THE SELF DEVELOPMENT PODCAST - EPISODE 003 - LAURA WHATELEY ( MONEY - DEBT - PENSIONS - INVESTING )

[Music] hello and welcome to the real influencers podcast this is the podcast for those that are looking to develop new skills and knowledge that can hopefully help us achieve our own goals uh on this episode i'm going to be discussing a subject that i think a lot of us may bury our heads in the sand uh when it comes to discussing uh but One that i think every responsible adult should at least have uh some kind of understanding of and that is money um back in 2018 i picked up a copy of this book here

from waterstones when i was looking for a book on finance for myself and it's called money a user's guide the blurb reads money a user's guide cuts through all the panic of personal finances It will teach you how to get a great credit score how to save hundreds on bills and offers practical advice on every difficult conversation you've ever been avoiding including housing whether you're looking to buy or rent student loans pensions paying off debt stocks and shares and ethical investments this essential Book will give you confidence and clarity to take back control of your

bank account enabling you to thrive in all areas of your life uh i have done and i will continue to recommend this book to everyone regardless of your financial knowledge and from an investment point of view i think it's probably the best eight quid that you'll ever spend i knew at some point i wanted to talk About money on this podcast uh and knowing how good that this book is i thought i'd try my luck at trying to contact the author and see if she would be kind enough to lend us her time and uh

and her advice uh to people who might not have read the book yet um as the saying goes if you don't ask you don't get and i'm very glad that i did ask uh so Please welcome today's guest uh laura watley hi hi thanks so much yeah thanks for listening to that absolute essay as an introduction give my ego oh are you well yeah i'm good good good good so when i knew i wanted to do a podcast on money this book absolutely love it um i think everybody should know it everybody should read it

and buy it but Uh thank you so much for coming and having a chat not at all thank you so can you quickly explain a little bit about the book and yourself how you got into finance for anyone who might not know yeah sure so i have been writing about money as a journalist for i don't know like 12 13 years now it's quite a long time i always wanted to be a writer or a journalist i never thought i'd write About money particularly i've not ever been somebody who is brilliant with numbers or brilliant

at money or actually massively interested in the world of finance i always thought it was for different kind of people for me and but when i left university i found out about the job at the times on the money desk and it was very junior and i thought oh this is a good in into journalism i'll apply for the job And it was in 2008 so a couple of weeks after lehman brothers had collapsed in right in the heart of the personal uh the big global financial crisis so it was actually quite an interesting time

both kind of personally and professionally to be writing about money because i could see the impact of the crisis um on my friends so people in their 20s at the time Lots of people were being made redundant lots of salaries were being cut or not certainly not going up and people were really struggling to think about the cost of housing so i actually learned a lot about money but also people through my own life in 20s in london writing but also interviewing interesting people in the finance world for the times and in 2018 so kind

of decade after financial crisis And a decade after i started that job i really felt like people were still feeling the effects of you know younger people still feeling effects on their on their money but weren't really knowing where to turn for advice and although i'd been writing about money for years for a personal finance section of a newspaper actually how many people in their 20s and 30s Or older who are concerned about finance feel confident enough to pick up the money section the business section to feel like it's for them certainly i never did

before i started writing about it so that was my motivation to write the book was to kind of distill everything i'd learned in my own life but also at the times um and create like a handbook that i wish i'd had when i was younger i almost wrote it like i imagine i was Writing an email to my friends or to my younger self and just like this is what you need to know i like all you you know there's a few swear words in there which makes it just everyone couldn't do you know yeah

and i kind of i think one of the things about the world of finance and money is that it can seem really intimidating and it can seem like something you need lots of qualifications to understand or that it's really complex A lot of jargon yeah and i think yes some like really complex investment is hard to get your head around but for the vast majority of people who aren't billionaires who don't have loads and loads of cash floating around and they want the basics like how do i save more how do i buy a house

how do i get by yeah there is some fairly straightforward basic stuff that you just need to know like who teaches you about this you're Quite quite on our own i think um and if you look at like the older generation say my parents generation they had a different way of working a little bit so that you'd have maybe a job for life like my granddad had a job life less school 14 went into work retired in the 60s had a really secure pension his kind of organization looked after him financially That's not the way

we work so much anymore right lots of people self-employed pensions are not as guaranteed you have to sort of make your own way and look after yourself and your own family and therefore i think you actually need a bit more knowledge so yeah so that that is how i got into finding money interesting because i think it has a real impact on People's lives and i think it's cool you're talking about it on this podcast because for years i feel like money's been siloed into this thing that's not linked to health or lifestyle it's like

something that's different and yet it does underpin every other aspect of our life and you know feeling bad about money worrying about money has a real impact on your health and your well-being So i think we need to like get a bit more comfortable with it being part of our like conversation about how we look after ourselves it's strange in it why do you think that is that that it's like an awkward thing to talk about i think there's like the split between it's a subject that people feel they should understand but they don't so

i meet a lot of people who are i know I'm 40 but i don't understand what a pension is or how it works i know you know i should notice what a mortgage is or like what stocks and chairs are but i don't and i think there comes a point where it feels too late to ask anyone so you kind of like just winging it right you're like um i was just pretending yeah like i am an adult like you're waiting for that moment of to become an adult and as you get older You realize

that never really happens so i think there's that aspect of it but i also think money is so emotional so emotive i think it it's still quite tied up with like a marker of success or how well you're doing totally yeah do you think there's an element of it where people don't want to talk about it because they might look like they're showing off definitely Yeah i think you know often if you end up earning more or less than your family or your friends or your um siblings it can be a cause of tension can't

be like i don't you know because we tend to think if you earn more money you're somehow better or more successful or doing doing well or like you have a house that's like the marker of having made it well the world has Changed it's much much more difficult to buy a house for example um so i think yeah you're right you don't want to look like you think you're better than someone because you've got more money equally sometimes i think people feel embarrassed that they you know i can't afford to buy my own place or

i can't afford to get married or to i don't know like live a life i see Other people living on instagram and therefore i don't want to admit to people that i'm struggling so i think there's this tension and and that doesn't help anyone if we can't talk about it yeah totally in regards to the housing i think uh a question that i wanted to ask you to to start with uh which i've spoke a lot to a lot of people recently Who've been looking to buy the first now especially with the uh the uh

