There's a fake Barefoot Investor. And he's everywhere.

My kid's teacher pulled me up at school drop-off this week.

"What's he done now?" I asked, bracing myself.

Turns out I was the one in trouble.

"I saw you on the internet advising people to sell everything because of the budget," she said.

I'm not even on social media. But there are hundreds of AI-generated posts claiming I am, complete with photos of me looking like a washed-up Blue Heelers extra who never made it out of the pilot episode.

Honest, Miss!

Then again, AI isn't designed to tell you the truth … its sole aim is to keep you coming back.

I know a couple who use ChatGPT as their relationship counsellor. After every fight, they each go to their own bot. And every single time, they're told they're completely right and their partner is the problem.

Separately, they're thriving. Together, they're cooked!

And we haven't just invited AI into the bedroom, it's now in our bank accounts. Today ChatGPT is the largest provider of financial advice in the world. More than 200 million people a month ask it for money advice, and last week OpenAI went further: US users can now hand it the keys to their actual accounts and get tailored financial advice. Australia won't be far behind.

My worry is that ChatGPT is like having your bestie do the job:  it’ll tell you what you want to hear.

Ask it to validate the hot stock tip your brother-in-law gave you. It'll find reasons it could work. Ask it to explain why you deserve a boat. It'll build you a spreadsheet. Ask it whether you really need to pay off your mortgage or whether you could just invest the difference in crypto. It will construct a beautifully logical argument for whichever answer you were hoping for.

It's a yes-man with a PhD.

Then again, let's look at the alternative: seeing a real financial adviser will cost you five grand, minimum.

And a lot of people walk out with a template of common sense, and a portfolio so complicated they have no hope of understanding it. Which is exactly the point. Complexity is their job security. That 1% annual fee quietly bleeds you of tens of thousands of dollars a year and almost guarantees you'll underperform a simple index fund.

So you're stuck. A bot that flatters you, or an industry that confuses you on purpose.

Well, here's the third option.

After two decades of writing this column, I can tell you the one thing that separates people who build real wealth from everyone else: they made decisions that felt bad in the short term. They knuckled down and saved up for a deposit when the market was flying. They kept their boring low-cost super when crypto was mooning. They said no when every algorithm and influencer said yes.

Build your career. Boost your super. Pay off your home.

And you don’t need an AI to tell you that.

Tread Your Own Path!

---

Your Questions & Answers

• I will never, EVER read you again

• I’m addicted to spending money

• Vale Neale Daniher

---

I will never, EVER read you again

Scott,

I have loyally read your column every week for 20 years. First the sudoku, then straight to you. I've clipped your articles and sent them to my kids and grandkids. Never again.

You are a socialist. A cheerleader for a lying, thieving government elected on a false premise. This budget is drowning in waste, CGT grabs, attacks on negative gearing, small business owners crushed under red tape while politicians throw other people's money around like confetti.

I'm 74. I've seen first-hand what profligate politicians do to an economy. You have no idea what these policies will do to this country, or your own children's future. You’ve lost me, Scott, and judging by the comments under your article, a hell of a lot of your once loyal readers. 

Mick

Hey Mick,

Calm your bloody farm!

You've been with me 20 years and you're calling me a socialist?

If you've read me that long, you know I'm an equal opportunity offender. I've never spruiked a political party in my life, and I'm not about to start now.

Here is the guts of what I actually said about the Budget:

Negative gearing, the introduction of the 50% discount on Capital Gains Tax, and falling interest rates combined to price a generation out of the property market. We need to level the playing field.

The government now wants to tax investment profits the same as workers' wages.

And the reaction has bordered on hysteria.

Yet as I showed last week in my column, the changes aren’t actually that radical, and in terms of the new proposal of indexing  Capital Gains Tax to inflation, it may work out better for investors than the current 50% discount.

Again, I’ve never voted for the Labor Party in my life. I am not in their pocket. It’s just the facts.

Another fact is that these changes (especially the crackdown on distributing income via trusts), is going to mean I pay more tax going forward.

Yet I still think it's the right call.

Still, we agree on more than you think, Mick: we both want less waste. Lower taxes. Fewer bureaucrats spending other people's money like confetti.

