Should We Sell Our CBA Shares?

Hi Scott,

We got Commonwealth Bank shares when the bank was floated years ago. Until recently they were worth $100,000, but now they have plunged to just $74,000. We are retired and self-funded (income about $70,000 combined) and do not want to watch them disappear! What is your recommendation?

Bernice

Back it up,

Bernice!

I’ll answer your question in a moment, but first, for the benefit of younger readers, let me give the backstory:

The Commonwealth Bank floated on the share market in 1991, for $5.40 a share. The minimum you could purchase in the float was 400 shares -- so you BPAY’d your $2,160.

A few weeks later you ticked the ‘dividend reinvestment plan’ form.And then you sat back and ate kabana.

Fast forward to today.

Your $2,160 investment is now worth … drum roll please ... $138,400.

(So, given you say your shares have ‘plunged to $74,000’, I’m assuming you have sold some along the way.)

Yes, my nipples are getting hard, but let me give you one more amazing stat: last year CBA paid out $4.29 per share in dividends … that’s 80% of what you initially paid for each share!

Okay, so that’s the backstory. Now let me answer your actual question -- should you sell your CBA shares?

The answer is … it depends. If your CBA shares make up more than 30% of your portfolio, it would be wise to sell down part of your holding and diversify by investing in other companies. (This doesn’t just apply to CBA shares; it’s not good to be too reliant on any one company.) It’s even more attractive if you’re holding the shares in a self managed super fund (SMSF) and you’re in pension phase, as there are no tax consequences. Either way check with your accountant. Winner, winner, chicken dinner!

Scott

Your Steps Can’t Work for Us

Scott,

I have a bone to pick with you. I have been a loyal follower for years, have ALL the newsletters, and have just bought your book. I have read it and re-read it and now am more confused and frustrated than ever!I am a stay-at-home mum. My husband is a self-employed tradie who relies HEAVILY on a $9,500 business overdraft. He earns between $45,000 and $55,000 after tax to ensure we can still get Centrelink ($10,000). His income is so sporadic that, when it does finally come in, it is gone on living expenses, suppliers and a bit of savings. Your steps can’t work for us.

Deb

Hi Deb,

Are you seriously happy living your life playing Centrelink limbo?

The problem with that game is that, even if you manage to earn as little as you can to get under the bar, you’re still … in limbo.

If your husband is earning only $45K a year as a tradie running his own show (with debt!), that’s the universe telling him it’s time to seek out a regular job and then focus on paying off his overdraft.

And another thing: a good tradie doesn’t blame his tools ... my steps work, but they need the right materials: in your case, cash!

Scott

Forget iPhone X, I'm Getting This Instead ...

My iPhone is basically my office — it’s where I do business.

In contrast, we got a ‘burner’ phone for my 60-something farmhand Archie … this is not where he does business.

He often shoots me blank text messages, and when he does work out how to reply it’s often IN. FULL. CAPS:

Now unless you’ve been labouring away in a paddock in Romsey, you’d know why I’m telling you this.

Last week, Apple had a big event, where they announced a few of their newest gadgets.

I dutifully got up early and watched it, and in the process saw why Apple is the most valuable company in the world (and on track to becoming the first trillion-dollar company — for reference the entire ASX 200 is valued at $1.3 trillion).`

It droned on for two bloody hours … though you wouldn’t know it by looking at the nerds in the crowd, who were absolutely losing their Samsungs at all the new — and insanely expensive — kit!

Enough!

How many more pixels do you need till your life is complete?

Does the slither of extra screen around the edges justify an $1,829 price tag for the top-of-the-line iPhone X?

Or maybe it’s that you can use Apple’s (slightly creepy) face-scanning feature to turn yourself into a poop emoji?

Why am I ending every line with a question mark?

However, there was one product that I think could be the next big thing: the latest Apple Watch.

The new version has its own SIM card, which means you won’t even need to lug your iPhone around.

Hell, I’m thinking of buying one.

I’m a big user of Apple Pay, via my ING account, and I like the idea of using my watch for purchases, without my wallet or phone (or shoes). Even better, the watch takes calls, right on your wrist, just like Dick Tracy (ask your parents).

I’m even thinking about getting one for Archie … it’s even waterproof, which will help when it’s calving season.

