Five minutes a week that makes you smarter and calmer about your own money — plus a look at what I’m actually doing with mine…
Good afternoon,
I keep hearing the same thing from people: "I've got money sitting in the bank doing nothing, and I don't know where to start."
If that's you, you're in the right place — and in very good company. There are millions of you. This week the government handed all of you a soft deadline, so let's start there.
THIS WEEK IN 30 SECONDS
Inflation fell to 2.6% — and an August rate cut just got more likely — great!
Your Cash ISA allowance is being cut by £8,000 — and that’s good news.
This week’s myth: you need a small fortune to start investing. You just need £25.
THIS WEEK IN MONEY
Your Cash ISA allowance is being cut by £8,000 — good.
From April 2027, under-65s can put £12,000 a year into a Cash ISA, down from £20,000. The rest of your £20,000 allowance has to go into a Stocks & Shares ISA instead. Over-65s are untouched.
Here's my take. A Cash ISA is a fine home for money you'll need in the next year or so. But for money you won't touch for a few years, it's where wealth goes to stand still — earning a few percent while shares do the real work. The Chancellor is cutting the allowance to push people out of cash and into investing. I rarely side with a Chancellor. This time, I definitely do.
Inflation fell to 2.6% — and the Bank has room to cut
Prices rose 2.6% in the year to June, down from 2.8% in May. That's the lowest reading since March 2025. Cheaper fuel did most of the work — diesel fell about 10p a litre over the month — and food inflation cooled to 1.7%.
What it means for you: the Bank of England has held rates at 3.75%, and a softer figure gives it more room to cut in August. Rate cuts hit savers first. If your money is in a decent account, enjoy it while it lasts. If your mortgage is up for renewal, cheaper deals may be on the way.
WHAT I’M DOING
My portfolio's on the site, updated this morning — every holding and how it's doing: See my actual portfolios here.
Nothing major to report this week. Good to see PayPal starting to move at last, but in my view it’s still got a long way to go so no changes here. Elsewhere in the portfolio, no significant changes other than trimming my Generac position to fund some withdrawals. The thesis still stands — it remains in the portfolio.
The specific picks — which ETFs, which stocks, what I paid, and why — are for paid subscribers only. Free readers get my thinking. Paid members get my actual holdings.
ONE THING WORTH UNDERSTANDING
Both are ISAs — a wrapper that keeps the taxman off your money. You don’t pay any tax on your profits, or your withdThe difference is what's inside.
A Cash ISA is a savings account: safe, earns interest, £1,000 never drops below £1,000, but doesn’t get much above it either. A Stocks & Shares ISA holds investments — usually a fund owning hundreds of companies at once. It rises and falls, sometimes sharply, but over ten or twenty years a broad fund has historically averaged around 10% a year.
Cash is for safety. Shares are for growth. The trouble starts when people try to use a Cash ISA to grow their wealth. Only shares can do this, not savings.
MONEY MYTH OF THE WEEK
”"You need to be rich to start investing"
This one keeps people frozen for years — they think they need a lump sum before they can begin. You don't. Most platforms let you start a Stocks & Shares ISA with £25 a month. Anybody can do that, yet very few do
What builds wealth isn't the size of your first payment; it's how long the money's invested. Starting small at 40 beats starting big at 55.
JARGON, DECODED
Index fund — a fund that buys a whole market in one go instead of trying to pick winners. An S&P 500 index fund owns a slice of America's 500 biggest companies. You're not betting on one horse; you're buying the whole race. Cheap, boring, and it quietly beats most professional stock-pickers over time.
WORTH YOUR TIME
The million-dollar bet that proves the whole point. In 2007 Warren Buffett bet a million dollars that a plain S&P 500 index fund would beat a basket of hand-picked hedge funds over ten years. The index fund gained 125.8%; the expensive funds averaged about 36%. He won so easily the other side conceded early. Read the story here.
The Psychology of Money, Morgan Housel — Timeless lessons on wealth, greed, and happiness. The best money book of the last decade, and not a spreadsheet in sight. It's about behaviour — why sensible people do stupid things with money, and how not to be one of them. Get it on Amazon here.
BEFORE YOU GO
If you have any questions, dop me a line — just reply to this email. I’m always delighted to hear from readers, and I read every email.
If this was useful, forward it to one person with money sitting in the bank who doesn't know where to start…
See you next week.
Tim
P.S. One month's inflation figure is noise. Ten years of it is what quietly decides whether your savings kept up or lost money.
I am not a financial adviser. Nothing here is personal financial advice. Please do your own research before making any investment decisions.