The question is which party gets us there?

Well, that's between you and the ballot box.

Keep enjoying the sudoku Mick. Unlike me it'll never turn commie on you.

---

I’m addicted to spending money

Scott,

I'm addicted to spending money. Each week I read your replies to people who are married to someone who is reckless with money and you give them advice on how to protect themselves. But it's me, I'm the problem, and my husband has gone to the effort of hiding money from me so I don't spend it (thankfully, or we'd be broke). Is there an "AA" for reckless people like me who want to stop but can't seem to do it? I’m 37, with a good job (earning $140k). However, like any good addict I have all the best intentions (I've read your book countless times) and think "just this last purchase" and then it all slides. I want to stop but I can't.

Ellen

Hi Ellen,

We're all addicted to something.

Online shopping, porn, booze, social media, gambling, political outrage. Or in Mick's case, sudoku.

Yours is spending, and you've admitted it out loud without dressing it up. That's the hardest part.

Here's why willpower won't fix this: you're not weak, you're chasing a feeling. The hit, the relief, the "just this once" that quietly overrides everything you really want to do. Trying harder doesn't rewire that. A good psychologist does. Ask your GP for a referral, someone who works with compulsive or addictive behaviour. CBT is a good starting point.

There's a lot of shame in this kind of cycle. Most people carry it alone. It sounds like your husband is a good man. Let him walk with you.

---

Vale Neale Daniher

There's been a lot written about Neale this week. As there should be.

In a world of mock outrage and fake influencers, Daniher was the real deal. He was the closest thing this country had to a modern-day stoic — a man who stared down motor neurone disease for more than a decade and chose, every day, to keep fighting.

Here’s something you may not know. He spent his final year not only showing us what true courage looks like, but teaching us: he wrote his last book when his arms, legs and voice had all gone, using eye-gaze technology.

This week I've been reading it to my sons.

Everyone talks about resilience these days, but Neale actually lived it. And in his final book, he shows you how you can do the same. 

Buy a copy of The Power of Choice.

Share it with someone you love.

Thanks for reading!

Scott.

You’ll hate this

After reading this column, my editor, Wally, said:

“I’m confident this piece will generate the greatest amount of hate mail you’ve ever received.”

Let’s see if he’s right …

Do you know what the easiest thing I could have done this week was?

Exactly what every other financial commentator has done:

Lean into the outrage about the budget.

Instead, I’m going the other way. And I’m probably going to piss a lot of you off. Starting with Brian, who wrote to me after what I can only imagine was a solid session on the La-Z-Boy with a few reds:

Scott,

I am just so sick of these incompetent bastards. This budget is just another giant Labor tax grab. People in the top 10% of income earners pay more than half the taxes. Half! Now Albo wants to be a 47% silent partner in every small business in the country. Why would anyone bother? Young people saving for a deposit in index funds? Taxed. Family trusts helping kids through university? Taxed. Small business owners who’ve spent decades building something? Taxed at rates that would make your eyes water.

New Zealand has no capital gains tax. Dubai has no capital gains tax. And our smartest young people are figuring that out real fast. You’ve got the platform, Scott. Let your followers know what’s really going on.

Brian

Bingo-bango, Brian!

You’ve sure got a lot of very big feelings.

Thankfully, I’m a father of four. I deal with big feelings before breakfast.

Let’s get into it.

Brian and I have a lot in common. I’m a high income earner and I pay a lot of tax. I come from a family of small business owners and I run one myself. And I bristle when I see politicians crowing about their economic credentials. The fact is, this is the highest-taxing Australian government since World War Two, and that spending is putting pressure on interest rates that every mortgage holder feels.

Yet what really worries me isn’t the tax take. It’s that our outrage meter seems to be stuck at eleven.

It feels like we’re drifting towards America, where everything is viewed through a political lens and everyone is absolutely furious all the time.

And if we get angry enough we might just end up with Pauline as our PM, and the greatest economic insight she’s ever had was asking “Why can’t we just print more money?”

(Seriously, look it up.)

Anyway, let’s deal with Brian’s three beefs.

Think of the poor kids!

Plenty of young people have written to me in a panic about the changes to capital gains tax. Many were planning to use their share portfolio as a house deposit.

