Q&A

State Professional Help is back with Season 2, Episode 1. They will be introducing a new feature, answering specific questions from listeners. One listener asked about choosing a benchmark for their portfolio, and Scott advises selecting a benchmark that aligns with their investment goals. He suggests using tools like Trustnet or Morningstar to analyze portfolio breakdowns and choose a suitable benchmark. Another listener asked about high saving rates offered by Revolut, and Scott warns that the rates are for a money market fund, which is an investment and carries more risk than a traditional savings account. He advises reading the fine print and ensuring that savings are backed by the FSCS. Lastly, a listener asked why they see initial gains in weightlifting but eventually reach a plateau. The answer is that initially, gains are due to neural adaptation, becoming more efficient at lifting. Later, small improvements feel like a plateau because they are a smaller percentage increase in Dave? We're back. We are back after a bit of a hiatus. I'm calling this season 2 of State Professional Help. Episode 1. Episode 1. How was India? It was the main reason we've had quite a big break. Yeah, I found myself, which is good. I like that hair again. Hair's gone still and I really like it now, you know. I think I'm more edgy. I'm now thinking about getting a tattoo. It's just, I don't know where this can go. I'm excited. Hairless Scott. We want to bring in a new feature. Something that a few people have asked us is about, just rather than huge topics and people have responded really well to having guests on, which we're going to keep doing, but just in the meantime, the two of us going into more specific short questions that people have about other episodes that we've done, questions that have come up on Spotify. Yeah, we've racked up a few questions from all our lovely listeners, so we're going to try and answer them as best we can really and hope it provides some kind of value. We're going to do a little interim Q&A episode. They'll be titled differently on Spotify. They'll be shorter. Don't know how regular. Don't know anything about them yet. Let's see what happens. Okay, so we had one from Jess quite a while ago now. In fact, I didn't really know there was a Q&A feature on Spotify until recently, so apologies that some of these are going to be delayed. But it's in regards to your podcast about portfolios, Scott, and the whole rating system. Do you remember the old Nando sauce? Yeah, it feels like a while ago now. Yeah, and the question generally says, I'm a level three investor, but I've realised I don't have a benchmark. What do you recommend? Yeah, that's a very good question. It's very specific to the person. The way I would approach that would be your benchmark should be a good representation of what you're trying to achieve. So if, for example, and obviously I don't know what this person is invested in, but let's just say that she's 100% in equity and it's all in the UK, then your benchmark is going to be like a FTSE 100, because that's a good representation of the UK market. Whereas if her portfolio is more balanced and she's got some bonds in there, some equity, some other stuff, then you'd want to try and create a more composite benchmark. You can add a couple of different indices together. So a bond benchmark plus an equity benchmark, or there are some purpose built composites on there that you can just kind of type into Google. But it's a hard one to answer without actually knowing what she's invested in, because it has to be a fair comparable, basically. There's no point me saying, choose the FTSE 100 as your benchmark if you've got a global portfolio, because a global portfolio historically has outperformed the UK market. So it's not a fair benchmark to use. So you need to, yeah, it's very specific on you. And so how would you go, as a fair answer, how would you go about identifying which ones are specific to you? So you just have to do a bit of a breakdown of your portfolio, really. So there's lots of good tools out there that you can use. So a good website I recommend would be Trustnet, if you've got lots of investing lots of funds, or Morningstar as well, both free websites, you can kind of just plug in, plug into them what your portfolio currently is. And then it will give you a breakdown of what your geographic splits are, what your sector splits are. And then from that knowledge, you can kind of choose a good benchmark for you. Great, thank you. Okay, Scott, so another finance-based question for you. So this one has come in from Josh. Names might be real, might not, who knows. Josh says, Revolut are offering very high saving rates. Should I put my money here? Thanks, Dave. That's an interesting question from Josh, actually. And he did actually send some supplementary material with it just to show us what he was looking at. And on the face of it, it looks like a pretty good interest rate. Obviously, interest rates, the base rate is quite high at the moment. So there's going to be a lot of good savings accounts out there. So you can actually, you know, shop around and find some attractive deals. But when I looked a bit deeper into this particular one, it was actually quite interesting. So what the one, the one that they were specifically offering was actually a money market fund. So basically not a profit