8 Rules for Investing in Your 20s & 30s | What I've learned as a Financial Adviser

[@JamesShack]

I've left the best ones till last, so you'll have to watch the whole thing 😉 ... or just skip to the end. And remember, please let me know if you've been given any good/bad advice by your parents? Maybe you're not sure if it's good or not? Let me know below and I'll try and set you straight.

[@genomicsANDeconomics]

Best advise my folks gave e was to get the maximum student loan back in 1997, as the interest was super cheap and payment terms better than my parent could ever get from bank loans. Got me though Uni and allowed me to get my career in biotech. With the Ben and Alice example, I would imagine Ben would need to start with a lump sum of £50k (plus 10 years average 7% gains), in order to match Alice's pot by 65. Just thinking of us oldies who start investing later in the game :-)

[@bigdawg1353]

James, what would you choose to invest your pension in - DCS Global Equity fund or the Purisima fund ? 😅

[@cleric7788]

Do up another button. This is not a night club.

[@amerasinghamkarunananthan711]

I just started to follow you on KZbin! Impressed !! I’m 70 & invested in vanguard funds via Aviva pension pot. To date, my financial advisor charge was grater than my return reinvested beside Aviva charge. I have cancelled my financial advisor yesterday as no longer needed. Hope, you can advise me to manage my pension portfolio! I wish to receive some dividends remitted in my bank a/c! 👍🏿. Thanks 🙏🏽

[@NekonataVirino]

Mine told me to buy a house if you can instead of paying rent or your life like they did, they told me to get qualified and Go into the professions if I could, they told me not to risk more money than you can afford to lose.

[@paulwilson1726]

2 years ago you had 144 subscribers, and now you have 72.7k. That's return of over 50,000% ~ a reasonable investment. Thanks for the great content!

[@alexbird7355]

With a father as a financial advisor and working in finance myself I’ve seen a lot of rubbish on here but this is class - clear, concise, sensible and simple advise that does exactly what it says on the tin! Lovely stuff!

[@JamesShack]

Cheers Alex!

[@ItsABarmcake]

Love to see a British person talking about money! looking forward to the next one!

[@JamesShack]

Cheers Rob!

[@Greylocks129]

Great video. Number 8 - just start is the main advice to follow! I was badgered by my late father every year about whether I was saving enough from my early 30s. Fast forward to now, and inputting my data into your spreadsheet, it appears I have achieved financial independence.

[@BollywoodBonanzaB]

For me, my parents gave me advice to become financially independent, I.e. working, from a young age - so I've been lucky to have been working most of my life. Dad told me, don't buy things you have to borrow money to pay for, which is the best advice ever. Except for mortgages, degree, and maybe cars, I'll never want to be in debt. 🙏

[@calum6590]

Had a few of your videos on in background today and think this is my favourite so far. It's clear to see your genuine passion/interest. Most people get bored in seconds if start talking about investing and compound interest, really liked the genuine excitement. Ps: That pension at HSBC was insane!

[@JamesShack]

Interesting! This is actually my least scripted video and I think it shines through. Need to give myself some more freedom in the future!

[@RaviRaveenthiran-j9f]

Came across your video/vlog accidentally but found it very useful and easy to understand. Many thanks & keep producing similar videos.

[@atul9380]

Very nice video, James. Good to see some more UK financial advisors on here as a lot of the other content is US based and their stuff is so much more complicated! I’ve been reading up on investing and maybe you could do a video on the difference between investing and speculating. That might help people understand about risk management and timeframes

[@JamesShack]

Cheers mate! Yes thats a good idea. There's to many people that think trading is investing! It's not!

[@swright5690]

Indeed. But as a US investor, I still think his message is just as valid. Same game for all of us.

[@zeinab8794]

16:01 is a great way to put things, in investing and in life. The earlier the better because something is always better than nothing

[@JamesShack]

Even if it's just £50 a month. You'll learn a huge amount by doing it!

[@mvp_kryptonite]

Wish I knew all of this when I was young. Shared to my younger bro and working on my pension myself. It’s important to talk about this stuff!

[@chris1609]

Only just watched this video James.6 months ago you had 130 subscribers! Congrats on surpassing 10k! Keep up the great work

[@JamesShack]

Thanks Chris! It hasn’t been that long in reality but feels like it’s taken forever! I’m getting quicker at writing and editing though so it’s less and less effort each week. Thank for the continued support.