Climb Every Mountain

Hi Scott,

I just wanted to say thank-you for your book. Your advice has pulled me through some uneasy times, and in October this year I am set to build my legacy … by climbing Mt Kilimanjaro solo to raise money for the Cancer Council. You have taught me that spending my hard-earned money on giving back and helping others is so rewarding; I see it as a reward for finding financial control. Know that, as I reach the summit with my Cancer Council flag in hand, it was funded through the advice you provided, and that I will raise a beer for you -- if I can sneak one to 5,895 metres!

Jack

Well done, Jack!

The beer will be nice and cold at that elevation.

Thank you for reading.

Scott

Borrow to Buy Shares?

Hi Scott,

My husband and I are both 40, have two very young girls, and have owned our home outright for three years. We are now down to one wage ($100,000), but have also managed to also put away $90,000 in savings. With an eye to growing our wealth, we have borrowed to invest in shares -- on the advice of our financial adviser. But we are worried that the interest each month is less than the dividends received, and think we could have been saving this money instead and investing our own cash. What is your take on this?

Natalie

Hi Natalie,

Getting the banker off your back is (financially) the best thing you could have done for your family.

Well bloody done!

Truth be told, you’ve got the one character trait that almost no broke people have: a savings mentality.

Now, the strategy your financial advisor has you on is negative gearing (in this case shares, not property). And while the gains from borrowing to buy shares can look awesome on a spreadsheet, the truth is that most people don’t have the ticker to stomach a stock market crash with borrowed coin.

There are two major purchases that money can buy you from hereon out: the financial security of never having to worry about money again, and the freedom to spend time with your family and friends. Here’s how to achieve them:

First, save up three months of living expenses in a Mojo savings account.

Second, max out your pre-tax super contributions of $25,000 each year. That’ll give you both a tax deduction and a secure retirement. If you go back to work, do the same (i.e. $25,000 for each of you).

Third, set up a long-term share investing program to fund your kids’ education, awesome family adventures, and weird hobbies. Invest in the lower-earning spouse’s name and, if you’re a nervous investor, do it without debt.

Scott

When Dad Is a Mum

Dear Scott,

We are two mothers -- a couple wanting to have a baby. We finished reading your book a couple of weeks ago and have started implementing the strategy. The trouble is, I have never wanted to have kids until I had enough money, but my partner wants them as soon as possible. And I admit the biological clock is ticking. We both work but have next to no money. I thought you may be interested in a same-sex couple. We too have financial troubles ... it is not easy, that’s for sure.

Annie

Hi Annie,

On one hand, you wouldn’t be the first broke parents to decide to have a kid.On the other hand ... what the bloody hell are you thinking?

Look, I don’t care if you’re gay, straight or polygamous -- you need to take responsibility for your financial situation before you can take on the ultimate financial responsibility of having a child. You’ve read the book, so you’ve got your road map -- now it’s time for wine, garlic bread … and action.

Scott

How Does Getting Married Affect My Tax?

Hi Scott

We are getting married in June 2018. Planning ahead, I’d like to know what tax implications there are after we get hitched. We are both 27, I earn $64,000 p.a. and he earns $74,000 p.a. We currently keep our finances separate and plan to do so until the marriage (though we have joint savings for the wedding, which will be spent!).

Kelly

Hi Kelly

Congratulations. You are the first bride-to-be to ever put ‘tax planning’ on their to-do list.

Bridesmaids’ dresses? Check. Flowers? Check. Tax implications of nuptials? … Email the Barefoot Investor.

Then again, you’re talking to a guy who times his Barefoot Date Nights to coincide with the monthly Reserve Bank meeting.

HOT!

Okay, so the big change is an administrative one: once you’re married, you’ll need to record on your tax return that you have a spouse, and include his taxable income. (And your spouse will have to do the same on his tax return.)

Why?

Well, it’s part of a reality show the ATO is pitching as a rival to The Bachelor (“You told me you earned $200k!!”)

Okay, so that’s not true. In reality, the ATO needs your spouse’s income to work out if they can slug you with extra tax (couples without private health insurance that earn over $180k combined will be hit with a 1% Medicare Levy Surcharge, rising to 1.5% for couples earning over $280,000), and also to work out any family tax benefits.

(Interesting factoid: even though our pollies are spending $122 million on a postal vote to decide on same-sex marriage, the bean-counters at the ATO are much more liberal: they define a spouse as being either a registered partner or a de facto, so you may be doing this already.)

There are a few other implications:The Good: you can split your (non-salary) income with your spouse, so always invest in the lower-earning spouse’s name.

