76. Paul Lewis Puts Money In Its Box

This week, I have the pleasure of speaking to Paul Lewis, financial journalist, speaker and presenter of BBC Radio 4’s Money Box.

Paul talks very candidly about his early experiences with money, including how important he believes it is for parents to discuss money with their children.

Paul also shares his stories about managing money during his university days and dabbling with bank loans.

Paul has won more than a dozen awards, including Headline Money Journalist of the Year in 2010 and Association of Investment Companies Broadcaster of the Year in the 2012 Roses Media Awards.

I really loved being able to talk to Paul in-depth about his money beliefs and experiences and I hope you gain a lot of insights from listening to it.

I also review the options for buying an electric car, including the tax benefits. Plus, I look at a recent research paper which examines whether financial markets properly account for climate change risks.

The Economics of Climate Change:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3715848

Episode Transcript

Jason Butler 0:05
Hello, and welcome to the real money stories podcast. I'm Jason Butler. And I invite you to join me as I have intimate money conversations with people from all walks of life. Whether you're just starting out on your money journey, or well down the track, there's bound to be something you can learn from these stories about taking more control of your money, so you worry less and enjoy life more. Real Money stories is sponsored by Vanguard, bringing value to 30 million investors worldwide. Visit Vanguard investor.co.uk For more details, and remember, the value of investments can go down as well as up and you may get back less than you invested. Hello, Jason here, and thanks for joining me on another edition of Romani stories. In this week's podcast, I revisit the issue of buying an electric car and share a few useful insights. look at recent research into whether stock markets properly price the risk of climate change, and have a great interview with Paul Lewis, the well known presenter or BBC Radio four's moneybox program. But first an apology. Sorry, there was no podcast episode last week, my editor was on holiday. And I just couldn't spare the time to create two episodes the week before. Sorry about that. Now, if you're a regular listener, you might know that I've just completed building a holiday home in part of my garden. And you can watch 20 episodes of the construction on my YouTube channel at Jason Butler financial wellbeing. And last weekend, we went live with the website and started marketing it as a holiday lead on all the main property portals. And you can check it out wood cutters, lodge suffolk.co.uk. Let me know what you think. Now we um Dennard about the pricing. And we ended up going slightly higher than the market rate, primarily because it's a very, very good quality property. And it's done to a high standard. But what amazed us was the fact that we've already taken seven bookings for almost a month's worth of stay this summer. So it seems that price doesn't seem to be a factor quality does seem to be very important. Now remember, you can only ever have two out of three of the key elements of any product or service that's price, quality, and convenience, strength speed. So you can only ever have two out of those three, and in our case, quality, and it was vailable. But you have to pay a price. Now you might remember a few weeks back that I mentioned the new monthly subscription service offered by on to for electric cars, that's o n dot t o. And that's where you could get, for instance, a Tesla Model 34799, inclusive of insurance, maintenance, breakdown and charging points. And you only have to commit one month at a time. So it's not like a normal even business lease which you normally have had two or three years. Now the problem is the en tu has had such a demand that it used up all its allocation of Tesla's and it's got no idea when it's going to get any more. Now you can get smaller Evie cars from the electric cars. But if you want a Tesla, you're going to have to look at buying direct from Tesla or another source. And that brings me on to the tax benefits. There's a chap called Martin Bamford who's a financial planner down in Surrey cranly. And sorry, he's a director of informed choice, who I've known for many, many years, and he's got a really useful YouTube channel. Now, you know, not everyone likes his content, but I think he's a top guy. And he's got a recent video in which he explains how he bought a Tesla Model three, he says for zero cash cost. Now, behind that headline, the reason it cost him zero was that he was comparing buying the Tesla through his profitable company with his previous diesel car that his company provided as a benefit in kind to him. So the car still costing 40,000 pounds after getting your grant from the government. But it's just he paid for the car rather than all that money out to the taxman like he did when he had a normal diesel car. And that's because his Tesla worked out like this. He got 3000 pound government grant which bought the 43,000 pounds down to about 40.

