What % do we save a month? Ask Us Anything

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0:49So we're going to be taking a quick break and we'll get back to our normal interview style podcasts in a couple of weeks. But today we're going to be going through a few of your biggest questions that you've sent in to us. So, Quanti, what have we got? Elliot writes, in a hypothetical world where this doesn't constitute as financial advice, if a person is involved in their workplace pension and their employer will not match any more than the required 3%, should the person who has 30 plus years until retirement be investing their surplus cash in the workplace pension, a stocks and shares ISA or in a SIP?

1:23In the hypothetical scenario, the workplace pension provider fund options are not 100 % equities. whenever someone starts an email with, I know this isn't financial advice, but I shit myself. Because it's always, they're always asking for financial advice. Trying to get us in trouble. Yeah, they're always asking for financial advice, which I won't give because I'm not qualified. So what we've done is we've asked Tom Morgan, who is a qualified financial advisor, for his answer on this. And he's sent in some guidance, hypothetical guidance. Essentially, you want your cash to be working as hard as possible for you.

1:55So any surplus cash you are looking to invest needs to be done in a tax efficient environment first and foremost. The workplace pension ticks this box, so does the SIP, but the kicker is it does tie your money up until at least the age of 55 currently, but that's moving to 57 soon. A stocks and shares ISA solves this access issue and you can get at it whenever you want, but the kicker here is you're not getting the tax relief on the way in like you do with pensions. I think the whole pensions versus ISAs is a silly debate. They're both great for different reasons and should both be used to ensure you get the best of both worlds.

2:29If you have desires of early retirement, look at stocks and shares ISA to complement your pensions. But on balance, pensions tend to provide more long-term tax benefits due to the tax relief on the way in, compounded growth on the money over the long term, and the fact that you're likely to be a lower taxpayer in retirement. The real problem, though, in this hypothetical scenario is not having the risk options you want available. For example, full stock market exposure. Someone with a 30-year time horizon, if they are secure financially, should be looking to the stock market and be brave. Short terms, ups and downs are not a problem.

3:02It's like riding up an escalator whilst playing with a yo-yo. Don't focus on the yo-yo, focus on the escalator. People talk about risk being volatility. That's pretty brilliant to be fair. I know, I just imagine a yo-yo just - Yeah, yeah, yeah. People talk about risk being volatility, i.e. the ups and downs, but really the risk is not meeting your financial objectives. that yo-yo example is going up and down the escalators flinging out a yo-yo doing all my little tricks I was like where's he going with this yeah I know it's a good illustrative example because yeah you focus on the journey not on the ups and downs don't focus on the micro focus on the macro yeah yeah yeah the yo-yo is the short term volatility in the market and the escalator is taking you to your destination which is where you want to go yeah so don't worry about the yo-yo that's a I mean like he said like the risk is not meeting your financial objectives so it's like keeping the money in the bank Like your money is just deteriorating, you're losing value.

3:54So the risk is not meeting those objectives. So you want to be on the escalator for the journey. Yeah, one of the thing about the workplace schemes, like he says, is they often have limited fund choices. So paying into a sip of your own choice outside, that gives you the ability to pay in, you know, to have more control over fees and the funds. The one thing I will say is though, that there can be a benefit to pay an extra into a workplace scheme on the basis that if your employer offers salary sacrifice and passes on the NI saving. So it's worth checking that. My employer that I used to work for didn't do that.

4:28So for me, I just matched the contribution that they would offer. And then I went and invested in a SIP. But it's worth walking into your HR department and say, do you pass on the NI saving to me? Because that's more free cash in a way. There's no simple answer to all this hypotheticalness. Yeah. And they're not pinning us down and getting us to commit to anything. No, no. And this is why really, you know, speaking to advisors or getting specific guidance for your circumstances is the only way that you can answer a question like this. You can actually do that with Tom, by the way, through us. So if you want to chat to Tom in a guidance, you know, capacity where you just sit down, have a talk, just email will at getmost.co.uk.

5:12Matt writes, how do you agree with your partner or wife on what numbers go where for your wages? I feel everyone should do percentage rules as this stops lifestyle inflation explaining this might help a lot as it's helped me to understand what I can afford to invest or save I do not we do not have any percentage rules in my house I you know me I'm an impulse buyer so if I'm on holiday or night out or I don't go shopping often but when I go shopping I go like explosive something like I go Bista and just like if I see a sale I'm buying like 10 versions even though it costs more but you know you save 40 % so yeah we don't really have percentage rules we should do We try and save every month though.

5:48How much of your income do you save? You know what? You save all you pay from the podcast, don't you? That's enough. Yeah, I did it until the Euro started. That's so hard, no. It depends. No, I invest a lot of money from the podcast. I save five to 10 % a month, which is better than before, because it used to be zero. But yeah, I'm a big saver or a small saver. I either save in abundance. So like when I was in crypto, I was getting paid loads in crypto. So I just saved that money in crypto and then paid my rent and everything I didn't spend. I just left in crypto, which is why I've got so much crypto.

