Scott’s Hot Date

Dear Scott,

At 17 I am currently completing my VCE studies, but will soon have to make my own way in the world. I have $7,000 in savings and was hoping you would be able to help me find the right way to invest it so I do not just burn through it right after graduation. I am constantly anxious I will not have enough money to do all that I want, namely paying for living expenses, travel and study.

Holly

Hi Holly

Where were girls like you when I was seventeen? I would have dated you in a heartbeat!

Keep at least $5,000 in an online saver account (which Barefooters call Mojo). The return you’ll get on your Mojo is peace of mind. When you graduate, look at getting a full-time job over the summer -- preferably one that you can continue when you go to university.

If you’re living at home, you should be able to save up a few thousand dollars for your upfront expenses next year. Depending on your parents’ income, there’s also a chance you could get Youth Allowance.

My final tip is a strange one. In fact, you’re probably going to think I’m completely bonkers, but think about doing it anyway: go to kiva.org/team/thebarefootinvestor and lend some money (as little as $25) to a struggling businesswoman in the third world.

There is no need for you to be constantly anxious. You’re not only well ahead of most girls your age, you’re also one of the wealthiest women on the planet. You’ve got this.

Scott

Death, Taxes … and HECS

Hey Scott,

In your book you mentioned that HECS debt dies with you. My wife passed away in 2011 -- and the $15,000 she owed rocked up bang on settlement of her estate. So I paid it, on advice from my lawyer. Is there any way to get this back if I paid it unnecessarily?

Harry

Hi Harry,

The executor of your wife’s estate was legally required to lodge a tax return up to the date of her death, which would have included the compulsory HECS-HELP debt repayments up to that date. The balance of her HECS-HELP debt would then have officially been written off by a (weeping) ScoMo.

So if your lawyer instructed you to pay off the entire debt, you got the wrong advice. I’d be calling the lawyer up and explaining the situation, and asking them to lodge an objection with the Tax Office so you can have the funds returned. And I’d expect the lawyer to do it gratis.

Scott

We’re in a Pickle

Hi Scott,

My boyfriend bought a one-bedroom apartment in Brisbane’s inner city three years ago for $404,000. We are in desperate need of more space and would like to sell, but a recent valuation has put it at $320,000. With $350,000 still owing on the mortgage and only $20,000 in savings, this puts us in a pickle. Renting the place out will not cover the mortgage, and by the look of Brisbane’s property market the value may continue to decrease. What is the best way to deal with this situation?

Anita

Hi Anita,

The way you’ve written your question tells me you want to sell: you’re ‘desperate’ for more space, renting the place isn’t an option, and you’re worried the apartment will drop further in price. All of these things may well be true, and if they are, you should save up the shortfall and sell. However, it was only three years ago that your boyfriend bought this joint. So before you crystalise the significant loss, I’d want to understand why he bought it in the first place. What was his plan at the time?

Scott

The Secret Credit Card

Dear Scott,

I am at my wits’ end. My husband is a spender who leaves me to pay all the bills, including a car loans of $17,000, a mortgage of $239,000, and an ever-spiralling credit card debt -- currently $38,000. Actually that’s not quite right. I have just discovered he has another credit card on which he owes $20,000! Of course I asked him how we can possibly pay this back, but I still have not heard an answer.

Nikki

Hi Nikki,

He’s cheating on you.

Financially, he’s cheating on you.

You haven’t given me enough information on your financial situation, but experience tells me he’s addicted to something -- most likely gambling.

So, I want you to do three things:

First, go to the bank, and put a stop on all the credit cards (ask him if there are any others), and request detailed account statements.

Second, sit down with your husband. Don’t bother asking him how he’s going to pay the money back -- he has no freaking idea -- if he did, he wouldn’t have racked up a $58,000 debt in the first place. Instead, just go through the statements, and work out where he’s spending the money, and why.

Finally, and based on how the chat goes, you should book in to see either a gambling counsellor (1800 858 858) or a financial counsellor (1800 007 007), and definitely a relationship counsellor (1300 364 277).