And because he was writing off the whole cost of the car, the 40,000 net cost against his company profits that saved him about another 8000 that he didn't have to pay in corporation tax. Because the benefit in kind charge this year onwards is only about 200 pounds compared to you know a sale 1000 pound or whatever. He says over about a five year period which is where he you know the length of time he tends to own his cars that saved him 28,400 pounds over the five years in benefit unchain charges, he won't pay less there's no vehicle excise charge, which in fact saves him another 500 pound per year because with a premium car premium and luxury car, you always pay a surcharge over the normal cost. So that's about two and a half 1000. Plus the savings on just paying for electric versus diesel was about another 2300. So, you know, essentially, rather than pay money to the Inland Revenue, he's got himself a lovely 43. Grand Tesla is very happy and worth checking out this video because he explains it all. Now, something worth noting that the purchase Grant has reduced to two and a half 1000 pounds for new electric cars and is only available to cars that cost under 35,000 pounds. But in any case, if you own your own business, or you can arrange salary sacrifice through your employer salary or bonus, then you might get the cut get the cost of a an electric vehicle much lower than you think. But you must remember that all cars lose value and never buy a new car. Unless you've got rid of all your non mortgage debt, you've got a proper emergency fund. And also the cost of the car isn't more than about 50% of your annual income because cars lose money. If you keep buying new cars and you haven't got your other financial basis covered, then you're going to go backwards. But no shame in having a nice car. If you can afford it, just make sure you do it tax efficiently. Okay, let's move on. Now, in the last episode of Real Money stories, I spoke to Megan Brenner of sericin partners. When she explained why and how she manages money on an ESG basis. That means environmental, social, and governance factors. And if you missed that episode, do check it out, because mega makes a lot of sense. Now, some people think that some asset classes and individual securities don't pricing, the real risk of climate change. So think about things like fossil fuel companies with proven reserves of oil and gas. But that haven't written down the value in their books to reflect the fact that none of those fuels can ever be burned. If we don't all obviously want to end up living under the sea, which we don't know, in fact, I covered this very issue of what we call stranded assets or companies which have not sort of reflected on their balance sheet, the new world that we live in. And I covered that in the second edition of my book, The Financial Times guide to wealth management. Now that was over six years ago. So this isn't a new issue. So it was very interested to read some new research which looked at whether investment markets are properly pricing in the substantial risks of climate change. And this research paper in question that I'm talking about is called the economics of climate change. And it was created by three investment specialists at dimensional fund advisors known as DFA, they're their multi asset class Investment Group, and you can access it via a link in the show notes below the pod if you want to read it. But here's the overview. The researchers found that financial markets process complex information every day, and the impact of climate change is no different in that respect. And they looked at all the available academic research and they said that it finds really compelling evidence that prices in a variety of asset markets incorporate information about climate risk. And their findings also, were that all the research shows that firms have an incentive to manage their climate risk exposure because higher exposure can result in a higher cost of capital bears. Makes sense, doesn't it? So remember that public investment markets aren't perfect, and they're not totally efficient, and prices do sometimes go to extremes, but they're efficient enough to enable you to get the right risk return exposures you want or need. And in that respect, climate change will be factored into current prices and future values. Right. My guest this week is a writer, a broadcaster, a campaigner, and one of the most experienced and trusted personal finance experts in the UK. I am, of course talking about the host of BBC Radio four's money box program, Mr. Paul Lewis.

Hello, and thanks for joining me on another edition of the real money stories podcast. I'm your host, Jason Butler. And today I'm joined by another one of my How can I put someone I've respected for years and years when I first joined financial services, this individual going to hear from today was kind of one of the good guys leading light of someone that you kind of just knew you could trust that was the beacon of truth and knowledge and wisdom. So he's a broadcaster. He's a writer. He's a campaigner. And he's authority. Good, good guy. And I'm really pleased to say that we've got Mr. Paul Lewis on the show today. Hello, Paul.

Paul Lewis 9:36
Hello, hello. Well, after that introduction, can I say thank you very much for inviting me

Jason Butler 9:41
via and I also, just like everything, Paul, you seem to have been around forever, and I know you're very youthful looking. But in my life, I joined financial services in 1990. And you kind of just always been there. So thank you for all the work you've done over the years. But, you know, this show is about breaking down the taboo of talking about money the wrong way. Life and and for people to help themselves help themselves. So we'll we'll obviously touch on some of your thoughts on what you've learned about money. But I'm interested to know what your early experiences were when you were growing up kind of the the influences and the values and the beliefs that you've developed around money. You know, so there's sort of people can understand their own journey.

