Winning the Money Game

Dear Scott,

I've been a Barefoot investor since my husband and I read your book 12 years ago. I'm grateful we followed your steps to get where we are now. We have $39K left on our $1.2m house and will pay it off within 12 months, at ages 43 and 44.

Here's my problem: My father was a gambler and not responsible with money. I still have baggage when it comes to taking risks to grow wealth.

I have $330K in super, as does my husband, but I'm scared to switch to high growth. It makes sense - I want to grow our wealth - yet I'm not brave enough to make even that small decision.

We donate regularly and plan to leave a legacy (Step 9) but I'm not sure how. I also want to set up investment bonds for my two children and maybe buy an investment property. But I'm reluctant to commit to any of it.

How do I let go of the hesitant voice in my head? I've created my own financial literacy, but I'm paralysed by my father's baggage. What's your advice for someone who has "planted" but is struggling to "grow" and "harvest"?

Linda

Hi Linda,

Sometimes we learn from our parents about what NOT to do with money. Your father's gambling drove you to focus on safety and security – which is why my book resonated. We're the same: safety first.

Here's what you need to hear: you've won the money game.

You're 43, about to own a $1.2m house outright, with $660K in combined super. Your kids are growing up with parents who don't fight about money, who can take a day off for school sports. That's your legacy right now. That's Step 9.

And here's the difference between your father's gambling and switching your super to High Growth: Your father bet on unpredictable outcomes he couldn't control. High growth super delivers 20+ years of compound interest by making you a part-owner in the world's most successful businesses. You're not punting it on the pokies. There's no shady hot tips. Linda, it's the exact opposite of what your dad did.

I plugged your numbers into Moneysmart's calculator: moving from Balanced to High Growth could boost your super by $200,000 each (which I think is actually quite conservative but, hey, it's the Government's calculator).

If I were in your shoes I'd max out your super contributions (best tax deduction going), keep a solid Mojo account, and, if you want to invest for the kids, set up a family trust and buy low-cost index funds each month.

Yet here's what matters more: In twenty years, you'll look back at this moment … and give anything to be back here. Don't spend these years paralysed with fear. Go travelling. Take time off. You've earned it. Now's the time for your victory lap, while your kids still want to take it with you.

Scott