Scott

Parents, You’re Doing it Wrong

When I was fifteen I would sit in English class and read the Financial Review.(This, of course, made me wildly popular with the ladies.)

Looking back on it I was always going to become the Barefoot Investor: I started working when I was in primary school (for coins!), and had built a prized share portfolio by high school.

Most teenagers don’t give a snapchat about managing their money.

That was confirmed this week by the results of an international financial literacy survey of nearly 15,000 students which found that, on average, 15-year-old Aussie kids struggle to understand financial basics.

“Australian students performed significantly lower in financial literacy than [international] students with similar performance in mathematical and reading literacy”, said the report.

And parents, you know what that means, don’t you?

It means that there’s a real possibility that your grunting, moody, Xboxing teenager could still be fronting up for Coco Pops when they’re in their dirty thirties …  possibly accompanied by their fiscally challenged boyfriend.

That’s actually not too far of a stretch: nearly 25 per cent of people aged 20 to 34 continue to live with their parentals, according to the latest HILDA study. And here’s the kicker: research by AMP found that a kidult (aged between 18 and 24) costs a middle-income family $678 a week, or $35,256 a year.

Froot Loops!

Well, allow me to lay out a Barefoot Bootcamp for your teenagers. Do these three things, and you’ll be able to lovingly boot your kids out when they can grow a beard (or date a man with a beard):

#1 Open Up Your Wallet

I’ve always said that the best way to raise financially fit kids is to be financially strong yourself.

Whether you like it or not, they’re modelling your behaviours: do you fight about money? Do you turn off lights when they’re not needed? Do you gamble?

When your kid turns 18, you don’t throw them the keys to the Jag for the first time, do you?

Of course you don’t.

You spend many (frustrating, potentially lethal) hours sitting beside them with the ‘L’ plates up. Their first experience driving comes with you clinging to the seat beside them.

It should be exactly the same with money.

Look, your kids are being actively targeted by the predators of the banking industry (especially if you signed them up for one of those cute little Commbank Dollarmites accounts). You need to make sure they’ve got their money miles up while they still live with you.

The best way to teach your kids about the reality of money is to give them responsibility.

Challenge them to find a lower-cost energy provider — and make a game out of it. If they can get your household bills down by $500 a year, split the difference.

Show them your bank statements, and again challenge them to find a better home loan rate, or (gulp) calculate the amount of interest you’re being whacked on your credit card.

Actually read your super statement, and have your kids calculate the amount of fees you’re paying, and see if they can find a cheaper alternative via superratings.com.au. Then head over to moneysmart.gov.au and check out their managed fund fees calculator to visualise the amount of money you could save by switching.

These are the real-life lessons that will stick with your kids.

#2 Flip it Good!

These days kids get participation trophies. Everyone’s a winner!

Uh-huh.

Kids need to understand that the world isn’t there to serve them — it’s the other way around.

Thankfully there’s an easy fix to this counter-culture: make them get a part-time job.

Every teenager should have a part-time job … preferably with a boss who doesn’t treat them like a unique special snowflake, and one that gives them a bit of acne from flipping greasy burgers.

Again, making them work isn’t really about the work, and it isn’t really about the money — it’s just another tool to give them real-world financial education. They learn to show up on time and work. To get along with other people. To deal with a tough boss (hopefully). To read an employment contract, and, if you’re doing your job right, to choose a good super fund.

This shouldn’t be an elective — it’s an essential part of their formal education. When I’m hiring a young person for my business, I can always pick who has had a part-time job through school. They’re more resilient.

#3 She’s Got a Ticket to Ride

Straight up, buying your teenager a brand new car amounts to child abuse.

Don’t do it.

The pull of owning your own wheels is strong with teenagers — especially boys. Use it. Again, hopefully you’re seeing a theme here. It’s not about the car, it’s just another tool for teaching.

So sit down and challenge your teen to save up for their first car. In reality this could involve you matching them dollar for dollar, so they don’t end up driving around in a 1966 XP Falcon like I did (safety features? Lap seatbelts). Have them research the running costs of various models, how much it costs to insure, and how to negotiate a good price.