My view?

The CGT change is not their biggest problem.

Let's say a young investor puts $50k into an Aussie index fund. Based on historical returns, it grows to around $72k over five years. Under the new CGT rules, they'd pay roughly $900 more tax when they sell. And depending on future returns and inflation, they might actually come out ahead.

The real problem is the share market dropping 40% and their $72,000 deposit becoming $43,000. Then it takes a decade to recover, while rents keep rising and they’re still at their parents’ place eating their Cheerios. That’s why my rule has never changed: do not save for a house deposit in the share market.

Introducing my new business partner!

Brian’s “47% silent partner” line was funny on social media the first 700 times. Now it’s just annoying. And it’s wrong. The small business CGT concession regime allows the vast majority of small business owners to halve or completely eliminate the capital gains tax they pay when they sell. It’s been there for years (though the thresholds need to be increased).

The real risk is using the tax rate as a reason not to back yourself. Building something from nothing, employing people, serving your community. It’s a hard life. It’s also one of the most rewarding things a person can do. Don’t let a meme talk you out of it.

The family trust

Okay, so this one stings. You see, my kids have been nothing but a spectacular financial loss since the day they arrived. I was counting down the days until they turned eighteen, when I could finally start distributing trust income to them and claw something back. And then the bloody government snapped that door shut just as my eldest was getting close to useful.

Yet it actually makes sense. The system lets wealthy families with good accountants pay less tax than nurses and tradies. That doesn’t pass the pub test.

Finally, if you spend enough time on social media (or listen to Brian) you may start to think that Australia is the highest-taxed nation on earth. Actually, we’re in the middle of the pack, but with a standard of living in the top handful of countries on the planet. The cops don’t shake us down (mostly). Our kids go to decent public schools (mostly). And if one of them gets sick, you don’t need a GoFundMe page.

And what about the top 10% of taxpayers that Brian is so upset for?

We’ll be fine.

After all, we’re the wealthiest people in the country.

Living in one of the wealthiest countries in the world.

At the richest time in human history.

Life is good, Brian, especially when you log off.

Tread Your Own Path!

---

Your Questions & Answers

• Am I Financially Abusing My Brother?

• No Show Albo

---

Am I Financially Abusing My Brother?

Hi Scott,

My brother just divorced his nasty wife. She had access to all his accounts, blew through a $180,000 inheritance, ran up $25,000 on his credit card, and towards the end wouldn’t even let him touch his own debit card. He’s now living with me. He’s on a disability pension and can’t work. I manage his accounts, have set up his savings, and have tried to teach him the basics. He says it’s too hard. My sister accuses me of making it worse. Am I doing more harm than good?

Caring Sister

---

Hello Caring Sister,

Your brother is lucky to have you.

Your sister doesn’t sound nice, but she does have a point.

(How’s that for having it both ways?)

Now, before you throw me across the room, I know your intentions are completely different from his nasty ex-wife’s. You love your brother. She didn’t. But, from where he’s standing, someone else is still controlling his money, his savings, and his decisions.

Now your bro doesn’t need to become the next Warren Buffett. He just needs to learn to stand on his own two feet again, but that won’t happen while you’re transferring his surplus savings for him.

Think about how this plays out long term. Your brother grows increasingly dependent on you. You grow increasingly resentful … and neither of you need that. 

My advice?

Keep helping him with the basics. Set him up with one simple account, show him how to use his card, and then step back. Let him make small mistakes with small money. That’s how people learn. And then, when the settlement comes, he’ll be ready to move out and start his new life. That’s good for him, and great for you.

---

No Show Albo

Scott,

As a man who lost the family home because of my gambling addiction (a shame I live with every day), and as a father whose teenage son ‘plays’ fantasy football and gets emails and ads from sports gambling companies, I was bitterly disappointed that the government tried to bury their inaction on gambling ads. Did you get a reply from the Prime Minister?

Daniel

---

Hi Daniel

I wasn’t expecting a reply, and old Albo didn’t disappoint!

He’s the most powerful man in Australian politics. He had the backing from both sides of politics, and the people – nearly three-quarters of parents (myself included) reported being bothered by their kids being exposed to gambling ads.