Paul Lewis 10:21
Yes, I suppose. I mean, when I was growing up, we had pounds, shillings and pence. So it was, it's rather different from how it is now. And I remember being really enthralled by the different coins and what they were worth and how they added up. And when you've, you know, 12 pence in a shilling and 20 shillings and a pound and that that engaged my mind, I remember once I was in a shop when I was just learning this and my mother was buying something, and it was two and six months, two and six, we used to say, two shillings and six months it was. And I said, Why don't they just say eight? And I hadn't, because I didn't understand it was two shillings in six months. And then she taught me that. And I think, I think both my mother and my father taught me a great deal. My father was a mathematician, my mother, well, they were both teachers. And I think they taught me about money. I remember having a post office system, you know, you had to count things out and give change and all that kind of stuff. I really liked that a sad, I suppose. So that was my childhood with money. And then I suppose money for me has just, it's just been a, it's been a means to an end, really. And you just have to try and earn as much as you can. And when I had my first job, I also wrote I'd always wanted to be a writer. I wasn't a writer till I was 30. But I've always wanted to be a writer. And I used to write in my spare time I used to write for I've My first job was with age concern, which is a Jew caner. I used to write things for them. And I wrote leaflets, booklets, pamphlets, articles, right from when I even when I was an employee in my spare time, partly to earn extra money, partly because I loved it. So that was really my background. And I suppose working for age concern, and then a one parent families charity. And then I ran a charity for young unemployed people, campaigning for them, I must say not not actually giving them work. I was always interested in explaining to people who couldn't afford an accountant who couldn't afford a financial advisor. Not that such things existed many years ago, financial advisors explaining the complexities of money, whether it's benefits or tax, or other things you can get from the state, like young people with what was then the youth training scheme. All those things interested me a lot. And that's where my background is. It's not investment, it's not economics, it's getting real information to real people about the money that they need.

Jason Butler 12:56
Yeah, and I know you've done a lot of work there. But I just I don't want to leave your childhood for a minute, because I want to understand the motivations for you because because for many people, money is scary. It is abstract, it can become a god, it can become beyond enjoy, it can be part of the inextricably linked with their self identity and their sense of self worth. And some people it's they associate money with, if they're not good at maths, they can't be good with money. So I'm just interested how you develop your money identity. When you were sort of a teenager, did you do work? I mean, were you in a did you grow up in a wealthy family? Or was it quite sort of?

Paul Lewis 13:30
I mean, no, my father was a math teacher. My mother taught, went ran house to house teaching children and young people who have mental mental capacity problems, I suppose we'd say now. I went round with her. And I met a lot of these people. My father was the mathematician. He gave me my love of math and numbers and all those sorts of things. Without any question, he was immensely influential, and so was my mother. They were both careful with money, they didn't have that much money. And they were also careful about borrowing it and my mother always drummed into me from as early as I could remember, even buy your own house, you know, that is the most important thing, buy a house. And and they did do that and where we lived, and then they they moved from time to time. And it was that sense of it was important to have that financial stability. And also, I think the thing I learned was, was good debt and bad debt. I mean, they were never, they were always they always said they were hard up, you know, couple of teachers with three children inevitably. But they did borrow money, but they borrowed it since they bought it for a purpose and they knew what they do with it. I remember they had an extension built on the house and my father showed me the check and I was probably 1000 pounds or something which then to me seemed when I was about 13 It just seemed the largest sum of money I've ever seen. And they taught certainly taught me about banking and how to make write a check, make sure you wrote in the right way. I mean, most people listening probably think like 30 going on about. So it was being careful with money was part of how I was brought up. And I think I always have been careful with money.

Jason Butler 15:20
So the takeaway there just for some people listening, is that if you talk to your children or young people about the positives of money, and confront the potential dangers of it, and show by example, then that's generally a good a good thing, isn't it? Because this is the problem learn bad behaviors from parents to children?

Paul Lewis 15:38
Absolutely. And it's interesting. I mean, I thought back on these times recently, because I've read quite a lot about how important it is that, or at least how influential parents are that, how they manage their money, and how they talk to children, affect those people for the rest of their lives. And I've always thought financial education begins at home, not at school. And I think that is so important. And looking back, I think, Well, yes, I suppose I did do that. I'd have to say, my own children. I call them children, my own adults, are all very sensible with money. And I don't remember ever, particularly talking to them. And so sitting them down and saying, This is what you must do. But I think they kind of in imbibe those habits from from their parents, and I certainly wasn't well off when I was when they were growing up, either. Not at all. So I think you do learn a lot from your parents, and it's how they, how they deal with money is very, very, very important. And I can't stress that enough to parents of young children listening, make sure you just as part of conversation as part of life not sitting down doing homeschooling, talk to your children about money, how it works, so they understand how it works, and how you've managed your money. And indeed, how you've mismanaged it mistakes to avoid all those kinds of things. Yeah, mentally important.

Jason Butler 17:00
It's interesting. You say my daughter works for me. And she started working in the summer after she graduated. And she looked at my whole back catalogue. And obviously, I've been around a long, long time, not as a broadcaster like you, but written books and keynotes and all sorts of stuff. And she looked at the whole back catalogue. And she said, it was like that. It was like, even though she's been around, obviously, it's growing up. She said it was like a sort of a baptism of fire, learning everything and everything. And what she didn't realize was that I was a complete train wreck in my 20s with debt. Now, here's the thing you absolutely right. If As parents, we can share our mistakes, as well as our successes, then we're actually demystifying money, aren't we? So tell me about you went to university, didn't you? Yes, I did. Yeah. How did you navigate the university is with money, because that can be a real problem for political climate?

