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The Martin Lewis Money Show - Season 18 Episode 12 - Season 18, Episode 12
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00:05Hello, are you invest curious? A shares is a tax-free way to invest and far more
00:12people should have one than do, even on volatile days like this. Yet for many,
00:17investing feels complex, scary, risky, something for other people not you. But
00:23maybe we'll change that today. And all that means as a nation we under invest,
00:28with many only exposed to the market via their pension, often without realising it.
00:33But avoiding risk has risk too. Inflation can eat away at your savings and you can
00:40miss the chance to build wealth. Today it's all about whether a shares is right
00:45for you and how you start investing. And I'm joined by a specialist panel over
00:50there, welcome everybody, to help you pick the right places. Plus in my news you can
00:54use. 15 to 23 year olds may have hidden thousands of pounds in child trust funds.
00:59They've got cheap beauty deals and we've got a scoop for you. 18p gelato on Saturday.
01:05Let's do it.
01:13Wave, you won it!
01:17Oh, they're feisty tonight. They are. This is good. This is really good. Of course, we want to hear from
01:22you to get your questions in on tonight's subject all the usual ways on the screen right now.
01:27But we can kick off tonight's show with an investments question. Yanru, in our studio audience, you've got a question
01:32for Martin.
01:33Hello, Yanru. I like your reward.
01:34Oh, hello. Hello. Hello. Hello.
01:38Hello. Yes, please. You've got the question.
01:40Yeah, yeah. So for someone like me who knows nothing about investing, so where should they realistically start?
01:47Well, I think the first thing, do sit, please. I think the first thing is that you need to start
01:52by understanding investing.
01:54I mean, before we even get into, as we'll talk to the panel later, where do you put your money
01:58and who the best providers are and all that type of thing.
02:01Investing is something, conceptually, you need to understand to see if it's right for you. And that's what I'm going
02:05to go through in this first part of the show.
02:07So I'm going to go straight into my big briefing. I'll come back a bit more later. Big briefing time.
02:13OK. So investing is when you put your money somewhere in the hopes that it's going to grow far more
02:21quickly than saving, but the risk that it might go in the other direction.
02:26That's the reward and that's the cost. And it is all about volatility. And this is what people think of
02:33when they think of investing.
02:34This is what scares people. Here we go. I've got three of the big indices here.
02:38World index, a FTSE 100 UK index, S&P 500 US index. And this is their year by year performance.
02:45So look, some years, great. Up massively. Some years, down. Money is dropping. And that's the thing that puts people
02:54off.
02:54But the first rule that this teaches us is investing when you're a beginner is not about the short term.
03:01This is the golden rule. Here we go.
03:04Now, only invest what you won't need for at least five years. My view. James, you're three, aren't you?
03:10James is three. Three, five. A long period. Whichever you want. A long period.
03:14Make sure you've cleared any expensive debt first. And you should always have a cash emergency fund, a savings emergency
03:20fund.
03:21Three to six months worth of bills built up. After that is when investing becomes a ripe spot for you
03:27to put your money.
03:29Now, I said this is how people think of investing. But that's the wrong way to think of investing.
03:35Because investing is over the long term. This is the right way. Here we go.
03:40So this is going to be a chart. If you had £1,000 ten years ago, what it would do.
03:43All the data is historical performance. And past performance is no predictor of future performance.
03:47So there's no guarantees. But I think this is important.
03:50First thing to say is we need to look at inflation. This is the rate at which prices rise.
03:55So for you just to be standing still after ten years, your money has to be at the level of
04:01inflation.
04:02For it to grow, it has to be above. So let's first look at the top savings. These are my
04:08top savings.
04:09The Martin Lewis top pick of the market over the last ten years. If you'd always had your money in
04:13those, this would be your return.
04:17Below inflation. So in real terms, your money would not have been saving. It would have been losing.
04:24It's got better in recent years, but it was all of those super low inflation years that really meant your
04:29money was hurting compared to inflation.
04:33But what really matters is what I'm going to show you now.
04:36I did this in December. The audience then were surprised. I suspect you will be too if you missed that
04:40show.
04:41This is investing in three big indices. You see the difference. So massively above inflation.
04:51This is UK. This is the world index. So very heavily loaded to the United States shares.
04:59And this is the S&P US shares indices. Now, look, it goes up and down.
05:04That volatility is still there day by day. But over a ten year period, you would generally expect these big
05:09indices.
05:10So they're tracking lots of different shares. It's not about one share.