[@julianharvie7406]

This is some high quality camera work :)

[@JamesShack]

My man!!

[@jpturner171]

Thank you James I pass this on to our three daughters who were in her 20s! Semper Fi 🇺🇸👍🏽

[@MineshPatel]

Followed after seeing Reddit and well done! I've learned a lot especially from the latest video! The examples you give just make it much easier to understand Vanguard from a novice perspective

[@MineshPatel]

I would love to see a video of a break down of what you should be saving as a percentage of your salary, and how that should be broken down to high risk to low-risk investments over 20/30 years

[@JamesShack]

Thanks for the supper Minesh. Once you have an emergency fund (3month+) you should really have everything else invested at the sake risk level, basically as much risk as you can tolerate. As to saving amounts, really depends on you as an individual. Maybe think about it like this: what are you saving for ? Retirement? Ok well how much do you need - at 60 you be able to withdrawal c5% from your investments without much risk of running out of money. So if you have £300,000 that’s £15,000 a year + you’ll get the state pension too ( currently £9k if you pay NI for 35 years). Think about how much you’d need , just roughly, then try and work it back to how much you’d need to save each year from now on so you’ll be able to reach your goal. Assume m a 5% annual growth rate on your investments (it should be higher than this but 5% strips out inflation) and you should then be able to work out how much you need. Try doing it in a google sheet/excel.

[@jamesalfei]

Awesome video as always! Really liking the new format too so definitely a thumbs up from me! Keep up the helpful and informative content! Lovely to finally see a KZbinr who is *actually* qualified and yet discusses these topics in a down-to-earth manner :)

[@JamesShack]

Thank you James! This comment means the world to me. I can see people watching the vids but I don’t get much feedback so I really appreciate this!

[@jamesalfei]

@@JamesShack I know what you mean. All well and good seeing the number tick up but always good to get proper opinions! Just a quick thought however, personally I love the videos and don’t mind the swearing whatsoever (in fact, I chuckle every time), however I do feel less inclined to want to share the videos for that reason. For example, I wouldn’t want to share the video publicly on social media due to this. Don’t get me wrong, don’t want you to change the format or content at all, just a thought for consideration in future content if you want to hit a wider audience :). Even just a minor bleep would do the trick :D

[@JamesShack]

@@jamesalfei a good point well made! I will tone it down, it's not really adding much!

[@Loosechunks]

Fantastic Video. Interesting how sweary you are aiming at a younger audience and looking at your videos now with so many thousands subscribers banked! Anyhow. Keep up the good work, I think you're the most engaging and intesting financial advisor doing these videos. At 49 years old and 7 years and 7 months from my planned retirement i GREATLY value your content. I salute you sir!

[@andrewhill9513]

Its great watching these older videos, I’m learning so much

[@ZohoExpert]

just found your channel, good work. Shared with the guys in my WhatsApp group. Keep up the good work! My financial advice from my parents came in the following ways: - Mother: what not to do (e.g. showed me how bad it is when you get into debt, spend too much money, fail to invest, etc.) - Father: work hard and save as much as you can in your pension (never invested in properties, other than the family home, although I always tried to encourage him)

[@alatalos]

Really well explained. I've linked your channel to our daughters who are just graduating and are just starting the careers. Compounded interest etc.

[@JamesShack]

Epic! Hopefully you can get them started early!

[@MrPurle]

Sweary James is the best James! Spending a couple of hours checking out your channel is one of the best ways I've ever spent a day off... subbed... your channel is a goldmine of info without the BS.

[@JamesShack]

Haha I think so too. My early videos when no one was watching - not that professional though!

[@shyyou93]

Rule #2 is very underrated. I have worked in the accounting and banking industries for 17 years but have learned so much more talking to 2-3 people outside the industry about managing my own finances.

[@bradholway8900]

You are an absolute hero. Just found your videos and considering starting my investment journey tonight. Thank you 👍🏻

[@chrissyt8111]

Great content James! I've been finding it really difficult to find UK youtubers who can educate me about money and how our systems work over here. You and MamaFurFur are the only ones who keep me engaged and interested and not drop off out of boredom. Subscribed!

