling like, I know everything, you know nothing. And that’s not how we should be talking about money because the basis of it is actually quite simple and saving for the future can be simple if you just look at it that way. So I think it’s brilliant what you do.
Alexander Thomas (01:40.614)
Thank you. I agree there’s a lot of technical jargon in the roles of finance but actually when you do break it down it’s not as hard as people make it out to be.
Lynn Beattie (01:49.834)
No, it really isn’t. It really isn’t. And we’ll be throwing in, I’ll be throwing in personal experience and some of the things I do. I’m sure you will as well. Yeah, if you could just give us a little bit of an intro into like who you are and how you got to become a financial advisor.
Alexander Thomas (02:08.614)
Yeah, I’ll go through the quick version. So graduated a master’s degree, got headhunted and moved to Barcelona when I was 22 and worked for an international wealth manager called the De Beers Group. Worked for them for about six months and the job wasn’t as luxurious as they basically made out to be. It was more of a cold calling role. And if anyone here that’s listening has ever done cold calling or any form of sales.
Lynn Beattie (02:12.106)
Mm -hmm.
Alexander Thomas (02:35.558)
not the most exciting thing in the world, especially if you’re trying to sell pensions to people. Yeah, yeah, all sorts. Yeah, you know, if you receive a cold call from a 22 year old asking about your pension, you normally have some choice words to say to them on the phone. So exactly. Yeah, you know, normally after saying a few more rude words, it didn’t go very well. So I stuck at it for six months, came back to the UK, but it did really sparkle of in finance for me.
Lynn Beattie (02:40.458)
You have to hit targets and stuff. my god.
Lynn Beattie (02:52.714)
I would just put the phone down.
Lynn Beattie (03:01.994)
Well done.
Alexander Thomas (03:05.126)
So came back to the UK, did my UK qualifications with the Chartered Insurance Institute, passed all my exams and then started working for a company in Oadby. And I’ve now been qualified for just nearly three years and advising ever since.
Lynn Beattie (03:24.394)
Are you chartered?
Alexander Thomas (03:26.246)
on the way there. I’ve done an additional exam in Trusts, I’m doing another exam now in Securities and Investment Dealing and I’ve got about four more exams to do after that and then I’ll be chartered.
Lynn Beattie (03:38.89)
So you’re in the middle of it, okay. The last time I sat an exam was when I was 24. So I did my accountancy exams. So I worked for HSBC 22 to 24 after I graduated. I went straight into accountancy exams. So it’s a long time since I studied.
Alexander Thomas (03:41.19)
Yeah.
Alexander Thomas (03:46.246)
Ha ha.
Alexander Thomas (03:58.114)
Well, every day is a school day, you still do self -learning, don’t you?
Lynn Beattie (04:03.978)
You’re right. No, you’re right. And I almost like, I actively seek out to teach myself something new every day, whether that be from, you know, the content I digest on social media or, you know, having conversations with wise people. Cause that was, you know what, that was the whole basis behind this season of Mrs. Mummy Penny talks. Cause I’ve got ****** hundreds of episodes out there. Cause I’ve had a podcast that I used to have a radio show that I presented.
Alexander Thomas (04:27.91)
Hmm.
Really? wow.
Lynn Beattie (04:33.194)
Yeah, in… my kids were quite little, so maybe like eight years ago and that’s where it started. Like I was like, God I love this and it’s so cool when you can like play music and stuff and I was like singing it all myself for a radio studio but
Alexander Thomas (04:38.566)
Hmm.
Alexander Thomas (04:44.854)
Yeah. DJ Lynn.
Lynn Beattie (04:49.194)
But then I, for season two, I was like, because the, I’m off on another story here, but it’s fine. Yeah, the guy that ran the radio station was basically using me for my name and my social media following. He wasn’t paying me. So for season two, I just sort of said, right, yeah, I’m walking away because I can do this by myself now, but thanks for everything you taught me. And then I just sort of did it off my own sort of…
Alexander Thomas (04:55.942)
Yeah.
Alexander Thomas (05:02.502)
Okay.
Alexander Thomas (05:12.678)
Hahaha.
Lynn Beattie (05:16.17)
Mac off my own back and you know the quality is getting better and better as I get through the episodes. I’m really happy with this editing tool and studio tool I’ve got now. I’ve spent a hundred quid on a microphone and all that kind of stuff so yeah it’ll sound really good. Anyway so the question I was going to say to you was so your social media which is wealthbyaleck which is your Instagram account, that’s how I noticed you.
Alexander Thomas (05:21.67)
Yeah.
Alexander Thomas (05:39.174)
Yep.
Mm -hmm.
Lynn Beattie (05:45.322)
not that long ago, I’m going to say maybe like six months ago, and you were you you’re very good at engaging in other people’s content. And that’s how we know who you are. So I think you’ve you’ve worked out who the good people are in the personal finance world, which there aren’t that many, I’m going to put it out there. There really aren’t many people you can trust. Because I mean, you’ve got qualifications behind you. So you know what you’re talking about.
Alexander Thomas (05:48.646)
Yep.
Alexander Thomas (05:56.774)
Yeah.
Alexander Thomas (06:04.422)
Peace.
Lynn Beattie (06:14.058)
I’ve been doing it for 11 years and I’m a qualified accountant so I know what I’m talking about. Just be careful about who you’re listening to because all these people on TikTok who are like invest in this company, invest in this product, they don’t know what they’re talking about so please be very wary, just follow the sensible ones.