The Bad: if you both own a home, you have to choose (or apportion) which one gets the capital gains tax (CGT) exemption. Talk to your accountant to crunch the numbers if you’re in this situation.

The Ugly: watch Seven Year Switch on Channel 7.

Congratulations!

Scott

The Ultimate Father’s Day Gift

Hi Scott,

I loved your ‘Ultimate Father’s Day Present’ column so much! My dad, who is 76, lives in WA and I have not seen him for five years. Today I called him to say I am booking a ticket for him to visit us at Christmas (and I will be recording his answers to your questions). As a single parent for over five years living week to week, there was no way I could have done that before. But I have saved, Barefoot style, and now I can! Your advice has changed my world (and my family’s).

Maya

Hey Maya,

Nice one. (For those of you who missed it, last week I urged readers to whip out their phones and ask their dads some simple questions, like ‘How would you like to be remembered?’)

Tell your dad what you just told me, and it’ll make him proud.

Thank-you for reading.

Scott

I Need $372,255 ASAP

Hi Scott,

How do I come up with $372,255 ASAP? I am 43 and going through a divorce and property settlement. My ex-husband has offered the house and 20 acres to me if I can come up with the money. But I am a low-income earner with no assets (other than my two gorgeous children) and no substantial savings. I am thinking I need to either go to the bank for a whopping loan or find some investors, and I am planning on subdividing 2 x 5 acres to pay them. Any suggestions would be greatly appreciated as I am out of my depth.

Claire

Hi Claire,

Don’t take on the house.

You can’t afford it, and, in the unlikely event you raise the dough, you’ll end up working round the clock and stressed out about your debts.That’s not fair on your kids. They need you right now -- they need all your focus and energy to help them through this really difficult time. So give it to them, and not to a pile of bricks, your husband, or your bank manager. The house doesn’t matter; instead focus on the dining room table you sit around each night as you talk with your kids, wherever that may be.

Scott

Can I Buy a Corvette?

Hi Scott,

I am 31 and earn $120,000; my wife earns $90,000. We have a $750,000 mortgage on a house worth $1 million, $10,000 in index shares, and $20,000 in Mojo. Can I buy a $40,000 1970 Corvette Stingray? Or is that totally irresponsible? I would save up and pay cash for it, I promise!

Rob

Hi Rob,

Years ago my wife got a bloke in to measure up some curtains.

As he was up on his ladder, she asked him, “Will this fabric give full block-out?”

He looked at her, then turned to me -- the man -- and gave the answer. (“Well, mate, you have to understand that total block-out is not …”)

This little game played out for the next five minutes -- my wife getting increasingly testy, me trying to play sexist charades with the curtains guy (raising my eyebrows and nodding to my wife) ... and the curtains guy being totally oblivious as to who really wore the pants (and the curtains) in our household.

Bottom line?

The curtains bloke didn’t get the job … and it looks like it’s curtains for your Corvette. Now that’s got nothing to do with whether you can afford it, and everything to do with the fact that you’re writing to me about it, rather than discussing it with your wife on a Barefoot Date Night.

Scott

Should I Sell My Telstra Shares?

Hi Scott,

I was one of the sheep who bought Telstra in the floats (T1 and T2) when the government thought it would be a good time to sell off taxpayers’ assets. I have been a long-term investor -- I have been holding them for 20 years and they have delivered me bugger all! Now they have come out and cut their dividend, the share price has been shredded even more. So my question is, should I just sell this dog?

Tim

Hi Tim,

The first thing to understand is that the stock market doesn’t give a stuff about what price you bought Telstra for.

Seriously, it’s totally irrelevant.

The only thing that matters is what the price is today.

So you need to ask yourself this question: “Knowing what I know now, would I buy Telstra shares today?”

If you wouldn’t, sell them. If you would, keep them. It’s that simple.

Personally, I’m a Telstra shareholder … and I’ve been buying Telstra shares recently.

Why?

First, because data is about to explode, as the internet goes from your computer to syncing up to your fridge, your washing machine, and every other smart device.

Second, the NBN is proving to be quite the white elephant. While it’s true that Telstra has (sensibly) decided to stop paying out all its profits in dividends to shareholders … this decision is in part to fund the roll out of their 5G mobile network, which could eventually eat the elephant.

Finally, while the dividend has been cut, on the revised numbers it’s still delivering around 6 per cent fully franked. They’re my reasons for continuing to hold the dog-and-bone, anyway. Over to you.

