106 Money Saving Ideas for Dentists 2018/2019 - Essential Money
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
106 Money Saving Ideas for Dentists
2018/2019
By
Thomas Dickson
Sixteenth Edition
© Copyright 2018 All rights reserved.
Please distribute this guide to friends & colleagues. It’s FREE –
as long as the author is credited. Please ask permission of the
author if you would like to reproduce any part of this publication.Contents
n Introduction Page 3
n Mortgages Page 4
n Loans Page 4
n Investment Page 5
n Tax Page 6
n Practice – Principals Page 7
n Professionals Page 8
n Pensions Page 8 Giving You
n Estate Planning Page 9 Peace of Mind
n Protection Page 9
n Property Page 10
n Some more creative ideas Page 10
n Telephone Page 11
n Scams Page 12
n Travel Page 12
n A few extra tips Page 12
n The Author Page 13
n Some quotable money quotes! Page 14
Essential Money
2Introduction
One of the first questions I often get asked is ‘How There is an essential issue to understand – the distinction
can I make the most out of my money?’ The second is between tax avoidance and tax evasion. The simple
‘How can I pay less tax?’ and all dentists I meet want difference is that avoidance is legal, evasion is not.
to reduce their taxes (legally of course). Remember - any scheme that seems too good to be
true…. probably is.
There are 24 taxes in the UK that in 2016/2017 are
forecast to raise £665.1 billion#1. Unfortunately for us tax Rather than just limit this guide to tax, we’ve added lots
payers, this is real money and not the Monopoly variety. of ideas that have helped our business grow over the last
The three taxes that raise the most with 60% of the total few years and saved a few pounds as well. They are a
are Income Tax, National Insurance and VAT. selection of the best of what I have picked up from years
of books, courses, conferences, colleagues, clients and
In addition to that, the UK public sector national debt business experience. I wish you all the best in saving
as at March 2017 was £1,729.5bn #2 and that burden money and tax!
inevitably falls on us taxpayers. Higher rate tax payers
particularly and therefore many UK dentists therefore If you have any questions or if you would like further
need to take action now to protect their income, savings, information on any of the ideas, or if you have any of
investments and pensions from recent and no doubt future your own suggestions you’d like to add please email me
tax increases. personally at thomas@essentialmoney.co.uk or phone us
on 0121 685 5060.
The good news is that many taxes can be avoided through
careful foresight and planning. Being knowledgeable on #1 SOURCE: Institute of Fiscal Studies, Briefing Note BN09 | Nov 2016
the rules and timing of your transactions can result in #2 SOURCE: Office for National Statistics
significant tax savings.
www.essentialmoney.co.uk
36. There’s a lot of concern about endowment
shortfalls and whether they’ll be able to pay off the
mortgage. If you have one make sure that yours
is keeping pace with the amount outstanding on
the mortgage and the funds you’ve invested in
are still appropriate. The sooner you deal with
the situation the less of a problem it will be in the
future.
7. To improve the chances of being approved for
Mortgages
a mortgage you should consider the following:
1. You can save thousands of pounds by switching ensure you’re on the electoral roll, arrange credit
mortgages or changing to a better deal with your card payments on a direct debit to ensure you
existing lender. This can involve no upfront cost as never miss one, do whatever it takes to avoid
lenders often pay valuation and legal fees for you. exceeding your bank overdraft limit, pay off any
Even if you have redemption penalties on your unsecured debts and check your credit score to
existing mortgage it can still be worth switching - make sure there’s nothing lurking there you don’t
so get your calculator out. know about.
2. One way for self-employed dentists to save Think carefully before securing other debts against
interest payments on a residential property is your home. Your home may be repossessed if you
to use a flexible (or offset) mortgage. Rather do not keep up repayments on your mortgage. We
than saving money due for self-assessment in a charge an application fee of £95 and a completion
low interest rate account the mortgage can be fee of £295 and typically receive 0.35% of the loan
reduced over the year until the money is paid value paid by the lender.
to HM Revenue & Customs when the mortgage
balance will increase again. Done over a number
of years the interest saved can be substantial.
Offset mortgages can also be a great way to save
money if you regularly have capital sitting in your
bank account, particularly if your mortgage is
relatively small.