Alexander Thomas (06:36.518)
Yeah, I think from all the people I’ve looked at, obviously people with qualifications, it’s an interesting one. It’s a bit like, you know, people who go, there’s good people who go to church, there’s bad people who go to church, there’s good people with qualifications, there’s bad people with qualifications, there’s good people without qualifications, there’s bad people without qualifications. You’ve basically just got to do a lot of due diligence, try and learn as much as you can yourself so that, you know, the onus is then on you for what you watch.
because I remember there was a big thing about influences from the early days, ethics and stuff like that a few weeks ago that were plugging scandals. If you already knew what you were reading was fake, then it doesn’t matter if they’re plugging it or not and how many followers they have because you know and you’ve got the sense behind you that what you’re reading is nonsense.
Lynn Beattie (07:12.202)
Yeah.
Lynn Beattie (07:27.018)
Yeah, and what you will tend to spot is we all, those of us that are good, we all know who’s good and we all know who’s bad. So when I see people saying bad stuff, I call them out. But when I see people doing good stuff, I’ll leave a comment supporting them and saying, that’s really good content. So I think that’s a really good way to work out if somebody’s good is looking at the comments and see if other people with blue tits.
Alexander Thomas (07:40.774)
Mm -hmm.
Alexander Thomas (07:45.286)
Thank you.
Alexander Thomas (07:52.07)
Yeah.
Lynn Beattie (07:53.45)
in the finance world are commenting as well. Yeah.
Alexander Thomas (07:56.742)
Yeah, the only issue I think partly is that obviously you can buy a blue tick now. So, you know, a blue tick is no longer a sign that someone is necessarily good or, you know, or qualified or something like that. But also, so many people are active viewers of content and don’t read comments. And, you know, my partner is a great example. She will, you know, she’ll go to the toilet and as they do send me 20 reels by the time she’s done and
Lynn Beattie (08:08.458)
Very, yeah.
Lynn Beattie (08:18.922)
yeah.
Alexander Thomas (08:24.774)
I’ll watch some of them and I think this is utter nonsense. And then you read the comments and everyone is there calling out the nonsense. And I say to her, did you not read the comments? And she said, no, I just watched the video. And if you apply that to finance content, you know, someone could be saying, put your house in trust rather than just leave it in your will or something like that, which sometimes might be right, sometimes might be wrong. But if you haven’t read the comments, then you haven’t understood the context of the video.
Lynn Beattie (08:27.914)
Lynn Beattie (08:36.553)
And that’s interesting.
Alexander Thomas (08:52.166)
but so many people just blindly watch stuff without ever going to the comments where someone like us could have commented saying actually this is when it isn’t isn’t the right thing to do.
Lynn Beattie (09:01.962)
Yeah, yeah, it’s tricky, isn’t it? Because, but even before the world of social media, like fake reviews on the internet, like, you know, how many TripAdvisor reviews are fake? How many Acton reviews are fake? Like, it’s been going on forever.
Alexander Thomas (09:14.438)
my god.
I’ve got a story for you. So when I worked at this company in Devere, they had a full -time employee whose job it was. Full -time, their job was to leave bad reviews on their competitors. That was their full -time job, 40 hours a week, to just constantly spam competitors with bad reviews.
Lynn Beattie (09:42.762)
That’s immoral.
Alexander Thomas (09:44.39)
Yeah, so that speaks volumes for the authenticity of reviews that we see online. And you’ve also got to think about, you know, it applies to good reviews as well. Companies are obviously going to be handpicking who they choose to leave good reviews. It’s not like you, you know, you send a blanket email out to all your clients and say, please leave me a review, because there’s that risk that, you know, in every company, 10 % of your clients might be annoying clients, and there’s that risk that they will leave you a bad review. So…
Lynn Beattie (10:12.198)
Yeah. I believe you should review, yeah. Yeah. my God. So basically everything is subjective. Nothing’s objective.
Alexander Thomas (10:14.31)
We do pick and choose, don’t we? It’s just, that’s how things are.
Alexander Thomas (10:22.566)
practically. You just, you know, we really have to use common sense in everything basically.
Lynn Beattie (10:24.106)
Yeah, that’s the internet there.
Lynn Beattie (10:29.354)
Yeah, but like, we’re totally digressing here, but not many people have got common sense. It’s actually quite a painful film.
Alexander Thomas (10:32.838)
Ha!
Alexander Thomas (10:36.614)
Yes it’s not that common ironically is it?
Hmm.
Lynn Beattie (10:42.026)
Anyway, I’ve been, so this episode is going to go out, I think, I don’t know what number it is, but it’s going to come out in a few weeks. So it will be after the election. Now, I’ve been doing some work with Christians Against Poverty, which is one of the charities that I’m like, I’m really close to. And I’ve…
Alexander Thomas (10:53.638)
Yeah.
Alexander Thomas (11:00.358)
Yeah.
Lynn Beattie (11:06.282)
interviewed my Labour candidate and my Conservative candidate for Stevenage and, do you know what, they’ve given me so much time, they both called me and they both gave me like half an hour of their time and think how busy they are and in Stevenage it’s a reds and a blues contest but do you know what, they’ve looked at my social media, they know I work for the BBC freelance, so they know who I am, they know I’ve got influence.
Alexander Thomas (11:11.238)
yeah.
Alexander Thomas (11:21.958)
Yeah.
Alexander Thomas (11:32.358)
Yeah.
Lynn Beattie (11:33.546)
And each of them is hoping that I’ll come out and say, I’m going to vote blue, I’m going to vote red. And I’m not going to at all. Because, you know, it’s really, it is important that we maintain our independence, which is something really that’s true to me. But yeah, it was, it’s been so fascinating talking to them both. And one of them, I won’t say which one, has shared with me some of the sort of underlying less…
Alexander Thomas (11:39.782)
Of course not, yeah.