Scott

The Present I Gave Malcolm Turnbull

Last week I sat down one on one with the Prime Minister.

A journo from a rival rag snivelled, “He’ll answer questions from hosts who aren’t wearing shoes” … which, unless Malcolm has been doing vox-pops with homeless people, is a swipe at yours truly. (And for the record, I not only wore shoes, I even donned my wedding suit jacket for the occasion.)

Anyway, I found him to be a good bloke — though maybe that’s because we’ve got a lot in common (like me, in his line of work he tends to upset people, and, like me, he’s even been known to cop it in the neck from his own … err … kitchen cabinet).

The video is on the Barefoot Investor Facebook page … but here are some of the highlights from our chat:

(note the shoes)

Power to the PM

Barefoot: You’ve recently given the energy retailers a slap. I’ve saved $540 on my power bill by going to energymadeeasy.gov.au. Have you run the numbers on The Lodge?

PM: (laughs) Well, I’m pretty sure my son-in-law has …  but I must say your savings are representative of what a lot of people are making by switching.

Financial Education in Schools

Barefoot: Something close to my heart is financial education. The Commonwealth Bank is one of the biggest providers of financial education in schools. Do you think there’s a conflict of interest in having the banks teaching kids about money and then getting them on a database to sign up as customers?

PM: Well, um, I can understand that argument but I think the important thing is getting plenty of people in schools giving that financial education. I mean financial literacy is critically important as you say, so it’s a fair point, Scott.

Barefoot Community Q&A with the PM

Barefoot: Now to some questions from our Barefoot Investor community. Laurie asks, “Why does our government continually reduce the amount we can salary-sacrifice into super?”

PM: I don’t think it’s fair to say we continually reduce. We made some changes in the last budget to make the super system fairer and more flexible, but we don’t have any plans to make any other changes.

Barefoot: Elle asks, “Why is so little being done to help housing affordability? There are so many tax deductions for property investors, like negative gearing, but those of us trying to buy just one home get jack!”

PM: You’ve got to recognise that there’s nothing special about negative gearing … It’s been part of the income tax system since the Income Tax Act was passed in 1911.

(Barefoot aside: Though in 2005 he agreed with you, Elle, labelling it ‘tax avoidance’.)

Barefoot: Finally, I’d like to give you a copy of my bestselling book. I think you’ve got your money sorted, but you might want to give that to ScoMo — it could help him balance the budget.

PM: (laughs) Thanks very much, Scott.

Tread Your Own Path!

Fish’n’Chips and a Smile

Hey Scott,

I would just like to say a massive thank you. I have just had the best holiday in Exmouth (WA) with my kids and it was all paid for from our ‘Smile’ account! While we were treating ourselves to a fancy fish’n’chips dinner, the bloke behind the bar commented on the word ‘Smile’ written on my card. He said it was the second one he had seen in a week. I got to tell him all about the Barefoot way. So thanks again!

Frank

Hey Frank,

That brought a smile to my face!

For readers wondering what the hell Frank is on about, let me explain. In the Barefoot world, you allocate your pay into separate (zero-fee) accounts: 60% for daily stuff (‘Expenses’), 20% to put out financial fires (‘Fire Extinguisher’), 10% for fun (‘Splurge’), and 10% to save up and spend on longer-term things (‘Smile’) … like a good old-fashioned family holiday where you have fish’n’chips with your kids.

Who needs New York or Paris, when you’ve got fish’n’chips with Dad on the beach!

Thank you for reading ... and happy Father’s Day!

Scott

Divorced Dad Wants to Win

Hi Scott,

As a dad, how do I best set up my son financially? He’s four, and I'm planning ahead! I am 42, separated, and renting. I have no debt other than a mortgage. My total assets are $20,000. I am on a low training wage now (midlife change of career) but if I pass I will be earning up to $100,000. So, do you suggest saving or investing for him in his name? Or building up my assets so I can provide a home?

Tim

Hi Tim,

You’re already making the right long-term investment for your son -- by lifting your income to six figures, you’re going to be able to buy yourself long-term financial security. When you have your money sorted, you’re free to focus on the things that really matter. Your son doesn’t care about what car you drive, whether you own or rent your home, or how much money you have in your bank account -- all he really cares about is spending time with you. What more status do you need? You’re the man!