Paul Lewis 17:43
Well, managing money for the very first time is always trouble. Trouble, isn't it? I was what 1819. And I remember, I always had an overdraft. I thought great. an overdraft I can spend more than I've got. Well, the student grant then was I mean, it was a grant not alone, I have to say which, you know, let me just say now, I think it should be now i don't agree with student loans in any way. And I can't remember what it was, it wasn't very much my parents used to chip in the extra bit they were responsible for. And I remember that I used to take five pounds a week out of the bank branch in the University where I was at university of Stirling. And that was it. That was it for me. And that was quite, you know, quite a lot. But I did go overdrawn. And then in the summer, I worked, and I paid it off. And I remember going to see the bank manager, you know, all these things you never do. I went in to see the bank message at the Bank of Scotland. And I said, I would like I would like to borrow a bit more money to go on holiday in the summer. Before I start work. It's a very door until the very elderly man he was probably about 40. And he said, Can I see your checkbook, Mr. Lewis? And I said, Yeah, gave it my check. And he looked at it and he said, I see you don't fill the stumps in. And I said, No, I sort of have a mental picture of how much I've got. I know what I've got in the account. And I get my statements. And he opened the drawer in his desk, he put the checkbook in it, closed the drawer, but you can ask that back when you manage your money. Request review. It was absolutely extraordinary looking back on it. And I suppose it made me think and after that, I did actually fill the stubs in, as I remember and did start keeping a sort of bit of a tally, but not not much. I'd wait for the statement. And of course, then when you've got a statement here, overdrawn it was in red ink. Isn't this extraordinary? That's what being in the red means. His statement came in black and radio. So so I never had enough money at university even though I worked and I used to sell. I used to sell private island things. How to make a bit more money during the term time as well, they never had enough money. And that was the state I was in for some years after that, I have to say

Jason Butler 20:08
that it's so so this is an interesting one. Even though your parents were very, very organized taught you well, for example, you know, weren't big debt, people used it perhaps for house to buy the house and extensions, you slipped into what I call sleepwalked into debt without even really thinking about it, because it was an overdraft just like a credit card. Similar thing. Yes.

Paul Lewis 20:29
And it was very cheap, then I mean, yes, you paid some interest on the extra bit, as you do now. Now, we've had this this change in the rules by the Financial Conduct Authority, and thank goodness for them. But it was very cheap borrowing. And I remember even later, I mean, this is moving on. But when I when I became self employed, I always thought the first thing I must do is 25% of every fee I get for writing, it goes straight in a separate account. So with my bank, I have my current account, and I had a separate account to pay that tax from. And I would have an overdraft on the current account, even though I had a positive balance in the savings account. Now, most people would say that's nonsense. For me that savings account was my sleep at night money, I knew that when that tax bill came as it inevitably would, it was a bit less formal than it is now a self assessment. I could pay it because I had the money in this account. And I did this for years that every fee, I got 25% went straight into a separate account. And that stopped me ever getting in debt with the tax authorities, which is that the most important thing level to do.

Jason Butler 21:39
Now that's interesting, because what you're illustrating there is a concept that we call partitioning or labeling or mental accounting. So essentially, you've got

Paul Lewis 21:47
your jamjars,

Jason Butler 21:48
my granny had the rent, very water, the electric, all that above the fireplace in the jars and you've done the same thing. And that can work. Now that's what I do in my smart spending system on smart spending plan, which you can download for the website. And it's just a way of partitioning the purpose of money. And even though you had an overdraft, you realize you had to pull your finger out and get some more work right. So that was a you weren't kidding yourself. Now, just just head back a bit because I'm interested in to know, the transition when you went from being an employee. So you so you weren't brilliant with money to start with. You had overdrafts, you weren't so you were starting to fill up the checkbook stubs. You were an employee for a number of years. Was there an epiphany, pivotal time? Or was it a gradual change to becoming slightly more in control of your day to day spending and having a bit of reserves? And did that happen before you became self employed or afterwards?

Paul Lewis 22:36
Gosh, I'm trying to think I don't think when I was first married and we had young children and I was an employee then I don't remember having spare money in a savings account? No, no apart from My Tax Account, because I do even when I did freelance work I did used to keep money separate. I remember that by the end of the month, I was usually a bit overdrawn. And that was because you know we needed things nice things for ourselves and for the family for the children if we needed to go on holiday the famous holiday compensation but you do when you've got kids and you're both working you know you need to you need to take them away. So I was I was overdrawn towards the end of most months. Absolutely. And my solution to that was to earn more and it still is it always has been if I need more money time I borrowed in the short term, but I will earn more money so I would work more out I do more in my spare time. So I suppose the transition was that I always knew I was never in trouble with money. I never had real debt problems at all. And when credit cards came out, which that shifted after that wasn't it quite a bit after that. I never got into difficulty with credit cards though I would often have a balance on them a debt balance on them. But I did I think looking back I must have used them sensibly because I never got into serious debt ever. I was often slightly on the wrong side with the bank but you know, it was very cheap money and I didn't care that much.