05:13Lots of different shares are going to go up over time.
05:16And if you do not invest, if you've got the money, you are missing out on that level of growth.
05:21And it's fascinating because we did the last show in December. We were here.
05:24And then some people say, oh, you did it just before a dip. We did do it before a dip.
05:27But the dip was before a rise and things go up and down. And you have to embrace that if
05:32you're going to do this.
05:33Yeah. And we've got some questions here, actually, because timing is clearly important.
05:37Two questions here. The first has come from Angela. She's asking, if current market volatility continues, how does it affect
05:43stocks and shares?
05:45Is it better to wait or go for it in the hope that shares rise at some point?
05:48And then we've got this coming in from Colin. I keep hearing that we're in a massive stock price bubble
05:54that's likely to eventually burst.
05:56If this is the case, then shouldn't we be saving cash instead?
05:59Well, we do, of course, have the Middle East situation going on. That's huge volatility.
06:05And with President Trump, obviously, it's a volatile politician there. Things change all the time.
06:10And equally, we've got volatility in the UK today. We don't know what's going in our political situation and uncertainty
06:15brings volatility.
06:16Plus, I mean, let's play the negatives. The deputy governor of the Bank of England said there's a lot of
06:21risk out there.
06:21And yet asset prices are at all time highs. We expect there to be an adjustment, a drop at some
06:27point.
06:28James, how do you time the market?
06:30Well, I think the Bank of England comments are really just reflecting the uncertainty they see in the global economy
06:35right now.
06:35I think we see that uncertainty, too. But we say that the underlying outlook is actually much more resilient than
06:40that.
06:41As you said, volatility is par for the course when you invest.
06:44Markets move around short term on news flow and on politics, but where they go in the long term is
06:49what really matters.
06:50If you look at the US stock market over the past five years, we've seen 180 new all-time highs,
06:57the most recent of which was actually last week.
06:59So for all of this noise, for all of these scare stories, the reality is markets have delivered, financial markets
07:05have delivered strong returns for investors over the long run.
07:07Why? Well, I don't think there's ever a wrong time to get invested. I think there always is reasons not
07:13to invest or to convince yourself not to do it.
07:15But I think what's really important is that long term story, riding out the ups and the downs and making
07:20sure that you're comfortable with that volatility as you go.
07:23Let me just let's just play a hypothetical game. This is not a prediction. Let's just imagine we had a
07:29crash tomorrow and the markets dropped across the world to 50 percent.
07:32I mean, massive economic news and big economic disaster. So that takes us back from where we are there to
07:39probably about this point. It's the same level here.
07:42If you invested here, wow, are you going to feel, oh, my goodness, I've lost so much money, right? Because
07:48you invested yesterday. If you invested there 10 years ago, you're still not going to be happy.
07:54But in most cases, you should still be up. And I think that's the important point about I'm not making
08:00any predictions. I'm just saying this is why you've got to think the long term.
08:03The worst thing you can do as a beginner investor is follow every day. The price is going up and
08:07down. It'll just make you feel sick and it's not what it's about.
08:09So this is about putting money in for the long term and thinking that way. OK, and we're going to
08:14move on to. Oh, yeah.
08:16Yeah. So which brings me to this point. When investing, there are only four things that matter. The price you
08:22bought it for, any income it provided like dividends and the price you sold it for and inflation.
08:28So in the mid time might be the most sensible thing for a beginner investor. Indeed. OK, we've got a
08:35quick question here from Paula.
08:37Paula's asking, what would you say about investing in individual shares?
08:43Buying an individual share is very or an individual asset or an individual commodity is very high risk.
08:49If it goes well, you could double treble 10 times your money. If it goes badly, a company can go
08:54bust and you can lose all your money.
08:56And that's not what this is about. What we're talking about today is where do you begin to get some
09:02access to overall average market growth.
09:05And that means the standard starting place for a beginner. Get rid of that one.
09:11It's a fund, which is a basket of investments that you buy as one.
09:16Now, I've got shares and bonds here. A share. I mean, it's very simple. You might own your own business.
09:21If you buy a share, you own a teeny tiny part of a maybe a big business, an international conglomerate,
09:26which means if its price goes up because it's more valuable, your share price goes up.
09:30If it's making profits and they've got cash, they might give you dividends or payment each year that you make
09:35money from.
09:35A bond, corporate bond, not like a savings bond, is an IOU from a company. It promises to pay you
09:42a fixed amount of interest.