I’m biased of course, but I see these financial literacy findings as just as important as the final year marks.

Why?

Because it’s the one skill every student will be tested on — daily — in the real world. A below average grade in money management colors your entire life; what you do for a career, the amount of time you have to spend working, the stress you will endure over your working life, your relationships, your health, and ultimately what your last days look like. This is important stuff … so start testing your teens today.

Tread Your Own Path!

A Woman Is Not a Financial Plan

Dear Scott,

I am 22 and have independently bought my home ($207,000 owing), have $5,000 in Mojo, have $7,000 in other savings, and have no debt besides HECS and the mortgage. My (fairly new) boyfriend earns $53,000 and has a car loan of $25,000 and few savings. He is kind and generous but a spender, whereas I am a saver. As the relationship gets more serious, how can I protect my assets and encourage him to develop healthier financial habits? To reverse your saying, a woman is not a financial plan!

Natalie

Hi Natalie,

If you end up shacking up with him, you could protect yourself by having him sign a cohabitation agreement. Though that would be kind of weird -- don’t you think?

It’s a bit like buying a dog that you’re secretly worried will one day go feral and bite your hand off.

Better to just not sleep with dogs.

Still, let’s give the bloke a break. He could just be young, dumb, and full of credit. He wouldn’t be the first fella to fall into the trap of trying to impress a young filly by flashing his (borrowed) cash.

So, explain to him that this approach may work with girls -- but it doesn’t wash with a confident woman like you. If he really wants to impress you, tell him he can start by becoming debt free. And if it works out you can’t teach an old dog new tricks, drop him off at the pound.

Now, if you’ve got to the bottom of my answer, and you’re thinking to yourself, ‘you’re being a bit of a hard arse Barefoot’, read the next question.

Scott

Why Are You Randy?

Dear Mr Pape,

I enjoyed your book. However, as a non-native speaker, there were things that confused me. Could you please explain what “Paint me red and call me Randy” means?

Yu

Hi Yu,

I have no idea what it means either.

Thanks for reading.

Scott

No Such Thing as a Silly Question

Hi Scott,

I am loving your book and have one (probably silly) question. My husband and I, both 40, are tackling a $45,000 credit card debt on $70,000 a year combined income. Most of it is business credit card expenses -- his small business has had a very quiet start to the year. Do we redraw this amount from our mortgage (we have $300,000 in equity), pay off the credit card and start again, or keep chipping away?

Kelly

Hi Kelly,

Yes, you can refinance the debt onto your mortgage to get a lower rate.But there are a few things to remember:

First, it’s no magic wand. You’re eating into your family home, and there are only so many times you can do this.

Second, you’re turning a short-term debt into a long-term debt.

Third, you’re putting a bandaid on a deep gushing wound.

The wound was caused by your husband’s flailing business. Paper-shuffling your debts doesn’t mean it won’t happen again. So I’d sit down with your husband and have what comedian Tom Gleeson calls a ‘hard chat’. If the business doesn’t improve by Christmas, it’s time for hubby to get a job.

Scott

Tax Rules

Hi Scott, I am returning to work post-children. I recently started looking for a part-time job, during which time my husband asked me to do his books and admin work. I am legitimately doing two days’ work a week. When we visited an accountant my husband suggested paying me a wage, but the accountant said this is not possible under PSI tax rules (an associate for non-principal work). Is this true?

Danielle

Hi Danielle,

He can pay you … he just can’t claim a tax deduction for it under the PSI taxation rules. (For those of you reading along at home, Danielle is not talking about tyre pressure -- PSI stands for Personal Services Income). Simply put, your husband can’t claim a deduction for the salary he pays you, because you’re not involved in the principal work. Sounds like you have a good accountant!

Scott

Pay Off Your Home in 10 Years

Hello,

I read a book about property investing by Konrad Bobilak and there is a chapter on how pay your house off in 10 years with no extra payments. The deal is using a 55-day credit card, keeping all your earnings in an offset home loan account, using your credit card daily, and setting up an automatic transfer before 55 days to pay back from the offset to the credit card. But in your book you do not mention this. I am confused -- what should I do to pay off my mortgage quicker?