He had the ability to stand up and say:

“We’ve got a huge gambling problem on our hands, and the beginning of that problem is that sport is a gateway to gambling: today for three in four kids it’s a normal part of sport. That’s crap. I’m the Prime Minister of this country and I’ve had enough. No more bloody ads.”

But he didn’t.

The lobbyists won, the kids lost.

The odds never change.

Thanks for reading.

Scott.

Barefoot’s Take on the Budget

A spinner from the Housing Minister’s office called me a couple of weeks ago:

“The Minister would like to invite you to Canberra to attend the Budget. There are a few changes we’re going to announce that, let’s just say … we think you’ll be very interested in”, he purred.

“Yeah, yeah. You blokes always say that. What’s the date again?” I asked, turning off my tractor.

“It’s the 12th of May”, he confirmed.

I pulled up my calendar.

On the 12th of May I had one all-day event scheduled:

“Colonoscopy.”

Yes, I’d booked an anal probe, completely forgetting my other Canberra clean-out with Dr Jim Chalmers.

Seriously, this column writes itself. (It would be funny if I wasn't completely TERRIFIED.)

It gets better though. As I lay on the cold operating table on Tuesday, my backside blowing in the breeze, the anaesthetist appeared hovering over my head:

“I just want to say I’m a huge Barefooter. Your book changed my life. You took some time off the column, but I’m glad you’re back. Now go to sleep … deep sleep …”

Meanwhile in Canberra, as a nation we collectively clutched our coits as Dr Jim pulled on his rubber gloves.

The changes to negative gearing and capital gains will make property investing less attractive. I’m happy to cop that if it takes a bit of heat out of house prices. My kids need somewhere to live one day. So do yours.

He also tightened the squirrel grip on trusts and capital gains tax. But you’ve already read a thousand boring headlines about all this since Tuesday so I won’t go on. 

Yet here’s what I actually think mattered:

The Government did not touch the two tax-free foundations of the Barefoot Steps: your family home and your super. In other words, even though some rules changed on Tuesday, the Barefoot plan did not.

Finally, I know this is a lot. But if you’ve been sitting on the fence about calling your doctor and getting a full ‘Barnaby Joyce’, just make the call. Book it in. It’s the same rule as investing: the best time to pull the trigger is when you’re terrified.

Tread Your Own Path!

---

Your Questions & Answers

• Albo Buried This on Budget Day – Let’s Dig It Up

• We Are Going Under … 

• Against All Odds

---

Albo Buried This on Budget Day – Let’s Dig It Up

So I didn't make it to Canberra this week. Yet it turns out that Albo and I had something in common this week: we were both busy burying things somewhere the sun don’t shine. So, for the first time ever, I'm flipping the script — I’m not answering the first question, I'm asking it!

---

Dear Anthony,

All the headlines this week are asking whether you lied about negative gearing. I don’t care. You saw an opportunity and you took it. Good on you.

Here’s my question: why couldn’t you be bold when it came to our kids?

Australians are the world’s biggest gambling losers – forty percent worse than the country that comes second. That doesn’t happen by accident. It requires fresh-faced kids. And over a third of 12- to 17-year-olds are already gambling. Gamblers Anonymous is now seeing teenagers at its meetings.

The late Labor MP Peta Murphy handed you 31 recommendations, and her dying wish was urgent reform. You had bipartisan support. You sat on it for 1,050 days. Then, while every journalist in the country was buried in the budget lockup and I had a camera up my clacker, you quietly slipped it out.

Now, you could have gone on The Today Show and said:

“These companies have hijacked our sport and they’re targeting our kids. I’m banning the ads.”

(And I think every parent in the country would have fist-pumped their Weet-Bix off the table, even the ones who love a punt.)

But you didn’t.

Is it any wonder voters are done with the party machine? You’re the most powerful man in the country, Anthony. You just proved you can be bold when you want to be.

So why not for the kids?

Scott

We Are Going Under … 

Dear Scott,

My husband and I are both 53, earning $120,000 each. Our 18-year-old is at uni and still lives with us. We have two younger boys (16 and 14) with ADHD, both on medication, both seeing specialists, and studying with tutors because they have difficulties at school. The medical bills are brutal.