interest rate from a bank. The major difference between money market fund and your kind of bank interest rate that they would offer you in your savings rate or your cash ISA is that it's actually an investment. So it was managed by this particular one, an investment firm called Fidelity. They're a very large US based and UK firm. They're global actually. I don't know why I said that. But they, yeah, it's a fund that would be investing in super short term liquid assets. So like government bonds, things like that. But basically, the moral of the story is that it's not super, super safe, like your cash savings bank deposit they would offer you. So you've got to be a bit careful with these things. Not to say that Revolut don't offer a standard savings account that is backed by the financial service compensation scheme. So anything that you put into that is backed by the government up to 85 grand. But for money market fund, which is very similar to what that would be, is not backed. So if it does default for whatever reason, you would potentially lose your money. And it's again, a slight difference between that and what the bank would offer you is that you're not guaranteed to be making money. So because it is an investment, it could actually go down, even though it's a super, super safe one. And the odds of that happening are quite low. It's still an investment. I always kind of think with these things, if you're just looking for a place to park some cash, and it is your super safe stuff, you don't want to take any risk at all. Even if this money market fund is giving you an extra like 20 basis points, which is, you know, might be attractive on the face of it, it's not worth taking that extra risk, just because you can. So my advice here is just always look into the details and read that small print, because even though it's super boring, read the small print and make sure it is always backed by the FSCS. Make sure you're covered, because yeah, it's not going to be fun if it does default for whatever reason. So essentially, this is a higher risk, but the reward of the risk is kind of pointless. In a sense, yeah, I would say that it depends. It depends if you're comfortable taking that extra risk, because you could get more out of it. However, if it's the difference between earning an extra 100 quid a year, because it's not the return difference on this, when I compared it to other things in the market, it was just, it's not enough. And this is what you would call your risk return payoff. So your return needs to be warranted or big enough for you to take that extra risk. And for this one, it's just not. I wouldn't bother. If you're going to be taking risk, take it in your equity portion of your portfolio, not with your cash. So what I ended up doing, I shopped around a little bit. I found some better deals out there. And just a caveat, Rovalute do have some bank products that are covered. So it was just this particular one that he was looking at had a higher interest rate and didn't. But yeah, just shop around. You'll find something that's very similar in the kind of four and a half to 5% range. Right, Dave, first health question of this podcast, and it's from Anonymous. Okay, whoever you are, you saucy minx. When I get back into the gym after a break, I see huge increases in the weight I can lift, but eventually reach a plateau and get demotivated. Why does this happen? Okay, Anonymous, because you call them a saucy minx. Good question. And I get that one quite frequently, actually. There are kind of two things to bear in mind here. First thing is when somebody begins lifting, the majority of their initial gains are to do with neural adaptation. So just reduce the complexity of that for a second. Essentially, you become more efficient at lifting. So the right muscles are turned on, switched on to complete the movement. Let's say I am bending my elbow, which is a bicep dominant movement. So the biceps are recruited to bend and flex your elbow. You want all of, you want as much of the bicep to be stimulated to produce that movement. And you want as little as of the muscles that do the opposite movement, which in this case would be the triceps to be activated. So you send an electrical impulse from the brain to say I want to bend my elbow. And initially, that message is a little bit nonspecific and it kind of turns on all the muscle tissue, mostly the biceps. But as you get more efficient, you get better at recruiting just the bicep muscle to flex the elbow. And in those first studies, basically show those first 10 weeks, there's not really any change to the muscle tissue itself. But people become stronger because they become more efficient at doing that movement. Make sense? And I'd say the second point on this is just remembering that small improvements in strength feel like a big deal initially. So if my maximum, well for you Scott, your maximum bicep curl being a five kilograms, a five kilogram increase would take you to 10 kilograms, which is still not a huge load to be lifting. But you've wow, okay, that's 100% increase. Whereas later down the line, you feel like you've plateaued because if you're lifting a lot more weight, so you're squatting 120 kilos, and you make a five kilogram increase to 125, it's not actually as a percentage that big an increase. But as an absolute increase of weight, it's still quite a good number