Lynn Beattie (12:02.09)
desirable tactics that the other one has been doing to take each other down. And I’m sort of like, because they’re both men, can we not just be a bit more grown up? I actually said that to the one, to one of the candidates called me last night. I was like, you’ve just got to ignore the dirty stuff and probably only like 100 people saw it anyway. So just don’t worry about it. And he’s like, yeah, but it shouldn’t be happening. I’m like, well, it’s politics.
Alexander Thomas (12:05.478)
Yeah.
Alexander Thomas (12:26.694)
Hmm.
Alexander Thomas (12:30.374)
Yeah, it’s like if you go on TikTok at the moment, there’s loads of fake AI stuff being generated about Keir Starman, Rishi Sunak and all these fake policies that have been made. They’re not even, you know, not even legitimate at all, but fake stuff that’s been going massively viral and people are believing it. And it’ll be like, you know, Keir Starman is going to do this, Rishi Sunak is going to do this or not going to do this. And people are just sucking it up because it’s all relevant at the moment. And it’s all just been pushed out to try and sway people either way.
Lynn Beattie (12:39.754)
Yeah.
Alexander Thomas (12:59.814)
and people don’t know who’s making it or whether one party is making it to push down on the party or it’s ridiculous that people are using social media to sway these political parties but that’s the way it is at the moment.
Lynn Beattie (13:13.606)
Yeah, yeah, yeah that do you know what I think I’m gonna I’m gonna do a whole nother episode on that maybe the What is what is the authenticity of social media something like that? I think that would be really good and if I might try and get somebody Maybe from meta, although that would probably be a bit too subjective I’ll try and find who’s an overall independent
Alexander Thomas (13:20.742)
Hmm.
Alexander Thomas (13:26.694)
Yeah.
Alexander Thomas (13:35.046)
Yeah, maybe someone that’s like in the AI space or tech space, something like that.
Lynn Beattie (13:40.554)
now I went on a yoga retreat last weekend and one of the ladies was an AI expert at Cambridge University. So, boom, well done. Okay, right. So let’s talk about our big question, which is how do I invest for the future? Now, how are we going to try and structure this is we are going to talk about short term, medium term and long term because, ask me if I’m wrong. I’m not wrong. I’m right.
Alexander Thomas (13:46.758)
there you go. Perfect.
Yep.
Yeah.
Alexander Thomas (14:03.814)
Okay.
Lynn Beattie (14:09.962)
what we’re saving for is just as important as what tool we use to save. Yeah, and also how old we are and all that kind of stuff. There’s so many levers you can pull. But yeah, so if we start with short term, and I’ve talked about this in a lot of episodes before, but…
Alexander Thomas (14:15.974)
Yeah, absolutely.
Alexander Thomas (14:21.606)
There’s so many pieces to the puzzle, yeah.
Alexander Thomas (14:28.966)
Yeah.
Lynn Beattie (14:33.994)
the importance of an emergency fund. So just do me a little spiel on how we should all have emergency funds or **** off funds is another word we can call them.
Alexander Thomas (14:42.214)
Yeah, yeah, so it could be an FU fund if you leave work, if you get made redundant.
Lynn Beattie (14:46.538)
I can swear, well I swear, it’s my podcast, I can do what I want.
Alexander Thomas (14:51.366)
Yeah, you can. So an emergency fund really or a rainy day pot or whatever you want to call it. A lot of people don’t have it, you know, if you look statistically, there’s a vast amount of people that have less than a thousand pound in savings. A lot of people, even more, that have less than 500 and so many that have literally not a penny in savings. So I literally met someone yesterday who is living on the bread line. Their income is two thousand pound, they’re spending two thousand pound and
They had about 3 ,000 pounds in savings. But if you consider their outgoings are two grand a month, they’ve got enough to cover a month and a half’s worth of expenses. So if you consider a scenario where they get maybe redundant from their job, or they’re ill and they can’t work, then after six weeks, how are they going to fund their lifestyle? They’re not going to get insurance in place or anything like that, they just can’t. So they’re the kind of scenarios why you need an emergency fund or a rainy day pot. And…
And all of them most people will say is that you want six months. But that’s normally quite an excessive amount. It is a lot because for that person, that’s going to be 18 ,000 pounds, which is just sat in a bank account. And it’s a lot.
Lynn Beattie (15:53.546)
That’s it.
Lynn Beattie (15:59.018)
Yeah, can I just say I’m risk averse and I only ever have two or three months worth in my emergency fund and I’m fine with that. My attitude to risk.
Alexander Thomas (16:03.461)
Yeah.
Alexander Thomas (16:07.75)
Yeah.
Alexander Thomas (16:11.238)
Yeah, because for me, an emergency fund is not a one size fits all. You know, people will scream to the hills six months, but it’s not right. It’s actually dependent on your scenario, really, and actually on how much risk your own life has, if that makes sense. So I would say, I’ll give a scenario. If you’re, for example, a roofer, you know, you’re a self -employed roofer. So one, you’re self -employed. That adds an element of risk to your life.
Lynn Beattie (16:16.074)
and
Lynn Beattie (16:35.882)
Yeah.
Alexander Thomas (16:39.782)
you’re a roofer so you know you have a higher risk because you could fall off the roof you could you’re going to be injured you know there’s a significant amount of risk for being a roofer you’re probably actually going to want that six months maybe even more maybe even nine months of an emergency fund and actually if you’re in a job like that you’re really going to want to look at something like income protection insurance as well because something more serious can happen whereas if you’re in a desk job you know you’ve got what’s the risk you’re going to get a paper cut it’s so insignificant.
Lynn Beattie (16:52.394)
Yeah.