We owe $35,500 in unpaid school fees and carry a $1.25 million mortgage. Fifty percent of our income goes to the mortgage alone. Some months we spend more than we earn. On top of that, both my husband and I have some pretty serious medical issues – and yet we’ve been skipping seeing specialists for fear of even higher bills. My husband took a new job to earn more money, but he’s not sure it will last. The tension at home is constant. We yell at each other about cheese.

We’ve seen a financial counsellor, who told us nothing new. We have tried the Barefoot buckets but there is not 10% left to put in any bucket. We don’t know whether to sell the house, rent it out, hold on, or let go. Scott, we are drowning. Please guide us.

Maria

---

Hi Maria,

I want to share something with you.

Many years ago, at a deserted beach, I got caught in a rip.

It happened so gradually I didn’t notice at first. I thought I was in control. Then I realised I was moving steadily out to sea.

At first, I panicked. I screamed and waved at the lone surfer on the shore. I stripped off my clothes, thinking it would help me stay afloat. It did. But only for a minute.

Then I got so tired I remember thinking I couldn’t go on. That I’d just let the waves take me.

That’s where you are right now, Maria. There are no boats coming. No one else can make this call. But if you're asking me what I'd do in your situation, here's the lifejacket:

Sell the house. Rent. Demolish the debt. Regroup.

You couldn’t afford it even if every one of you was in perfect health. But you’re not. Every person under your roof needs medical treatment, counselling, or extra tuition. These are needs, not wants.

And the private school? You’re paying overdue fees and private tutors. If they can’t get your kids across the line without backup, what are you actually paying for?

One rate rise, one car noise, one bad day at the new job, and you get sucked under and don’t come back up. You’re skipping seeing specialists for fear of bills. That terrifies me more than the mortgage.

Right now you have choices. That won’t always be true.

Reach out and grab the lifejacket, Maria.

Before the rip takes you.

Against All Odds

Hi Scott,

I’m a 25-year-old woman looking for help with my super. I was kicked out of home when I was 16, and due to this I have no parental figures to ask for guidance. After all that trauma, I’ve finally got to a place where I’m financially stable (mainly thanks to your book, The Barefoot Investor, which has been a godsend). I’m now looking to set myself up for retirement. I’m wanting to know what’s the limit to insurance on my super fund. How much in weekly fees for insurance is too much? I’ve got just under $30,000 in my super fund. I work a blue-collar job (parts and accessory fitter). I’m unsure what cover I need and what fees I should settle for. Please help, and thank you.

Sarah

Hey Sarah,

It sounds like the trauma you faced as a kid has defined you, in a good way. You want security, and from the questions you’re asking I have absolutely no doubt you’ll never be financially vulnerable again.

You are a winner.

Now, to your question:

Blowing out 25 candles kickstarts your super fund charging you for default insurance cover.

Is it worth it?

Bloody oath. Default insurance super starts off pretty cheap, around $300 a year for a combined policy that covers you for dying, being left totally disabled, or losing your income if you need extended time off work.

Of course, without kids or dependants you don’t have to worry too much about dying … it’s the cover for being ‘nearly dead’ (disability, loss of income) that’s important for you.

You got this.

Thanks for reading.

Scott.

Cup of Coffee Tax Cut?

Hi Scott,

I’m a mum of two toddlers and watched the Budget hoping for something meaningful. The tax cuts are fine, but $5 a week won’t stretch far with the way groceries and rent are going. The Treasurer says we’ve turned a corner economically – is that really the case, or just pre-election spin? I’m trying to make good decisions for our family, but it’s hard to know what to believe. Would love your take.

Narelle

Hi Narelle,

There was nothing meaningful in the Budget.

The main takeaway?

Don’t look to the government for help – they’ve got enough problems of their own.

Yet, as you’re a mum of two toddlers, let’s talk about your occupational drug of choice:

Coffee.

I’m writing this in a café, newspapers spread out, reading headlines like:

“Labor’s ‘top-up’ tax cut is enough for a coffee – and a brazen pitch for votes.”

Bulldust!

I just paid $6 for a macchiato.

(Yes, my coffee order sounds very … Melbourne. But my doctor says I need to ease off the cappuccinos – something about my belly turning into a buddha.)

