High Income Earners Completely Out of Control

Scott,

We are what many would consider ‘high income earners’, earning $255,000 a year ‒ and yet we are completely out of control. Our five years of DINK (Double Income No Kids) lifestyle came to a halt when we had three kids in two years, and we are now floundering month to month. I am struggling to change my shopping habits (expensive everything), and we have a large dream house that we started building before our unplanned children arrived. What can we do?

Bec

Hi Bec

I was reading a magazine profile the other day on Johnny Depp.Instead of buying his smokes himself, he has his assistant do it ‒ and gets them to scribble out the health warnings and horrific pictures of blackened lungs with a biro, so he doesn’t have to think about the health consequences. So far it’s working out well for him.

If you’re on a high enough income, you can apply Johnny’s smoke experiment to your money. You’d be surprised how many couples I meet who are in your situation and do just that. As long as the money keeps flowing, you’ll be able to smoke through your prime earning years.

However, it will catch up with you eventually. It always does. The damage you’re doing to your finances isn’t hit or miss. The black shadows, the worries that wake you up in the middle of the night ‒ and cause you to tap out a confessional email to me ‒ won’t go away. Eventually they’ll consume you.

My inbox is full of people who are 20 years down the road you’re on. They’re in their fifties and have suddenly been richoched into reality by a divorce, disease or retrenchment. They’re left bitter and twisted, and scared that they now can’t live any other way.So right now you’ve got a choice. It’s not too late. What you’re doing isn’t working. You’ve admitted that yourself. For the sake of your family -- and to be good role models for your kids -- it’s time to start doing something that will work.

This week I want you to have your first Date Night and set up your buckets. Then, start moving through the Barefoot steps together. They’ll work for you, just as they’ve worked for thousands of couples (and many on far less income than you). The steps work every single time. Not because there’s any magic, but because they’re based on good old fashioned common sense.

Email me next week after your Date Night, and let me know how you go ...

Scott

‘You need sleeping pills’, said my doctor

The Three Exams

Years ago, when I was cramming for my final VCE exams, I went to see my doctor.

I confessed to the old quack that I was stressed — wound up like a lacker band — and was having trouble sleeping.

He just started chuckling, and then pulled out his prescription pad:

“You need sleeping pills”, he said matter-of-factly.

Now, in hindsight, that was very bad advice.

Those pills were like horse tranquilisers. The first time I took one, I woke up 10 hours later with my face superglued to my textbook by my own drool. And to counteract the fogginess I began scoffing No-Doz caffeine tablets (one down from speed, one up from Red Bull). Seriously, my final year of school was like Charlie Sheen’s final season of Two and a Half Men.

Still, the good doctor gave me some wise advice that I’ve never forgotten:

“These high school exams aren’t nearly as important as you think. You’ll have much bigger ones in the future.”

The doc was dead right.

It was only as I got older that I realised that the really important exams ‒ the ones that will change your life forever ‒ don’t have a date, a time, or a room number. (And because of that, most people not only don’t study for them … they snooze through them, again and again.)

And given students across the country are sitting down to do their final exams this week, I thought I’d take you through them. The first life exam is finding a career you enjoy. The second, is to choose to become financially secure. The third, to invest in your family and friends. You’ll sit these three exams over the next decade (and beyond). Here’s how to ace them.

Your Career

The average Aussie teenager will have 17 different jobs, and five careers, in their lifetime, according to the Foundation for Young Australians.

Fair dinkum!

My first job out of uni was working on building sites with a joker called ‘Wolfy’ … who would (unsuccessfully) wolf-whistle at women who walked by. (True story: the day the Australian Stock Exchange called to tell me I’d secured a graduate position, I thought it was old Wolfy playing a trick on me, so I told them to bugger off.)

Anyway, while it’s very important to sidestep the working wolves, you don’t want to keep changing career like Australia changes prime ministers. Otherwise, you’ll never make a dent in the universe.

The smartest method I’ve found to think about such an overwhelming topic (what do I want to be when I grow up?) is to set aside an afternoon and do a thinking exercise that author Arun Abey calls ‘the three circles’:

“What am I deeply interested in?”

“How can I work, over many years, to become truly great at it?”