Jason Butler 24:10
So let's This is really illuminating and thank you for sharing and being handy because even you the money supremo who is super super, you know, knowledge about things in your early life. You were what I call Shades of Grey when it came to money, right? You weren't in a real hole. And neither were you flush with cash and super, super organized and Mr. spreadsheet, man, but but there was that shade of gray because there were pressures. And the fact that were pressures meant there was a little bit of haziness around the edge, didn't mean you're a bad person, and you did eventually sort of move forward. So how did you what was the motivation and what were the implications of you going from becoming an employee to self employed bear in mind you had the slight cashflow, wrinkles as it were,

Paul Lewis 24:50
well, it was a moment and I remember it very well. I'd worked as I think I said for three charities and the last one, which was called us aid. It was a youth unemployment camp. And charity, I was the director. And I did spend a lot of my life raising money to pay the salaries of me and my colleagues. So it felt very precarious. There were times when you just need it, you know, you just managed to get a big grant from a trust, or help. Sometimes occasionally, you've got a bit of money from state sources, not the government, but local authority sources. So it was a very precarious life. And I've been doing a lot of a lot more writing in my spare time, regular writing, I wrote for saga magazine. And that was a regular contract to do that. And I wrote pamphlets and leaflets and things like that, going back to age concern, I wrote things for them for money once I've left them. So I will, I was working a lot in the evenings. And then I won a journalism prize for some things I wrote in saga magazine, this was 1986. And I thought to myself, Oh, gosh, I can win a prize, part time journalist, I can make a living at it. And I thought, Okay, I'm gonna give up this job. And I'm going to work full time. And I did some calculations. And I got another regular contract with the Daily Telegraph to write for their money section. And the thing that I had, and I think this is important for anybody listening has had a dream of being a journalist and wants to be a writer, you need a specialty that no one else does, you know, don't do pop music. And do holidays, don't do travel, have something that no one else looks at. And what I had my unique selling point was I was writing about money for people without much money, tax benefits, government assistance, all that kind of stuff. pensions, meet state pensions, other pensions that mainly state now. And so I had that unique thing. And of course, editors kind of loved it, because they thought, well, we're actually serving a different audience, it will actually bring more people in for the Telegraph, you know, like, what it like it is now is very much a paper for better off people. And so I had that unique selling point. And I just plugged it, and I got a lot of work, writing for all sorts of outlets. I also wrote about technology briefly, that computer games, and things like that. But mainly It was about money. And it was that unique selling point. And that's what led me on to doing other things. I'll just say that when I left my job, and I had two or three initially, and then it grew, people who paid me money to do things. And it was all my money. And I was in control of it. And I could buy what I needed for the business. And, you know, I had to do all my own tax. Suddenly, I was in control. And I thought, Well, okay, one of these editors takes against me, the other two or three will carry on. So I was actually more secure, then as a freelance, and I felt as an employee working for a fairly precarious charity. And that was also the motivation. And you know, people said, Well, what kept you going? How do you sit down every day working at home, to write things and I just say, well, the postman arrives in the morning with the bills, so of course, money, those are the days when the postman did arrive in the morning. And so it was that interchange, bills would come in, I'd send things off, it was all by post then. And that was how I managed my life. And it was a bit hand to mouth. But slowly things grew. And it was because I looked at money for people without much money, that I began to get work on air. And I began to do the advice I gave in my columns I began to do on television and on the radio. And that is what led to me being a presenter and doing what I do now.

Jason Butler 29:03
Now there's three things that I just want to touch on there which are timeless piece of advice and really important for mindset. One is you saw there was more risking being an employee for a precarious charity that may or may not stay in business than having five or six freelance customers or clients. That is interesting. Secondly, your view was if you needed more money, and the expenses couldn't be dropped, you have to go no more money. And therefore you felt more in control of being able to earn more money. And thirdly, this is really important. You You play to your strengths and your niche. You're there's something you had that other people didn't have in a crowded field. So so I think that's wonderful. It's not that everyone should be self employed or everyone should be an entrepreneur. But that's a great three great lessons from you, Paul, you've been doing it now for 3030 3040 years. Is that right? Oh,

Paul Lewis 29:50
full time since 1986. So whatever that is 35 years. Yeah. And for at least 10 years before that I was doing it part time. But not as a self employed person. And I think the other thing that I would say is, when you do when you if people want to be writers when you sit down and write, you know, the two lessons I learned right at the start was deadlines. It's no good if it's late. And length, it's no good if it's 200 words too long. And that is a discipline. And I remember once I did write something that was too long, it was for the times educational supplement, I think it was 100 words too long. And I just, you know, they'll squeeze it in. They didn't, the subedi to cut it. To cut Yeah, just cut it at the 300 word. And it just ended. Good grief. I mean, it was bad. So that seemed to be fair. But it was it was a bit of a lesson, but get it being reliable. I mean, this is what you've got to be reliable. Time to length is the most important thing about.