Finally, I’ll tell you this: handing a kid a huge cheque on their 21st birthday sometimes does them more harm than good. If you really want to build your son up, invest the time you have with him right now. Do ‘jobs’ with him, and pay him in gold coins into three jam jars (‘Save’, ‘Spend’, and ‘Give’). That’ll do more to shape his values than almost anything else you could do.

Scott

Chasing Ghosts

Hey Scott,

I am a 32-year-old soon-to-be father (with my beautiful fiancée). In the past, my spending was out of control, causing me to rack up $55,000 in credit card debt and a huge car loan. Now all of that bad debt is history and we will soon be settling the purchase of our first house in the suburbs. But I feel that the ghost of reckless consumerism still lingers in my past. How do I stop this poltergeist from infecting my children and plunging them into a life of bad debt?

Nick

Hi Nick,

You’re not the first bloke who was a little loose when he was younger. And you’re also not the first bloke who has cleaned up his act in the face of the impending Triple Ms (marriage, mortgage and midgets).

My view?

You’ve clawed your way out of a heap of debt and got yourself in a position where you and your fiancée are buying a home for your family. There’s nothing loose about any of that, mate. Besides, the fact that you’re admitting you’re packing your dacks about the awesome responsibility (and privilege!) of providing for your family tells me you’re up to the challenge.

Finally, remember it’s not your money anymore. It’s your family’s. You’re not a single bloke, you’re a team! So do the Date Nights I speak about in my book -- once a month get a babysitter (or grandparents), take your wife out and, over a glass of wine, make joint decisions about your finances. It’s one of the best things you can do for your marriage -- and your stress levels!

Scott

Am I Making a Big Mistake?

Morning Scott,

When reading the section of your book where you talk about starting a business, I remember thinking, “I can’t see that happening to me”. What would make me leave my secure, well-paying job ($100,000 plus)? Well, an opportunity has presented itself. I have been offered a contract by my current company (construction) that is open ended -- if I am happy to do it, they will pass on client work. I figure it will cost about $80,000 to set up the business, and I can earn $150,000 p.a. plus. I am 75% convinced this is the right thing, but my wife is not -- her parents lost everything in a failed retail business. I see this as a potentially life-changing decision for our young family ... but only if I get it right. Any help would be appreciated.

Jim

Hi Jim,

My first question is this: would you be running a genuine business, or is your boss just parlaying some of his risk?

There are rules against ‘sham contracting’ which you should look into -- make sure it’s a genuine opportunity for you … and not your boss!Now, your wife is right to be wary: right now you’re earning $100k plus.And in this case the plus really is a plus. As an employee, your boss shells out for your superannuation, you get four weeks paid holidays, and you get paid time off for sick leave, carer’s leave, long-service leave, and public holidays. And unless you go loco and bring a gun to work and start waving it around, it’s actually quite difficult for your boss to sack you.

Best of all?When you get home, you can kick the footy with your kids and not have to think about work or where your next pay cheque is coming from.

However, if you start your own business, you’ll have, as Jay-Z says, 99 problems: you get to spend your nights doing bookwork, stressing about where you’ll find new, profitable customers, and possibly dealing with employees and paying their entitlements. Oh, and your worried wife will be riding you harder than your current boss.

Bottom line?

If I were in your shoes, to go it alone I’d want to be earning (eventually) AT LEAST double what you’re currently earning as an employee, especially if you’ve got to stump up $80,000 of your own dough, bro!

Scott

What Motivates Me

When I was younger, I was motivated by trying to attract women (largely unsuccessfully, but that’s another story).

That was a long time ago.

These days, I’m a dad, and my motivations have changed. It does have an upside though, I now get to wear the same jumper and chino combo most days (it’s my dad uniform), and I couldn’t care less if women looked at me … and they still don’t!

As a Dad, the thing that really motivates me now is being a hero to my kids.
(My wife? Well, the polish has worn off me, but, like a comfy pair of boots, she keeps me around.)

And let me tell you, it’s hard work impressing my boys.

Take this week, when I proudly announced:

Barefoot: “Today I’m meeting the most important man in the country!”

Four year old: “Donald Trump?”

Barefoot: “No … the Prime Minister of Australia!”

Four year old: “Does he know Jimmy Giggle?” (The ABC Kids host).

Barefoot: “No, I don’t think so … ”

Every DIK (Dad I Know) is motivated at a deep level to be a hero to their kids. (Of course, the only one who really nails it is Jimmy Giggle … he’s got it all sorted out.)