so that it feels like you're plateauing later. So yeah, essentially, they're my main two things. You become more effective at lifting and therefore get strong quickly in those early days. And then the incremental increases feel like smaller wins later down the line. And just on the motivation part of that question, do you have any tips for people to almost gamify it maybe, I don't know, to continue that motivation when you do start to plateau? Yeah, so another good question there, I think you want to remember the things I've just told you and be a little bit less harsh on yourself so you don't lose motivation. A, I think B, really zoning in on those small wins of like, okay, I am just looking for a two kilogram increase, but that is still a really good improvement as long as numbers are going up. And I think finally, look for other parameters that you might be able to make improvements. So it might not be that you're lifting more, but you're lifting the same weight with a much smaller exertion. That was eight out of 10 difficulty now actually is a five out of 10 difficulty or I'm able to get a few more reps or sets in. So yeah, just looking and searching for other ways of winning other than just absolute number of plates on the bar. No, that was a really good answer, Dave. Very interesting, especially on the efficiency part. I hadn't actually thought of that before. So yeah, good one. And continuing on the theme of lifting, we've got a question from Steve. Hello, Steve. He says, I often see influencers talking about strength, but also about increasing muscle size. Is there a difference? Let me know, Dave. Yeah, so there is actually a difference. So strength is obviously the amount of load that you can shift. So what is your ability to lift X amount in a squat movement, but that doesn't necessarily always correlate to general muscle size. So the word for muscle size is hypertrophy. Again, probably needlessly scientific, but if you ever see hypertrophy written down, that's essentially what it means. And muscle size and hypertrophy isn't necessarily the same thing as strength. And you will actually often see people who don't look particularly strong, inverted commas, because they're not huge bodybuilders or fitness models, but they can shift a shed load of weight. And I guess that all comes down to the way they train and what their goals are. But know that strength and muscle size are not the same thing. Interesting. I always thought it was hypertrophy. Okay, you've become fixated on pronunciation. Hypertrophy, hypertrophy, potato, potato, move on. Yeah, sorry. Getting back to the question. Hypertrophy, hypertrophy. So if I wanted a train for hypertrophy or strength, what would you recommend? So yeah, to grossly simplify it, strength training is really boring, to be honest. It's low repetitions, very high loads. You're kind of doing your one, three, five rep maxes. So it's nothing over five repetitions, really. Obviously, lifting at a higher repetition range is also going to get you stronger. But not as effectively. If strength training is your goal, you need to be working in those lower rep ranges with lots of load, long rest periods. If your goal is, I guess, aesthetics more, where lifting weight will still get you stronger, but you also want that slightly increased muscle look, then you want to be working at a slightly higher rep range. That's probably more your six to eight to twelve repetitions. And again, there is crossover. So lifting low repetitions with a lot of weight is obviously going to increase the size of the muscle as well, and vice versa. You know, lifting higher repetitions, eight to twelve, with good amounts of load will make you stronger in that movement. But I think you have to balance your training around which of these things is my priority. Follow-up question to that. If I trained between six and seven reps, would that be a perfect balance of strength and muscle mass, or would it just be inefficient? No, I think it would be veering towards hypertrophy and less towards your strength gain. But yeah, it would be, again, I'd say on a scale, really, that if you wanted perfect strength training, you'd go one or two repetitions and go as high load, one rep max. But it would be very tedious, and I guess that is often what powerlifters do, spend loads of time in the gym for one or two sets of exercises, and really low reps, but they can be in there for 90 minutes and it looks really dull. So it's about finding that balance. Yeah, if you're like, I want to get big, but my main focus is towards strength, I'd go, yeah, five, six, seven. If it was more the opposite, and I don't really care about what numbers I'm shifting, I just want to look good, you're more towards the 10, 12 side of that scale. Does that make sense? Yeah, nice. Thanks, Dave. Thanks, Dave. And that was the end of this podcast and all the questions that we've had today. So thank you very much for sending them in. Please continue to do so. If you've got any, you know, interests, queries, or just general thoughts, send them in. We'll try and answer them, providing they're half related. But yeah, this is a new format. We're trying it out. We're just going to see how it goes. But yeah, thank you. And remember, everything that you've heard on today's podcast is our opinions only. And if you do have any serious questions, always seek professional help.