[@JamesShack]

Cheers Christina, thanks for saying so!

[@vinylwarmth]

You've got a loyal follower now James. Thanks for the great videos! Can you do one of these for a 40 year old?! I started investing properly at 35 (41 now). My current strategy is increase my salary over time and invest as much as I can! Any advice for someone like me would be appreciated 🙂

[@josephlong1336]

Spot on video, refreshing to see normal and actually qualified person talking not just someone chatting away about the same stuff as everyone with no qualifications!

[@JamesShack]

Thank you! I appreciate it!

[@shanecostelloe4701]

Enjoy your casual language and ways of explaining - making things a lot clearer for me as a new investor. Thanks 🙏

[@moneyedminds4973]

KZbin got lucky when you decided to create a channel! You're very well on your way to reach a million subscribers very soon! And you've got a die-hard fan!

[@anantmehta123]

Your videos are great. They make me feel much less overwhelmed by it all. Thanks!

[@JamesShack]

Thank you! Good luck with it all!

[@jobhunterpodcast5066]

Honestly the most underated Finance YT account out there, would love to have you on my Podcast all about people from the UK with interesting jobs, aimed at 18-23yr olds, would love to hear your take on what you do but also advice you could give to the listeners! Cheers Tim

[@MikeBradleyUK]

Id say don't listen to most parents - some of us are ok 😊 I'm giving my 18 year old daughter advice and hoping she follows it. I'm getting her investing as well as contributing to her work pension (in the adventurous fund). I'm explaining to her that her portfolio value is going to rise and fall daily but not to panic and that it's something for the long term. They should definitely teach more financial stuff in schools.

[@creators1000]

My dad actually gave me great advice. He gave me the simple path to wealth book and I learned about Jack Bogle and index funds. I invest in singular stocks and says I should adopt a more hands off approach.

[@BPGOfficial]

Thanks man! I found you on Reddit, great content!

[@JamesShack]

Thank you for watching!

[@vladbargaoanu3866]

Look man, this is probably the best video of youtube that I have ever watched as you described exactly my parents, experiences and everything else I've known/heard of up until the age of 28. I think what y ou are doing is great and also keep doing it. I realise this is a 2020 video ( late 2020 ) however, I hope to find out even more financial education from you in the future videos on your channel. Also, the links were very useful. Cheers!

[@stansheppard8929]

From 100 odd subs to where you are now, great Jon James. Keep up the great work

[@JamesShack]

Haha thank you!

[@seankearney7070]

Soft lighting on point

[@JamesShack]

Thanks! I actually made the shelves and installed those pendant lights myself, you can learn to do anything on KZbin!

[@jbarea2080]

Thank you James.You put this information in a good down to earth fashion.Excellent info which I will follow up on.

[@lisapagin6228]

Love this...... as a parent I keep telling my kids this ..... some parents advice is ok 😂😂

[@cathy2708]

Appreciate every bit of advice from this channel. I suppose the worst bit of financial advice from my parents was the lack thereof... or too much reliance on sketchy people, not doing their own research when it comes to money, not reading contracts properly before signing...

[@JamesShack]

Yer we do have an advantage with the internet, being able and confident enough to research things ourselves. Do you think they didn’t talk to you about it because money was a taboo subject? Hopefully we can change it into being a fundamental conversation that needs to be had!

[@samhale06]

Enjoyed the video, thanks. On your template 'e-mail to HR' it might be worth including whether the scheme is salary sacrifice or not. I've found this is an area people rarely understand and the benefits (particularly >40%) of it.

[@JamesShack]

Good shout Sam, I will update that. Thanks.

[@DavincisGirl66]

just found your chanel. Good info. Very smart use of light in your filming setup.

[@JamesShack]

Thank you! I’ve been trying out filming in lots of different places but ended up fitting those hanging lights in my kitchen myself! You can learn to do anything on KZbin!

[@stevie3452]

Could you do another version of this with some more advanced tips please? Not a bad vid, but this was all pretty obvious for all but absolute beginners! (I really enjoyed your 4% rule rent vs buy video for example!) Thanks!