The thing fatherhood has taught me is that deep down your kids aren’t impressed with what car you drive, or the suburb you live in, or the clothes you wear, or even the fancy-pants people you get to meet in your job — all they really care about is spending time with their hero.

Pediatrician Meg Meeker, in her book Strong Fathers, says that if dads could look at themselves through the eyes of their kids — and see just how big and important and powerful they are to them — that’s all the status they’d ever need.

And to celebrate Father’s Day, this week’s questions are dedicated to dads …

I’m a Single Woman Earning $210,000 … How Do I Pay Less Tax?

Hi Scott,

I am a 40-year-old, single, professional woman with no dependants (other than my pets). I have recently increased my income to $210,000 and so have moved into the top tax bracket -- a double-edged sword. I am following your steps, claiming deductions where I can, and saving for a home. The trouble is, most of my income disappears through tax! I have seen you recommend family trusts, splitting income, etc, as ways to reduce tax. What options are available for employees like me who do not have a traditional family?

Jessica

Hi Jessica,

I don’t think earning $210,000 is a double-edged sword … it’s more of a diamond-encrusted poker.

So let me poke you a bit.It’s not true that most of your income disappears through tax. The Australian tax system is based on marginal rates, so you are only paying the top rate of tax of 45 cents in the dollar, excluding Medicare, on each dollar you earn over $180k. The total tax payable on your $210,000 is around $71,932 per year, roughly one-third of your income.

My advice?

Put away your violin, and start swinging from the chandeliers!

You still have $11,503 after-tax income is hitting your bank account each month. and you have no debt and no dependants to share it with. Life is good! However, the truth is that you’re working a very demanding job, so my advice would be to keep your financial affairs simple and build up your financial security.

Here’s what I’d do over the next decade:

First, save up a 20 per cent deposit and buy yourself a nice home. You deserve it, and you can afford it.

Second, add to your employer’s pre-tax super contributions so that you round it up to $25,000 per year.

Third, build up a Mojo account of three months of living expenses.

Fourth, focus on paying down your mortgage as quickly as you can.Fifth, then start building up your investments, inside and outside of super.

Disclaimer: I understand that none of this is as sexy as taking out a whopping big loan, investing in something exotic, and then running a spreadsheet of how much tax you’ll save each year.

But my plan is simple, and it works.

And if you continue earning big bucks, you’ll retire a very wealthy woman, no doubt about it.

Scott

Centrelink Property Mogul

Hi Scott,

I’m a 41-year-old single mum stuck on Centrelink benefits. I cannot work for health reasons, but I love (and have always loved) houses! I am cashflow poor but have a good amount of equity in my home and want to work towards having two or three properties to support myself and provide for my future. I have found a few cheap, positively geared properties I could buy with the equity, but once their value reaches $250,000 my benefits would be cut. Any advice on how to get out of this cycle?

Natalie

Hi Natalie,

I love that you want to get off the welfare cycle … but you’ll be replacing it with a debt cycle.

Now, even though you have equity in your home, and you’re planning on buying cash flow-positive investments, the banks are bound by responsible lending laws to take your income into account.

And if you’re on Centrelink, you don’t have enough income.

My view?

If you’re smart enough to hunt down positively geared investments, then you should be able to turn your talents to doing paid work in some capacity. And working is the only surefire way to escape the welfare cycle. You’ve got this!

Scott

Too Young to Be Barefoot

Scott,

I do not have a job or any real income, besides weekly allowances and lunch money, because I am only 15. I picked up your Barefoot Investor book (thought it might be an interesting read) and am halfway through, but I can’t really relate because I can’t save up or anything like that. Anyway, my question is, how do I make sure that I never have to turn my life around financially and that I am ready for any financial fires that come my way?

Oscar

Hi Oscar,

Truth is, I get a lot of teenagers who write to me with concerns like yours. Often it’s because they’ve grown up in homes where a lack of money was a big problem. Often they learn what not to do from their parents.But you know what, Oscar?

The cool thing is that it doesn’t matter who your parents are, or where you’re from, or what you look like, or whether you’re good at sport, or how popular you are.

All you need to do is build some ‘million dollar habits’: work hard, save, and compound your money.

Money is the great leveller in life. All you have to do is have at least a passing interest in it, early enough. The fact that you’re reading a finance book and not on Snapchat tells me you needn’t worry about any financial fires. You’re going to tread your own path!

Thank-you for reading!

Scott