Des

Hi Des,

What you’re referring to is a ‘sweeper strategy’: parking your salary in your offset account, spending everything on a credit card, and then sweeping your entire credit card balance clean before your credit card repayment is due.

It looks awesome on a spreadsheet, but I’ve seen it harm more people than it helps. Reason being, most people end up spending too much on the credit card and get whacked with a backdated interest bill. Then, instead of saving interest you’re paying it.

Here’s you: “I won’t miss a repayment … ever.”

Here’s me: “You probably will at some stage. The Australian Bureau of Statistics suggests that about two-thirds of credit card holders miss a repayment at least once a year.”

My advice?

Get an ultra-low-cost variable home loan, forget the credit cards, and focus on making extra repayments each month.

Scott

I'm in Love

Scott,

I’m in love! I met a guy six months ago, and he’s now moving into my house and wants to put his income into paying down my mortgage while we use my income to live on. I am on $105,000 and he is on a $90,000 base (more with overtime). He has no debt, while I owe $330,000 on my home, $250,000 on an investment property (barely breaking even), and $20,000 on my credit card (from a holiday). We are going to get married eventually, but the plan is to live together and pay down my mortgage for a couple of years until we need more space for kids. The trouble is, I do not want him taking on my debt. So should I sell and start again together?

Melanie

Hi Melanie,

“I feel it in my fingers, I feel it in my toes, when love is all around me” …… you’ll probably make dumb money decisions.

Seriously, I’ve had little lambs last longer than you’ve known this bloke. (And you know what eventually happens to them, don’t you?)

A few things:

First, keep everything separate until he puts a ring on it. If you want to live in sin (as my grandmother calls it), charge him rent, and pay that straight off your mortgage. Easy.

Second, get rid of the credit card debt pronto. (Seriously? On a holiday? WTF?). Do the sums on your investment property and then ask yourself the ultimate question: would I buy this property again today? If not, get rid of it.

Now’s the time to get on top of your debts. But don’t do it for him. Do it for you. Repeat after me: “This man isn’t my financial plan.”

Finally, it sounds like you’ve fallen hard for this bloke. The best way to see if he’s as committed to your future as you are (other than checking his phone) is to sit back and watch what he does over the next 12 months. If he’s serious he’ll be working and saving like a man possessed. “Come on and let it show!”

Scott

Let’s Hear It, Barefoot

How come your book does not come as an audiobook? I am sure there are many visually impaired younger people who would love to learn from you. You have podcasts available on iTunes, so where is your audiobook?

Pete

Hi Pete

I chose your question because it provides me with an excellent opportunity to shamelessly plug my wares. As luck would have it, I recently recorded the book for Amazon’s Audible service. (They were going to get James Earl Jones to narrate it ... but I put my foot down.) It’ll be available next month.Happy listening.

Scott

Paid Off the House … What Next?

Hi Scott,

My partner and I both turn 32 this year, and by January 2018 we will have our home paid off in full, all on a combined $150,000 a year. We are already thinking ‘what next?’ and would appreciate your advice. We think we will both put an extra 10 per cent of our wages into super, build up our Mojo, and save for an overseas trip. We are also considering buying an investment property or getting into the share market. And one more thing: we intend to start a family in the next year or two. Where is the best place to put our money?

Ella

Hi Ella,

O.M.G.

You paid off your home in your early 30s?

If you were standing in front of me, I’d give you both a big bear hug. Better yet, let your family and friends give you one -- plan one hell of a par-tay for January 2018! Seriously, paying off your home is one of life’s great achievements. Celebrate it.

(For anyone keeping score at home, you’ll notice that Ella gave the month she would be debt free. She’s focused on her numbers. This didn’t happen by accident.)

Okay, so what should you do now?

Well, first, avoid the Instagram-envy of thinking you have to trade up to a more expensive home. The ultimate status symbol isn’t a flashy home or car -- it’s having the freedom to travel and spend quality time with your kids (when you have them!).