[@jennyskerry344]

*Thanks for your review feel free to contact my personal broker on WhatsApp ...+1° 3° 8° 6° 3° 6° 1° 3° 2° 0 °7 for trading guidelines*

[@ΑνδρέαςΧριστόπουλος-σ9μ]

Great video! I've been investing for 6 months now and i am trying somehow to show the basics to a friend of mine... Your video is number 1 on my list my friend! Greetings from Greece🇬🇷

[@garymathison8361]

Just found your channel. What a find! Your giving me so many answers and more.

[@sgist7824]

My grandparents said 'Never a Borrower or a Lender Be. ' Also Money doesn't grow on trees. Both of these stuck with me. But my mum however has always been living month to month, so I guess the advice skipped a generation 😔

[@jasonfishy]

In Singapore company pay a mandatory 17% of our salary to our central provision fund (CPF). Something similar to your pension. While we'll have to contribute mandatory 20% of our salary to the fund.

[@JamesShack]

Which is a great thing, we need more of that in the Uk. So long as the money is invested well!

[@NorthEasternCyclist]

Great content and easy to follow explanations. Thanks a lot.

[@kevinsmith7823]

Hi James . Been watching you in the background . Some really good advice thinking about what your saying . Buy the way it’s not about you looking good it’s about 1, you explaining in simple terms.2, honestly good advice.3,been impartial.or at minimum letting people (know if one isn’t) 4, good veriatiation . 5, what’s maturing is your info is good sound info . 6, what I have seen so far is you are giving that . 😊 infact I have given this info to my son … kind regards kevin . Now that’s looking 👀 ing good . Use other words to get across your point . Weakness is unsung swearing… but I forgiveness . Please keep up the excellent advice/ info

[@MrLasty12]

Great content & high quality camera set up!

[@JamesShack]

Cheers buddy!

[@iji5kpdy784]

The examples of Alice and Ben at the end is so eye opening, I am going to save this for my children . Hope they do listen 😊

[@ylissa5855]

James I love your channel so much, you are absolutely hilarious and thank you for destigmatising and demystfying finance for the younger generation. Pensions are fucking epic!

[@JamesShack]

Yes they are!

[@nataliawalker4184]

Thank you

[@musicloverUK]

My dad told us to buy a house in 1988 as prices were going up. Boy was he right!

[@alfsporturbo]

Great video. Mega. Numbers at the end are so powerful

[@jennyskerry344]

*Thanks for your review feel free to contact my personal broker on WhatsApp ...+1° 3° 8° 6° 3° 6° 1° 3° 2° 0 °7 for trading guidelines*

[@sbo3]

I have actually known someone who turned down work due to the higher tax bracket. She was my head of department (teaching) and she said that she turned down any additional roles that may give her a additional responsibility pay. I believe she was already in the higher tax bracket but her POV was, well if I am being told I'll get £2000 more for being safeguarding lead (which is already too little for most TLR roles we call them in teaching), then I'm taxed higher on that 2k and then it doesn't become worth my time and energy at all. She stopped exam marking for the same reason. I sort of get the rationale behind this (depends on the financial worth you put on additional work I guess) but this is very different to the misunderstanding that your pay will actively go down if you go into the higher tax bracket.

[@JamesShack]

Indeed! When it involves working more hours I kinda get it. As an example your take home pay would go from £10/hr as no taxpayer, £8 /hr as basic then £6/hr as a higher payer, and that’s not including national insurance. But when someone turns down more money for the same hours...

[@markcampos7484]

Thank you very much for all the info

[@JamesShack]

You are welcome!

[@s.willfd]

Mate this is awesome. Really appreciate the advise and help. Exactly what I was looking for, subbed for life. Shall also share!

[@JamesShack]

Epic! Ok glad you found it helpful and thanks for sharing!

[@eurabio]

Only financial advices I can got from my father: - Don't worry about money, choose a profession you love and it will come. - Pay in cash your home. Save so you don't have to use credit. 🤣

[@mrogers1]

One mistake I have made is opening a cash LISA instead of a Stocks and shares LISA, thereby limiting my interest over the years significantly. At the moment you can’t change or transfer funds, but I’m hoping that will change

[@JamesShack]

Really? I'm fairly certain you can just transfer it to another LISA provider. Or is this with HL or something and they're refusing to move it?