Alexander Thomas (17:10.278)
If you get made redundant, office jobs are, you know, they’re all over the place, you could probably get re -employed within maybe three months. So actually, maybe three or four months of an emergency fund is actually going to be sufficient. If you’re single versus if you have a partner, that’s going to make a difference. If you’ve got a partner who can support you financially, you need less emergency fund. If you’re single, you probably need more. If you have kids, you need more. If you don’t, you need less. There’s all these different things to factor in. So you know, six months is what people use as a baseline, but
increase or decrease it depending on your personal situation and that’s basically where I’ll leave it.
Lynn Beattie (17:42.89)
Yeah, and personally what I’ve done, just because you’ve said a lot of risk factors there that are actually me, because I’m self -employed, single, three children, and I’ve got three months, is because I have the policy which you touched on, which is called income protection insurance. So if I get ill and I’m unable to work, then I pay £40 a month for a policy which will pay out.
Alexander Thomas (18:00.966)
Mm -hmm.
Lynn Beattie (18:12.49)
two and a half grand a month for two years on each claim and that kicks in after three months. So it assumes that I’ve burned through my emergency fund then I can start claiming from this policy.
Alexander Thomas (18:25.606)
So it only pays out for two years?
Lynn Beattie (18:29.386)
I only get paid it for two years, but then I can submit another claim like six months down the line. I think I can claim three and I’ve got that until I’m 60 and I’m 47.
Alexander Thomas (18:31.622)
Yeah.
Alexander Thomas (18:36.134)
Okay.
Alexander Thomas (18:40.422)
Okay, brilliant. Yeah, realistically, there’s not a person out there that shouldn’t gain income protection. It’s just a factor of the monthly cost and whether people can afford it or not because it’s such a valuable insurance policy.
Lynn Beattie (18:55.082)
But like how many people have got income protection insurance? Very low, I would say. Very low.
Alexander Thomas (18:59.366)
Yeah, it’s one of the lowest because it’s one of the more expensive insurance policies. You know, most people have got a life cover because of the mortgage, but life cover is normally £7 a month, £10 a month. Income protection, when they think it’s £40 a month and they can’t really see themselves claiming it very often.
Lynn Beattie (19:04.714)
But it’s not.
Lynn Beattie (19:09.226)
Yeah.
Lynn Beattie (19:18.314)
But that’s age dependent. So for you, your life insurance and your income protection insurance are gonna be a lot lower. I’m 47 and I have quite a lot of complex health stuff with parents who died early and things. So my life insurance is like 20 or 30 pounds a month. And then my income protection insurance is 40 pounds a month.
But then I have an old life insurance policy from when I was 24 that is like a last until I’m 50, which is six pounds a month. Because when you take it out when you’re really young and it was like, you know, super, super cheap. So yeah, but what I will say about insurance products is because I don’t want to go too much detail. It’s very, it is quite complicated and you need a specialist broker.
Alexander Thomas (19:50.278)
Hmm.
Alexander Thomas (19:53.83)
It’s so cheap here.
Lynn Beattie (20:12.266)
help you with those insurance products, I assume you’d insurance at your place. Yeah.
Alexander Thomas (20:17.094)
Yeah, yeah, so we’ll cover all types of personal and business insurance. But yeah, you are right, because you can go on a comparison website and buy your own insurance, but insurance is different types can have so many different exclusions. And we’ve had people come to us before, who have bought income protection, for example, had it for 10 years, had an incident, tried to claim, and then the insurance said, actually, no, your particular problem is not covered.
Lynn Beattie (20:22.602)
Yeah, yeah, yeah.
Lynn Beattie (20:28.874)
No. Don’t do it.
Alexander Thomas (20:44.838)
they’ve paid 10 years worth of premiums just to find out that they weren’t covered. Whereas you know if we had said if they’d come to us we could say all right what particular thing do you want covered we can make sure that the provider we find does cover it.
Lynn Beattie (20:49.098)
Yeah, exactly, exactly.
Lynn Beattie (20:58.794)
Yeah, and there are…
I’m going to say some names here of companies who I’ve used. So Life Search are a really, really good insurance comparison company. And then Cura Insurance are really good when you’ve got complex health issues, me. So I have done my life insurance where Life Search did my income protection insurance and they are just specialist insurance brokers, but financial advisors and financial planners.
can organise that as well, but there will be fees related, I have to point out. Yeah.
Alexander Thomas (21:38.63)
There’s no fees for setting up an insurance policy from an IFA.
Lynn Beattie (21:41.93)
I could just come to you and say sort out my next life insurance and you just do it.
Alexander Thomas (21:46.694)
Yeah, so the insurance is the only thing that we can still get paid by the provider.
Lynn Beattie (21:48.202)
Cool, all right.
Lynn Beattie (21:52.33)
yes. Got you. Got you. Okay. Yeah. Okay. So, right. So we talked about emergency fund. The other thing I’d say in short term funds with what’s so firstly with your emergency fund, that is what you also use for true emergencies like the washing machine breaking or the car needing for new tires. I always Yeah, I don’t I’ve got to get my boiler changed. And
Alexander Thomas (21:53.702)
Yeah.
Alexander Thomas (22:01.094)
Yeah.
Alexander Thomas (22:07.398)
Mm -hmm. Yep. Yeah, the boiler, anything like that.
Hahaha!
Lynn Beattie (22:17.546)
Then the other thing for short term is literally like things you know you’ve got coming along this year. So I always have a holiday, pots, so my holidays always go in advance. My eldest son is 17 in November, so I’m gonna have to pay driver. Yeah, so then so then medium term, I would say, I would say medium term is what would you say like one to five years or one to 10 years?
Alexander Thomas (22:20.326)
Yep.
Alexander Thomas (22:27.302)
Yeah.