09:43But the important things to understand there is its price can go up and down to relative to other things.
09:48So it doesn't mean that the amount you put in, you're always going to go back.
09:51Now, when you buy a fund, you have a big spread. Now, most funds might be all shares. You might
09:56say US technology fund shares, and there'll be lots of different ones.
10:01But the key is you've got lots and lots of them. It might be shares and bonds like this multi
10:05-asset fund. And then some go up and some go down.
10:10And your returns depend on the collective. So this is all about mitigating risk.
10:18Funds can be made up of shares, bonds, a mix. You could have commercial property in a fund, even within
10:23an ISA, commodities, gold, cocoa.
10:25You could invest in chocolate. You have them spread in different ways.
10:31FTSE 100 UK, Chaka, US tech, emerging markets, ethical, high yield corporate bonds. There's lots of choice.
10:36But with all of them, you've not just got your eggs in one basket, you've got it spread across.
10:40And it is that diversification that mitigates the risk.
10:44That means you're not going to get absolute spikes and drops.
10:48It's going to be more about this type of curve going up and down.
10:52If you go ultra-specialised fund or complex fund, then again, you're probably upping the risk.
10:56Now, the big point here with funds, there are active funds, where a fund manager is paid to pick stocks
11:04for you, and they want to outperform the market.
11:07Or a passive fund, which is like a tracker, where it tracks an index like the FTSE 100 index of
11:13the UK's biggest companies.
11:15And it's just an algorithm that tries to predict it.
11:18This might outperform the market, but we'll have higher charges because someone has to be paid.
11:22This will be cheaper.
11:23Ed, our financial advisor here.
11:25Active or passive for a beginner? Where would you go?
11:27A great place to start is passive, particularly thinking about the MSCI World Index that we saw in the chart.
11:32So that's a global tracker.
11:34How many shares does that invest in?
11:35You've got around 2,500 shares around the world, and you can buy funds with up to 11,000 to
11:3913,000 shares around the world.
11:41Just buying the world by market capitalisation.
11:44Yeah, so you're just spreading your risk across all those big companies, and that's where you'd suggest a beginner starts.
11:48That's a great place to start.
11:49Active or passive?
11:50I'd go passive for a beginner.
11:52I've got the MSCI World Index Fund and Exchange Traded Fund.
11:55It's cheap.
11:56It's simple.
11:57It's easy.
11:58Passive as well?
11:59Absolutely.
11:59Well, we've got a clean sweep on our panel.
12:01I think that answers the question.
12:02Jeanette.
12:03Charlene's tweeted this in for you.
12:05I've always had cash icers, but I'm unsure about shares icers.
12:08I'm concerned my money will be at risk if the shares go down.
12:11Are there any guarantees to protect my money?
12:13No.
12:14No.
12:15That's a fundamental difference.
12:17Money in a cash icer.
12:19Your capital is protected.
12:20You get a defined amount of interest as a compensation scheme.
12:22When you put money in shares or funds, it's about the underlying performance of those assets.
12:28Now, yes, you might say, what happens if the platform goes bust?
12:31Well, actually, you own the shares and they're normally ring-fest, and then there's underlying protection.
12:35But generally, we're talking about the performance of the stocks and shares.
12:37If you're buying an individual share, you could lose all your money.
12:40If you're buying a fund, that's unlikely.
12:42It may go down.
12:43But over time, on a big wide spread, hopefully on the balance of probability, it will go better.
12:48And it will do better than savings.
12:50No guarantees, but it should.
12:52But that's not what a shares is about.
12:54A shares is a tax-free way to save.
12:57A shares is a tax-free way to invest.
12:59So we should talk about the three taxes there are in investing.
13:03Most important one, capital gains tax.
13:05It's on profits when you sell something that's increased in value.
13:07You're allowed to make £3,000 of capital gains a year without paying tax.
13:11The rates above that are right there for you.
13:13What I really want you to understand, though, is there is no inflation offset here.
13:17So if I bought something 30 years ago for £1,000, and it's worth £100,000, and I sell it
13:24today,
13:25that £99,000 gain is all crystallised in this tax year, so I'm going to pay tax on £96,000
13:33of it.
13:34Do you understand?
13:35If I bought it last year for £1,000, and it's worth £100,000 today,
13:39I'd probably leave the show and just tell you what to invest in.
13:42But then in that case, I'd still just pay tax on the £99,000.
13:46The length of time you've held it doesn't matter, which is why it's really got to just stick that in
13:52your head for a moment,
13:53because we'll come back to it.