[@CorrosiveCitrus]

@@JamesShack Moneybox don't allow you to transfer from their cash LISA to their S&S LISA even to this day. So I guess I'm stuck with a cash LISA unless I decide to move provider, but I'm not sure how soon I'll need the money for a deposit (the hope is in the next 3 years) so I don't know if it's worth it anymore.

[@michaellewis6569]

If it was 175 of your money, then it was only 600 going into your pension, not 1000.

[@danrickmagno8151]

Alice did it!!

[@Qaphi1998]

Awesome videos man! Finding everything so helpful!

[@JamesShack]

You're welcome!

[@zakajadi2744]

This was a very informative video. Learnt a lot. Thank you & keep it up

[@HarryButcher-Sound]

I'm frequently being told to buy a house with savings (even if only for buy to let, cheers unaffordable London). I'm adamant that it's bad advice and I can make the same or more gains on the stock market with the same risk.

[@JamesShack]

Hi Harry, thanks for watching! In the UK we do have an unhealthy obsession with property. This is based on its past performance (80's,90's,00's) and the fact that rental accommodation in the UK is of poor quality/high price. The Rent Vs Buy argument is actually much closer than you'd think, and often, especially in London, renting is preferable purely from an investment perfective, so long as you're investing what you would have used as a deposit elsewhere. I would recommend checking out Ben Felix's video on this: kzbin.info/www/bejne/i6jPZGCgd7N4mpY. I often get clients saying they're looking to invest into BTL property, I normally ask them to take a step back and think about what's the real goal... to invest in property or to build wealth? I'm not saying that property can't do that, it certainly can, but just don't restrict yourself to one asset class when the goal it to invest in whatever is going to build you wealth in the most effective manner.

[@Life_Literacy]

Only just found your channel, wish I’d found it sooner. Some great advice 👌🏻

[@JamesShack]

Welcome!

[@stemoore]

Thank you for these great videos, I’m a new subscriber and new to investing so I’m learning a lot. I’ve just watched your recent video on the Vanguard Lifestrategy fund and wondered if your example of compound interest would apply to a fund like the Lifestrategy 100%?

[@JamesShack]

Yep, it will. Compound interest or compound growth, the terms mean the same thing. The stock market has on average growing at 8% per year. Some years up some down. But the growth compounds year after year. It’s exponential!

[@taggthis]

Thank you, I am just about to make my first index fund purchase via vanguard. I intend to invest long term and just leave the funds ‘locked away’ for at least 5 years forgetting about it. I am just getting slightly stuck on how I balance my percentage portfolio between equity vs bonds. Low risk is good for me. Any tips or related videos you can recommend?

[@gopikashah]

Needed some direction regarding the below - Any suggestions would be highly appreciated. I am looking to invest in a LISA (Lifetime ISA ) before the window closes for it, 1) should i invest in cash LISA or stocks & shares? I am more inclined towards stocks & shares as i can withdraw only @ 60 which gives a good time for the investment to grow & pass off fluctuations in the market. 2) Is it a good idea to invest right away into stocks & shares LISA (not sure how fluctuating the markets are due to covid) 3)which platform should I use taking into account the fees, charges & other factors ( i prefer vanguard as their charges are low but i don't think they do LISA stocks & shares) ? I am new to investing as well, so looking for passive investments (low-cost index funds) and not active .

[@danieldeak6193]

What a fantastic, informative, well produced video. New sub.

[@JamesShack]

Cheers Daniel!

[@jonathannaylor1084]

Seen this a year after you posted it….. every single thing still rings true. Glad to see you are doing well on the sub’s front at least. Really good

[@labrun4633]

James - what financial apps would you recommend today ? Aware video was made 3 years back.

[@FoxBox72]

Can I suggest a video for 'late starters' investing in their 40s-50s ?

[@JamesShack]

Sure we can do that.

[@suekay5782]

OK, I'm getting educated. Saved some £ for my kids, they are now in early 20's. Gonna look at starting Investing with them (I think I'll point them at you, cause if the advice comes from 'Mum' it could get ignored). Again, perfect timing. Are you my Financial Angel ?

[@JamesShack]

Haha maybe!