Alexander Thomas (22:33.51)
Yeah, short term we’d sort of say less than 12 months wouldn’t we?
Alexander Thomas (22:46.854)
I would say one to five years medium term. Yeah.
Lynn Beattie (22:48.682)
one to five years. Okay, so what would you recommend in the one to five years pot?
Alexander Thomas (22:54.854)
When it’s less than five years, it’s going to become a lot more subjective because it now depends on your attitude to risk. Because I’ll give you an example. My friend came to me wanting to buy a house in about five years. So he was under 39. So the obvious solution was lifetime ISA. And he had two choices. He could get a cash lifetime ISA or a stock share lifetime ISA. He’s got five years. What’s the market going to do in five years? Well,
Lynn Beattie (23:08.202)
Yeah. Right.
Alexander Thomas (23:23.846)
I didn’t have my crystal ball with me, so I couldn’t tell him. But he’s got a choice to make. He can either take that risk that over five years he’s going to be up, or he can put it in a cash ice and get it guaranteed. At the time, the interest rates were like 2 % from the cash ice. He could guarantee that he’s going to make that. But realistically, inflation was still higher. So he could basically take a pundit that the stocks was going to do better.
he did. And actually he ended up being significantly better off by going for stocks and shares. But he’s young, he’s 20 something. And he’s quite an adventurous person. He does all kinds of crazy sports and stuff like that. So he’s got a land rover, you know, one of these wild people. Yeah, needs it. Yeah. But because of the kind of person he is, he was happy to take the gamble. He knew that
Lynn Beattie (24:09.322)
Hopefully it’s the life of Florence. Yeah.
Lynn Beattie (24:18.154)
He was, he wasn’t risk averse. He was like me. He was a risk taker. Yeah.
Alexander Thomas (24:20.71)
Exactly. He was. Yeah. So because of that, and because of the timeframe, I think it was about four years he was waiting, he knew that he was also getting the 25 % government bonus. So even if the value did go down a little bit, he knew that with a government bonus from the light up, obviously this only applies to lifetime high. So yeah, he was still going to be doing well anyway, even if the market did go down a bit. And four years really, it’s not a huge amount of time, but if the market did dip,
Lynn Beattie (24:29.45)
Yeah.
Lynn Beattie (24:37.386)
bit of a no -brainer, innit?
Alexander Thomas (24:50.086)
after two years you’ve still got two years for it to recover the only real risk factor is if on the third year or you know six months before you had a dip you’ve not got enough time for the recovery so it does really come down to your personal opinion at that point but yeah.
Lynn Beattie (24:54.25)
Yeah.
Lynn Beattie (25:06.826)
But when you are looking at these products, so we’re talking specifically here about ICERs, which is, we’ve got a £20 ,000 allowance to put into an ISA, and it can be a capital ISA, it can be a stocks and shares ISA but your limit is £20 ,000 per year, which is a lot, like…
Alexander Thomas (25:18.118)
Yeah.
Alexander Thomas (25:24.902)
Yep.
Alexander Thomas (25:30.086)
Mm -hmm. It is, yeah.
Lynn Beattie (25:33.066)
There are not many people who max out on their ICERs each year, can I just say. So we’re talking to normal people here. So I, for example, put £200 a month into my stocks and shares ISA. And I, I’ve been doing that for five years or something, started off at £100, put it up to £200 and now I’ve got, I don’t know.
Alexander Thomas (25:38.726)
We are.
Alexander Thomas (25:43.878)
Yeah.
Alexander Thomas (25:49.606)
Yep.
Lynn Beattie (25:53.802)
12 grand or something sat there. So, but bear in mind that as I’ve already said, I am a risk taker. So I’m happy to watch my money go up and down. But in reality, so I’ve had it for five years, Alex, and it’s never gone down. And I’m getting because I’m there, you know, blended funds with lots and lots of companies worldwide shares in those stocks and shares. I’m riding the wave of the stock world stock market, which which generally
Alexander Thomas (26:01.446)
Yeah.
Alexander Thomas (26:15.75)
Yeah.
Lynn Beattie (26:23.756)
grows over time. If we look at say the FTSE 100, which is the top 100 companies in this country, if we look at how they’ve performed from say 1980 to 2024, the curve is like that, isn’t it? Yeah. All right. Here’s another one.
Alexander Thomas (26:27.11)
Mm -hmm.
Alexander Thomas (26:40.294)
Yeah, the first is not the best example to use, personally. The first is a bit flat, but yeah, if you’re going to look at the S &P or the Dow, both which are in America, or even the Nasdaq, something like that, then yeah, they are all very much on an upward trend. You know, if you zoom in and look at one year, it can be anything like that. If you zoom out to five years, it suddenly looks more like that. If you zoom out to 10 years, it suddenly looks more like that. It’s, you know, the more zoomed out you are, the more an upward trend it is.
Lynn Beattie (26:50.282)
Yeah.
Lynn Beattie (26:59.626)
Yeah, exactly.
Yeah.
Yeah. So that.
So there’s always a risk and I always have to cover myself and say like money can go down and up, which I’ve already alluded to. But it’s sensible.
Alexander Thomas (27:18.534)
Yeah, you made a really interesting point there. So sorry to interject, Lynn, because you said that you’re putting your money in every month, you know, rather than just say you’ve got 5000 pounds, rather than putting the money in at the start, and then you’re leaving it to be subjected because you were putting your money in every month. What you’re doing is cost averaging. So you’re almost riding the wave, and you’re buying at the ups and you’re buying at the downs. So that’s a really good way to hedge your bets and actually
Lynn Beattie (27:47.306)
Yeah.