Six bucks for a watery espresso with a tablespoon of froth!

So, no, the tax cut’s not even covering your caffeine. And I doubt voters will give a frappuccino about it either – especially with the average price of a coffee tipped to hit $7 within six months.

Why?

Three reasons:

Wholesale bean prices have doubled in the past year.

Café rents and power bills are skyrocketing.

And high staff costs. Sunday rates mean your man-bun barista is on $39/hour (and even then the poor bloke still can’t afford his rent!).

And that’s why it’s been a brutal year for your local café, Narelle.

Higher prices mean more people will bring it from home, grab a servo brew … or skip it altogether.

And that is why nearly one in 11 hospitality businesses have shut shop in the last 12 months.

So, Narelle, has the economy turned the corner?

Not if the price of coffee is anything to go by. It’s a frothy little sign that things are still running hot!

Scott.

The one thing I won’t tell my son

My 11-year-old son was in his jim jams reading Harry Potter.

“Get out of bed – I want you to watch the Budget with me”, I urged.

“What’s the Budget?” he said with a yawn.

“Hurry up, it’s starting now on Channel 2.”

“What’s Channel 2?” he asked innocently.

Kids these days.

Now, even though he’s still in primary school, I figured he’d be a good proxy for what the average Aussie thinks. (Then again, this week his school had ‘Maths Day’ and to celebrate he took it upon himself to cut his chicken sanga in the shape of pi, so maybe not.) 
 
Anyway, with a few clicks he managed to find ABC streaming.

“Parliament House is like Hogwarts … just without the magic”, I joked.

To his credit he dutifully watched the young wizard (Jim Chalmers) try and cast his spell over voters. When it was finally over and all the politicians were celebrating and slapping each other on the back, I switched off the TV and asked him what he thought.

“Well, he didn’t talk much about climate change and sustainability. And there also wasn’t much about artificial intelligence or robotics. I mean, clearly that’s the future”, he said.

Yes it is.

AI and humanoid robots are going to reshape the world more than the iPhone did. Climate change is going to punch a hole through the economy and the planet. And my son is going to live through the upheaval. This will be his reality.

Yet you wouldn’t know it listening to Jim on Tuesday night.

He did the same old Ctrl-C, Ctrl-V trick that every Treasurer has been doing for decades:

Tax more.

Spend even more.

Cross your fingers and hope China keeps buying rocks.

Jim told us he’s thinking about the future – but what he really means is the next four weeks (leading to the election), not the next forty years.

Still, I was curious to find out if my little maths man had picked up on the numbers that Jimbo spat out.

“Did you catch how much the government debt is, mate?” 

“Was it a billion?” he guessed.

“Ah, no. It’s set to hit $1 trillion dollars next year”, I said.

Silence.

“How many zeros are there in a trillion Dad?”

I actually wasn’t sure, so I got out my iPhone and asked ChatGPT.

“There are 12. Another way of thinking about it is that it’s one million million dollars”, I said.

“And do they have a plan on how they’re going to pay that money back?” he asked.

“Actually, no. In fact, they’re planning on adding to the debt over the next 10 years”, I said.

“Wow”, he said, in a way only an 11-year-old could. 

And with that my little Harry Potter went off to bed. 

Now it was a school night and I didn’t want to give him nightmares, so I avoided telling him the truth:

It’s highly likely he’ll spend the rest of his life paying off this debt.

Tread Your Own Path!

The anti-budget

Today, for the first time in over 20 years … I’m breaking with tradition.
 
I’ve decided I’m not going to next Tuesday’s Budget lockup in Canberra.
 
(My editor is not amused.)
 
Tuesday is Daddy-day with my three-year-old, and we have a very busy day planned on the tractor, digging random holes around the farm that I will invariably forget about and end up driving my ute into.
 
Besides, the Budget has always been poor man’s prime-time political theatre.
 
The Government’s spin doctors spend months in focus groups conjuring up a catchy name for their signature splurge – which they hope will get them re-elected.
 
(This year it’s ‘Made in Australia’, apparently.)
 
Then they get turfed out, and the next mob dismantles it.
 