13:55Dividends tax is on income you make from dividends.
13:57You've got a £500 per person allowance. Those are the rates there.
14:00Above that, you would be taxed.
14:02And there's income tax on savings, like the interest from bonds and gilts.
14:05I've discussed that on the show so many times before.
14:07Hopefully you know all the different savings allowance,
14:09like the starting rate of savings for people who have lots of interest,
14:12but the earnings and the £1,000 a year you can make tax-free.
14:16Those are the taxes on investing.
14:19And all a shares ISA is, is a wrapper.
14:23You're allowed to put £20,000 per tax year in an ISA,
14:27whether it's a cash ISA or a shares ISA,
14:30or you could have in both as long as you're not putting more than £20,000 in.
14:33Once in, it stays tax-free year after year as long as you don't take the money out.
14:37Everything in there is tax-free.
14:38The only difference is HMRC cannot come along and bite it.
14:43So on that capital gains, £1,000 30 years ago, £100,000 now.
14:49If it were in your ISA, did they have ISAs 30 years ago? Ignore that.
14:53It's all tax-free. And all the gains are tax-free.
14:55So on this topic, I've got a question that's coming from Ian.
14:57And Ian's asking, I have 60K in a cash ISA.
15:01What would be the benefits of switching to an investment ISA?
15:05Well, that could mean two things.
15:07I mean, it could just be a simple saying, should I invest?
15:10In which that's the whole thing that we're talking about in the show.
15:12But if you were specifically saying, I've got savings and investments,
15:17which is best to use my ISA allowance for?
15:20Because you only get £20,000 a year.
15:22Well, let me just unwrap this for a second, if I can.
15:25It worked. Yay, I like that.
15:28Remember this one, the 10 years ago.
15:30So the point is, we're talking about, as a beginner,
15:33buying assets for the long term,
15:36holding them in the hope they're going to grow a lot.
15:39Then when you sell them, you're selling them in one year.
15:42So the gain could be huge, and it's all happening in a year.
15:44In savings, the interest is paid annually.
15:46So it doesn't accumulate in the same way.
15:49Because of that, if I had both savings and investments,
15:54I would probably be looking to protect my investments
15:56from the tax ahead of protecting my savings from the tax.
15:59Panel, agree? Correct.
16:01Yeah. OK.
16:02They agree. That's good.
16:04OK, well, coming up next,
16:06a part dedicated to putting your investment questions
16:08to our panellist specialists.
16:09We'll see you after the break.
16:22Hello, welcome back to our Shares ISA programme.
16:25We've already talked about the fact that over a long period of time,
16:28with money you can lock away,
16:30investing will smack the pants off saving on a balance of probability.
16:34But the way to do it as a beginner is to diversify your risk
16:37in an investment-type fund.
16:39Jeanette, what's happening out there?
16:40There are so many questions coming in on this,
16:42so let's get straight into it.
16:43We've actually got this question coming in from Joe.
16:45And Joe is asking,
16:46can you transfer old cash ISAs into stocks ISAs?
16:52Absolutely, yes.
16:53But when you do it, you have to be careful.
16:55You have to go to the new Shares ISA provider.
16:57It will have a transfer form
16:58and let it move the money out of your cash ISA
17:01into your Shares ISA for you.
17:02If you do that, moving the cash into shares
17:05doesn't use up that £20,000 a year allowance.
17:07If you took it out, it would.
17:09And therefore, you could put a whole new £20,000 into an ISA,
17:12so you've got to transfer it.
17:13You can also currently transfer shares ISAs into cash ISAs,
17:16but it's very likely from next April,
17:18you'll no longer be able to do that.
17:19Just the cash to shares, not the shares to cash.
17:22OK, perfect. You can talk to your specialist.
17:24Actually, just...
17:25Yann Roo, can I ask you?
17:26Mm-hm.
17:26So, did you start to get the fundamentals of where we are?
17:29Yes, thank you.
17:31Good.
17:31But I think what we need to do now
17:33is let's get a little bit nitty-gritty with the panel.
17:35Ed, we'll probably start with you.
17:38Where would you suggest...
17:39You're an independent financial advisor.
17:40Yann Roo starts investing.
17:42What should she do as the beginner step
17:44to actually putting your money somewhere?
17:45OK, a great place to get started
17:47is to find yourself an investment platform,
17:50somewhere that you can get that stocks and shares ISA open
17:52nice and easily.