Alexander Thomas (27:48.294)
end up buying at what you call the market average price and that mitigates your risk. So even when the market’s up you’re buying at a higher price when the market’s down which is not great but you’re also buying the shares at a discount. So it means when the market does recover you’ll recover with that growth as well. So over the five -year period that’s when you’re doing best for a five -year period purchasing monthly is probably the best way to do it from a risk point of view.
Lynn Beattie (28:02.474)
Yeah.
Lynn Beattie (28:15.242)
Yeah, okay, that’s good. So that brings me to my next point then, which is, if we move on to a long term where we talk about pensions, I’m going to tell you what I do with my pension and you’re going to tell me that’s not the right thing to do. So…
Alexander Thomas (28:27.334)
Yeah.
Lynn Beattie (28:34.57)
I always find putting money into my pension quite a traumatic decision because I’m self -employed and I need to wait for a point where I’ve got like a really good cash flow, you know, excessive cash in my business and I’ll make a decision at the end of every quarter how much excess cash I’ve got and then I’ll say I’ve got five grand extra.
Alexander Thomas (28:39.814)
Yeah.
Alexander Thomas (28:48.038)
Mm -hmm.
Alexander Thomas (28:57.382)
Mm -hmm.
Lynn Beattie (28:57.386)
I’ll maybe put three of that into my pension because I’m like, I can’t put the whole five because once it’s in my pension, it’s locked away until I’m 57. Yes. 58, 57. I should know that. Yeah, yeah. Which is 10 years time. So that’s what I always find. And that decision is going to get less and less traumatic as I get closer to 57.
Alexander Thomas (29:05.478)
You can’t get it out, yeah.
Alexander Thomas (29:10.182)
Yeah.
Alexander Thomas (29:13.702)
57 as of 2028, yeah.
Alexander Thomas (29:26.31)
Yeah.
Lynn Beattie (29:26.41)
And a huge benefit of that is I don’t have to pay corporation tax on that money that I took out of my company and put into my pension. So it’s so, so, so tax efficient. So yeah, explain to people what the difference is between pension and investing in a stocks and shares ISA.
Alexander Thomas (29:31.91)
Yeah.
Alexander Thomas (29:45.222)
So for you it’s obviously very different because you’ve got a limited company so you’re getting the corporation tax relief.
Lynn Beattie (29:50.09)
Yeah, so just assume, don’t say it as if you’re throwing a pop in your pants.
Alexander Thomas (29:54.406)
But if you were, for example, self -employed, or if you were an employee, well, let’s just say, you know, you’re 30 years old, you’re putting your money away. If you wanted to put money into stocks and shares ISA, the ultimate difference, there are two core differences between investing in a stock to shares ISA and into a pension. The first one, as you’ve roughly said, is the access age. So you’re ISA, you’re gonna be able to access that whenever you want, tomorrow if you want.
Lynn Beattie (30:00.106)
Yeah.
Alexander Thomas (30:23.238)
obviously not prudent to do so because you need it to grow, but you can access it whenever you want. So if you, let’s say you’ve got your emergency fund, but let’s say you had a super emergency, the house blew up and you needed more money than you had in there, where you’ve got your ISA. So you can use that if you needed to. Or let’s say you wanted to upside the house or something. You’ve got access to that money immediately. Or let’s say you wanted to retire earlier than 57. Well, you can use those ISA funds. There you go. You and me both.
Lynn Beattie (30:47.466)
Yeah.
Alexander Thomas (30:51.462)
can use those ISA funds to bridge the gap. So if you want to retire at 50, you can use your ISA money from 50 to 57 and then the pension money from 57 onwards and that’s what most clients will do. They will use it as a stop gap basically to bridge that gap. But you can’t contribute to your ISA until the money is in your bank. So you have to get paid through PAYE or if you’re self -employed, you’ll pay your income tax 20 % or 40 or 45, pay your national insurance which is 8 % or 2%.
Lynn Beattie (30:58.794)
Yeah.
Yeah.
Alexander Thomas (31:22.63)
With a pension, you are stuck until you’re 57. At some point, it’s going to 58. So we don’t know when that is. It’s loosely, it’s between 2037 and 2044. That’s all the legislation says at the moment, which is unbelievably great. So by the time I get there, it might be 60. Who knows? All we know is that it’s being pegged to 10 years below state pension age as of 2028. And that will, they’ll both continue to rise in the future based on life expectancy and government debt and things like that.
Lynn Beattie (31:45.322)
Yeah.
Alexander Thomas (31:53.318)
But when you contribute to your pension, it’s not after you’ve been paid, it’s at the point when you receive your salary. So you get your income tax relief and that’s at the marginal rate of what you pay income tax. So that could be the 20, 40, 45%. So and if it’s through, if you’re employed, it can be, if it’s through salary sacrifice as well, which is a particular type of pension contribution, you’ll also save on that insurance. So you can potentially get either 28 %
Lynn Beattie (32:03.466)
Mm -hmm.
Alexander Thomas (32:23.43)
tax relief, 42 % tax relief or 47 % tax relief. If you’re in this awful tax bracket between 100 and 125, you can get 62%. But we’re not going to complicate that. We’re going to keep it for normal people for now. But you know, the average person is basically going to get 28 % tax relief potentially through salary sacrifice. On a pension contribution.
Lynn Beattie (32:32.234)
Don’t talk about really… No, because… Yeah.
Lynn Beattie (32:45.066)
Just, just it, because, can I stop you Alex? People won’t know what tax relief means, so can you just explain what it means?
Alexander Thomas (32:51.174)
No, okay. So you put £80 into your pension and the government will give you back the 20 % tax that you otherwise would have paid, so that £80 will become £100.
Lynn Beattie (33:02.41)
Yeah. Yeah.