Loans
3. If you have a mortgage on an investment property
you should claim tax relief on the interest 8. If you have debt on any credit cards, it’s worth
payments, so subject to the interest you’re paying considering taking out another card and transferring
it can often make sense to pay off residential the balance to benefit from 6-12 months interest free
mortgages before you start reducing any tax loans. Watch out for balance transfer fees, although
efficient loans. a recent deal I saw was 0 for 18 months with no
transfer fees! Some credit card firms offer 4.9% on
4. You can reduce your interest payments by balance transfers until they’re paid off. Credit card
paying more each month than you need to. This companies are so competitive that if you call your
can significantly reduce the effect of compound credit card company and tell them you’ve found a
interest on your original loan, but make sure your lower APR on another card, they may even match it
lender charges interest daily or monthly and not as they’ll want to keep you as a customer.
annually. Some lenders may charge a penalty for
overpayments so check first. 9. Get something back from your credit cards - I
suggest finding a credit card that offers some type
5. You could set the mortgage up to run over say of reward such as cash back, phone discounts or
22 years instead of the normal 25 years again charity.
significantly reducing the total interest payable
over the term, provided you can afford the extra 10. Pay off your debt with savings – why earn 1-2%
monthly payments. (On a £150,000 mortgage this interest on your savings (after 20% or 40% tax) when
would save over £15,000 in interest payments you can save paying penal rates of interest on loans
over the term). or credit cards.
Essential Money
411. If you still have unsecured debt on a high interest at age 60) or you lose the tax benefits. If you invest
rate, consider releasing some equity from your house the maximum you’ll still have £16,000 available for
with a re-mortgage – or even a further advance an ISA.
which is often a cheaper option and less hassle.
17. If you invest outside of an ISA watch out for Capital
12. Often when you take out a loan, lenders will offer you Gains Tax which is payable when you sell - 10% on
Accident Sickness & Unemployment cover. This type the gain and 20% for a higher rate tax payer (the
of cover may not be suitable if you are self employed rates are 18% and 28% for investment properties).
and if you already have Income Protection. You may However, you do have an allowance each tax year
have heard of PPI... (£11,700 for 2018/2019). So in order to avoid paying
any CGT, you’d need to cash in your investments
when you’ve made a gain in any one tax year of just
short of the allowance and you’ll pay no tax! Simple.
18. For higher rate tax payers, income from investments
can suffer income tax at a rate of up to 40% or
32.5% for dividends (income from shares). So
consider transferring assets to a non-working
spouse to make full use of both personal
allowances and increase overall investment returns.
Investment Such transfers must, of course, be outright and
unconditional and it goes without saying you’ve got
13. The first step in financial planning is to identify to trust your spouse!
what you want. Your short-term goals (five years
or less) might include a wedding, a honeymoon, 19. By investing lump sums offshore in an ordinary trust,
furniture or a new car. Next, think about medium- you can avoid paying any UK taxes. The only time
term goals, anything from 5 – 15 years such as you need to pay any tax is if you bring the money
owning or expanding your practice and financing back into the country (assuming you’ve been in the
your children’s education. Finally, list your long-term UK for the time of investment). However, there are
goals, such as retirement, travel, living abroad and simple ways of bringing the capital back into the
philanthropy. Once you know your goals you can country without paying any CGT, by clever use of a
work out how much to save, where to save it and trust and the personal allowance. Not for the faint
what investment risks you can afford to take. hearted but completely legal.
14. By investing in the stock market over the past 80 20. Fund managers routinely charge 1.75%-2% of the
years, you could have made more money than most funds invested and more often than not underperform
other forms of investments. The best way to start against the average. Cut out this layer and invest in
investing is by putting regular amounts of money into institutional funds that will give you the return you
an equities (stocks and shares) Individual Savings should expect from the risk you’re taking, without the
Account – see tip No. 15 additional cost.
15. Individual Savings Accounts ISAs are tax efficient 21. Decide what your level of investment risk you’re
wrappers for lump sums or regular monthly savings prepared to take. More often than not, the greater
that typically invest in collective pools of money such the risk the greater the potential reward. But don’t
as unit trusts or investment trusts. ISAs are excellent get greedy and go for rewards that may put your
investment vehicles for avoiding both income tax and investment at too high a risk to be safe. NEVER invest
capital gains tax and benefiting from stock market more than you can afford to lose.
growth. In the tax year 2018/2019 it is possible to
invest up to £20,000 per person (aged over 18). 22. You may wish to take different levels of risk for different
investment goals. For example you may be prepared to
16. On 6th April 2017, the Lifetime ISA was introduced accept a higher risk on an investment with no specific
which allows individuals aged between 18 and 40 goal than on your pension. Generally the shorter the
to save up to £4,000 a year and the government will investment period the less risk you should take.