um what advice would you give to anyone looking to purchase the first house in terms of what you need to do building up to it yeah in terms of because it's not as easy as just having the money in the bank and ready to go people ask for accounts and things like this and stuff Um yeah what would you give there it's quite a few steps i think yeah try and think about it a little bit in advance like don't panic if you haven't thought about it a year or six months before you want to

buy it is possible but like if you can give yourself a bit of a run up it helps because presumably most people who are listening to podcast would be buying a house with a Mortgage not just like a suitcase full of cash yeah yeah so in order to get a mortgage is harder than it used to be because you know banks are want to know that you're a reliable borrower and that you're going to pay back the money that you borrow and so there are quite a few hoops to jump through to to prove that

so back in the day and i think this is a lot to do with before the financial Crisis so during the financial crisis loads of people ended up sort of locked in properties that they couldn't really afford they'd taken out 100 mortgage which means they didn't put any cash down they just bought a house on a loan and then they couldn't pay and then you know it was a bit of a disaster for a lot of people so banks have become more cautious so what so you've got this combination Bank wants to see how much

you earn so how much you can borrow in a mortgage and the mortgage is like the money that you borrow from the bank the rest of it the deposit is the cash that you can put down on a property so in order to borrow they want to see how much you earn and you'll only be able to borrow a certain uh i want to say percentage it's kind of Like a multiple of how much you earn so it'll be like no more than four or five times how much you earn right so you can see

why if you're only earning like 30 grand for example which is just below average salary in this country and you look at how much houses cost you know you can only borrow four times 30. it's not that much money right so that's one of the challenges but they also want to see not just how Much you earn but also um other things that you might might stop you paying your mortgage back say they want to see your three months worth of bank accounts for example to to check that you're not sort of really struggling with

money that you will be able to afford to pay a mortgage back they also want to look at your credit file so credit files are records of all the financial interactions you've had in the Past like for example whether you've had a bank account or a credit card they're kept by credit reference agencies and the banks will use that information to look at whether they think you're a reliable borrower that sort of assess you so they'll be like look if you've been in masses of debt before and you've struggled to pay back if you miss

bills if you miss your mobile phone payment or If you which is a lot a problem for a lot of young people you don't look like you've ever borrowed money before they might be like don't know if we can trust that this person will pay back so we don't want to lend them so much that's something i've always it's always baffled me a little bit yeah in terms of to prove that you're good with money you've got to borrow money yeah it's like this difficult Chicken and egg situation right and there is a little bit

more help for people so one of the so one of the big challenges like i said is young people they've only ever rented before and they've been actually quite careful with money and they're like i didn't want to get a credit card because i was worried about getting into debt or you know they just quite young and you have you've had a student bank account and you win what you're learning yeah Exactly you haven't really so there's a couple of new products you can you can take out so or one of them is um called

the rental exchange so it's a way of adding your rent to your credit file in order to show that look i pay my rent back every month on time yeah unreliable should be able to pay mortgage back so the other things you can do is like take out a credit card but be super Careful only repay a third of your credit limit and repair every single month just to give a bit of an idea that you're reliable so do you food shopping on it something yeah exactly just like use it a little bit but to

kind of demonstrate that you're do you think there's an element of people that have self-control as well with with credit cards and things At the same time yeah i think yeah that's the problem you have you know you've got to see it as a way of getting better with your finances rather than getting into her exactly and you need to know yourself a little bit i think when you're taking out a credit card you need to know like you know how likely am i to be able to resist spending this when i'm feeling a bit

like emotionally you know like look at how much Online shopping we've all been doing didn't lock down to make us feel better so like if you know you're that kind of person yeah you want to tread carefully because you don't want to go in the opposite direction and end up really unstuck with debt because the bank will think well you're not going to be able to afford a mortgage if you can't afford this huge credit card so going back to the Original question when you're applying for a mortgage or looking to buy a house should

i say number one look at how much you think you can borrow based on your salary it's loads of online calculators so just search mortgage calculator and you can put in like how much you earn how much the house that you want to buy costs and you can kind of see how much you might be able to borrow Then look at your credit file and there's three credit reference agencies uh trans union experian and equifax and you just go on their websites have a look and see where you're at see if you need to improve

it and like i said there's a few things you can do or talk about what you can do in the book and then thirdly look at your bank accounts think about like your spending habits And try and imagine you know what a bank might say about them yeah and like you want to avoid massive trip well i mean you might be able to at the moment like trips to vegas three months before you want to borrow you know like like be a bit more sensible with your money in the run-up just to prove that you

are a good borrower in terms of a deposit as well if you're putting a deposit down um the Bigger the deposit the less that you're going to borrow the quicker you'll get it paid off yeah exactly yeah would you recommend trying to put the marsh cam down definitely because the other irony that's the other thing that's really hard for younger people is how much a mortgage costs you depends it's the interest rate are the interest rates or mortgages are really low the interest rate is basically how much You're being charged to borrow the money so

you pay back the mortgage loan but you also pay back interest on top so obviously the idea is to get that interest as low as possible the smaller your mortgage likely the better borrower you are that the kind of less interest you'll pay now you only get more mortgage you have a very deposit but saving that deposit is really hard for people because houses are so expensive Relative to salaries so yeah i mean if you can get a bigger deposit it is always better generally speaking but people will find it difficult yeah i mean i

put in the in the book um and something that actually has happened a bit in covid since i've written the book banks are quite reluctant to lend with tiny deposits so a 5 deposit which is like or a 10 deposit Um that is often what first time buyers are looking at because it's so hard to save money but a lot of banks have actually withdrawn those loans during lockdown because they're reluctant to lend so they want you to have a 20 deposit of 25 which has made it even harder for people and on top of

that you've got stamp duty yeah exactly so yeah yeah i think that people forget that When they're saving money for deposit they forget about the costs of moving stamp duty is the big one there was obviously a holiday at the moment through covid which means you don't have to pay stamp duty up to a certain value of property that's for a first time well it's for everyone but at the moment but it comes to an end for everyone i think it's was it just ended they keep extending it And changing it but for first time