Alexander Thomas (33:05.638)
So, whereas normally if you were paid that £100, you would lose the 20%.
and only receive £80. And then you could put it in stocks and shares or whatever, but it’s actually reversed. You put the £80 in your pension, you get the £20 back. So now you’ve got £100 in your pension.
Lynn Beattie (33:22.25)
I will credit Claire Barrett for this analogy because it’s a really good one. So a pension is like a boots meal deal. So the actual bit you pay into your pension is the sandwich, but then the packet of crisps is the tax you’re getting back from the government and then the drink is your employer who’s also contributing to your pension.
Alexander Thomas (33:28.55)
Yep.
Alexander Thomas (33:48.198)
Hmm.
Lynn Beattie (33:49.386)
So you are winning two ways with a pension. So if you’re ever in a position where you’re thinking, I can’t afford it, I need to opt out, you need to think about all of that extra money that you’re missing out on. And as somebody who opted out in her twenties and is now having to make up for it now, don’t do it. Just if you really, it’s the last thing you should do is opting out of your pension.
Alexander Thomas (33:52.294)
Yeah, that’s very good.
Alexander Thomas (34:10.214)
Yeah.
Alexander Thomas (34:15.974)
Yeah, that’s a really good analogy. It is. Because all you’ll be left with is the sandwich and… What’s a sandwich without a drink? It’s just a dry mouth, isn’t it?
Lynn Beattie (34:18.346)
Yeah, it’s good.
Lynn Beattie (34:23.753)
That’s why Claire is the person in charge of personal finance at the Financial Times. So, yeah. But then the other thing I want to ask, where are we at? 34 minutes. Is that, because we haven’t talked about property, okay? And I hear from so many people that I don’t need a pension because I’ve got my house.
Alexander Thomas (34:29.318)
Yeah, she’s very good.
Alexander Thomas (34:44.038)
Yeah.
Lynn Beattie (34:51.402)
and I’m gonna have paid off my house. Yeah, I’m sure you do. And the thing is, is you always need somewhere to live or let’s say really, really far down the line and you make it into a care home, your house is gonna have to be sold to pay for that care home. So it’s not enough, is it, to rely on just your house?
Alexander Thomas (34:51.878)
Yeah, I hear this a lot too. Yep.
Alexander Thomas (35:05.958)
Mm -hmm.
Alexander Thomas (35:12.102)
Yeah.
Alexander Thomas (35:18.374)
No, not at all. If you go right back to the person I spoke about earlier, so her bills were £2 ,000 a month, the mortgage may be £700 of that. So yes, once she’s paid the house off, she’s freed up £700 a month, but she’s still got £1 ,300 a month to pay for. So yes, she owns her house now, but how is she going to pay that £1 ,300 a month without a pension?
Lynn Beattie (35:27.018)
Yeah.
Alexander Thomas (35:46.118)
Even when she gets to state pension age which is 67 by the time she gets there that’s going to give her what 900 pound a month. Where’s the other 400 pounds coming from?
If she’s got a partner, okay, they’re both getting estate pension, that’s fine. But what if the partner dies? What if you’re single? What if your bills are higher than £1 ,300 a month? Because for a lot of people they are. It’s not good enough to just have a house. And as you said, if you go into care, well, something in the house is gone, how are you going to pay for care fees and things like that? I mean, yeah, you can get free care, potentially, but don’t you want to leave that house to your children if you’ve got them?
Lynn Beattie (36:12.554)
Mm.
Alexander Thomas (36:28.582)
Don’t you want to leave it to someone? You’ve worked your whole life paying off that mortgage. What was it worth if you have to lose its care fees?
Lynn Beattie (36:37.674)
And one thing I want to touch on because it’s from what you said earlier is about when big life events happen. So you said if your house caught on fire. But the thing is, I’ve had a lot of emergency life events happen to me.
Alexander Thomas (36:50.694)
Mm -hmm.
Alexander Thomas (36:56.87)
Yeah.
Lynn Beattie (36:57.61)
where I took my stocks and jazz I said so a perfect example is when you get divorced okay and for 42 % of us are going to get divorced so that’s pretty much half and that is such a shock to the financial system where
Alexander Thomas (37:08.23)
Yeah.
Lynn Beattie (37:18.666)
I mean, I won’t go into loads of detail, but I had to give my ex -husband a lot of money. You know, the equity in the house had to be split 50 -50, and I wanted to stay in the house, so I had to buy him out. So I had to find a hundred grand, basically. And, you know, where do you find a hundred grand from? It’s really not easy. And at the time, I had bugger all money. So,
Alexander Thomas (37:25.286)
Mm -hmm.
Yeah.
Alexander Thomas (37:35.302)
Yeah, it’s not that easy.
Yeah.
Alexander Thomas (37:43.878)
Yeah.
Lynn Beattie (37:45.354)
In fact, I’d only just finished paying off 16 grand worth of debt. So anyway, by the by. But I’ve got plenty of money now, so that’s good. But yeah, it absolutely killed me financially because I was going through a divorce, but I was also going through a remortgage process because I needed to borrow another 100 grand. So I’ve now got a massive mortgage. And because I was going through the mortgage process, I couldn’t borrow any money to like…
Alexander Thomas (37:49.382)
Mm -hmm.
Alexander Thomas (38:06.022)
Yeah.
Lynn Beattie (38:13.418)
pay for things I needed to pay for. So I had to borrow 10 grand from two of my best friends, which we wrote very detailed contracts and you know, I promised to give them the money when the mortgage actually came through, but I didn’t know the mortgage was even going to be granted. So they took a huge risk on me. I mean, it did. It came through three days before lockdown. Like you would not believe the luck of the timing and Santander, I’m hugely grateful to them for.