6:24But now I kind of save a little bit, spend a bit, go on holiday, shopping. But we do try and save. Mainly, since I've had a kid, it's more about the ISA, the JISA, JISA. Junior ISA. Junior ISA and his SIP. Yeah, that's pretty much where it is. So I think having a kid's got me to save more. But definitely not saving like you. You're a hoarder of saving. You've got a problem, mate. you save too much. Yeah, schmaug. Come and come and - Sack my gold. Yeah, you're just like, my precious. Every month just saving away. But yeah, you need to come spend some of that with me. Yeah, yeah. So no, I mean, I fill my eyes for every year and then each year because I've got a limited company, I'll look at like what retained profits there are and then I'll bang as much as I can into a pension, sip.

7:06And then the only percentage rule that I have is any money that I earn above what I need as a baseline each month i say 50 and i blow 50 because my problem is like anti-lifestyle creep what do you mean you say 50 so let's say let's say because my income fluctuates let's say i need four thousand pounds to live if i bring in an extra grand 500 of it's going up the wall and 500 of it is it's getting saved so i try and live by those rules just to make sure that i live a bit of life yeah i'm very erratic with that like normally when i get a bonus or like i do a big I've got a lot of commission that month.

7:44I'm like, we're going shopping, we're going on holiday. We're going to the spa. Like, yeah, it needs to be more saving. But I feel like you should enjoy your money while you can. While you're young. I like experiences and like. And then, yeah, we sat down with the pension Tom the other day and he was talking about, you know, if you're saving 30 % towards your retirement, you're probably saving too much. And I was like, God damn, yeah. I'm not for the record. Yeah, yeah. So that's like, I think it works both ways. And I think a lot of the people listening to this podcast are, you know, there's a lot of people that really struggle financially, but there's a lot of people listening to this podcast that have a bit of money and they want to know like, am I doing the right things?

8:21Or there might be a lot of guilt associated with thinking that you're late to the party and you need to save a lot. And I think it's hard both ways. I think I've had to set rules for spending so that I spend a bit of money. I think you've got to be in the minority. Yeah, no, 100 % I am in the minority. But Matt said there about lifestyle creep. So that's that issue of as you earn more money, you just end up spending more and more and more and things get out of control. Yeah, you buy a new car, that car costs more to run. You know, you get a bigger house, that house has a garden, you've got to get a gardener.

8:53You've got bigger rent, you've got more. Yeah, so it's, I mean, I, yeah, for me, it's, I think I'm like a lot of people that you're like, oh, I'm not saving enough. I look at someone like you and I'm like, he's saving so much. I'm going to be screwed in the future. Oh, forget it. I've got to just pay this bill. I've got to pay this car bill. And you just kind of, we're like, like hamsters on the little wheel, just keep going till tomorrow, next payday, next paycheck. But I started by going saving, like you said, just start, like just start a little bit. Like even if you say 50 quid this month, a hundred quid next month, 300 quid next month, like whatever it is, 25 quid, it's better to save and invest 25 quid because it's in a compound than like, oh, I can't afford to save.

9:28So like, and then once you start, I think you kind of get more into it and you kind of get a bit more invested in it because it's like - Once you see the numbers going up. The numbers going up, yeah. It becomes its own little fun game in your life. and there's a man who likes a little gamble like you. I do. It's kind of, it scratches that itch a little bit, doesn't it? And I love getting these little emails saying, oh, you're like from the, not accumulation, the other one. Income funds. Income funds and like, oh, you've got this much money. Dividends. Dividends. We, me and Damien, when we were younger, we were like, oh, when we're older, we're gonna have a butler and his name's gonna be Dividends.

9:59So we'll be like, Dividends, answer the door. And then this guy will come in like a suit and he'll just say, his name will be Dividends. Jeeves McDividends. Lifestyle creep right there. Lifestyle creep, yeah. Jeeves McDividends, costing a fortune. So yeah, no percentages, no rules. Not really in my house. Like fill the ice there, put as much as I can into pension. And that's about it really. Does your missus save as well? I mean, yeah, she saves a bit, but not as much as I'd like her to. She always puts like, you know, it's like, oh, it's not a good time. It's never a good time. It's never a good time.

10:38You just got to start. Yeah. It's one of the biggest, like, I'm like, you live with one of the biggest financial YouTubers in the UK and you're barely saving any money. What is going on? Yeah. So, you know, I mean, she's got her own business to run and she got hammered by COVID because of the way that they treated people within her space. So, you know, she's still playing catch up with that in a way. It's okay. Dividends, open the door, please. Is it pasty time? Is it lunchtime?

11:14Please remember, this is not financial advice. Like we say a lot on the podcast, investments can fall and rise. In fact, it's pretty much a guarantee. Past performance is no guarantee of future results. So your money is at risk with investing and other fees may apply. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you.