Ask us anything: Do you need a financial adviser?

0:28Right then, T, time to record the Money Week advert. it summarises the biggest news stories that you need to know about, from pensions to investing, tax to the budget, or even what to do with the£1 coins while you're sat on the toilet. Along with their own analysis, they pulled together pieces from the top publications, like the FT, Economist and Wall Street Journal, to give you a balanced look at what's going on. If you want to give Money Week a try, you can get six issues in print and on the app for free by visiting moneyweek.com forward slash money. After your trial, you'll save an extra£5 on a quarterly subscription, exclusive to Making Money listeners, so that's moneyweek.com forward slash m-o-n-e-y there's a link in the description

1:06welcome to our mini episodes where we answer your biggest questions about money we've been loving reading your questions keep them coming in guys okay let's go

1:20rian asks what have you guys changed about your own approaches since starting the podcast Do you want to go first? Yeah. I guess I've become a bit, I won't say more risk averse, but probably looking a bit more long-term in my investment horizon. Looking at diversification and my utilizing my tax-free wrapper of my ISA with some ETFs. Nice. Yeah, nice. I want to sort out my Lysa and I also want to sort out my son's ISA, maybe SIP. But I mean, the thing is, I've learned so much on the podcast. It's like, okay, what do I, I want to do everything, but I can't do everything. So it's kind of targeting it.

2:02So for me, number one is the ETF in my ISA and the number two is an ISA for my kid. So those are my two priorities. Yeah. For me, I've been spending more money. No, seriously. I just like reined in the investment. like speaking to certain people it's you know it's clearly it's more about happiness than it is about the numbers and i save an aggressive amount of my income you know a large proportion of it 60 70 maybe of what i bring in some months so i've just dialed that back and spending more yeah so basically you're becoming more like me and i'm becoming more like you yeah exactly yeah i'm in more yolo yeah you're a bit more like let's be conservative it's about being happy isn't it yeah And you know, I lived for such a long period of time, like on not much money a month in terms of social and stuff that I was kind of like ingrained into me.

2:51Whereas it's now it's like, no, break off a bit and spend it every month. Enjoy life. Yeah, yeah, yeah. Yeah, yeah. So that's probably it. Forgiving myself as well is the thing. So we really are like the yin and yang and we're just like, we're meeting in the middle for like nice balanced happiness and healthy portfolios. Yeah, yeah, yeah. Yeah, I'm still investing a load of money more than I need to probably, but I've, you know, dialed it back a bit so that I could spend a bit more. I've actually reduced my crypto investments, well, monthly, not over, not the whole portfolio. It's all still there.

3:22They do a good job of doing that themselves. They erase themselves every month. It's eroding away slowly my money or quickly sometimes. I mean, it's doing well at the minute. It's doing well at the minute. But yeah, I think diversification. Happiness is really important though because I think you said when you have financial education or financial, it makes you like generally you live longer, you're more happy. And it is a lot, it's kind of like a game. Again, now I understand when you said, oh, every month I like to save. And I like, I move my money into these different pots. And it's kind of, it is fun because you're like, okay, I'm putting this for this.

3:55And you're like, I'm putting this money away for this reason. And this is long-term, this is short-term, this is medium-term. And you kind of feel a bit more like holistic, a bit more balanced in your life. not having before I had all my eggs or my most of my eggs in one basket and it was very stressful even though I don't really get stressed but it was like probably subconsciously I was probably like worried about it but now it's like okay well you feel like a more solid foundation exactly I feel a bit less guilty about like being so frivolous with my money just like throwing it into a risky asset and then just kind of you know I'll be fine but now it's kind of a bit more calculated and a bit more controlled so yeah and it's gone to other aspects of my life because I want to save more, I'm avoiding parking tickets.

4:36So I'm paying them off quicker or sometimes. And yeah, driving less, like different, like the more money you save, the more you can invest. So sometimes I'm like, oh, I want to just eat and I want to take away. I'm like, nope, if I save that 30 quid, I can put it in like my ETF or something. So it changes every aspect of your life. Yeah. And it's like over time, you'll do those little things with the index funds and they'll build and then it'll get to a point where like I'm at now where it's like, actually enjoy a bit of it so i was out the other day for dinner and i bought dinner and it was like 150 quid but i got a dividend while i was having dinner that was more than the dinner and i was like there we go you know i earned more there off that dividend from the global index than they did for dinner and that was a moment of like you've been building this thing for 10 years damien and now it's literally paying dividends you know time to enjoy bits of it otherwise i just i could so easily just sprint with my head down to the end of life and get to 80 and have millions of quid and be like, well, I'll help you spend it.