[@grc9808]

Hi James, great videos. Thanks for explaining everything so clearly. I am in mid 40’s and been living pay check to pay check since I started work in my 20’s. I save bits for family hols etc but have nothing left at end of year. Suited us fine but now thinking of putting some aside for future. I have full teacher pension from 21 and am looking to retire around 55 but not necessarily take money out early. Just look at doing something else. Any financial support to enable this goal and indeed support myself and family after this date is my goal. Have I left it too late? I am able to invest and gain enough to make enough of a difference in 10 yrs time?

[@JamesShack]

It’s never too late. 10 years can make a huge difference. But remember your investment horizon is more like 40 years as you need this money to be growing and producing a sustainable income until you die. And perhaps even longer if it’s for the benefit of your family.

[@lewis4777]

This is amazing James, I’ve binge watched your videos today - thanks for knowledge sharing! A question on the template email in the description: what counts as the additional voluntary contribution? E.g., my employer has an 8% match pension contribution scheme. So if I contribute 8% is there an NI saving I can ask for? Or would there only be a saving for them if I was to contribute 10%, which is 2% more than they match?

[@natashamartin5851]

Loved this video! Got a new subscriber 👍🏼

[@kenyee]

Thank you for this - I'm learning so much from you!

[@JamesShack]

Brilliant, that’s the aim!

[@tlowday3925]

How can I find out more in regards to setting up match pension contributions in my company?

[@daniellaw20]

Thank you for the very informative content James! I'm looking into investing in sustainable/ethical funds at the moment which would be interesting to get your perspective on :)

[@JamesShack]

Hey Daniella! Happy new year! Yep, ESG is very popular among clients right now but it's actually quite hard to define what's actually a good company and what's bad. For example, HSBC, Shell and BP often rank highly for certain ESG ratings, because they invest so much back into communities and new technology. On the other hand, companies like boohoo were darlings of ESG funds... until the sweatshop scandal. However, more and more big shareholders are becoming social "Activists" and forcing company boards to be more accountable. If you want to learn more check out this video here: kzbin.info/www/bejne/rZa5coFofd2LoM0

[@daniellaw20]

@@JamesShack Sweet, thanks very much!!

[@mooncake8742]

Great video James!

[@JamesShack]

Thank you !

[@Naomi-zj2yf]

I really enjoyed this video and thanks for the letter

[@JamesShack]

No problem!

[@paulthorpe766]

Good advice By folks - namely - place money, don't spend money and compound interest is a turbocharger strapped to your money and time invested is more important than amount invested 💰

[@frankjaeger393]

Alot of people believe you earn less if go into higher tax bracket, it's surprisingly common.

[@derekpryor6029]

My father says from his experience saving 12% of his annual income since he was young gave him his pension and financial freedom

[@johnristheanswer]

Good video as usual , however the average annual salary in UK is NOT £35K . Office of National Statistics have it at around £28k - £541 / Week as of August 2021.

[@Lena-tl7rz]

My mom taught to be frugal and to save for things before buying it, loans are bad and NEVER quarantee a loan to ANYONE. And my aunt once said ”What ever you do, do not invest! You only lose all your money.”

[@marildamassarotto6253]

You just got one more subscription 😊

[@JamesShack]

Thank you and welcome!

[@omardude39]

The culture of not talking about money came from businesses discouraging people from talking about their salaries. By telling (and in some cases, compelling) people to conceal their salaries, companies can manage pay down to try and control the labour bill. It was taboo to talk about what you are being paid to do your job, and it still is. I haven't disclosed what I am earning to my colleague whom I have worked with for almost 5 years.

[@JamesShack]

It's a strange one. It's in our best interest to talk about how much we get paid (in a constructive way) but we don't.

[@sophiadalyrossin]

Hi James, been watching your channel for a while. I have a question, whats your views on Investengine as a platform? Its seem new-ish, Given is low fees, I thought I should move my ETFs and "core portfolio" (inside a isa) there, and use my H&L for stocks and "fun portfolio" (inside an ISA). Thanks in advance Sophia

[@SC-ox4vt]

James. Great content and guidance. I've followed you for a while now. I think you've since cleaned up on the f-bombs (adds nothing - and stains your usual professional approach - just saying)! I have my kids you watching too! Trying to get them started early with the investing for the future mindset vs spending on small luxuries. :)

[@pc557]

I'd like to clarify a point you made in this video. In your example with Alice and Ben you described that their investment was a "diversified portfolio of index funds". How does this type of investment benefit from compound interest?! Great video overall, I'm looking forward to more content.