buyers yeah i think it's 300 000 pounds off top of my head you have to look out maybe 350. you don't have to pay stamp duty which for first time buyers which is obviously really good for my for younger people who yeah people are a bit of a chunk there yeah um so on top of that solicitors solicitors fees which which could be a Thousand pounds or more um you have to pay things like land or just do fees like little and it's so annoying when you start the process of buying a house you suddenly

hit with all these things right you know you have to pay a solicitor to to check um like i don't really understand all of all of the ins and outs of what they're checking for but like land Registry and for flooding and all that kind of stuff you also may or may not want to pay for a survey that's worth thinking about on the property itself yeah so a lot of people make this mistake they think that when you get a mortgage the bank will do a survey on your property basically it's very rudimentary and

they're just doing it to check it exists because they're taking on a risk as well As you and like giving money to this house they want to check it it's real so but you know some people talk about it's literally that something like someone drives past in the car and looks at it or looks at it online they're not going there to check if the ceiling's about to collapse so if you are worried that the ceiling is going to collapse you might need to Buy your own like a proper property survey and that's something you

need to pay for which is probably worth its weight in gold in it yeah it depends the kind of property you're buying but yeah it's certainly worth thinking about yeah i mean and obviously they've got moving costs if you're moving house if you're selling somewhere to buy somewhere else yeah so it adds up you Need to factor all of that in to how much deposit you can afford to put down yeah i would say if you're buying for the first time getting a mortgage broker is a really good idea and they can help you navigate

how to get a mortgage where to find it you know most of these are free are they yeah i mean some of them will be paid via recommending products okay but The thing is at the moment mortgages are really cheap and it's my view you know people have a different view but my view is that um there isn't a huge amount of difference between lots of different mortgages as long as you're kind of comparing the interest rates for example so i think it is worth going to a mortgage broker and like you say some of

them are free And not worrying too much they're trying to flog you something because actually a lot of them will just be super helpful oh cool yeah um so yeah i think that's a good first step especially if you're self-employed i get asked a lot about people who are self-employed it's extra hard to get a mortgage because you don't have that steady paycheck coming in yeah banks will lend to the self-employed but not Maybe as much or maybe they'll want to see yeah some three years some will be less than that some only will see

one it just depends okay so that's i would always recommend speaking to a mortgage broker if you're self-employed to just ask who the best banks and building societies are to approach yeah so there's a lot there's a lot to talk about there but it's just a It is quite an involved process there's a big chapter in the book yeah trying to talk you through i mean part of as i say in the book part of the motivation to write about this was because it is an expensive process and it is a stressful and frankly quite

boring process doing all this paperwork and the bureaucracy of trying to buy a house And and if you don't know before you enter it how much it's going to cost or what your financial position is or really what you're doing you can feel on the back foot when you're having these negotiations with estate agents or banks so i think genning up a bit beforehand and going in prepared just can help make the process a little bit less stressful yeah And as well to think you know let's say if you say 30 grand for a deposit

if that's your deposit you're going to need a bit extra aren't you for all the rest of the the stamp due to the thing you know yeah definitely and also if you're really i mean it again it's difficult because it is very difficult to save for a deposit but if you're really stretching yourself you have to ask what's going to happen Once you're in the house because when you own a house there's loads of unexpected expenses i mean i find this i bought my first flat um a few years ago now but i was saying

this the other day to my husband like who knew when you own a house how many annoying things there are to pay for like if something goes wrong it's your responsibility there's no landlord's call you're like oh no i've Got to get a new washing machine no like there's a hole in the roof whatever yeah so you do want to feel that like you're not going to get yourself into debt because you stretch yourself so hard to get onto the housing ladder that once you're there you can't afford to look after the house would you

recommend giving it a few more years wait till you're in a position to completely be comfortable maybe save up Yeah i i think i mean everybody's situation is totally different i think there is i think this discussion about whether you should buy or rent is tricky because as the as this country operates at the moment renting is quite insecure whereas buying is like an asset so once you own your own flat your own house you know you're not paying all your money to your landlord you're paying Into in theory an investment for the future that's

quite a british thing though isn't it it is quite a british thing things they all render yeah exactly and i think part of p i mean like my grandma rented for 40 50 years and you know she had a nice and she looked after her and she didn't have to worry about the garden he came and did the garden And it worked for her yeah and it didn't really matter that she was paying rent because it wasn't like she was about to get kicked out it wasn't the rent was going to go up and she

couldn't afford it but lots of people don't have that good experience and i think that's what people worry about that actually if they want to have a family and they want to settle down their kids are at school if you're Renting could you land or just with three months no to say you've got to leave so i think that that is a real risk for people but and and so therefore financially it does still make sense to buy but maybe we need to change our mindset or some of the laws or some of the protections

in order for people to feel that they don't have to stretch themselves so hard to buy that they actually End up feeling like they don't have any savings or they i think if you look at it i remember me uh my mum and dad telling me i think when i when i was first born about 30 years ago they paid about 20 grand for their house yeah um and don't get me wrong the wages were a lot lower than yeah but i feel like the weight while wages are doing this the house prices are That's

just staying together yeah so it's a lot more it's a lot harder now for people to to buy on on the wages that they were not yeah i know i think that is the main and you know people say oh it's because young people like to go onto doug dudes and have too many coffees or whatever but like really i actually do some calculation the book can't remember it but you know the Amount of brunches and stagnates you're going to have to not go on in order to save the average deposit is nuts that is

not the primary issue yeah okay you could probably we could all probably save a bit more money but it's there is this like yeah breakdown between the average amount that people are earning and yeah the amount it cost and like i said Number one thing to look at when you're wanting to borrow money and the bank will look at is how much do you earn you can borrow four to five maximum-ish amount of that right so you need to be earning a really big salary potentially to afford a house in somewhere like london or south

east or manchester or like big cities where The jobs that pay lots of money are yeah you know yeah okay there are places in the uk which is much cheaper to live but are they within a commutable distance of a job that pays enough it's that like it's that disconnect it's hard maybe not down or change because lots of people are realizing they don't have to live next to their office anymore yeah so you know you could earn a london salary but live In a place that's much much more affordable and maybe that would be