add another 25% - making a maximum investment
of £5,000 a year. The only catch is you have to use 23. Remember - tax efficiency is only one consideration in
the LISA to help buy a property (or take as a pension an investment. Don’t let the tax tail wag the dog.
www.essentialmoney.co.uk
524. Start to invest as early as you can. Einstein said that unequal shares unless you complete the Form 17
Compound Interest was the most powerful discovery of Beneficial Interest. So if one of you is a basic or
ever made. non taxpayer and the other is a higher or additional
rate tax payer, ensure the property is owned
25. Our investment philosophy is to avoid timing the tenants in common with the lower earning spouse
markets as we don’t know what the future holds. owning a higher percentage AND you’ve completed
However if you can’t resist, make sure you buy when the above form.
everyone else is selling and sell when everyone else
is buying. In other words buy low and sell high – the 31. Consider selling shares or other investment assets
essence of contrarianism. before 5th April each year, to use your £11,700
Capital Gains Tax annual exemption (2018/2019).
26. One way to secure stock market gains is to sell half Your spouse can then buy them back if you want
your holdings once they’ve doubled in value, thereby to retain the shares and obtain an uplift in the base
keeping your original investment. cost, or you can buy them back yourself, provided
you wait 30 days.
32. Register for the rent-a-room scheme and rent out a
furnished room in your house, tax free up to £7,500
a year.
33. Children’s capital gains are not taxable on the
parents unlike most income sources so you can
use your children to escape tax – if you trust
them more than HM Revenue & Customs! Certain
Tax investments can therefore be acquired by the
parent for their child which only give rise to capital
27. An investment of £10,000 into a Venture Capital growth and no dividends. Planning a series of such
Trust (VCT) will guarantee you a tax rebate of investments to mature each tax year will use up
£3,000 (30% of investment). These investments your children’s CGT exemption.
(maximum £200,000 a year) tend to be riskier than
the unit trust variety and are really for the financially 34. If you are a hospital dentist on PAYE; check your
sophisticated or those who can afford to lose the tax code. If tax has been deducted on Emergency
money. As long as you keep the investment for five Tax Code or at Basic Rate or you only worked
years or more, the rebate is yours to keep. So even part of the tax year there is a fair chance that you
if you make a 30% loss, you still break even! could be due for a tax rebate at the end of the year
(unless you have more than one job).
28. Enterprise Investment Schemes (EIS) are a similar
government initiative where tax paying investors 35. If you are considering a career break of say 6
receive initial income tax relief of 30% (2018/2019) months, take it in two tax years. This could save
on the amount invested in an EIS Company. You considerable amounts of tax especially as a
can invest up to £1,000,000 every year. higher rate tax payer. If the career break is for
pregnancy, make sure you let your income
29. There is also an additional tax advantage of protection provider know as they may offer a
investing in an EIS which is the ability to defer a career break option.
capital gains tax bill up to 28% which is good for
your cashflow. However, since 22 June 2010 any 36. Older married couples benefit from an increased
Entrepreneurs Relief (where tax is paid at 10% of age-related personal allowance if one partner was
the gain) would be lost so this is not suitable for born before 6 April 1935. If you’re married and
everyone, especially those who have sold their born after this date you might still benefit from the
practice if the gains are less than £10m. Marriage Allowance where a non-earning spouse
can transfer £1,190 of their personal allowance
30. If you live with a spouse, HM Revenue & Customs to their spouse (providing they earn less than
normally treat income from property held in joint £46,350), saving up to £238 a year. In the right
names as if it belonged to the two of you in equal circumstances, careful planning by transferring
shares. Each of you is taxed on half the income. investment capital to rearrange income between
This rule applies even if you own the property in spouses can also improve tax-efficiency.
Essential Money
637. Give your money away and save tax! Obtaining tax 42. Once you’ve worked out your hourly rate, you’ll realise
relief on gifts to charities is now much simpler than in that it’s not financially worth you as a dentist, doing
prior years. However, obtaining relief at higher rates work that other people can do such as bookkeeping,
can involve careful tax planning. It is possible by installing software, and practice administration.
using a ‘deposited donation’ to obtain this benefit. Employing and delegating the work to someone on
You can also carry back donations into previous tax less than your hourly rate can save you stress and
years if you’re no longer a higher rate taxpayer. hours of time - see tip No. 44.