5:34Don't worry. Yeah. What am I going to do now? I'll be there at 50 like demo. Yeah. Let's dip into this. So yeah, now I, now I break off like a chunk. Have a good time. A little, little, little 10 piece. Still stayed in a crappy hotel last night though, didn't you? Oh mate, it's awful. It's the old habits. You're trying to save, trying to save the money. You should just pay more and got a nice room. It's like a hundred quid a night and it was like, oh, so bad. I'm tired today. Had the worst to be. So bad. Yeah. Yeah, literally it was just tapping all night. And the bed was like, you know, the weird springy ones that are kind of like camp beds.

6:03Me, I would have got the Ritz and be like, oh, made loads of money this week. Let me spunk it on the nice. I know, I know. And you, the, you know, the bed, it's like a sheet. And then there's a blank, there's like a weird scratchy thing in between with another sheet. And like, you can just tell they don't wash the inner layers. And I move about. So I woke up this morning, it was all over me. I was like, no. It was almost on my face. oh yeah that was yeah motto of the story is don't be tight on the hotels yeah i could have spent an extra 50 quid a night and done all right but i was like no i want to stay in central london in south kensington for under 200 quid for two nights i found a place but yeah the place has now found me

6:42okay next question this is a big one from callum so hi gents your episodes drive me to learn more they help me challenge my friends about crypto investing and debt advice and together we strike meaningful conversation that I know is for the better of our generation because we were never taught this in schools. It's a lovely thing to say, Callum. Thank you. Anyway, thank you both. Well, mostly Damien. Not a nice thing to say, Callum. Thank you. He actually wrote that. I'm not even making it up. On to my question. I'm lucky enough to have an interest in personal finance and feel I have a solid grounding.

7:13But as I approach my 30s, I'd like to seek personal advice. Who should I turn to and what should I look for? He then asks, Who should I trust? How do I judge financial advisors? How does it all work? The advice I would be looking for would be to be tax efficient and slow and boring wealth growth, tailored to a debt-free married couple with one-year-old. He then lists his income, says he's already paying into global ETFs and they save 20 % of their salary and they put stuff in high interest savings accounts as well. I mean, my question for you, Callum, is why do you think you need a financial advisor?

7:47Because it sounds like you've got it pretty boxed off there. I think, I mean, I don't know, is it a confidence thing just to know that you're doing the right thing? I think it's reassurance. Like even with me, we've had all these episodes and I was like, even before I wanted to open my eyes, I'm like, Damien, show me how to do it. Is this the right one to invest in? Is this the right fund? Is this the right ETF? So I think it's, and he's obviously got a lot of, he said he's got a solid grounding in finance and he seems to know what he's doing. Yeah, I mean, you know, you basically say in there, I want a financial advisor to help me invest tax efficiently in a slow and boring manner.

8:20And then you're listing that you're doing exactly that. So if it is about confidence, we can't tell you how to find a good financial advisor. To be honest with you, I wouldn't know because I don't use them. And the only experience I've ever had with one myself professionally wasn't very good. I know financial advisors from a personal standpoint and they're excellent. If you want their details, get in touch with me and I'll pass them over. They're my mates. But make sure they're regulated correctly. Covered by the FSCS. Yeah, that's it. And so they're regulated by the FCA and then they're covered by the financial services compensation scheme, which means you get up to 85Ks worth of cover if you get bad advice.

8:58As well as that, if you're just looking for reassurance, maybe consider one that takes you on an hourly rate rather than you ask how it works. What a lot of them do, the way they make their money is they manage your investments for you. They migrate all your investments over to their products and then they charge you a percentage and it's typically quite high. some financial advisors can charge like five percent of the money going in and then another percentage on going and it can really add up so if they're trying to do that maybe that isn't what you need and maybe what you need is just to sit down with someone for a couple of hours who goes you know what you're doing all right here mate you say they charge three to five percent they charge not total of what comes in so it's not as bad as five percent a year but they might charge five percent of any money that you pay in so if you're paying a thousand pounds you know they take 50 quid of it or whatever is that right yeah no it sounds yeah yeah it is right sorry quick math um and then you know they'll take a chunk and then they'll invest it and they'll take a portion of that every year as well and that can really add up if you're doing low-cost global index funds to migrate over to that to get annual advice on a yearly basis i don't know i wouldn't personally do that and even like the etf fees of uh what 0.2 0.22 percent points you're at seven percent I'm like, whoa, that's a bit more.

10:12Well, when then you go into the financial advisor world and they could be charging, you know, 1%, 2%. So it really racks up. For a lot of people that works. And for a lot of people, it is about reassurance and just that someone's looking after them. And if that's what people need, then fine. I'm not best qualified to advise on how to find a financial advisor because my whole thing is you can do this yourself and here's how.

10:35What do you want to ask us or future guests? Email us at makingmoney at kindling.media. or just slide into the DMs. This isn't advice. Whilst we discuss individual examples, we can't give you personal financial advice. What we can do is offer a perspective and discuss the issues. I'm Damo. I'm T. And we'll be back next week answering some more of your questions.