Being debt-free at such a young age, you can’t help but become incredibly wealthy. I’d suggest you go through the Barefoot Steps: boost your pre-tax super contributions, and build up your Mojo to cover three months of expenses (which will be much less without a mortgage). Then, I’d look at setting up a family trust and investing in low-cost share funds (consider buying an investment property when the market crashes). If you’re able to invest just $30,000 a year, you’ll be looking at a nest-egg worth over $5 million by the time you retire.

Scott

The Gambler

Hi Scott,

My situation is complicated and I need your advice. I am in my early 40s and have been with my fiancé for seven years. We do not live together but have bought a block of land (in his name) and are building a house (in his name), and will move into this house together. I have contributed money to this, but my issue is that he has a gambling addiction that he is in denial about, and he lies and deceives me. He believes that it is his money and that I should not say anything. I am fearful I will lose everything.

Hayley

Hi Hayley,

Yes, your situation is complicated, but it has a simple -- though brutal -- answer: don’t marry an addicted gambler.

Your fiancé has a long road ahead of him, but he hasn’t even taken the first step -- admitting his problem. The alarm bells should be ringing in your head: he deceives you, and he believes your money is his, and you have no say over anything. It’s highly likely he’ll gamble the lot.

If I were in your shoes I’d do three things. First, lovingly and supportively explain to your fiancé that he needs to get help with his addiction -- or you’re leaving. Second, sit down with a financial counsellor (1800 007 007) and get their help in removing your name from any joint accounts you may have with him. Third, talk to a solicitor and see if there’s an option for getting a financial settlement … before he blows the lot.

Scott

What Should I Do About My Crazy HECS Debt?

Hi Barefoot,

I will get straight to the point. I have a crazy HECS debt to the tune of $70,000. I am getting hitched in September to the the most amazing girl on the planet. What should I do?

Tom

Hi Tom,

First, you should definitely marry her.

Second, don’t bother paying any extra off your (admittedly gigantic) HECS-HELP debt.

Not even a dollar.

All the hoo-ha about the Government’s proposed changes to the HECS-HELP rules are focused on the compulsory repayments that come out as a percentage of your salary: they’re proposing to lower the starting income threshold by almost $13,000 (to $42,000).

In doing so the Government has all but given up trying to get people to make voluntary contributions -- the bonus was scrapped from 1 January 2017. So why would you bother rushing to pay off the cheapest loan you’ll ever get -- it simply increases with the general cost of living -- when it’ll come out of your salary anyway?

The answer is you shouldn’t, Tom. Forget about paying any extra and direct your cash into saving up for a deposit on a castle to share with the most amazing woman on the planet.

And one more thing for readers:I’m writing this from a hotel room in the US of A, where the average college student graduates $35,000 in debt to a financial institution that charges commercial interest rates. And it’s one of the few debts that doesn’t get wiped out in bankruptcy. We got it good!

Scott

If you want to buy a cheap inner city apartment … read this

Tick. Tick. Tick.

That’s the sound of the inner-city apartment market.

There are 15,000 brand-spanking-new apartments due to settle before 30 June this year.

Many of these apartments won’t settle … because the buyers can’t come up with the balance of their money, after paying a deposit.

A couple of years ago I wrote a click-baity story:

“2018: The Year First Home Buyers Get Their Revenge!” (Not bad eh?)

I was writing about the opportunity for first homebuyers to buy a brand new inner-city apartment — at fire sale prices. Much, much cheaper than they were selling for at the time.

Here’s what I wrote: “In three years’ time there will be an oversupply of inner-city apartments in many parts across the country. It’s actually not hard to forecast today, because we can see what’s coming down the property pipeline in a few years’ time: apartment towers take years of planning and regulations to get approved. When the market is hot, like it is now, lots of developments spring up to feed the demand … but there’s a lag.”

Basically, I argued that too many investors had put down too little a deposit, and when payment was due they’d struggle to come up with the dough — causing them to either default with the developer, or sell at a massive loss.

Today I want to revisit that topic, to see how we’re faring.