43. Recruit your team members carefully and always use a
3-6 month probationary period for new employees to
ensure they are the right people for the job. Not 100%
sure after the 3-6 months? Just extend the probation
period. If you need to terminate an employee consult a
solicitor and make sure you do it correctly.
44. Delegating correctly will give you more time to either:
treat patients, relax or work on making your practice
Practice – Principals more efficient and profitable. It’s important to delegate
the whole task to provide employees with a degree
38. For those in practice, it can be worth paying a salary or of authority but beware the dangers of completely
bonus to a lower or non-taxpaying spouse, provided, of abdicating all responsibility.
course, they perform work for the business that justifies
the payment. This could be at such a level as to ensure 45. Just because the profits of the practice are increasing
it is free of income tax and NI, assuming this is the does not mean that you should necessarily pay
taxpayer’s sole source of income. If a pension payment your staff more. Link their pay directly to productivity
is made in respect of this salary or bonus, more tax and performance and you’ll find that their levels of
savings are secured now and potentially into retirement. satisfaction and your profits will improve. This can also
Even better, if your spouse is GDC registered you could improve staff retention.
take them on as a partner in the practice.
46. Spend your marketing budget carefully. To do this,
39. When you first start your business, claim capital one of the important factors is to know which areas of
allowances on any equipment you already own, but your practice are profitable. Not all areas of dentistry
take into the business, for example, a car, desk and are equally profitable so it makes sense to understand
so on. You also don’t have to claim all the capital where your hourly rate is the highest and make sure
allowances you are entitled to. It may save more tax to that’s the service you’re promoting. Make sure you know
claim less and carry forward a higher value to the next how all your new patients found out about your practice.
year when your profits may be higher or your personal
allowances lower. 47. Understand the difference between assets and
liabilities. A simple definition is that assets put money in
40. If you’re a principal (self employed rather than your pocket, and liabilities take money out. So buying
incorporated) and have money in your capital a car, a boat or a holiday home might traditionally be
account, you might be able to raise finance on your seen as assets, but as they all take money out of your
practice (interest is tax deductible) which you can then pocket (in maintenance costs) they’re really liabilities.
pay yourself and use to reduce your mortgage, where Instead focus on buying assets such as commercial
the interest is not tax deductible. or investment properties, dental practices, and shares.
Once you’ve got your assets paying you a regular
41. Work out what your hourly rate should be by working amount (without having to work) you can indulge in the
backwards. Decide how much you need to earn, add luxuries!
a margin to provide for tax and National Insurance, and
add in the overheads of the practice to get the gross 48. One of the best time saving techniques I started using
income for the practice. Then calculate the number of many years ago was having a driver for whenever I
hours you’ll be able to work in the year (less holidays, travel more than an hour from the office. This means I
conferences, lunch breaks etc) then divide the required can write up meeting notes, catch up on emails, and
practice income by the total number of hours available talk safely to clients. I accept this example might not be
to actually treat patients, and this is your required gross appropriate for dentists – but who could you employ to
hourly rate. Make sure you’re not undercharging! make you more productive?
www.essentialmoney.co.uk
7The revenue will help you calculate your tax ‘correctly’
but they do not usually help you to minimise your tax.
Would you ask a crocodile to help you across a river?!
Professionals
49. When seeing a doctor, solicitor, accountant or any
type of service profession, I always recommend using
a specialist. Almost without exception, the specialist Pensions
will have more experience and skill in their particular
area than will a generalist. This then translates into 56. Stakeholder Pensions have reduced the charging
higher quality services provided in the most cost structure of personal pensions to an annual
effective manner possible. management fee of 1.5%. So if you have a Personal
Pension or Retirement Annuity Contract (Section
50. An accountant who works on behalf of dentists 226) it might be worth transferring to one of the new
will make sure you’re claiming all expenses you are low cost products.