Jason Butler 30:58
But that's the point in anything in life being consistent. Doing what you say you're going to do. And having some form of, as you say, sort of went What does good look like or know what good look like whether there's a date or the amount? Yeah, I agree. So I just want to touch on two particular things. Before we sort of let you go today. I'm interested to know how you and your wife have evolved your because this issue of couples, particularly when people get older, or there's a change in their circumstances, divorce or bereavement. I'm just interested to know how you have resolved or how you develop as a couple your approach to managing the family's finances. Do you do cuz you're the head honcho? Do you do it? Or does your wife do the day to day on your just big picture? How have you evolved it?

Paul Lewis 31:37
Well, I divorced my wife a very long time ago. I'm not I'm not I have I have, I am married. But the wife that I grew up I developed with with children. So and I divorced a very long time ago. But I think I think the way that we we dealt with it. And certainly the way that we deal with things now is is first of all, honesty, and straightforwardness. Knowing what other people have knowing what you can do, discussing anything major, whether it's change of job or change of aspect, or indeed big expenditure, discuss it and talk about it. And my view is that couples should always keep separate accounts. Now, okay, you have a joint account for the household expenditure. And you each put in either 5050. Or if one of you earns a great deal more than the other, maybe 7030 8020, something that feels fair to you. And again, it's about talking, do what feels fair. And then your money is what's left. And you can do what you like with it. And as long as you're fulfilling that obligation to pay your share of the living expenses. What you do with your own money is should be absolutely up to you. No one should comment on it by No. And I mean, the other partner should comment. Yeah. Unless, of course, you're doing something like, you know, spending it on I don't know, alcohol and damaging your health. I mean, that kind of gambling or, you know, gamble, gambling, particularly, you know, let's make it clear that if somebody in my sort of gambling, I would be talking about it a great deal.

Jason Butler 33:15
And that's a bad thing. Isn't that a values thing? Yeah.

Paul Lewis 33:18
As long as you're buying stuff for yourself, you know, you might have a great interest in I don't know it in, in trainers or something like that. People do all stamps, you know, it? Yeah, it Mike, in my case, I collect old books. And you should be absolutely free. It's your money free to spend it. I suppose. The other thing is that now I'm in the circumstances I'm in. I'm very fortunate to have enough money, you know, I'm not worrying at the end of every month where I'm going to spend on my spending has gone down because this house here is paid for. So that's the kind of thing one can hope for when you get to be my age. But it it certainly wasn't the case until I was, well, it wasn't the case. Till probably 10 years ago, actually, that I felt that I actually had enough money coming in to do what I wanted.

Jason Butler 34:07
And that's a very good point, knowing enough is really important because I I know what was enough when I was 48. And that doesn't mean I'm super wealthy. It just means that I work because I want to know because I have to because we're very low cost lifestyle. I don't care what anyone else has got. And once you know your values, you're absolutely right. What matters to you, in your circumstances. Here you are now because we're changing as people, aren't we Yes, that's very important point. I just wanted to touch on the issue about your children. They've all turned out to be quite you you said sensible with money or good with money. Do you do can you think back Did you was it just by example, or was it because you you've chatted freely about money, or what was it? Do you think what what were the takeaways from how your children turned out? Well, they're

Paul Lewis 34:47
just naturally, you know, well, sometimes in a completely I think this is nonsense, but sometimes I think maybe it's genetic or hereditary because Yes, I talked to them. I mean, particularly when they're at university, and obviously I would give them money towards their costs. And, you know, we talk about it, and they would, they were just sensible. And I just think they're, you know, they're intelligent, sensible people, and they handled it very well. And, you know, some of them are better off than others, but they're all perfectly fine. So they are all very good with money, whether they've got it or they don't have it, you know, they don't have it when they've

Jason Butler 35:32
read your books over the years and been an avid listeners of money box, obviously, on radio.

Paul Lewis 35:36
Yes. I mean, I, I have, I have written some books in the past, but they're all out of date now. Which did contain this kind of simple advice.