17:53And then you want to go for those diversified investment funds
17:56where you're buying the global markets
17:57and just start putting some money in.
18:00No matter how small, start paying in monthly
18:02and watch your money grow over time.
18:04But you don't even need to make that much decision, do you, Holly?
18:07You can... You know, there are robo-advisors out there, aren't there?
18:09Yeah, I mean, the good news is for lots of people,
18:11investing gives them brain fry.
18:13If that's you, there are places called robo-advisors.
18:16You'll do an online quiz, maybe five or six questions.
18:19Not a test. It's your attitudes. Don't worry.
18:21Yeah, simple questions, but it'll give you a ready-made option.
18:25So Monzo, Moneybox, Vanguard, JP Morgan, some good names out there.
18:30Yeah, so if you're having indecision paralysis
18:33and that's what's putting you off,
18:34something like a robo-investor can just make the decisions for you,
18:37which will take the pressure off you.
18:38And hopefully, you know, a nice broad spread of diversified assets.
18:40Let's get into questions we've had in for you guys.
18:43Hayley, I have a cash ISA that runs out in May with a bank.
18:46I was thinking of transferring it across to a Stocks and Shares ISA.
18:49Am I better to invest it all straight away on Stocks and Shares
18:52or drip-feed the money monthly?
18:54So drip-feeding is when, let's say you've got £10,000,
18:57you put £1,000 in each month for ten months.
19:00Which would you go for?
19:01Well, markets spend more time going up than going down,
19:04so perhaps you're better off just investing and getting started.
19:07But a lot of platforms will let you hold that money as cash
19:10and drip-feed it across that pound-cost averaging,
19:13which means you're buying shares at different prices every month,
19:15but ultimately it helps to take a bit of risk.
19:18I suppose, James, if we're talking about that correction,
19:20if a correction did come, if you were drip-feeding,
19:23well, you might buy high, but then the next month you might buy low
19:25and it would all even itself out.
19:27So it is a sort of risk-mitigation strategy, isn't it?
19:29Yeah, exactly.
19:30And I think if you have a particularly large sum of money to get invested
19:33and you're worried about whether now is exactly the right time to invest,
19:36just take the time and drip it into the market over a period of time.
19:40So long as you don't take years to do that,
19:42you're not going to miss out on that.
19:43And most shares ISAs will let you hold money in cash while you do that
19:45and you can set it up to do automatically in a pick of funds.
19:48Louise, I've opened a stocks and shares ISA with my bank
19:51but don't understand how to invest.
19:53Often not with your bank, I have to say.
19:55The bank obviously has to remain impartial, so can't help.
19:57I just wanted to invest a little money into the ISA
19:59to see if I can get a better return on my investment
20:01and understand there's a risk.
20:03Where can I go for advice?
20:04It's probably a robo-invest.
20:05What do you think about using the bank?
20:07I think banks have got better, I'd say,
20:09out of all the main options out there.
20:11Barclays are best for investments.
20:13Monzo is also decent.
20:15If you're not sure and you want advice,
20:17financial advice is expensive.
20:19It's a luxury item typically for people with more than £100,000.
20:24If you're watching a mum and dad have got an advisor...
20:26That's what Ed does. If you can afford it, go for it.
20:27But otherwise...
20:28But if not, maybe mum and dad have an advisor.
20:30They might be happy to help.
20:32If not, robo-advice, go online.
20:35JP Morgan Personal Investing will help.
20:37Monzo Moneybox, options like that.
20:39James would be very pleased that you just gave his lot a plug there.
20:42Yeah.
20:42OK.
20:42So let's move on to the next one.
20:44Claire, are there any good apps that can invest your money for you
20:47when you can select low, medium, high risk?
20:50Absolutely.
20:50The apps out there have got better.
20:52I'd say Trading 212, a fantastic app, very popular.
20:56Monzo Moneybox.
20:57There's lots of decent apps out there today.
20:59Let's just talk about fees and charges investing.
21:02I mean, this is what you specialise in on your site,
21:04is going through all that.
21:06There are a lot of fees and charges and hidden fees and charges.
21:08How do people navigate their way through?
21:09I mean, when you buy a fund, there might be an upfront charge,
21:11especially if you buy it direct.
21:13Weirdly, buying direct tends to be the worst decision on buying a fund.
21:16Always buy through a platform.
21:17There can be annual management charges.
21:19There can be share trading charges.
21:21Where would you go to keep those charges low
21:23so you get more of the investment growth yourself?