Blood in the Streets

The housing boom has been fuelled by property investors, and in inner-city apartment markets it’s been driven by Chinese investors buying up big.

So this week I caught up with Li Ming, a co-director of Aussiehome, who specialises in selling Aussie property to Chinese investors.

Ming: “The Melbourne off-the-plan apartment market is the worst I have seen in the last 10 years.”

Barefoot: “How long have you been in the market?”

Ming: “5 years.”

Ming believes that around 80% of Chinese buyers won’t be able to settle on their Australian apartments.

So what’s happening?

Well, Chinese investors are caught in a ‘pincer grip’.

Here’s a real-life example of one of Ming’s clients:

Three years ago his client bought a yet-to-be-built, off-the-plan, two-bedroom apartment in Melbourne’s Southbank for $750,000.

They put down a $75,000 deposit (10%) and planned to organise a loan for $675,000 (90 per cent) in three years’ time when the apartment was built.

Now, at the time his client was flipping through the glossy apartment brochure Melbourne prices had soared 35% in the three years prior … so there was a chance the investor could turn around and sell the apartment for more than $1 million by the time the apartment finished.

Yeah, Nah.

Let’s get back to the present day.

The Pincer Property Grip

Because of the oversupply of inner-city apartments, the Aussie banks are now being cautious about how much they’ll lend (and they’re also charging investors a higher interest rate for their loans). They told Ming’s client they wouldn’t stump up 90% of the purchase price — only 80%.

Remember, Ming’s client was still contractually bound to pay $750,000 to the developer.

Bottom line: he was $75,000 out of pocket.

So where does he find the extra money?

Well, that’s the second part of the pincer grip: the Chinese Government.

For the past year, the Chinese Government has been clamping down on investors taking money out of this communist country. Investors used to be able to take out $US50,000 per person per year … yet now many state-owned banks are lowering the amount, or outright blocking the money going overseas.

“So what did your clients do?” I asked Ming.

“They had no choice. They walked away … and lost their $75,000 deposit.”

Ming told me he has other clients who flat-out couldn’t get finance from the banks.

“They managed to negotiate to flip their apartment for a 7% loss … but even that is getting harder to do. Everyone is getting desperate”, he said.

60 Minutes Says …

Australia’s ‘flagship’ current affairs program, 60 Minutes, did a story last week on housing affordability. They interviewed two of our biggest inner-city apartment developers about the issue.

However they didn’t press them on the fate of Chinese investors. They didn’t ask what effect the banks repeatedly jacking up interest rates on investors was having on demand. And they certainly didn’t ask why the Reserve Bank has openly stated this week that it’s worried about the inner-city apartment market … along with flat-as-a-pancake wages growth, heavily indebted households, and sluggish growth.

Instead, they simply walked around in hard hats, grinned, and pointed at skyscrapers. And, in turn, the two rich white dudes gave two bits of incredibly condescending advice to young first homebuyers:

“Suck it up” and …

“Let us build more apartments.”

Seriously, that’s what they said.

Angry Millennials took to Twitter to vent their frustration about being labelled unrealistic, coffee-swilling, avocado-eaters.

My advice?

Don’t get angry … get even. Falling prices are coming, and right on cue.

Tread Your Own Path!

We Can’t Sleep at Night

Hello Scott,

My husband and I are on the age pension and receive $2,200 per month. We also receive an overseas pension of $700 a month. We have a combined super balance of $32,000 and a home worth $600,000.

We owe $25,000 on our car, $24,000 on our home, and $25,000 on a bank overdraft (we used to have a business but it collapsed). We are considering borrowing $100,000 for debt consolidation, paying off the car and overdraft, putting some into our home loan, and topping up our super with the balance. The payments on such a loan would be $600 per month (based on current interest rates). Please help, as this is leaving me anxious and sleepless at night.

Kathy and Kevin

Hi Kathy and Kevin,

You’re going to struggle to get a $100,000 loan when you’re on the pension, and with good reason:

Pensioners can’t afford to be repaying debts!

If I were in your shoes, I’d downsize your home, pay off all your debts, and keep the money in super as a backstop.