good but i think a lot of people have probably started to do that yeah but yeah i think that is the problem so so yeah when you're buying you need to really think about like yeah also you're going to want a sofa you're going to want a rug you have to vanish the place like you need a bit of extra money for that it's not just about the deposit Um another one i wanted to talk about was student loans yeah i've read in the book a bit about that um what would your advice be to

anyone who's uh currently in university with a student loan uh there's only tips and advice i know you talk about a lot about don't worry too much about that that yeah um i didn't go to unisa I'm not too too glued up on that but have you got any advice yeah i think the message is yeah it's difficult to say don't worry because i understand that it is really expensive it's really exhausting yeah like when i went to university the student loans were much much lower they were the different student loan system it's um if

you've been to university since 2012 You're borrowing huge amounts of money but the difference between a student loan debt and the debt from the bank is is very significant and i think the way to look at student loans at the moment is more like a tax so you only repay your student loan when you can afford to do so so it's when you earn on graduation a certain amount of money now whether or not you think it's fair that students should basically have Money taken out of their pay packet in order to repay their student

loans like basically being ta if you think of it as a tax being taxed a bit more than everyone else whether you think that's fair or not is kind of something to set aside in terms of like whether it should keep you awake at night or not it shouldn't because if you don't earn enough money you're not going to get The debt collectors come knocking on your door whereas if you've got credit card debt if you've got loan debt from a bank they don't care how much money you earn and if you lose your job

and you've got massive doubt signing on a credit card you still have to repay it there's the things you can do there's charities that can help you but or a student loan is it is it gets written off is one secure and one Unsecured is that am i right they're wrong yeah um so and and secure loans tend to be things that are secured against something else like a mortgage so like it's a loan screwed against your house so if you can't pay they come and get they can reclaim your house unsecured debts are like

um like credit cards and bank loans so our student loan is almost separate from that And i think it's almost a bit deceptive that it's sold as a debt because obviously in theory yes you have this money that you owe but you are only paying it back um when you as a sort of person percentage of your income if that makes sense so like you know like with the tax you know the more money you earn the more you're taxed the more money you earn after graduating the more money you will repay on your Student

loan and it gets wiped out completely after 30 years so if actually you graduate and you've got you know in theory you owe 50 000 pounds for your studies but you're only going to repay it at 9 of how much you earn above i think it's 20 i can't remember that figure 25 grand now so it's actually only like a nine percent tax on money over that right so if you earn a lot So if you go into investment bank after you graduate you will repay your student loan quite quickly because you've got quite a

lot of income if you you know come out of university and you become disabled and you can never work you will never repay it so i think it's a bit complex to explain in like and that and that in itself is a problem right that's why people worry about it understand how it Works but i don't think for the vast majority of students it should be something that puts you off studying or makes you feel frightened because it's not something necessarily to feel that like i said the debt collectors are going to be coming knocking

on your door yeah um like i explain it in a bit more detail in the book it's not saying like i think Student loans are fair but i just think that people unnecessarily freak out about them and that's that that is something that i'd like to prevent happening because you really don't need to whereas other kinds of debt like if you're in a lot of credit card debt that is something you need to address because it's going to cost you so much money in the long run and you'll have people Knocking on the door for

that yeah you can do yeah i mean again i would suggest people people tend to get in a lot of like if you get a lot of credit card that people tend to bury the heck because they feel frightened of it i would say never do that there are so many people in that position that is why credit cards companies make so much money yeah but There are also a lot of people out there to help there's some really good debt charities i'd always suggest step change they've got anonymous tools online you can just go

on and have like a chat with someone online and be like look i've got all this credit card debt what should i do a lot of it can be written off can't it yeah there's things that you can you know you can declare bankruptcy you can Get ivas you can get you know you can talk to your bank people with a plan to get it paid off exactly yeah and you can do that and you know banks will listen and and the mistake a lot of people make with that is that they think there's nothing

that can be done so they just ignore it and if you ignore your debt because interest rates are so Massive it will just grow and it'll grow and it'll grow yeah and as i write in the book the debt charter mentioned step change say that over half of the people they've seen have waited two or three years to come because they're embarrassed okay and actually during that time it's responsible it's grown and they've spent more so like face it head-on i know it's hard it is horrible And there's too much shame and no embarrassment tied

up with it but there are so many people who who are in this position and you can kind of move beyond it but for students please don't think that that's how the student known system works because it's not and you know i don't want people who don't come from rich backgrounds to think oh i can't afford university because i can't afford this Massive debt yeah yeah that's not to say that like when you graduate with not a very massive salary and you've got money coming out of it to repay your student loan it's not annoying

because it is you have less money in your pocket and that's hard for young people but you're not going to be in a position where you need to really focus on like hurrying up to repay your loan Yeah will there be interest added on there is but because of the nature of the way it works and do you know what i would tell everyone to go and read martin lewis's money-saving expert page on this because he explains it so well and he's a numbers man and he's said he can explain it so clearly yes there

is interest added on but because you only ever pay we pay at nine percent Of how much you earn per year um the interest gets added on over the long term so if you earn loads of money so like i said if you're an investment banker the interest matters more to you because you're going to pay your loan off quicker and more you know like your loan will the nine percent of your earnings is much bigger than if you're a nurse right or if you're a teacher So you will be paying back more okay um

so it matters more about the interest but i don't know if like we could we could do like five podcasts just talking about the details of student loans so i would tell anyone first thing don't freak out about it second thing read martin lewis's explanation of how it works and your own book there's a there's a good section on it all there Yeah yeah but i think it's a problem that um you know young people are worrying about and you know you know we university is more expensive than it used to be and that's hard

for people when they've you know perhaps not got parents who are able to help them out financially um they yeah it's tricky yeah for people who are just graduating Now especially into this jobs market which is i mean yeah this is it another thing i wanted to talk about was pensions which i think is another subject that people may tend to ignore for a while yeah it's a bit too late um what would your advice be for someone uh thinking about maybe setting some money aside either as a pension yeah what uh what Kind of