21:25Yeah, we've got a fee calculator on our site that looks at this.
21:28If you don't want to pay fees, Trading 212, light year, free trade,
21:32they don't charge you fees to trade within an ISA.
21:36There's plenty of sort of lower cost options out there.
21:39Look at...
21:39I mean, the average trading price in the UK to buy a share is £5 today.
21:44Yeah, but if you're buying a small amount, that will be expensive.
21:46And funds, do they have a cost as well?
21:48It depends, again, on the different platforms,
21:50so you need to look at it.
21:51Most platforms will let you charge funds without paying a fee.
21:54Some charge you fees, so you have to do your homework.
21:58So, the best platforms for funds?
21:59So, the best platforms for funds, if you've got smaller amounts of money.
22:03Actually, Hargreaves lands down a big platform,
22:05but they work out quite cost-effective for people with smaller sums of money.
22:08Thank you. And platforms are just, you know...
22:10Who are you going to buy it through?
22:12If you think of it like a supermarket,
22:14the platform's a supermarket and they've got different funds in there.
22:16That's what we're saying when we're talking about platforms.
22:18Neil, I own a lot of shares from a company I used to work at.
22:22Can I move these shares into a shares ISA, Ed?
22:25Yes, you can.
22:25If you've got them through a Save As You Earn scheme,
22:27that means that perhaps within 90 days of those shares being able to be taken,
22:31you can transfer them from your Save As You Earn scheme over into an ISA.
22:34It will use your ISA allowance for that year,
22:36based upon the amount of the shares that you've bought across,
22:38but do it within 90 days tax-free.
22:40And if you haven't done it in 90 days and you've still got them?
22:42You're going to need to sell those shares down
22:44and then repurchase them back if that's what you want to do.
22:47And when you sell, that crystallises that capital gains tax, doesn't it?
22:50So, you have to be aware of that.
22:51Yes, yes.
22:52Although, within a Save As You Earn scheme, you could be tax-free.
22:55OK.
22:58Diviani, is gold a valuable commodity to invest in right now?
23:02Well, James, I mean, gold's gone up a huge amount.
23:05It has.
23:06You know, gold is interesting to investors
23:08because it's often seen as a safe haven asset.
23:10That's particularly appealing when inflation is on the rise
23:13and also when there are geopolitics at play.
23:16I think it's worth saying that it's not guaranteed, though, right?
23:18As the Gulf crisis started, the price of gold actually fell.
23:23Gold is still an under-diversified asset.
23:26It still doesn't generate an income, and so for us,
23:28it's a small portion of a portfolio, a nice diversifier,
23:32but it needs to only be a small portion.
23:33So, don't buy all your eggs as gold.
23:35That's correct.
23:35But you can put it in a share's ISA, can't you?
23:37Because you'd buy a gold exchange-traded fund or something like that,
23:40and then you can effectively get the growth of gold inside the tax-free ISA.
23:43Where are you on gold, Ed?
23:45Yeah, it's part of a diversified portfolio,
23:47but it's had an extraordinary run lately.
23:49It really has.
23:50A lot of investors nervous about markets,
23:53concerned about inflation rates.
23:54Central banks have been buying a lot of gold,
23:56so, yeah, just be mindful of them.
23:58So, it could be at the top as well as it could still have room to grow.
24:00Now, it's someone who likes gold, but mainly in her ears.
24:02Jeanette.
24:02OK.
24:05Martin.
24:05Although, silver, I can't see from here.
24:07No.
24:07They are gold.
24:08Coming up in our final part,
24:10should you be opening a share's ISA for your children?
24:12And for those aged 15 to 23,
24:14are you missing out on thousands of pounds,
24:16plus a £40 Marks & Spencer summer beauty bag?
24:19We'll see you then.
24:33Welcome back.
24:34We have had lots of questions on investment,
24:36including this one that's coming in from Lava.
24:38Lava's asking,
24:39how does it work with transfers?
24:41I have a stocks and shares ISA that was fee-free for the first year.
24:45This is now finished,
24:46and I want to transfer it to another platform that has lower fees.
24:49Is there a certain time I should wait to transfer in terms of markets,
24:52or does it matter?
24:54OK.
24:55So, you can transfer from one share's ISA to another,
24:58make sure they've got the same investments.
24:59Again, you do the transfer form,
25:01you don't withdraw the money,
25:02because that would count as both selling your shares
25:04and being outside of an ISA.
25:06Normally, it works very smoothly.
