The beast is coming for me

For the past couple of years I've been quietly checking in on a single mum I'll call Fiona.

In 2024 she wrote to me with a confession: she had bought an apartment using the Government's low income single parent deposit scheme, and she was now in deep trouble.

I wasn't surprised.

For years I'd been warning that the government's low deposit schemes were the political equivalent of a crap in a paper bag.

You know what really stinks?

They knew it was a bad idea. Behind closed doors these politicians wouldn't let their kids sign up to these schemes, but they were happy to let other people's kids do it if it meant a few more years being chauffeured around in cars with the little flags on the bonnet.

I fought with both the Coalition (who dreamt it up) and Labor (who gleefully expanded it). Yet instead of telling the truth, they pointed to Treasury modelling that somehow, miraculously, said exactly what they wanted it to say.

Anyway, Fiona knew nothing of this.

All she saw was the government spruiking a scheme to help battlers get a foot in the door. She took the bait, plunked down a 2.5% deposit, and borrowed 97.5%.

During the election the Prime Minister was on the Today show talking about growing up in a housing commission flat and how he's helping people just like her.

It didn't take long for her doorbell to ring.

Sitting on her doorstep was a present from Canberra. The paper bag was on fire.

At the time she wrote to me:

"With the rise in interest rates and cost of living I can no longer sustain my mortgage. The strata and council rates have also since increased substantially, and my daughter and I can no longer afford to live there. We are trying to rent it out but it's been vacant for eight weeks."

Now I get why she did it.

She'd been on her own since she was 18. She became a single mum. She dealt with scumbags who treated her badly. She wanted a better life for her daughter.

And every signal in the country, right from the very top, was pointing her in the same direction:

This is how you get security.

The trouble was, what she bought wasn't security. It was debt.

And debt and security are not the same thing. Not even close. Debt means you have to keep working no matter what. Security is when you don't have to.

Debt keeps you on the treadmill puffing and panting, and interest rates and the cost of living keep bumping the speed up.

I checked in with Fiona this week.

She's working three jobs. Her daughter is picking up retail shifts after school. The unit is rented, but between repayments, rates and strata there's not much left. They're in a share house now. The adult version of musical chairs, except the music never quite stops and someone always forgets to flush.

Fiona didn't have dreams of becoming rich. She just wanted to be safe and secure, and give her daughter a different life than she had. That's all.

As we finished the call she said to me:

"Prices always go up, so I'll be okay when I retire, right?"

I paused for a moment.

"I honestly don't know."

That's what our political leaders should have said a long time ago.

And here's what nobody in Canberra wants to say out loud right now:

The only way to make housing affordable for people who don't own a home, is to make it a worse investment for people who do.

There is no version where both things happen at once.

Yet they won’t say that.

Instead they point us to the latest Treasury modelling that is confidently forecasting that the Budget will only lower property prices by 2% and raise rents by approximately $2 a week.

Pass me the paper bag.

Tread Your Own Path!

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Your Questions & Answers

• The Beast Took My Mum. Now It’s Coming For Me

• Say No to Starbucks

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The Beast Took My Mum. Now It’s Coming For Me

Barefoot,

My mum passed away from MND. I’m only 30 and have a 50/50 chance of inheriting it, and I'm getting a genetic test done to find out. If I have the gene, there's a 100% chance I'll develop it. Before I get the results though, I'm wondering if I could take out a large life insurance policy as a hedge. If I have the gene I keep the policy and it pays out when I die. If I don't, I cancel and I'm only out a few hundred bucks. Is it that simple? Could this finally be a way to get one up on the companies who prey on the vulnerable?

Lenny

Lenny

I'm so sorry about your mum.

Watching her get taken by the Beast would have been heartbreaking.

Facing the possibility that you may have the gene would be absolutely terrifying.

Now, let's talk about your hedge.

Life insurance companies cannot use genetic testing results to deny your coverage, however they can  ask about known family history of genetic conditions. MND in a parent is almost certainly a disclosable event. If you don't disclose it and you later claim, they're going to knock you back.

That said, most super funds offer a default level of life insurance cover that doesn't require medical underwriting or disclosure. It's not massive, but it's something. Check your existing super fund now and see what they pay out. Don’t say anything else.

Here's what I think you already know:

There's no financial hedge for MND. None. You can plan, you can structure, you can get your affairs in order. And you should. But there's no product that makes this okay.

Honestly?

I have no idea what you are confronting. None.

Yet there’s one guy who does: Neale Daniher.

He was a modern day stoic, and lived the motto Memento Mori, which means “remember you must die”.

And he not only lived with it every day. He embraced it. And in the process became a hero to the rest of us, who waste our lives like we’re sitting in an airport departure lounge eating salty snacks and doom-scrolling, waiting for a delayed flight that never seems to take off.

You've been handed something nobody asks for: clarity.

What you do with it is the only question that matters, mate.

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Say No to Starbucks

Hi Scott,

I've read your Barefoot Investor books — both the adult and kids versions — and I'm following the Barefoot Kids steps. But I get stumped at the business bit. Since I'm only 13, I need to borrow some of my mum's money to get started. The only problem is she earns a low income, and because my parents want me and my siblings to have a good education, they put us through private school, which chews up most of the money. I really care about having a secure financial future. If I didn't, I wouldn't be emailing you! Should I start a small job at Starbucks to pay for the business? Or should I keep saving up myself? I need advice!

Sincerely, Hannah

Hi Hannah,

I help adults with their money.

Yet you’ve shown more get up and go than most people who walk through my door.

You’ve read (both!) my books. You’re applying the steps. You understand your parents are making sacrifices for you, and you don’t want to be a burden.

Even better, you’re coming to me with your own ideas, like working at Starbucks.

(Don’t work at Starbucks.)

For one, you’re too young right now.

For two, I think you’ll learn a lot more — and earn a lot more — starting your own business.

You’d be an excellent babysitter, or a great dog walker. Or both.

You don’t need money to start. You just need to show people what you’ve shown me in this letter.

I’d employ you in a heartbeat.

Thanks for reading.

Scott.