 Plus, all the rosy economic forecasts they make in the Budget can’t hide the fact that many people feel like they’re living in a recession right now.
 
Bottom line?
 
Don’t look to Canberra for help – they’ve got enough problems of their own.
 
Instead, focus on what you can directly control, and I guarantee you’ll move mountains. That’s why this year I want to start a brand new Budget tradition. On Tuesday night I want you to dust off an old copy of my book and have a Barefoot Budget Date Night.
 
Yes, I know it’s probably been a while since you’ve looked at Betty the sheepdog and me, but there’s a special type of compound interest that comes from getting together to plot, plan and dream … as a team (and if you’re single, bring along a friend).
 
Specifically, on Tuesday night I want you to write down which Barefoot Step you’re currently on, and then pick just one thing you can do in 30 minutes or less that will help you move to the next step.
 
It could be sacking your scheissenhausen super fund, dominoing your debts, getting a cheaper deal on your insurance (they can do better, trust me) or, most importantly, rebalancing your bucket percentages after all the rate rises and rental increases.
 
Best of all, you can do it with a nice bottle of wine or a fancy meal (or both), with no Elbow or Mr Potato Head in sight. Now I haven’t passed this by a focus group, but I’m calling it … the Barefoot anti-Budget.
 
Tread Your Own Path!
 
P.S. Send a Barefoot Budget Date Night selfie to scott@barefootinvestor.com!

Jim Chalmers goes Barefoot for a day

Today I’m doing something that I’ve never done before in nearly 20 years of writing this column …
 
I’m letting someone else answer my readers’ questions:
 
And that someone else is Treasurer Jim Chalmers.
 
I caught up with the Treasurer this week ahead of his Grand Final (the federal budget) and added an even harder task to his plate: the job of being Barefoot for a week.
 
To ease him into the job, here’s the advice I gave him.
 
First, don’t be boring.
 
Second, really, please don’t be boring.
 
Finally, don’t give us the party line. Instead, give us the ‘Jim at a party, three bourbons down, telling it straight’.
 
Over to you, Jimbo.

Your Questions & Answers

• First Homebuyer Hell

• From a Sleep-deprived Mother of Two   

• The Pineapple Project
  

First Homebuyer Hell

Hi Barefoot (Jim)
 
My husband and I are in our late 20s and have been desperately saving for a first home. I’m a nurse and he’s a teacher, and we earn just under $160,000 a year combined. We’ve tried so hard to save up a 20% deposit but with house prices, and rents, going up so fast it feels impossible. We want to have kids soon and be close to our family (who all live in Sydney), but I can’t see that we’re ever going to make it. The system is just broken beyond repair. How can we plan our lives when we don’t even have the stability of the roof over our heads?
 
Bec and Steve
 
The Treasurer responds:
 
Thanks for the work you do teaching and nursing.  I get it – when you’re under the pump it’s hard to save for a house.  We’ve got two ways to help – one that’s up and running and one that’s on the way, but both of them are about helping you buy a house without needing the full 20 per cent.  
 
One’s called the First Home Guarantee (up and running) which can help you buy a home with as little as a five per cent deposit; the other’s called the Help to Buy scheme (coming). In the rental market there are tax breaks coming this Budget to encourage people to build more rental properties as well.  Big challenge, not uncommon, doing what we can.
 
 
From a Sleep-deprived Mother of Two   
 
Hi Scott (Jim),
 
I'm a single mum with two kids (and two cats and a dog), and I’m really struggling. My landlord just let me know he’ll be increasing the rent by $150 a week, due to the “changes in the housing market”. How will I survive? I’ve just moved into a permanent job, but my increase from four to five days means I will lose my Family Tax Benefit. I’ll probably also have to pay more after-school-care fees because I’ll soon be earning $100,000 a year. But it’s just ME on my single income paying for everything. What should I do?
 
Emma
 
The Treasurer responds:
 
Thanks for this and congrats on the new job. $150 a week is ridiculous. It’s worth talking to your local tenants union to find out what your options are. The options will differ depending on what state you’re in but could include reporting excessive increases to a relevant state body. Apart from that, we recognise rent’s a big part of the pressure people are feeling right now.  We are trying to get the parliament to agree to building more properties, we’ve got some tax breaks coming so that investors build more as well, and besides that we are making your after school care cheaper from 1 July, by increasing the subsidy – hope that helps you make ends meet.
 