25:08There is a small chance, with some providers,
25:11they may have to sell your ISAs in your...
25:14sell your shares in your old ISA and move it across.
25:17There'd be no tax, because it's still within an ISA,
25:19but maybe if they sold it two days ago
25:21and then, you know, the price changed,
25:22you might lose out because they're buying at a different level.
25:24So, you just want to check that first.
25:26OK.
25:26Got some more questions for our panellists?
25:27Yeah, absolutely.
25:31Let's go into this one.
25:33And this is also from our Yamru over there,
25:35but I have it on my card now.
25:37It's the one you guys always hate.
25:39Have we reached the point where ignoring Bitcoin
25:42is now riskier than owning a small amount?
25:45Ed, where are you on Bitcoin?
25:46Oh, Bitcoin.
25:47Well, it's a fascinating bit of technology
25:49that sits behind Bitcoin being the blockchain,
25:51but there's nothing influencing the price of Bitcoin
25:53other than supply and demand.
25:56There's no economy, there's no GDP,
25:58there's no central bank, so I would say avoid.
26:02James?
26:03It's a highly speculative asset.
26:06It's not where I would start if I was a beginner investor.
26:09The price moves pretty materially, and I'll give you an example.
26:12The lowest price in the last 12 months was $64,000.
26:15The highest price is $125,000, and it's currently at $80,000.
26:20So you really need to be able to stomach that type of volatility
26:23to invest in cryptocurrency.
26:25Some people believe in Bitcoin as a political thing.
26:27Other people think it's a good investment and it's going to take over
26:30as non-governmental currency.
26:31Some people buy Bitcoin because they believe in the greater fool theory.
26:34That's where you buy it in the hopes that a greater fool than you
26:37will be willing to pay a higher price in the future.
26:39That isn't necessarily wrong, and people have made a lot of money from Bitcoin.
26:43But I think the general statement is it's fine to have a little bit of Bitcoin,
26:46and you could even put it not in an ISA or in an innovative ISA.
26:50You can even now buy exchange-traded funds.
26:52Would you go for that if you were buying Bitcoin over Bitcoin itself?
26:54That's correct.
26:55You can hold it in an innovative ISA through up to 20K as an ETF.
27:00You do have to qualify, so you have to answer some questions
27:03and make sure that you understand the risk that you're taking.
27:06Straightforward cryptocurrencies, not ISA eligible.
27:08So, yeah, the ETF route is a much safer way to go.
27:11If you're doing it, it's not for all of your assets.
27:13It might be for some, but it's not for all of your assets.
27:15Aaron got in touch.
27:17Just one quick, Holly, one thing I think we haven't done.
27:20Basic, you just want to go and start somewhere that you're going to trade.
27:23What is the cheapest platform? Is it Trading212?
27:27Trading212, free trade, light year.
27:28They don't charge you to trade or to set up an ISA.
27:31And those are the ones where you can choose what you're going to put inside it,
27:34like an exchange-traded fund.
27:35So you talked about global trackers earlier.
27:38Mm-hm.
27:39Where would you go to buy his global tracker,
27:41and what would the funds be that you'd put in it?
27:43If you don't want to pay any fees, I mentioned Trading212,
27:47light year, free trade, platforms like that.
27:50You can buy trackers.
27:51Big brands are BlackRock, Vanguard.
27:54You could buy, very jargony-sounding, the MSCI World Tracker.
27:58You'll get that big basket.
27:59And all of those are global trackers.
28:01That's where we started as a beginner's place to dip your toe in the water.
28:04Final question from me to the panel.
28:05Janet got in touch.
28:06I am 66.
28:08Is it worth investing in a stocks and shares ISA?
28:11Holly.
28:13Absolutely.
28:13I'd say stocks and shares ISA, Martin, is a bit like falling in love.
28:17It's an amazing thing, and you're never too old.
28:20What a good way to say.
28:23Jeanette.
28:24That is very lovely.
28:25We've got Dave on our virtual wall, actually, and Dave's got a question for you.
28:28He's got two grandchildren, aged 10 and 12, and he wants to invest in their future.
28:33What are the benefits of a cash compared to a stocks and shares ISA,
28:36or is there a more tax beneficial scheme elsewhere?
28:38Oh, fascinating question.
28:39I'm actually going somewhere towards that in my news you can use,
28:41so let's do that now.
28:44OK.
28:45First thing I want to talk to you about is child trust funds.
28:47There are some who are missing out on thousands of pounds.