age would you say start start thinking about that so a lot of people do not want to talk about pensions excuse me partly because it is like as i said the book the least sexy thing in the world to talk about pensions isn't it and i think people think oh my god pensions are complicated yeah but ultimately a pension is just like a sort of Way of saving for your older age that's quite tax efficient and there's lots of different ways you can save into a pension it's not like a product itself it's like almost

a type of savings that you get massive tax breaks on because the government want us to save for our old age absolutely because then you're less of a drain on the system yeah exactly Yeah so actually the reason that saving into a pension product is a good idea is because you get you don't have to pay tax on it which makes a big difference um and if you have an employer they will also pay into it so it's a pretty lucrative way of saving if you have an employer and you earn more than 10 000

pounds you will be automatically put Into a company pension now okay i didn't have this when i was younger so i didn't start saving into pension until i was until more recently whereas all young people will now be if they've got an employer in a pension would you have to put in for them to put in yes but you are you will be doing that automatically You'll be taken from your salary yeah so what they say what the government basically realized that lots of people weren't paying interpensions from a young age so in order to

encourage people to do it they've created this thing called auto enrollment and that is basically when you start a job and you earn more than 10 grand you are automatically put in the company pension Scheme and that means that out of your pay packet comes a bit of money that goes into the pension your employer adds a bit of money too and on top of that you get tax relief so you've got this pension ticking away in the background if you've got an employer and lots of people don't engage there and they don't realize what

it is or where it is or what it does But the good news for lots of people who are young is they've got a pension yeah the question is is enough of your salary going into that i think you need to look at what else you want to use your money for whether it makes more financial sense for you to to try and use other savings that you have to get on the housing ladder for example and worry about your pension a bit further down the line if you're Self-employed as i am you don't have

a pension with an employer and so you have to set one up yourself if you want one you don't get the benefit of your employer giving you any money but you do get the tax break yeah yeah so that's why it's a good idea and also it's a good idea to get in the habit of saving for your future self because the way of it and this is another motivation to Write the book which is something that i didn't really think about when i was younger the longer you put money aside the more it will

grow compound interest which is like money or money or money is really powerful i remember reading about compound interest thinking this can't be true yeah when you see them it's like basically It's like covid you know when they like talk about exponential you know like the r number and you look at it and you're like oh my god you don't it just doesn't seem to make sense that like one becomes two becomes it grows and grows and grows and grows and then suddenly we've all got covered money is the same as that so if you

start young in a pension you have much longer for it to grow so that's the idea that you Start younger you don't have to put in as much when you're older because it's sat there ticking away a habit to start young i think so too yeah i wish i'd started younger but i would also say to people like there are a lot of pressures on our finances you've got a lot of things to think about don't freak out that you've you know if you're only 25 and you haven't sort of got anything putting extra money

in your pension that's okay like think and and you know i'd also say when you're thinking about how much money you want to save and that might be a pension for when you're older it might be in a savings account for that like roof leak i was talking about or for holiday you need to also look at your debts like i said not student loans put that to one Side because that's different but things like credit card that right the interest rate on credit cards are massive they're like 20 interest rate on a savings account

one percent if you're lucky so and similarly with pensions like yes they are really valuable but don't put all your errors like don't freak out put loads and loads of your earnings into your pension if you've also Got a massive credit card debt that you're serving because it it it's better to focus on paying your debts off get that off first yeah i mean look i'm not a financial advice advisor but this is what i've kind of learned from talking to people i think it's a bit of common sense in it yeah i think so

so i think pensions are a really good thing to get your head around Yeah but also i think you've got to see them as like a when you're doing like an overall budget or thinking about your money holistically you need to think about like okay my present self my midterm future self and my older self and you need to be kind of thinking about dividing up your money across those kind of three stages of your life do you think if you have got a debt your first job should be Getting rid of it yeah i

mean again it depends what debt like mortgages you know different kind of debt yeah like some debts like people talk about good debt and bad debt i don't like that because i think it's like too much morality around that yeah but the reason people talk about that is because there's like some debts that can serve you right so you're taking out a debt to Buy a house and that could be a good financial decision because you pay less in a mortgage than rent or because it gives you an asset that one day you know you'll

own this house and you your mortgage will be paid off in happy days right so that is a positive reason to take debt out arguably says a student loan you want to get a good education to earn more money in the future it's worth taking out The loan bad that is stuff that if you don't sort of repay it on time or it hangs over you it's probably going to cause you more damage than it is a positive benefit is that would that link into liabilities and assets as well yeah you know if you're taking

out a mortgage for a buy to let your mortgage let's say it's on an interest-only mortgage for 400 quid yeah you're renting the house for 800 quid yeah you're making money on on that Debt yeah yeah exactly like exactly whereas if you're taking a credit card to like i don't know buy some new trainers like cool those trainers might be helping you to do something but the cost of that debt can be very very big so you need to like be balancing a little bit more um you know what whether the trouble that you could

end up getting into with debts that you can't repay is is kind of Worth worth while you're going into the debt in the first place you know that's the kind of decision you're making um and like i said debts so mortgages mortgage debt you know the consequences of not paying your mortgage is massive you lose your house but the actual cost of the interest is quite low this might be a few percent actually this morning you'll probably have a lot Yeah well apart from student loans yeah well yeah yeah people will say that they'll be

like mortgages are cheap it's you're like leveraging us people talk about leveraging themselves like you said buy to let people will think it's an investment right whereas you look at the cost of a credit card that like i said the interest might be 20 very very high yeah that will build that Compounds like in like interest in a good way does so yeah that is like if you need to focus on how you're going to pay that back and if you're if you're just ticking away paying minimum payments on a credit card it will be

costing you a lot of money yeah yeah um so i would always you need to always understand how much your debt's costing you and whether you think it's worth it Okay in terms of investments as well um so for people who who might be self-employed um do you think it's a good idea to start putting money away to start working for you you know to make your money work yeah as in investment-wise yeah i think you need to look at um what you're saving for and the best way best way of saving or investing for

that Um when people talk about investing obviously they're often talking about stocks and shares which is like buying a tiny slice of a company and hoping that the value of that company rises and the thing to think about with investing in that way is that you want to be doing it for the long term and that during lockdown there's been this massive explosion of interest in investing in cryptocurrency and day Trading and meme stocks yeah exactly and i think everyone there's like a fever and i think it comes from what we've been talking about of

