It’s the end of an era for Barefoot
It’s been an emotional week.
On Thursday afternoon I opened up news.com.au and saw my noggin smiling back at me.
The headline read:
“‘Disappointing’: ING scraps wildly popular Savings Maximiser high interest savings account.”
Brutal.
You’d think they would have picked up the phone and called me.
I mean, they have my number.
Not. Even. A. Text.
Not that I’m bitter. After all, this relationship was one-sided from the very start. I never received so much as a sausage roll from ING for the millions of customers I sent their way.
Truth is, I wrote The Barefoot Investor imagining I was sitting at the pub with my best mate, telling him exactly how Liz and I managed our money.
The backbone of the plan was the buckets. They put an end to dumping everything in the one account and doing the shuffle. We set up the Savings Maximiser accounts. Nicknamed them. Made the automatic transfers. Even sharpied “SPLURGE” on the second card.
Fun fact: The Barefoot Investor was published almost 10 years ago, and it’s still in the top ten non fiction best sellers. The success of the book meant most banks ripped off the ‘buckets’ idea (just as I ripped it off from my grandmother and her envelope system).
Today there’s UBank, Macquarie, AMP, Up. (The big banks are pretty crap; their profits still come from billions of dollars sitting in zero-interest bank accounts.) You can use your mortgage offset. Heck, one bloke in Coober Pedy told me he stuffs his money into rusty buckets (not advised).
The brand of bucket doesn’t matter, so long as you’re getting a decent return on your savings (in an account covered by the government’s bank deposit scheme). The buckets are a financial filing system, not a way to get rich. In other words, I wouldn’t bother changing your set-up for an extra half a percent. Your time and energy are better spent making more money.
So what should you do now that ING is consciously uncoupling from us?
If you’re an existing ING customer you don’t have to do anything. The changes from 1 December only apply to new savers. You can keep your Maximiser and keep earning the rate, as long as you still hit their (annoying, self-serving) conditions.
If you’re setting up your buckets today, you have so many more options. They’re all going to honeymoon you, and then start layering the conditions for the bonus rate. That’s life. Just understand that banking is a lot like dating in your 40s. It’s treacherous. Every new bank will have some baggage, they all have a hidden agenda, and they’ll dump you at a moment’s notice.
Tread Your Own Path!
Your Questions & Answers
You’re Out of Touch, Barefoot
Mum Told Me to Read Your Book
You’re Out of Touch, Barefoot
Scott,
Is it a possibility you’re a smidge out of touch with reality? Reading your columns week in, week out, I noticed your last one started with a story about you being in Laos at a cockfighting ring. Your tour guide told you a story, which you retold to relate to those over the age of 45 for a column – tick, you’ve done your job. How did that little section provide any useful information about avoiding scams, identifying scams, what to do in a scam, what not to do in a scam, how to recover after a scam? Here’s a tip: write stories that are more relatable to the everyday person – more advice, tips, links, resources, anything that makes you look better than an average storyteller.
Katie
Katie,
My editor begged me not to respond to your letter.
He thought it was rude and that it added nothing for the reader.
I disagreed.
There’s no shortage of people who’ll give you advice on what you should do.
The trick is deciding who to listen to.
If I took your advice, I’d sound like every other writer on the internet, scraping the same stuff off ChatGPT. “Here are three hacks to beat the scammers!”
Katie, I’d rather stick my toes in a blender.
I’ve been writing this column for 23 years. I’m also a financial counsellor, and I sit down, face to face, with people who’ve lost their life savings. Here’s what I’ve learnt: more facts and more links don’t always change what people do. A true story, from someone they trust, sometimes does. And if it happens in a shady cockfighting den in Laos, so much the better.
Mum Told Me to Read Your Book
Scott,
I’m 19, and my older brother and I have inherited a house after our mum passed away this year. She was a fan of yours and made us promise to read The Barefoot Investor before she passed. My brother is set on selling the house, which has almost doubled in value since Mum bought it, and investing in stocks. I’m unsure whether to do the same, or buy my brother out, keep the house and rent it out.
I like the idea of having a physical asset rather than having all of the money in stocks. And if I ever need a house after I come back from my travels in a few years, it would be there. The only problem is that I would have to borrow a large amount from the bank to buy my brother out and cover the rest of the loan, which would be difficult since I only work part time. I’m still young and not sure I want to take on such a large debt. What would you think is a smart decision?
Belinda
Hi Belinda
I’m so sorry you lost your mum.
I totally get why you want to keep her house. It’s something you can touch. You can live in it, or rent it out. And I’m sure your mum would want you to have a safe, secure roof over your head.
You will. It just doesn’t need to be her house.
Right now you don’t have the income to buy your brother out or take on a big loan, even if you turned it into an investment property.
So I agree with your brother: sell the place and park your share in a couple of diversified low-cost index funds for the next decade.
You’re 19. You’ve got at least 10 years to have a proper adventure: travel, study, work out what you actually want to do. All the while that money will be growing quietly in the background.
When you’re 29 and more settled, you’ll have enough for a solid deposit on your own home. All thanks to your wonderful mum.
Oh, and please go to the library and borrow my book. Or check the next toilet you go to (there’s generally a half-read copy in most bathrooms).
You’re going to make your mum proud.
Thanks for reading,
Scott