Investment Clinic: the high earner taking stock tips from ChatGPT
Mar 4, 2025
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In this engaging discussion, financial experts Adam Walkom, co-founder of Permanent Wealth Partners, and Nimesh Shah, CEO of Blick Rothenberg, share their insights with high-earning Faye. They delve into tax-efficient investment options like venture capital trusts and highlight the common pitfalls of hitting the six-figure salary tax trap. The conversation also touches on balancing serious investment strategies with fun, such as unique ventures like personalized number plates, all while emphasizing the importance of structured portfolio management.
Faye's diverse investment strategies, including playful ventures like cryptocurrency and novelty license plates, reflect her risk-taking attitude toward finance.
Experts emphasize the importance of tax-efficient investing and a structured approach to balancing high-risk assets with traditional investment vehicles for long-term security.
Deep dives
Faye's Investment Journey
Faye, a 29-year-old actuary, has actively engaged in a range of investment strategies, some of which seem unconventional but reflect her risk-taking attitude. She has experimented with stocks, cryptocurrencies, and even purchased car license plates, indicating a playful approach to her financial decisions. Faye recently used an AI tool to suggest stocks, leading to a successful investment in Palantir, which has doubled in value. Despite her enjoyment of riskier investments, she primarily allocates her funds into more traditional vehicles, such as a Vanguard index fund, to ensure long-term security and diversification.
Exploring Tax-Efficient Investment Options
In discussions around her portfolio, the experts pointed out the importance of tax-efficient investing, especially as she maximizes contributions in her workplace pension and other ISAs. With her earnings, Faye is considering expanding her knowledge of alternative investment options, such as the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT), which provide tax reliefs for investing in smaller, unlisted companies. The experts suggest that an intentional investment strategy is critical, particularly in navigating the balance between high-risk and safer assets, especially as markets fluctuate. Faye's interest in these tax-efficient strategies reflects her desire to optimize her investments while still embracing her adventurous spirit.
The Importance of Strategic Planning
The conversation highlighted the necessity for Faye to take a more structured approach to her investments, separating her fun investments from those intended for wealth generation. Experts emphasized that maintaining a diversified portfolio with indexes and safe funds is vital, particularly in anticipation of market downturns. As a high earner, Faye faces unique tax considerations that require a thoughtful organization of her financial priorities to maximize returns and minimize tax implications. By setting clear goals and regularly reviewing her investments, Faye can create a more sustainable financial future while allowing room for her more playful investment tendencies.
Twenty-nine-year-old Faye has made some sensible investing decisions and … some more outlandish ones. Should this high-earning City worker, who’s dabbled in everything from cryptocurrency to novelty number plates, get a little bit more serious about how she invests? Presenter Claer Barrett, the FT’s consumer editor, is joined by Adam Walkom, co-founder of financial planning firm Permanent Wealth Partners, and Nimesh Shah, CEO of accountancy firm Blick Rothenberg. They speak to Faye about tax-efficient vehicles (such as like venture capital trusts), the six-figure salary tax trap, and why there’s nothing wrong with having a bit of fun investing.
Disclaimer: the Money Clinic podcast is intended as a general discussion about investing, and is not intended as financial advice or any kind of investment recommendation. Everybody's financial situation is different. You should always do your own research before you make any investment decisions.
If you would like to be a guest on a future episode of Money Clinic, email us at money@ft.com or send Claer a DM on social media — she’s @ClaerB on Twitter, Instagram and TikTok.
Read Claer's tips about other ways to avoid the 60% trap apart from paying more into your pension: https://on.ft.com/41glLjC
For a primer in how VCTs work - and the pros and cons for investors - see this FT article: https://on.ft.com/41lhpYB
Presented by Claer Barrett, produced by Mischa Frankl-Duval, with mix and sound design from Breen Turner and Joe Salcedo. The executive producer is Manuela Saragosa. Cheryl Brumley is the FT’s head of audio.