entitled to. Admittedly associates cannot claim as
many expenses as principals but it’s worth having a 57. You can now contribute up to your net relevant
dental accountant that can help check your schedules earnings every year subject to a maximum of
are completed correctly or assist if you’re considering £40,000 (gross) in 2018/2019, called the Annual
buying a practice. Allowance. This limit will reduce by £1 for every £2
you earn over £150,000, down to a minimum of
51. An accountant can also help you compare typical £10,000. You may also be entitled to carry forward
accounting ratios with other dental practices, such as unused annual allowance for the 3 years from
wages divided by the gross turnover or assets divided 2015/2016. You can contribute up to £3,600 a
by current liabilities, so you can highlight specific year into a pension with no evidence of earnings,
areas of the business to focus on. which means you can claim relief on tax you’ve
not even paid. Ideal for non-working spouses, or
52. It is important to understand how your accounts grandchildren.
work. The Profit & Loss Account is useful and good
to compare against previous years performance. By 58. For those earning over £100,000 a year, you lose
analysing and comparing 2 to 3 years accounts you £1 of personal allowance for every £2 earned up to
might be able to see where you could make your an income of £123,700 where you will have lost all
practice more profitable. Principals should make time of your £11,850 personal allowance. To avoid this
to do this analysis. consider making a pension contribution (subject to
annual limits in tip 57 above) or a charitable donation
53. Ignoring your tax affairs can cost you money in to reduce your income to below £100,000.
interest on tax and penalties (£100 per year) for not
filing your tax return on time. If you are overpaying tax 59. If you are a member of the NHS Pension scheme
it may not be refunded to you for up to a year unless make sure your membership and any personal
you pursue the issue. pension contributions are within the Annual
Allowance and Lifetime Allowance (£1.03m from 6
54. If you can’t pay your income tax on time contact April 2018) limits. Annual Allowance limits for NHS
HMRC on 0300 200 3835 (Business Payment scheme members are calculated by comparing the
Support Service) and arrange a payment plan – benefits at the beginning of the year to end of the
interest is currently only 3%. year, multiplied by a factor and includes both the tax
free lump sum, inflation and dynamisation factors.
55. HM Revenue & Customs only guarantee to calculate It is not simply the amount you or your employer
your tax if you get your return to them before 31st contributes. If you’re unsure phone Hesketh House
October. Otherwise you may need an accountant to on 0300 330 1346 and request a Personal Savings
help you complete the calculations on your return. Statement.
Essential Money
860. The NHS Pension changed in April 2015, and since bands increasing the tax exempt element to £650,000
then all dentists aged under 50 are no longer able to or £900,000 including the main residence relief
remain in the 1995 Section. This means your Normal (2018/2019). For those that have re-married after the
Retirement Age will be 65 (if in the 2008 scheme) death of a spouse you could potentially have an even
or your State Pension Age - typically 67 or 68 (for higher nil rate band.
those in the 2015 scheme). With contribution rates
up to 14.5%, as well as the additional tax burden of 65. Transferring assets may also be beneficial for avoiding
Annual and Lifetime Allowance charges, any high Inheritance Tax (IHT). Lifetime gifts to absolute or bare
earning dentists will need to seriously consider the trusts are Potentially Exempt Transfers. No inheritance
advantages of remaining in the scheme. tax is due on these ‘PETs’ if the donor survives for
seven years. If the asset is sold within 7 years there
may be an IHT charge if the donor dies within that time
so don’t spend all the money.
66. You can also transfer your assets into a trust where,
subject to your health and age, you can get an
immediate reduction on your IHT liability and any
growth on the fund is outside of your estate. After 7
years it’s all IHT free.
67. One approach taken to avoid IHT is to buy shares or
securities in Alternative Investment Market (AIM) listed
Estate Planning stock. After 2 years the assets can benefit from 100%
Business Property Relief, saving a 40% tax bill for the
61. It’s often said that Inheritance Tax (IHT) is a voluntary beneficiaries.
tax. If your estate is likely to be above the nil rate band
of £325,000 per person, plus the new main residence 68. You can also use Business Property Relief (BPR) to
relief of £125,000 (2018/2019) you may need to take your advantage by setting up a family trust. This can be
some simple steps to reduce the tax bill. Most people useful if you’re planning to sell your practice, you want
don’t realise their life insurance is included in their to reduce your IHT liability and you don’t necessarily
estate when they die. Review whether you can put need all your assets to provide an income. All you
these plans trust for your children or beneficiaries and need to do before you agree to sell your practice is
you might be able to save thousands of pounds of to set up a family trust and gift your practice property
tax. Who would you rather have your money - your into it. The assets then immediately qualify under BPR
beneficiaries or HM Revenue & Customs? and remain outside your estate for IHT purposes. The
only downside to point out is that the assets are now
62. Despite some financial costs associated with irrevocably outside your estate and the only people
implementing a will, the benefits from some estate that can benefit will be the beneficiaries – typically your
planning far outweigh the initial costs. Remember children or grandchildren.
solicitors typically make more from sorting out intestate
estates (no will) than they do from setting up wills.