Otherwise you could: withdraw your super as a lump sum and pay off the highest-interest debt. Then both of you could go back to work a day or so a week (combined you can earn $13,000 each before it affects into your Centrelink pension), and possibly rent out a room until you’re debt free.

Good luck.Thanks for reading.

Scott

I Ruined My Husband’s Life

Hi Scott,

My husband’s business has taken a massive hit, and I am entirely to blame.

He is a part-owner of a successful business for the past eight years. They have finally reached the stage where they are able to expand, and just a few weeks ago were approved for a significant loan.

Today, they received a call informing them the loan has been withdrawn: because years ago when they were setting up the company I was made a director, and I am bankrupt. (My husband and I have totally separate finances. I have nothing to do with the company, and own no shares. I am just a stay at home mum to three young kids).

When the business’s bank sent the paperwork to the seller’s bank, they were flagged my insolvency. The loan was immediately withdrawn. Because of me. Now I have single-handedly destroyed the future (and present) of my husband’s business partners, and the business they have all worked so hard to build. I am at a complete loss as to what I can do, short of divorce.

Ingrid

Ingrid,

Dial down the drama!

You haven’t ruined the business. And you don’t need a divorce, though a competent accountant would be nice.

You can’t be a director of a company if you’re bankrupt (so you should have left before you went bankrupt). But you can fix this; just call your accountant and have them lodge with ASIC and get it cleaned up. Then have your husband explain the situation to the bank -- that you’re basically a patsy director who owns no shares. If the business’s financials stack up (and the directors can offer the appropriate guarantees), they’ll get the loot. If the financials don’t stack up, they won’t.

Now the thing for me that is drama-worthy is that you and your husband still split the bills like you’re flatmates. That’s going to strain your relationship, if it isn’t already (and it sounds like it is). You need to work as a team, split everything down the middle, and make joint decisions. Do it for your kids.

Scott

Reminder: I first wrote about this years ago and highlighted the low fees. Today there are better bank accounts on offer. How do I know? Because my readers constantly email me about them! So before you do anything, google the best accounts on offer now.

Go Wash Yourself, Barefoot

Barefoot,

I have no question. I just cannot believe that -- in the paper last week -- you would be pushing a company such as Amazon.com. Talk about being a hypocrite! Here we are, us plebs who go to work every day, some of us for minimal wages, working 40 hrs a week to pay for our mortgages and living expenses, doing our damndest to make ends meet. And you are telling us how great this overseas company is just because they can deliver washing powder faster than Superman -- and cut back jobs. What about advance Australia fair?

Reg

G’day Reg,

Competition’s a bitch, ain’t it, Reg?

Whether you or I like it or not, Amazon is coming to Australia and it’s going to rock the retail industry. And that’s the point I made to my readers: there are 1.3 million Aussies retail workers, and jobs will go. (They’re called the ‘country killer’ for a reason.)

So what can we do?

Well, we can vote with our feet and buy everything locally from Aussie producers and retailers.But you and I know ... we won’t.

Scott

A Brick to the Head

Hi Barefoot,

I have been thinking about what I could do to have my deposit savings keep pace over the next couple of years before I buy my place. One idea I have is to invest my deposit savings into BrickX, which allows you to buy a share in an investment property. I see it as a hedge against rising property prices. What do you think?

James

Hi James,

I wouldn’t do it, even though it is a hedge (less their fees, and less any potential capital gains tax).

Reason being, I don’t advise people to buy an investment property before they purchase their principal place of residence, because in all the years I've been doing this I’ve never seen it work out. (And with a BrickX property, you don’t have the option of eventually living in it.)

ScoMo’s new ‘First Home Super Saver Scheme’ is admittedly a bit of a fizzer (maybe that’s why it’s got the acronym FHSSS)?

But it’s exactly where you should be saving for the last few years of your deposit. That’s because a couple earning $65,000 each will save an additional $12,000 by using the scheme -- guaranteed. And for the average Aussie trying to buy a home in one of the most overvalued patches on earth, every cent counts.

Scott