like young people is particularly feel under like not earning very much like got a lot of expensive things that they have to think about they want money quickly yeah and there's a bit of this idea that you can Invest to get rich but if you talk to anybody who works professionally in financial advice for example they'll be like it's all about taking your time over it if it was that easy to get rich wouldn't everyone be rich right and a lot of the way that people have been talking about investment or crypto on instagram or

tiktok it's basically gambling it's like Speculation like yeah you might get so lucky you might buy something cheap and you might buy crypto just at the perfect moment and then you can sell it for loads more money at the perfect moment but that is very difficult to do yeah yeah and it is again that is just gambling i think now as well it only takes one you know let's say elon musk comes out and says i'm not Going to use book you know these things are dropping off over one interview yeah and also you like

i mean this is social media's classic for this isn't it you only see the success stories so yeah some guy might have got like incredibly lucky and bought it you know just as just i don't know just to the point at which elon musk tweeted one thing and then tweeted something else and And got lucky you know like people win the lottery but then you see that on instagram and you think it's like oh that must be what always happens but that is not what always happens and you don't necessarily because you don't talk about

money you don't necessarily see the people who've lost thousands of pounds got in at the wrong time so if you really want to kind of invest in the way That you might through you know sensibly if you like to grow your money i think it's a really good idea but you have to be in a position to afford to do that and that means making sure that you've you're not paying those money on debts like credit card bank debts loan debts kind of paying out i now pay later debts because you'll be that will be

costing you more than you'll earn in return on your investments and also That you've got some cash handy because you want to be locking your investments away unless you're gambling which is different you want to be putting it away for the long term to trying to ride out the ups and downs of the market yeah so you want to be looking at five to five years or so five to ten years of like investing something It's a slow game in it yeah and that is what look again i'm not a financial advisor i'm not an

investment expert but this these are the kind of golden rules that are often talked about as a way to like be safe yeah in in in not yeah wasting your money like it needs to be money that you're prepared to leave alone it needs to be Money that you're prepared to not see for a while and potentially potentially lose because if you do it sensibly but yeah don't put your emergency savings in there or money that really you should be using to pay for debt yeah because you can come unstuck that way um so i

would be cautious of i don't say just cautious of what you read online it's not easy to get Get rich we spoke about it before we turn the microphones on about i think there's a lot of companies now making money from gullible people uh selling in the dream and the idea that you know invest them with me or into this company and we'll help you become the next property developer of the year you know and i think it's important for people to kind of Ask themselves about why would this company or this this person be

so interested in in selling me this product oh totally i think you know even though your eyes light up oh my god i can make 10 grand here yeah it's a bit it's a bit of a tricky one yeah i wouldn't touch it with a barge but yeah i would like run away and think yeah you're right ask yourself why they are approaching You yeah what's in it for them chances are they are making money from a course or it is a scam or they don't understand it themselves because any if you speak to any

qualified financial advisor wealth advisor they all say the same stuff which is like you know it is not easy to get rich you know It takes time you know you can make good returns but you need to do work research understand it be patient ask those of different people some random influencers popped up with like an amazing you know rooftop pool and dubai saying this i got this off the back of some course i did for 10 weeks no that is just it's just not possible um and i i think there's people out there preying

on This situation that lots of people find themselves in and they're not earning enough money in their job to have the life that they want to have or maybe deserve to have right i think there's people people think oh this is hard work i'd rather just find an alternative way to make money but the reality is alternative ways to make money Are not there's not lots of them and then it takes a bit of time i've found out over the years that it's normally the people and i think instagram and social media have played a

massive part in this as well where everyone wants to look successful everyone wants to look rich no one's really prepared to to do the hard work and get rich in a sense of It's boring yeah most of the people i know you've got good investments and a few quid in the bank they're not showing off they're not you know sat there playing the horrible boring game yeah which when you're 60 70 yeah works out wealthier yeah and the guys you know going around trying to look rich soon end up going yeah and actually people often

who get rich in this space Do so yeah if you're looking at influences often they are making money from these courses for example that's where their income is coming from not from their stocks and shares or their crypto i mean yeah there are people who have got rich from crypto but you know like there are like there are people who've got rich in the lottery or people who've got rich on roulette right absolutely yeah it's Unusual or lucky yeah rather than guaranteed or necessarily a particularly sensible way to make money now it might be like

part of what you want to do you like like gambling on the football might be like a fun thing to do right have a bit of crypto but like if you were gambling on the football you've got it's like comes with a house warning doesn't it it's got to be money prepared to lose so Yeah do you think there's a do you think there's a lack of education on money um and on one question i wanted to ask you is do you think we should be maybe introducing talking to kids maybe in high school at

an age where we're teaching them get you get your top grades uh because you'll get a good job you Know work hard do this do that do that for your good job but you could have all the money in the world but if you don't know how to look after your money it's worth it it's useless isn't it you know yeah um do you think we should be trying to educate teenagers whatever you know better at schools yeah i do i think especially like we were just talking about now that I think there's lots of

ways to come unstuck and lots of ways that you can lose money uh that people need to be like kids need to be aware of like if you're going on tick tock and like getting all your information from sort of trading stuff on tick tock you need to be able to have some basic like education to think hang in a second yeah No does this check out is this correct does and like i write about in the book a lot of the basics around personal finance how compound interest works how that works the difference between

a student loan debt or a credit card debt you know whether how to buy a house all that kind of thing is quite straightforward so yeah if it's embedded from a young age you can definitely avoid some expensive Mistakes or people getting kind of conned which happens a lot yeah i part of me wonders whether would i have wanted to hear it when i was a kid you know what i mean like like was it actually until i earned money for the first time that i even really thought about it yeah but then it's a

big shock in it it is a shock yeah you're suddenly in the world Oh my god i've got money in my bank account what am i gonna do with it i'm on my own here yeah it's up to me do you know have you heard of jim rohn jim not he's he's dead now he's an old uh he's like a motivational speaker he's going to business you know i love him and he says in the seminars in his books teacher teacher child how to how to Spend the first dollar i'll quit uh and he said