Ensure that the will satisfies your present requirements,
but changes in legislation and your personal
circumstances make it important to review it.
63. How about just getting married! If you’re living with
your partner, but not legally married your estate could
be left with a large inheritance tax bill as a result. This
is because if you leave your estate to your partner and
the value exceeds £325,000 then tax will be due at Protection
40% (see tip No. 80). However, if you are married the
entire transfer is exempt. Time to tie the knot? 69. Take out insurance when you’re in your 20’s & 30’s
as the younger you are the cheaper it is. If you’re
64. The other benefit of being married is that if your now in your 40’s or 50’s and realise you need some
estate passes to your spouse on death your surviving cover, it’s still not too late, but premiums will only
spouse will then have the benefit of both nil rate get more expensive each year.
www.essentialmoney.co.uk
970. Work out exactly how much life cover or critical illness properties. For instance, if you buy and sell, your
cover you want or need and then make sure you gains may be taxed as Income rather then Capital
review this reasonably regularly. Life cover may not Gains. This means that you need to establish how
be necessary for everyone, such as those with no and which taxes (Income Tax and / or Capital Gains
dependants. Tax) will be applied to your property investments.
Once you know how tax will be assessed on your
71. If you do have cover it’s worth reviewing all your plans investments, then you can establish a tax minimising
as term rates have reduced dramatically over the last strategy.
few years, particularly for women since the EU Gender
Discrimination Act was passed in 2012. 78. If you rent out a property and want to release some
equity from it, tax relief on the interest on the new
72. It’s also worth getting guaranteed premiums – it might mortgage can be given on loans up to the value of
cost more in the first year or so but it could save the property when you start letting the house. So
you thousands of pounds in the long term. If you’re even if you use the money for personal reasons you
planning on emigrating, returning to study, or quitting can still claim tax relief on the interest.
dentistry and plan to cancel the contract, reviewable
premiums may be more appropriate. 79. One cost effective way to own land is by ‘annexing’.
If you extend your fence to claim a piece of waste
73. Make sure you’re getting value for money on your land at the end of your garden, then after 12 years
protection products. Some income protection plans you may be entitled to claim it as your own. (Statute
have so many exclusions you may as well be pouring of Limitations Act 1977). This is not a simple process
your money down the drain. Not much point in that, so though so make sure you use a solicitor.
always check the exclusions, small print on your policy
details and make sure you have an “own” occupation 80. The new nil rate residence band (RNRB) of
definition that covers you as a dentist. £125,000 (increasing to £175,000 over the next
2 tax years) will be reduced if your estate is worth
74. When you’re completing applications for insurance over £2m. To help manage this you can change
disclose all relevant medical history. If you do not the property ownership into tenants in common
disclose material facts the policy could be declared null to allow each spouse to control how the property
and void and you’ll have wasted all your premiums. passes on death. This can potentially preserve their
‘Innocent non-disclosure’ is the biggest reason for entitlements to the RNRB by keeping each partner’s
failure of claims. assets below £2m.
75. If you your practice has incorporated, you can set up a
Death in Service scheme, where the practice can pay
the premiums which are fully tax deductible, whilst any
claim is payable tax free to your beneficiaries.
76. Write your life assurance policies in trust and then
make sure you review them fairly regularly. It doesn’t
just help to reduce tax, it can ensure the money goes
to the right people at the right time, without having to
wait until probate has been finalised. Some more creative ideas
81. Enjoy a first class seat on an airline but only pay
the economy fare. As you hand your tickets over
at the check-in, just ask the assistant whether it’s
possible to obtain a courtesy upgrade to first class
or business class. It helps if you dress smartly,
it’s your birthday or you’re celebrating a special
occasion.
Property 82. Get discounts on everything you buy just by
asking. If you don’t ask, you don’t get. This
77. If you buy properties to ‘renovate and sell’, then you especially applies to independent shops, dental
will be taxed differently than if you only ‘buy and let’ and stationery suppliers.