The Pineapple Project
 
G’day Jim,

I thought I’d add in a question of my own …
 
If the RBA gets its way, in the next few years there will be plenty of businesses that go bust, and lots of people who will lose their jobs. That is, after all, how to slow the economy.
 
Now here’s the jam, Jim: there is really only one place that Aussies who get the wrong end of the economic pineapple can turn to for free, unbiased, confidential financial help: a community-based financial counsellor.
 
There are 750 financial counsellors across Australia. Yet they are already overrun. People are being turned away. However, if your government put up the dough to double the number of financial counsellors, it would mean an additional 50,000 families would get the help they need to get back on their feet this year. Will you commit to that funding?
 
Scott Pape
 
The Treasurer responds:
 
There’s no doubt financial counsellors do a fantastic job. They help people who are in real financial strife to make the case to get a debt waived or get a better rate and that makes a massive difference in people’s lives. As a Government, we recognised how critical these services are, particularly during natural disasters and we’ve delivered extra funding over the last year to employ more financial counsellors in flood-impacted communities. We’ve also been working with industry on a way to make funding of these services sustainable over time which is something that my colleague Amanda Rishworth has been leading.

The Wrap-up
 
It’s a bit of a cliche to say “thanks for taking time out of your busy week” … but the dude’s got his first federal budget to deliver next week! So, Jim, thank you for taking the time to answer people’s questions.

However, I don’t agree with encouraging people to put down a 5% deposit (I’ll have more to say on that next week). And as far as your answer to my question … that was one hell of a word salad, mate. Should I just take that as a ‘no’?
 
Good luck with the budget and, as my old man says, “Just look after the battlers, son”.

Thanks for reading.

Scott

Budget Warning

Hi Scott,

I’ve just watched the Budget, and I reckon people need to be warned about these 5% deposit government schemes. I am old enough to remember the 1960s and early 70s when I was working in conveyancing. The state government had ‘vendor’s contract’ setps where people purchased homes under a contract of sale, with the title not transferred into their names until it was paid off. These were an absolute disaster as most people could never have paid off the contract, with interest rates too high and repayments too low. Many of them had to walk away as they owed more than the original purchase price of the property. Beware of governments bearing gifts!

Nancy

Hi Nancy,

You’re right, it’s potentially a taxpayer-funded trap for 50,000 families.

Let me explain:

In the Budget, the Government increased the Home Guarantee Scheme to 50,000 places.

The scheme allows first home buyers on low incomes to buy a home with just a 5% deposit. And for single parents it’s even less … all they need to scrounge up is a piddly 2% deposit.

Yet hang on a minute … isn’t this entire Budget about the rising cost of living?

So why is the Government encouraging low-income earners to load up on debt at a time when interest rates are rising?

Answer: for the very same reason that Labor has made this dud policy part of its election pitch:

They want your vote.

Strike me handsome! Giving people extra money to buy a home just filters through the market and makes all houses more expensive. When interest rates rise and house prices fall, many of these people will be underwater. And it’s you and me – taxpayers – who’ll be on the hook for the losses.

Luckily, I don’t need your vote, so I’ll tell it to you straight: avoid this scheme.

Scott.

Barefoot Budget Will Send Us Broke?

Hi Scott,

I was reading about this week’s budget and there was an article saying that you thought the Treasurer was going to send us all broke. I assume it was referring to all the spending and government debt, but thought I’d go straight to the horse’s mouth and check.

Jim

Hey Jim,

Yes, it was clickbait.

While much of the budget commentary was the predictable ‘yay for a tax cut!’, yet my thinking is that if you’re struggling right now (as many are), then you should squirrel away the (on average) $40/week saving and use it to pay down debt or build up your Mojo, rather than spend it. 

Some headline writers suggested that meant I was sticking it to the government. Not true. All I was saying is that if you follow my lead, and follow a plan that has a bedrock of savings, rather than spending, over the long-term you’ll build up both your resilience, and your financial confidence.

That’s good for you, and good for the economy.