70 percent of it so let's say 70 out of a pound and that's for everything your food your bills as a kid you want to go and write [Music] um put into work getting you know buy something for tempe itself as well you know just just get it to work or whatever and the last 10 day You know like charity which i think is massive [Music] next week next saturday i'll give you two quid back all right and then i'll see i'm thinking about anger do i need do i need this money i'm just getting

trying to instill this into it now uh because that's how it works it's not life-changing about someone it's not Give us a quid and i'll give you a 10x give us a quick and you'll get a little bit back um and i can see now now they're coming to me every week right what do you want to learn you know and i think if i can try and teach that but i think we should be trying to teach this to to kids in all schools i think yeah and i think you're thinking about this and

helping your kids and You know parents can help their kids financially by giving them money but they can also help their kids financially by getting them into the mindset like you are if you don't have parents who who do that a people don't have parents who've got money to give them so that can be hard in this world where lots of people buy property or go to university for free Because they've got the bank of mum and dad yeah but also i think there's this problem that you know if you your parents didn't have great

financial habits because they didn't learn about money they might not have passed on great financial habits to you or you may not have had a parent teach you some of the basics so i agree yeah where do we go if parents aren't teaching school you know Young people need like a mentor or somebody else to be able to help them even once a week in school yeah but also i i think there's a lot about mindset isn't there an emotion and a lot of doing well with money or making money is about understanding your own

instincts or what you want out of life being able to shut out some of the noise being able to think i'm not going to feel envious of that Rich person because there's always going to be someone richer than me or i'm not going to be doing this because i want to show off i'm going to be doing this because this is good for x y and z reason this gives me freedom or this helps me achieve something positive in life and some of that has got nothing to do with learning about the nuts and bolts

of Money it's all about learning about emotions or like managing relationships and all that kind of stuff so i'm all for talking about the emotional side of personal finance too and like how we discuss it with family and friends and and how we sort of resist the temptations and that you know i know a lot about the basics of personal finance does not mean i find it easy to save Or not or not to feel envious of what other people might have or not to be worried about money or all these things it's like knowing

we should be eating fruit and veg everything it's exactly the same yeah someone says should we get a takeaway you know yeah yeah it's the same so it's being able to balance those things yeah and yeah i think that's something we could learn from a young age Isn't it like helping still in younger people like how it's just just so it's not as much of a shocker yeah yeah isn't it it's a big shock in part two of this book you talk about um the mental health side of of money as well which i think

is massively important um i think um like i said a lot of people see it as a A figures game you know on a spreadsheet but a lot of it is to do with uh how we see things in our minds um would you say that mental health i i think i've read some as well about one of your friends was it bipolar yeah yeah that was affecting the way that she was spending her money and things like this um what advice would you give to people i mean not specifically but coming from That side

of it from a wellness point of view yeah um what advice or tips would you would you tell people to well i think being aware of the relationship so obviously there are people who have diagnosed mental health conditions like bipolar or depression or anxiety who will find it who do often find it difficult to have as much money or to manage money that might be because they find it Harder to work at certain points i think one of the diagnostic criteria for bipolar is at point spending lots of money in different phases right so you

know i think um if you're in that position like if you're in the position where you've got a condition that's difficult to manage there is more recognition of that and you should definitely talk to your doctor to talk to banks Talk to the taxman as i could talk about in the book there is an increasing recognition that you know people shouldn't be totally on their own with their money and that there's help out there there's quite a fear as well you know i think in reading as well that getting a letter through the poster bill

yeah and you know what it is yeah and people don't open it because you know What it is yeah sadly yeah it's it you've got to kind of face up and you know it's not going to go away is it yeah and i think it's very difficult so if you do have sort of anxiety for example or depression you find really difficult to open your bills you know is it cool that we live in in a system that Means that those people are sort of will end up paying more interest or get get that letters

more readily because they're fine unless you're going with their health and i think people are starting to wake up to that there's been a big campaign there's a really interesting charity called money and mental health policy institute which is backed by martin lewis And they've done loads of great work on like we need to stop making debt letters so threatening that it is really unfair yeah and and that is really not not helpful to people whether you've got a diagnosed condition or not or whether as i talk about in this chapter the fact that you're

struggling with money is causing these you to feel bad you know that it's like The chicken and egg thing again you know if if you struggle with depression you might find it difficult to manage your money but if you equally if you find it difficult to manage your money you're in debt you don't feel like you can talk to anyone it can create depression it can make you feel very very unhappy and make you very ill so i think understand that you are not alone with this although often people feel like you said You get

your first paycheck you've never learned about money in school you're like okay i'm on my own with this i remember getting my first wages yeah and it went on around the drinks yeah in one night yeah i know i went [ __ ] what am i gonna do for the rest of the week yeah no education at all yeah you know and i think there's probably a lot of people similar to that oh yeah Loads of people and some people are lucky enough to have a safety net if they do that and then they're like

oh my god i'm really suck i can't buy any food they've got people that can turn to you other people don't but there are charities and organizations and you know banks are starting to realize that like they need to give people a bit of a break you can discuss your situation with them and they will give you Like there's a new breathing space program where they need to give you time to repay money you own or to owe or to try and sort of get yourself back up on your fee so i'd always say to

people talk to someone else know that you're not alone and it can be anonymous you can go to like i said step change the charity are really helpful the charities like mind who work in Mental health have got loads of interesting tips on how to manage money on their website they recognize this as a as a big issue for people and actually there's a recognition as well that money is a big issue in relationships so charities like relate the counselling service says money comes up so frequently in couples counselling and they've got a big area

on their website about how to talk About money or manage money with somebody else so i think you know people need to feel like money isn't just a maths problem and a numbers problem that they've messed up on you know you do yeah or that they've not been clever enough to sort out yeah and know that yeah lots of people come and suck with money i think as well uh it's it's money in it it comes and it goes at the end of the Day you know you're not going to die when you run out

of money you've got to take it take it serious but i think i see a lot of people who who worry about it genuine fear yeah who gets sick and these people killing themselves over deaths um it's not that it you know i think especially the letters that are coming through like you said from from debt companies Are thinking this fear mechanism yeah pay now paying that you're over you know yeah i think we need to maybe change that and i think you'll probably get better results from people wording things different we know you're struggling

