9 Money Moves You Must Make Before April 6th

0:00Do these nine things with your money before April the 6th. So April the 6th is the new tax year. Bit complicated, but that's how the financial system works in the UK. So let's help you celebrate your new year, your financial new year, and maximize your money. So the first thing is you have not many days left to claim your ISO allowance. So an ISO, an independent savings allowance, is one of the main tax-efficient tax breaks, savings and investment, I guess, vehicles that there is in the UK. You currently get 20,000 a year that you can invest tax-free within your ISO wrapper. You have a few days to do that before you lose this tax year's allowance. Although, stay with me because you can claim them back, going back, but you don't want to miss this deadline.

1:00Now, if you don't have 20,000 put in as much as you can, I think it's a great idea strategically to max your ISO every year. ISOs have been going, I don't know, less than 20-ish years, and there are now ISO millionaires. People have invested in their ISO every year, and now they've become a millionaire just from their ISO wrapper. And it's tax-free until later in life when you start to draw it. And of course, if you reinvest the money into your ISO and it compounds, you could become an ISO millionaire, like some people have. On April the 7th, you can do the next tax year. And the earlier in the tax year you invest, you have more time for compounding. So if you have got the money on April the 6th, you can put in your maximum ISO allowance, which may change, by the way. So just always check the numbers that I've just shared. And then on April the 7th, you can do your next year ahead. You can do maximum 20,000 a year per person.

2:03So that means you could do you. You could also do your husband or wife. You can have a junior ISO for each one of your children. I believe that's around 9,000 again, check the numbers because they change. The easiest way to do this is to have a Vanguard or Hargreese lands down or Charles Stanley account where you can self-invest into your ISO. I personally prefer stocks and shares ISO than I do a cash ISO, even if we feel like we're in a correction part of the cycle. Because over the long term, the stock market always beats cash savings and interest. And you never really quite get the interest from the banks that the interest rate is supposed to be. It always seems to be a bit less. It's funny when the interest rates go up, the bank's charge you immediately for the extra interest on your debt. But they're slow to put the interest rate up on your savings. I've been investing in my own ISO for 15 years and I've maxed it every year. And I do the junior ISO for my children

3:05and I do my wife's ISO as well. And that for me is more like a save and never touch, which I call a SAMT, a save and never touch account. One day, you'll be able to turn on the income and potentially live off the income just from your ISOs. So do that before April the 6th and on April the 7th. The next thing you want to do is maximize your pensions and claim unused allowances. You can claim 60,000 pounds a year as a pension allowance tax-free per tax year. And again, this April the 6th tax year, it's weird because it doesn't work for income tax on the same tax year. And then you've got the calendar year. But for ISOs and pensions is April the 6th. So you've got a few days to claim your 60,000 pounds pension allowance in a SIP or a SaaS. So that's essentially a company or personal self-invested, self-administered pension.

4:05And you can actually go back for three unclaimed years if you didn't do it last year or the year before. And if you have, for example, an LLP, it's per partner so it could be you and your partner or you and your wife or your husband. So you can go back and put a lot of money into your pension. Now, I made a decision 20 years ago to not rely on the state for my pension. To not even have a private pension, I am my pension. My property portfolio, which is many tens of millions of pounds, is my private pension. And I can kind of claim that whenever I want. And I don't have to wait till I'm 55 or 60 or 65 or whatever age they push it up to. However, I do like claiming the tax break pension because it's a tax break. And the great thing about tax breaks is not just the tax break, it's the compounded nature of the tax saving just goes up and up and up and up and up.

5:06It was Charlie Munger, Rest in Peace, who said the one rule for compounding is never interrupt it. And if you had to keep paying your taxes, that would essentially erode the amount of money that's compounding. So claim your 60 grand for this year by April the 6th, claim your 60 grand next year, April the 7th, claim your 60 grand going back years if you haven't already. Her partner could be a big deal. The next thing you want to do before April the 6th because April the 6th is the tax end of year. If you want to do a financial audit, so do you have any money left before April the 6th that you could invest? Maybe you wanted to put it into gold or silver. Again, I recommend direct bullion for that. Or maybe you might want to invest in the stock market or maybe you might want some liquid to wait to invest if you think that the markets are going to correct in any way. And then what you want to do after that is budget for the next financial year. So obviously you haven't got long left for this year. Maybe you can improve on what you saved and never touched,

6:08which I call SANT. So for me, the ISA and a couple of other savings vehicles. My goal is to save it and never touch it. People say to me, well Rob what's the point to save and never touch and then you die. The point to save and never touch is you never touch the capital. And then one day you can just live off the income if the capital gets big enough. So that's the goal. Maybe you might need it for a regular shock because we'll come to that in a moment. So you should have a percentage of your earnings every year that SANT save and never touch. And then you should have a percentage every year that's investing. So the richest man in Babylon might be the oldest book that teaches you to pay yourself first. And what most people do is they pay Netflix first and they're gym membership first and they're tax man first and they're boss first and they're ex first and they're car first and them last. You need to change that and you need to pay yourself first. Now if you're not earning much money start with 5% or 10% and on the day you paid have a standing order

7:10into Hargreaves Lansdown or Child Stanley or at least into a savings account that you don't immediately touch and spend. And your goal over time is to increase that. So over time you might want 5% to 10% save and never touch. 10% to 20% invest. Now even on a relatively modest salary if you can save up to 10 and invest up to 20% in decades you're going to be a millionaire or you're going to be financially secure or even free because it works because it's a system and because compounding is the eighth wonder of the world. I'll by the way you can also increase your earnings. So maybe a second side hustle or over time or get some commissions. What most people do is when they earn more they spend more. What about if you kept your overheads the same and as you earn more you reinvest that into yourself you pay yourself first. So that could be a quicker way to accelerate to get up to 30% that you pay yourself first. Next thing you want to do before April the 6th is