Jason Butler 35:44
Money. Magic is still a word, a book that if you can get a copy of a post money, magic is money magic, isn't it? That was a good book, I still got a copy somewhere. I mean, you know,

Paul Lewis 35:53
either money magic it beat the banks, pay less tax. None of them sell very well.

Jason Butler 35:59
The stuff in them, even if even if you, you know, you look back, we can always do better. But so. So that's interesting. So you don't think they read your books or listen to money box? But nevermind?

Paul Lewis 36:07
No, I think they probably did those things. I think they knew what I did. And yeah, I mean, I did. I did.

Jason Butler 36:15
wareness, then there was an awareness because

Paul Lewis 36:16
he wrote me absolutely, yes, there was, yes, there was what I could not possibly say I actually taught them about money. But as I said, earlier, children sort of imbibed this from their parents without either side being conscious of it sometimes. And I

Jason Butler 36:32
think that's very important. And there's just two things I want to comment on before you go. One was just if you are someone in a very precarious or difficult situation, your life financially, nobody's like you can't breathe, you can't think straight. I just want your top tips for those people to try and get to move forward. And secondly, what your view is about people who don't necessarily feel ultra wealthy, but probably have enough for their needs, and how they might be thinking about how much is enough to help the next generation? And when should that happen? You know, should you wait to die? Or should you perhaps be thinking about helping out now? And will it Will it hurt or hinder them? So just those two thoughts before? Okay,

Paul Lewis 37:06
all right, well,

I will I always say about debt, that, I mean, obviously, you should avoid it as much as you can. And if you have it, you should be very much on top of it. But if the first thing you think of when you wake up, is your debt, or if you the last thing you think of at night is your data, you don't sleep because of it, you are in serious debt, get help from one of the two free debt charities stepchange, or national debtline stepchange, or national deadline. And they will help you. However much your debt is don't be embarrassed, they seen it all before. 30 50,000 pounds on a credit card you can't pay off, they have seen it in fact, six figure sums that are coming to them I know in the last year or two. So always deal with it. Open the envelopes, don't leave them in a pile that frightens you in the corner, always look at the bills, look at what you owe. And if you can't organize yourself to sit down and work out what you might do get help from one of those two geotech jet charters or Citizens Advice, which also is very, very good at dealing with this when you can get an appointment with them. But debt never gets better. If you ignore it, it only gets worse. So however bad it is today, if you ignore it, it'll be worse tomorrow. I'm sorry to say that to people who are in that position. Now, of course, it's easy for me to say because I don't have debt. And my income is as I said earlier, adequate. But a lot of people are finding this for the first time with lockdown that with with being furlough losing their jobs, 120,000 people a month I think of being made redundant. These are huge shocks to the financial system. And of course, they're trying to claim Universal Credit and finding how difficult and how restrictive and how me minded some of the rules around that are. So it is very, very, very difficult. But I think, you know, you look at can you sell anything? Have you got a skill? Have you got a hobby that you can turn into something that does bring you in a bit of money? I mean, are there ways to increase your income? That because I said that was my solution to not having enough money to increase your income, as well as cut back on your expenditure and make sure you know, you're not paying too much when there's all those little tips that I know you've got in your material. And I've certainly talked a lot about, but don't ignore that if money frightens you, if you say if you're breathless about it, get help, because there is help out there. Absolutely. You're

Jason Butler 39:40
not on your own. That's right. Yeah,

Paul Lewis 39:41
no, absolutely. You absolutely aren't. Now, the second point you asked was passing money on to the next generation. You see part of me has this view that i think i think people perhaps particularly English people, and I mean English people as opposed to British or UK, people have This sense that when you've got a bit of money, you're sort of you're almost like the aristocracy, you know, you'll pass on a house, you'll pass on a bit of land, you'll pass on some money to the next generation. And of course, inherited wealth is the key to wealth. It absolutely is for for many, many people, but not from the sort of wealth that ordinary people can pass off. And my, my view about passing it on is, that's fine. If you die young, make sure you've got your will written, make sure you know who's going to get what, make sure they're going to get your pension fund, separate from your estate and make sure that your house is sensibly arranged either to you know, make sure your estate goes to your your spouse or civil partner, because then you don't pay no one pay inheritance tax, I should say only, what four out of 100 states pay inheritance tax, a lot of people are frightened of it. Don't be if your estate sets in half a million you've got a house, you will