[@JamesShack]

It’s easy to assume that compound interest applies only to ‘interest’, like from a bank account. But it applies to anything that has exponential growth. E.g you have a stock valued at £100, it grows 10% in a year, you have £110, it grows 10% the next year, you then have £121, £11 more. And this just keeps going until you get to the final years where you are seeing huge gains but it’s still only 10%. Compound interest is just a economics term for exponential growth. A non finance example would be the virus R number.

[@SuperVivViv]

Hi James, this is great! I really appreciated the example between investing earlier and later. Would you have a link to a calculator that shows what the 2nd one starting later could do to try and match the same final portfolio size.

[@JamesShack]

Try this cashflow model i'm building docs.google.com/spreadsheets/d/1y7PxLSu_VQTP7l5xGmaQCcGmR1fnPhFcUn7ktNQPN4w/edit?usp=sharing

[@guywalsh8175]

Great video James. I was shocked by Alice and Ben!

[@JamesShack]

I know right! Compound growth is such an abstract concept that it's hard for humans to understand. Einstein called it "The 8th Wonder of the world".

[@mAcroFaze]

Can someone please explain to me just how that worked out? How such a difference came from those two investments and how investing £125k more somehow ended up with worse returns? I've recently started investing, but I think Alice has already taken me to the cleaners and back with her method :P

[@CrappyProducts]

It is true in Portugal. If you jump from one bracket to the other you will effectively get less money sometimes. It's bonkers but that's the tax system over there

[@JamesShack]

Wow! That’s mad.

[@CrappyProducts]

@@JamesShack It is indeed, it's quite shocking if I'm honest. Back in the day when I was working in Portugal I remember my employee asking me if I really wanted a raise since I would effectively get less money. Needless to day I've since moved to the UK which is a much fairer system. Yes you pay more taxes but ultimately you'll always get more money with a raise

[@diannep514]

Stumbled from reddit. Just want to say this is great content and easy to understand. Definitely going to watch the other vids. Since you talked about pension, any ideas about how the 2015 NHS pension work? I don't think they match the contribution but more of a 1/54 pot.

[@JamesShack]

Thank you! You’re correct the NHS pension is a Defined Benefit pension which means you’ll get a set annual income at retirement based on how long you work, and the 2015 pension is fraction of your average pay over your career. This is actually the type of pension that I say our ‘parents used to have’ in the video, but nowadays only government jobs offer these because they’re actually very generous!

[@sophiethompson6799]

Great video! Does this mean there is no point in increasing contributions to a 2015 NHS pension?

[@robbiegreen]

Hi, I have really been getting a lot out of your videos. Thanks so much for the content. Please could you make a video explaining the compound interest/growth of a fund such as Vanguard life strategy? I understand compound interest of something like a cash ISA but don’t fully understand it with index funds/ETF’s

[@JamesShack]

It works in exactly the same way but the % up/down each year is not fixed. The stock markets have grown at about 7% on average each year. Start with £100 and after one year you have £107, up £7. The next year you’re up another 7% but that’s not £7 up. That’s £7.50 up. The £ growth keeps getting bigger each year but the % growth stays the same. Ofc with stocks you’re not guaranteed the same gain each year, you could even be down. But over time it’s still exponential growth.

[@delsonpaul6553]

Very useful... Thanks James

[@JamesShack]

Glad it was helpful!

[@taggthis]

Great video!! Quick question? Can you open a lifetime Isa with the Hargreaves account if you have say a vanguard one open for this tax year? Also, can you add to both accounts concurrently?

[@prashphoto]

Excellent content James!

[@jennyskerry344]

*Thanks for your review feel free to contact my personal broker on WhatsApp ...+1° 3° 8° 6° 3° 6° 1° 3° 2° 0 °7 for trading guidelines*

[@gl2822ac]

Really helpful and insightful. Will you be doing another one soon on investing in low cost index funds?

[@JamesShack]

Who are you, are you watching me? I’m literally sat at my computer editing “Vanguard Index Funds for Beginners | What they are and why you need them” ... spooky.

[@JamesShack]

And thanks for watching !