Essential Money
1083. Similarly when you’re staying in a hotel, try booking 90. Don’t succumb to sales fever. It doesn’t matter if it
a standard room but then ask if it’s possible for a cost £2,000, reduced to £20, do you really need a
courtesy upgrade. Just by asking for the best rate purple fake fur jacket? If you don’t really need it and
possible you can often get better than a corporate it’s not your style, then it’s not a bargain.
rate. If you’re staying with a partner it might help to
mention if it’s a special occasion. Last time we did 91. Quit smoking. Just a couple of packs a week would
this we got a bottle of wine and a card – and yes it be a saving of £1,000 a year. Invested over 30
really was my wife’s birthday! years at 6% growth would give you over £80,000. If
you can’t quit smoking nip over to Europe and buy
84. When you’re going abroad, avoid paying tourist a few packs which will save you approximately half
exchange rates. Try using an online comparison the cost of UK cigarettes.
service such as CompareHolidayMoney who
will direct you to some of the best rates with
free delivery. For international transfers, I use
Transferwise.com as they have no minimum
transfer amounts and only charge a small fee.
85. If you’d like to earn 30 times more interest when
you’re in credit, halve the cost of your overdraft or
get better service, switching accounts is easier than
you might think. View some of the best accounts
and overdrafts at Moneyfacts – I have a 123 current Telephone
account with Santander to make the most of their
1.5% savings rate on balances up to £20,000 and 92. Use a comparison site to compare line rental
cashback on household bills, which easily covers suppliers against each other. Find one that takes into
the £5 monthly charge. account all of the hidden charges.
86. Don’t overpay for your utilities. Check the free 93. Check you are getting all the discounts
comparison services, which advise on the best you’re entitled to. There are often Friends and
deals in electricity, gas, home phones and television Family numbers which offer discounts on nominated
in your area. Taking a half day off work to spend numbers. Review your bills and update these
time arranging all this is likely to save more money frequently. There are also numerous tariffs that give
than you could earn after paying lab bills, tax. unlimited free calls for a fixed monthly cost.
87. If you’re interested in travelling abroad cheaply, you 94. You can make huge savings on international calls
could consider travelling as a courier which involves if you use a secondary supplier. I’m currently using
picking up packages from the airport at one end Local Phone which saves me lots of money calling
and leaving it at the destination airport. You get the abroad from my mobile but routed through them,
same benefits as other passengers on the same paying just a few pence per minute.
plane but far cheaper although you might have to
travel with carry-on luggage only. 95. Reduce your mobile phone bill - just phone up
customer services and ask the representative if
88. Buying on a credit card instead can give you the there’s a better talk plan you could be on. I prefer to
additional guarantees you need under Section buy my mobile phones outright and then sign up to
75 of the Consumer Credit Act. Avoid extended a SIM only monthly contract for £10-£15 a month
warranties – these are often worthless. Most – it works out cheaper than buying the phone on a
products have a 1 or 2 year guarantee anyway. contract.
89. If you’ve had bad service, it’s worth complaining.
Most large companies will usually settle up rather
than have a dissatisfied customer mentioning it
online. A short sharp letter to the head office of
a company who has given you bad service will
usually be replied to by return, with an apology and
hopefully a cheque.
www.essentialmoney.co.uk
11101. A well serviced car uses between 25% and 33%
less fuel each year. It’s also worth having the oil
and oil filter changed every 3,000 miles. Frequent
oil changes are the single most important factor in
extending engine life, and will more than pay for itself
in repairs and engine wear savings.
102. Fuel costs. Register at the free price-comparison
website PetrolPrices.com, which compares fuel
prices at all service stations across the UK.
Scams
96. A major financial scam known as ‘advanced fee
fraud’ involves offers of large amounts of money
in return for helping to move funds out of various
African countries. If it sounds too good to be true it
probably is! Avoid.
97. Pyramid Schemes are ‘get rich quick’ schemes that
in theory make money for everyone involved but
in reality see the original ‘investors’ cash-in at the A few extra tips
expense of newcomers. Best avoided like the plague
unless you like a gamble where you don’t know the 103. With the advent of Contactless we’re using cash
odds. Remember Risk & Reward are closely linked. much less. However, paying cash has been
proven to make spenders think before making a
purchase. Use cash instead of credit.
104. Work out where your money goes. Read your
bank statements as they can often reveal any
bad spending habits. Prepare a monthly budget
including all your direct debits and you’ll be
surprised how much money you should have left
over. It’s not the bills that get most of us down, it’s
the hundreds of little things we don’t plan for... but
Travel those little things add up …. QUICK!
98. Buy train tickets up 3 months before travelling 105. It sometimes helps to go shopping when upset
and you can often travel first class for less than an or depressed, often called ‘retail therapy’, but
economy ticket bought on the same day of travel. watch out for the shock when you get your bank
You’re also often entitled to complimentary food and statement or credit card the following month!
drinks.