Jason Butler 40:54
it's not your problem is it is your beneficiaries,

Paul Lewis 40:56
well, then it's not your problem. No, no, the people who come to me for talking about it are often the people who would inherit it. So part of me thinks that your job in life is to spend all the money you've accumulated. Because, you know, I think about my mother, who died Well, 10 years ago, and I was saying to you, don't worry, take out an equity release plan, borrow money against the house, have some money, because she didn't have a great deal of money to spend, you know, spend what you want spend what you need, we children, my brother, sister and I, we want you to have the money, you need to have a good life in retirement, we don't want you scrimping and saving. So part of me thinks that the most important thing is to make sure you have enough yourself, not just to get by but to do what you want to have a good time because most people have worked very hard in their working lives, and they need a good time in that last holiday, whether it's 1020 or 30 years, they have to spend the money, don't worry about it. Don't worry about inheritance, because almost no one will pay it. And if you have a valuable house, then you can borrow money against it and do the things you want. I mean, goodness knows it's not nowadays, so you can't travel around, take a cruise, it's very hard to save lots of money now. But you know, don't worry about passing it on to the next generation. Because the chances are, they're fine. They may not be and if they aren't, then again, sit down and work out what money they might need. And again, give it to them before you die, give it give them a deposit on a house. My goodness, I saw some figures for the first time deposits on houses, they are absolutely massive, they Big Five figure sums as a deposit to buy a house, it's absolutely extraordinary. That kind of money can only really come from parents, I think, generally or inheritance. So help them out when they're alive by them what they need. And the other thing I think is, if you've got more than one child, don't worry about him or her gave them 1000 pounds, you've got to give them give them the money they need when they need it. So they feel that you know that you can now buy them an old car, if they need a house. Now you help them with the money for that if they need a rent deposit, you help them when they need it. And I think that you don't have to feel obliged to treat everyone the same financially, except for all of them to know that if they really, really need something, you're there and you'll do what you can to help them absolutely. And then if you die and you've got money, and they inherit it, well, they'll probably be quite pleased. Not that you've died, but that they've got a bit of extra money, but don't make it the focus of your life or your finance. ever

Jason Butler 43:45
know all your relationship with your children or grandchildren. Yeah, I'll get it. Well, I said to my two daughters, so your

Paul Lewis 43:51
relationship with the children? No, that's absolutely

Jason Butler 43:53
yeah. As I said to my girls, charities will receive as much as you receive in my lifetime. And on my death. It's as simple as that. So that's my way of approaching it because society is just as important as the family. Yeah. And that's my view. Good. But Paul, I've taken too much of your time. Thank you ever so much for your thoughts on you still have money boxes on most Saturdays, isn't it?

Paul Lewis 44:12
It's Saturday, I'm on almost all of them. It's every Saturday, midday on BBC Radio four, and the cracking show on Saturday. And you can hear it online. If you just if you just Google BBC money box, you will find the link to BBC sounds and you can hear it. And it's normally a bit longer because the

Jason Butler 44:30
podcast version. Yeah.

Paul Lewis 44:31
Your podcast version is what you hear if you don't hear it live on Saturday. So please listen, and you know, we cover some interesting stuff. Yeah. And this isn't this isn't me. This is a great team of people. I have to say that they are brilliant people who do.

Jason Butler 44:44
Yeah, no, it is a brilliant show. I listened to every Saturday afternoon on the podcast version when as soon as it's downloaded by listen to it. It's a brilliant show. Paul, please, please keep on doing what you do. Appreciate your time today, pearls of wisdom there which you know, a lifetime of both personal experience and their profession. involvement in this has taught you, thank you for your time. Really appreciate your efforts. Thank you.

Paul Lewis 45:05
It's my pleasure. Thank you very much for inviting me. And I hope I hope it's helpful to some people.

Jason Butler 45:15
What a nice guy. Isn't it refreshing to hear that even an expert like Paul Lewis had to use a bank overdraft in the early years of his career and bring up his family. And I love Paul's insight on moving to self employment. And seeing that was actually less risky than working for poorly funded charities. And he also liked the idea that his income wasn't kept. So interesting one if you're thinking about changing your situation, from employed to self employed, and I also particularly liked his views on inheritance tax and leaving money to your relatives, his viewers, enjoy your hard earned money while you can in later life. And don't worry about inheritance tax, because you probably won't pay it anyway. But he did say that if you're going to give money to relatives, do say while you're alive and can see the impact it has, and that makes a lot of sense. Great guy really, really like talking to him. Well, that's another episode in the can. Thanks for joining me, please do leave a rating and a testimonial on your podcast platform as that really helps the show. See you next week. Thanks for listening to real money stories with me Jason Butler. If you like what you hear, please do tell your friends. And more importantly, please rate us on your preferred podcast app, because it really does help us get the message out there. So until next time, good luck with your money journey. Real Money stories is sponsored by Vanguard bringing value to 30 million investors worldwide. Visit Vanguard investor.co.uk. For more details. The value of investments can go down as well as up and you may get back less than you invested

Transcribed by https://otter.ai