Alexander Thomas (38:22.438)
Yeah.
Alexander Thomas (38:28.934)
Hmm.
Alexander Thomas (38:37.222)
Hmm.
Alexander Thomas (38:42.342)
Yeah.
Lynn Beattie (38:42.73)
giving me that money and the broker who helped because it was the broker who did all the work to be honest. So yeah, I just I think we can’t on our human nature is to carry it on thinking that bad things won’t happen. But the thing is, is they do we get ill, we get divorced, people die. I know we don’t like talking about it. But my parents died when I was a teenager, people die. So it’s just
Alexander Thomas (38:47.174)
Yeah.
Alexander Thomas (39:00.07)
Yeah.
Lynn Beattie (39:11.178)
being prepared for those kinds of things. I don’t want to be all doom and gloom because saving is such a positive thing and we can have wonderful holidays and if a car is really important you have a nice car if you save for it or nice handbags whatever. So, but I think we just need to realise with saving for the future that it’s about having nice things but it’s also about preparing for nastier things that inevitably happen, yeah?
Alexander Thomas (39:40.039)
Yeah, no, I completely agree, Lynn. And that’s such an example of a traumatic experience that we just don’t expect to happen to us. Because we live life, you know, it’s almost like Groundhog Day sometimes. We live life, we go to work, we come home, we eat dinner, watch TV. Every day almost feels the same. And then in the blink of an eye, something can happen. When I was 18, I got hit by a car and I fractured my spine, my skull, my pelvis.
Lynn Beattie (39:48.074)
Yeah.
Alexander Thomas (40:09.094)
and I was in hospital for a month and everyone thought I was going to die. And, you know, obviously looking at me now, I mean, I’m beautiful. You think I’m, it never happened, but, you know, not to be modest, but it was, it was a real, no, no, it’s slightly different. I mean, I’ve got scars and things, but you can only see them in person really. But, you know, my mum thought I was going to die on that day. It was really traumatic for my entire family. And luckily I’m here to tell the tale, but I was, I was a teenager and my life was almost taken from me.
Lynn Beattie (40:19.21)
You didn’t look like that in hospital.
Lynn Beattie (40:31.498)
Yeah.
Alexander Thomas (40:38.502)
like that. I didn’t even see it happen. I don’t remember it happening. And you know, like that anything can happen at any moment. And like you say, we all like to think it will never happen to me. That’s that’s the staple phrase, it will never happen to me. And it’s quite sad because I speak to people on a daily basis on Instagram, TikTok, things like that. And I’ll say, just put a little bit of money away for the future and things like that. And people do say, no, no, no, you know, might be dead tomorrow and things like that live for the moment.
And I can completely empathise because we should live for the moment. We might be gone tomorrow, but at the same time, there’s a very high chance that we might not be. And the last thing you want is to have spent your entire life living in the moment to then become, to find yourself 70 years old, not being able to afford the basics. Because that’s arguably just as scary.
Lynn Beattie (41:34.282)
Yeah, so I think let’s end on the point that life is about balance. We live for today and we have a great time and we do what makes us happy, but we also put some money aside for the future because we want to be happy for our entire lives, however long that may be. I don’t want to live until I’m 100, but I definitely don’t want to live like when I’m 58, like my mum did, you know?
Alexander Thomas (41:40.23)
Mm.
Alexander Thomas (41:49.894)
Yep.
Mm -hmm.
Hahaha!
Alexander Thomas (42:00.678)
Yeah, life is for living, both now and in the future. I think that’s what’s important. I think we shouldn’t sacrifice so much that we miss out on living now. We have to just give up a little bit so that we do get to live in the future as well.
Lynn Beattie (42:07.338)
Yeah.
Lynn Beattie (42:11.306)
Exactly.
Lynn Beattie (42:15.658)
Yeah. what a beautiful way to end the conversation. Was there anything else? Yeah, yeah. Yeah, I think it’s really important to share personal stories because the thing is, is there will be people watching and listening to this who have had a traumatic accident happen to them, like what’s happened to you. And you’ve obviously…
Alexander Thomas (42:19.718)
Yeah, thank you for sharing that, I really appreciate that.
Alexander Thomas (42:35.686)
Hmm.
Lynn Beattie (42:40.202)
persevered and got through it and like you’re doing really well. So yeah, people like to be inspired. What was I going to say? Is there anything that we’ve missed that you think that we need to touch on? Just that the regular person, I don’t think there is, but.
Alexander Thomas (42:45.574)
I’m trying.
Alexander Thomas (42:55.014)
No, I think if people have got questions, if they need help understanding tax relief, ISAs, property, anything like that, they can reach out to either of us and we can explain to them.
Lynn Beattie (43:06.538)
Yeah, yeah, yeah, yeah. So, just tell people where they can find you on the internet again.
Alexander Thomas (43:13.83)
Yeah so at wealth by Alex on Instagram, TikTok, LinkedIn, everything it’s all the same tag.
Lynn Beattie (43:21.386)
Cool, brilliant, nice and simple. Yeah, thank you ever so much for joining me, Alex. I really, really appreciate it. I know we talk quite a bit on Messenger, but this is the first time we’ve actually met in person, isn’t it? So…
Alexander Thomas (43:32.134)
Everything.
Alexander Thomas (43:36.326)
Yes, I’ve really enjoyed it then. Thank you.
Lynn Beattie (43:39.818)
Thank you ever so much. Yeah, thank you everybody for listening or watching. Don’t forget that it can be watched on YouTube. Not many people do, so I’d like it if you went over. And yeah, I will be back next week. And also please don’t forget to subscribe to my podcast, then you’ll get a reminder of the episode each week. Thank you. Bye bye. This will… hang on.