106. Always pay yourself first. Save at least 10% or more
99. Keep cars longer instead of trading in every few of everything you make for yourself and put it in a
years. Not only does the cost of new cars rise each savings account. This is probably the key secret
year, but cars depreciate quickly, and when you to keeping money and making your money work
trade frequently, you lose money on low trade-in for you. Remember it’s not what you earn that’s
values. Try buying a good quality car and keeping it important, it’s what you do with what you earn.
for 3+ years.
100. Buying a car a few months old can save thousands On a final and more personal note, a very good friend
of pounds in depreciation when a car drives off the and client read the above and commented
forecourt. They’re no more or less reliable than a “…investing time in your relationships can save you
brand new car and bought from a reputable garage, more in the long run than all of the above points put
will still have all the warranties. together!”
Or, if you really want a new car have a look at leasing Hope you enjoyed reading these tips and best of luck
one, also called Personal Contract Hire. making the most of your money! Thomas Dickson
Essential Money
12The Author
Thomas was brought up in Hong Kong as one of five Thomas has been a member of the Association of
children and spent a formative year in Tokyo as a Specialist Providers to Dentists (ASPD) since 2004.
20 year old. Having overcome the culture shock of Members of the Association are professionals such
moving to Aston University Birmingham in 1989 he as Solicitors, Accountants, Independent Financial
completed his Managerial & Administrative Studies Advisers, Practice Valuers, Bankers and Insurance
degree course 4 years later. He’s now happily married Brokers who specialise in providing services to the
with 3 young children and lives in Birmingham. dental profession.
Thomas started working as a financial adviser in 1993 This ability to network with like-minded professionals
with NM Schroders who were swiftly taken over by from various professional disciplines helps us to advise
Friends Provident the following year. In 1996 he made dentists throughout their career.
the step to become an Independent Financial Adviser,
founded Dickson Lishman Prince and due to their Thomas has continued to pass various financial papers
success in working with dentists they re-branded as and has been awarded the Advanced Financial Planning
‘money4dentists’. Thomas subsequently incorporated Certificate by the Chartered Insurance Institute (Dip
the firm as Essential Money Limited and is now the 100% PFS) is a Chartered Financial Planer and Certified
shareholding director. Financial PlannerCM. His main passion is working with
dentists to help them achieve their financial objectives.
The move into working with dentists began in the late 90’s
with a series of highly successful seminars. Invitations For details on how Essential Money can help change
followed from these to present financial planning seminars the way you plan your finances:
to groups within dentistry, including Women in Dentistry,
dental health education council, the BDA and both • call 0121 685 5060 and ask to speak to an adviser or
undergraduate & postgraduate schools. Essential Money you are very welcome to pop in to our offices:
are now regular speakers at events across the country and
work with dentists throughout the whole of the UK. • 3 Greenfield Crescent Edgbaston Birmingham B15 3BE
www.essentialmoney.co.uk
13Some quotable money quotes!
“In this world nothing is “There are few ways in
certain but death and taxes.” which a man can be more
Benjamin Franklin
innocently employed than in
getting money.“
Samuel Johnson
“Wealth is the parent of
luxury and indolence, and
poverty of meanness and “Lack of money is the root of
viciousness, and both of all evil.”
discontent.” George Bernard Shaw
Plato
“Nothing is so hard for those
“If thou wilt be perfect, go who abound in riches as to
and sell that thou hast, conceive how others can be
and give to the poor, and in want.”
thou shalt have treasure in Jonathan Swift
heaven.”
Matthew 19:21
“He that trusteth in his riches
shall fall.”
“Money is like muck, not Proverbs 11:28
good except it be spread.”
Francis Bacon
“He that findeth a good IFA
they can trust will do really
“It is easier for a camel to go well.”
through the eye of a needle, Thomas Dickson 2003
than for a rich man to enter
into the kingdom of God.”
Matthew 19:24
“The love of money is the
root of all evil.”
I Timothy 6:10
“A feast is made for laughter,
and wine maketh merry: but
money answereth all things.“
Ecclesiastes 10:19
Essential Money
143 Greenfield Crescent, Edgbaston, Birmingham, B15 3BE
t: 0121 685 5060
f: 0121 685 5065
e: justask@essentialmoney.co.uk
w: www.essentialmoney.co.uk
Essential Money Limited is authorised and regulated by the Financial Conduct Authority. Registered in England No. 6127617 v16 May 2018You can also read