yeah please contact us to a right you know something totally different where rather than the fear and yeah um and i think like we were saying With i think people feel that money is tied up with their self-worth so much that like you're stuck like if you make made a mistake and it spirals because often it does because these products are kind of designed to like someone's making money yeah exactly right so if you get yourself stuck and then you know if you've got a gambling addiction um You can feel like i made this mistake

i'm stuck now i have no there is no way out but there is always a way out and so many people are in the same position and if you you know what's quite cool so we kind of slagged off social media for a lot of like nonsense that's being sold but there's also a lot of really cool good advice now growing on social Media around debt and money and gambling and things so if you follow hashtags like debt instagram um or my debt-free journey there are a lot of people sharing their experience of being underwater

with money and how they've kind of climbed out who they've turned to for help just some like little sort of tips and support for other people if you know Just to make you not feel like you're on your own yeah i think because as well because we don't talk about money you're not going to go on sit and since oh guys i'm in so much debt yeah yeah and like we should right because when i've it's funny because i've never really spoken to my friends about money that much i don't know really why it's just

not you know i'm not said how much do you Earn or how much on your credit card or how much does your partner give you or your parents or whatever just not talked about that much until i wrote the book and then i started having more conversations and it's funny how once you start talking other people want to too like it is actually quite fascinating how people make these decisions and different people have very different attitudes To spending and saving or investing or debt like some people are very relaxed about being in debt yeah and

they're like you know what it's all right it's not other people are like i wouldn't even want to be 50p in debt i can't stand the idea yeah yeah so i think it's also about dropping some of our judgements about what's right and wrong and thinking you know people have different approaches to money and make It a a subject that we can discuss and you know because i think people will genuinely will you know if your mates are saying i've got a problem yeah um i think you you know you might say oh i can

lend you some money yeah stop paying the daft interest i'll sort you out you know and you might find oh really oh my god you know yeah and sometimes it's a little bit about Like yeah dropping some of your sort of the ideas that we have like i couldn't possibly borrow money or i couldn't possibly ask that of somebody or i couldn't or that you're embarrassed like sometimes it's about dropping that and being like look yeah i just yeah if this person is my friend this person cares about me then i should be able to

Have this open chat with them and that should be reciprocated yeah and i i i remember reading as well i think jim rohn said where you are now doesn't necessarily mean where you're going to be in five to ten even a year's time yeah uh things can change and turn around and also i think what's interesting is like money can build money right like if you've got a lot of money it's easier To take risk and then potentially get more money because often risk is rewarded in order to make money kind of need to take

some more risk and so often people who've got money to start with and that might just be how they were born right that they had rich parents or that they got lucky or you know they were right place right time and then it's easier for them to go on a Path of building that and so it can but it can be easy to look at other people and think oh wow they've done something smart they've done something clever and i haven't but often it is luck absolutely um so i think it's about also being honest

about that and you know being honest if you have got loads of money yeah about how it came about so people don't Feel like there's some magic trick some like magic instagram course that you're not going on that would change everything often it's as simple as that oh actually my parents gave me like thousands of pounds per house and that meant that i paid less rent so i could save a bit more and then i invested a bit more and then i made a bit more and then it grows and then suddenly you find yourself

in a Much better position so a little bit more honesty i think we might make everyone feel better and i think as well uh i've noticed that you've got to find out what what you what kind of life you want and you don't need to be a millionaire you know if you don't want to live that lifestyle you know people can be quite happy on a certain what you know live within your means yeah and ask Yourself why like why do you want lots of money like what what is it and you know fair enough

if it is like oh we're an amazing car i want the freedom you know go for it but like is that your real motivation you'll get the car realize anger about it that's a bit wrong because uh but the goals are always nice but i think that's it you know i've got a friend I've got a friend who completely lives with his within his means yeah uh he has a few buy-to-let properties he's not a millionaire he's not rich but he has all the time in the world yeah he rings me up in the afternoon

should we go training yeah i'm are you lazy bastard of course we should you know and yeah to me he's rich yeah uh he's not a multi-millionaire but he's Rich because he's got a lot of time have you heard of the fire movement which is these people who i think is really interesting concept i think it's unrealistic for most people but i like the mindset of a lot of people who follow it so it's basically um retiring early so work a lot of people in order to try and retire in their 40s from having a

reasonable salary are Saving extremely hard during their 20s and 30s it's kind of like a crazy extent so it might be that they have a really quite high salary but they don't spend any of it they're just saving saving saving in order to invest it in order to retire and then do what they want without the burden of having to worry about earning money now obviously you can unpick it and you probably have to be in a pretty Privileged position and maybe not have kids and maybe you know be able to earn a high salary

while living somewhere cheap you know yeah for most people it's not possible but this idea of avoiding lifestyle creep so avoiding i've got a pay rise i'm gonna make my life match that pay rise you know i've earned a bit more money so I'm just gonna spend a bit more money and then you kind of re reset what it what success looks like financially to you okay um avoiding that being like this is what i want it doesn't really matter how much extra money i get that can put you in a really great position if

if if you've not got used to spending it Don't ever spend it yeah pretend it doesn't exist yeah and but it's tempting isn't it i i see it myself you kind of like as you get a bit more money and a bit older you sort of readjust what is like the basics and you're like well actually yeah you know yeah right move like you know yeah yeah and i think you know some people that really works For but where do you stop i'm always fascinated by people who are super super rich who don't feel rich

like who if you ask someone who the average person would think looks pretty rich they often won't say they are because there's always someone richer so you know there's always something else you could aspire to financially and i think it's just setting your own Boundaries and thinking like okay this is what this is what being rich looks like to me rather than there being an objective because is there an objective what's rich like you know who are you comparing yourself to absolutely yeah yeah i think you have to absorb all of that in in your

sort of when you're looking at your finances or what you want or your Goals you have to also think a little bit about ask a question why all the time like why do i want that what is it that i'm aiming for so thank you very much thank you i've loved it good me too yeah yeah thank you it's a topic you can talk about for hours surprisingly surprisingly interesting chat for another two hours if you want no thank you very much thanks for having Me [Music]