8:12you want to look at what your debt is and see how quickly you can pay it now. Now for me there's two types of debt. There's good debt and there's bad debt. So good debt is for a mortgage that buys a property asset that grows in value, that pays income, the inflation pays the debt down, that the tenant is paying the debt for me. That's good debt. And I'm not always looking to pay that down. Sometimes I want it on purpose, especially if interest rates are quite low. So there's low cost to the debt. If inflation is quite high and it's paying off the debt and it's pushing the value up. But bad debt, consumables, electronics, cars, conservatories you do not want this growing, especially with high rates of interest. Now I disagree with Dave Ramsey who says that you pay your lowest amount credit card off first because he thinks that creates some dopamine and a virtuous cycle you feel like you've and paid off more than you actually have. I don't agree with that. I think you should pay off the card first

9:13with the highest interest payments. Why? Because debt compounds just in the same way that money compounds. So if you're not paying the highest interest debt off, it's going to take a lot longer to pay it off or the interest is going to get more and the amount that you, oh, is going to get even more. And I think that is way more demotivating. Oh, then, oh, look at me. I paid off one little credit card at 0%. What's the point in paying a credit card off at 0% if you've got one at 30%? Doesn't make any sense to me. So my rule is you attack the card with the highest rate of interest and you put most of what you're going to pay your debt down on the highest card first and the minimum amounts on the rest that have a lower interest rate. Even if you're juggling more cards. The next thing you want to do before April the 6th is you want to make sure you've got a solid emergency fund or a regular shock fund. Now, this could be anywhere between one and three months of your total living expenses. Most people, they don't even have a week.

10:16So if you can go from a week to a month, if you're living expense of three grand and you've got three grand, you've got a month that you can live with no earnings. Six grand, nine grand, then as you earn five grand and 10 grand and 20 grand a month, you times that by one or three. Now years ago, I liked having one year or two years in cash but now cash is becoming worth less. You've got security issues, high inflation, low interest, net to you. So I don't mind having say up to three months cash but the rest I want in liquid assets that aren't necessarily cash. But you need to be able to get that money quick. So for me, a week is probably quick out of the bank it's immediate but out of the stock market, it could be just three days. So it's pretty liquid. Even out of gold or silver, if you know where to sell it, like if you go to my partner's direct bullion, you could get that sold pretty quick. My gold mentor deals with my gold and silver, he says, look Rob, if you ever want to sell any gold, just sell it to me or buy it straight away.

11:16Now let's move on to some specific actions that you can do before and after April the 6th. So it's really good every year when you redo your budget, are you doing your budget? Most people don't do a budget, make sure you do a budget. It's really good to have a cleanse of all your overhead costs. Now, my business partner told me this, he has a recurring entry in his diary every year. And all of his bank accounts, he checks if he couldn't get a higher interest rate in a new savings account. You know, anything that he has on this subscription, he'll go to sky and he'll say, look I'm thinking about leaving and he'll get a better deal or he'll cancel the direct debits that he initially wanted and doesn't want anymore. So if you have a full review of all your subscriptions, your direct debits and the things that you pay on a recurring basis, we do it with our stationary in our company here, then you can save hundreds or thousands of pounds a month and there's probably a load of stuff you don't even use. Have a full review direct debits, standing orders and get rid of anything you don't use.

12:16The second is you want a full review of your main spending areas. So rent, do you need where you're living or your car finance? Do you really need to spend 500, 600, 800, 1200 on a car? Holidays? So car finance, going out, going out is one of people's highest expenses because it's kind of creep because a bit here and a bit there, it can be hundreds a week. Now the average person spends about 15,700 pounds a year on many of these things that they don't necessarily need or they could have a lot cheaper or they could be more efficient. And over 10 years compounded, that could be 426,000 pounds. Okay, the next three things you want to do, you're going to need to get some advice from an accountant on because they are quite specific, depending on your company structure employed, self-employed, LLP, limited company, what you do, how you earn your money. So I don't like to make a disclaimer

13:17because I like to give you all the information but when you need to speak to an accountant, I'm going to tell you when this is these three you do need to. So you have allowances you could potentially use from your spouse. So you can claim reliefs up to thresholds from you and your partner. And if you're not using their allowances, there may be assets or income, you can transfer to your spouse and utilize to get some tax reliefs. The next thing you want to do is check out your mix between salary and dividend if you are a director because it could be more tax-efficient to have less salary and more dividend depending on the tax brackets you're in and then reviewing all your general business expenses. Now this is where you can make the biggest difference because maybe having holidays but they could be work trips or maybe having meals out but they could be subsistence. Maybe you've got hardware that you've bought personally but maybe they're for use for business. There's many things that could be a business expense if you actually just claim them and knew the rules or if you just changed your lifestyle slightly

14:18and this is where you can save many thousands or tens of thousands of pounds and this is where people have a lack of knowledge and this is where they get this really wrong. And this is why I actually did something for the first time in maybe a decade. I've been running money school for nearly a decade so it's my global online school to help you make managing multiply more money and for less than 50 pence a day and you can cancel any time inside money.school is to help you make managing multiply money. And for the first time I'm now putting my approved accountants inside money.school so you can get access to them. I've been in business 20 years. I've had a lot of accountants, some good, many not good. And there is by the way a basic tax saving masterclass inside money.school as well as learning how to make managing multiply money start and scale your business and create multiple streams of income and get your earning power up as well as your expenses down.

15:44This episode was brought to you by Disruptive Media helping bold entrepreneurs stand out through podcasting, video and social content. Visit DisruptiveMedia.co.uk to learn more.