28:50HMRC is currently writing to 21-year-olds, only 21-year-olds, about 750,000 of them,
28:56about unclaimed child trust funds.
28:58These were the predecessor to junior ISAs, and the state put money in for you.
29:02You could add on top.
29:03People could add on top.
29:04So everyone who has one has some money in it if they haven't taken it out.
29:08The letter will tell you where your child trust fund is,
29:11so then you can go and contact that provider.
29:14Just be careful of scams.
29:16Don't use details on there.
29:17Go and find the provider's details yourself,
29:19and be careful of emails, calls and texts.
29:21This is a letter.
29:22The average amount, two grand.
29:25But it varies vastly depending on if the money was added by parents
29:30and whether you saved or invested,
29:32because invested over a long period outperformed savings.
29:34It's the whole point of this show.
29:36But if you were born between the 1st of September 2002,
29:39so you're 15 to the 2nd of January 2011,
29:41and you haven't accessed your child trust fund,
29:42you do not need to wait.
29:43You can find yours now.
29:44Go on to gov.uk.
29:45It's find a child trust fund tool.
29:48If you're under 16, your parent has to do it.
29:50If you're over 18 or older, you have to do it.
29:52If you're 16 to 18, either your parent or you can go and use the tool and find it.
29:57Well worse so.
29:58But just on the back of Dave's question,
30:01what's really worth you thinking about here is,
30:04when I said the amount varies vastly between savings and investing,
30:09it's a wake-up call to those with junior ISAs, the successor to child trust funds.
30:14Because I'm always, everybody always says,
30:16what's the top cash junior ISA?
30:17Side note, Leap Building Society 3.85%,
30:19and then NS&I Online is probably the best pick there,
30:22at 3.55% if you want online access.
30:25But remember, junior ISA money is money you are locking away
30:30and cannot access until the child is 18.
30:33So it fits our definition of when it's right to invest.
30:36Money that you won't be using and money that you won't be touching for a long time.
30:40It's absolutely in the investment sweet spot.
30:43And yet, parents put their kids' money in savings.
30:46It's about time to look at being a bit more adventurous
30:49if you want to give them that starting.
30:51I'm not saying you have to put all of it into a junior ISA shares.
30:55If your child has a cash junior ISA, consider some, or all if you wanted to,
30:59in a shares junior ISA 2 on the same principles we've talked about.
31:02They're all nodding, look at that.
31:03Same principles we've talked about there.
31:05The kids, you can actually have both a cash junior ISA and a shares junior ISA,
31:08you just can't put more than nine grand in per tax year.
31:11Worth a thought. I hope that answers your question, Dave.
31:13I need to rush on because the time is ticking.
31:16Got a couple of quickies for you.
31:17From Thursday, there's £190 worth of beauty products for £40
31:20with the M&S Summer Beauty Bag, online and in-store.
31:24Estelle order Clinique, you've got it over there.
31:26I've got it right here.
31:26Just modelling it over there.
31:27M&S say it's worth over 230 quid, but we calculated the beauty contents to be £190 if you'd bought
31:35it separately.
31:36Still, a lot of beauty products, £40.
31:37I think what you said to me earlier is there's a couple of things in there you like and the
31:41rest are sort of things to test and try.
31:42But the things that you like were worth over 40 quid anyway.
31:45So, you know, it can be a good buy if you're going to use it.
31:47I know me make up.
31:49And until Saturday, until 5pm, you can get 18p ice cream at 90 cream cafes, dessert parlours, normally three quid.
31:57For its 18th birthday, no code or voucher, turn up, expect queues, maximum five discounted scoops of gelato or sorby,
32:03but you have to pay for the cone.
32:0450p for a normal cone, £1 for a chocolate dip cone.
32:07And that is a wonderful place to finish.
32:08It's our last show of this summer run next week.
32:10We're going to be talking energy with the price cap coming up, predicted to be rising by 13%.
32:15Got any questions about energy bills or direct debits, do get in touch to the numbers below here.
32:19I want to say thank you so much to our brilliant panel, our brilliant audience, the brilliant Jeanette,
32:23and the brilliant you for watching.
32:25See you next week.
32:26Bye-bye.
32:38We will walk away.
32:45Bye-bye.
32:49We will meet you next week.
32:55We will have a great day!
32:56It's 1 papter Tetis from S incorrigid to the sauteale 허.
32:56Feels About 899, I'm good to finish up.
32:59Loves from number 91, the green hairет.
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