“How can I make enough money from doing it?”

Your killer career is found at the intersection of these three circles.

Your Financial Security

There are trophy degrees that will guarantee you a good income: medicine, engineering, finance, law. However, there’s no guarantee you’ll turn that good income into long-term wealth, and it’s certainly no guarantee that you won’t end up being ‘completely disengaged with your job’, as 70% of Australians apparently are, according to Gallup research.

Yet committing to being financially strong ‒ no matter what level your income ‒ will change the course of your life.
You’ll sit some form of this exam many times over your life: it starts the moment you get the letter from your bank saying “Congratulations, here’s your credit card!”, or when your employer automatically enrols you into their default high fee super fund.

The solution is to tell the bank you don’t do credit cards. And to tell your boss to put your super into a a low-cost super fund you’ve chosen yourself — then tick the ‘high growth option’ and let compound interest work its magic.

I like to think of compound interest like I do surfing. You put in a bit of effort paddling at the start, but when you catch a giant wave it carries you along without any effort. Which means that, instead of mucking around in the slushy waves later on in life, you get to lean back enjoy the ride.

Your Family and Friends

I’m totally unqualified to offer this advice, but I’ll give it anyway.

When you’re a teenager you think your friends will be around forever, because they always have been. However, unless you make a point of investing time in your friends, they’ll slowly drop away.

What does this have to do with money? Nothing. But it has everything to do with your long-term happiness. Wellbeing studies show that the happiest people are those with strong social bonds. Investing in your relationships, (especially your family) has the biggest payoff of all.

So there you have it. Sit these three exams and you may not receive a certificate in the mail, or attend a fancy ceremony when you ‘pass’ them. Yet the payoff is real. Because you won’t be one of those people who aces their ATAR exam and then snoozes through the exams that really matter ‒ and wake up 30 years from now and realise they’ve received an ‘F’.

Tread Your Own Path!

I’ve been a little low this week

I’ve been feeling a bit low lately.

My grandmother died last week, at the grand old age of 92.

My other grandmother died a few months ago, aged 93.

These two women shaped my life, and this week I’ve spent some time looking back at theirs.

These days it feels like we’re living through a time of rapid change: businesses are being disrupted, robots threaten to take our jobs, and your mother is now on social media (Hi Mum!).

Well, picture this:

Your family home doesn’t have a television. Or a refrigerator. Or a washing machine. Or an electric stove. Or air-conditioning. Or a husband, because he’s off fighting a deadly war in a place you’d never heard of.

Your home doesn’t even have the most important appliance: a flushing toilet. If you wake up and want to do your biz, you have to head out to the backyard with a candle and poop in a pot. A bloke empties it … once a week. (Can you imagine the smell after a week? Sure puts another spin on leaving the toilet seat up, right?)

Well, that was the life my grandmothers lived when they were raising my parents.

Now that is what you call massive change.

Look, things don’t change much year to year: there’s a new $2,300 iPhone that allows you to send a Poop Emoji. MySpace changes to Facebook. Cars get more safety features.

It’s only when you stretch out and look at the world over the course of somebody’s lifetime that you get a sense of how astonishing the changes have been.

Let’s face it: you wouldn’t trade lives with even the wealthiest people in the 1920s.

Especially if you were a woman.

My grandmothers were amazing country women who built loving families, yet truthfully they were never given the opportunity to do anything different.

Today their great-granddaughter — my daughter — has amazing opportunities they never had.

And that is one of the most exciting changes of all.

In loving memory of Kath and Lorna. Here’s to all the strong women!

Tread Your Own Path!

Is Dollarmites Done For?

Hi Scott,

I read in the news this week that ASIC are finally launching a review into school banking -- maybe it has something to do with that book of yours! What is your view on this? Do you think this could get the banks out of our schools, or is it still too early to get our hopes up?

Ethan

Hi Ethan,

Here’s what I hope the ASIC review will discuss:The Commonwealth Bank’s school banking program has, according to their website ‘been teaching generations of young Australians the importance of saving and lifelong money skills since 1931’.

So let me ask you this:

If what they did worked, why do we currently have record household debt, and low savings?

How did we end up with the horrors of the Banking Royal Commission (where Commbank received a gold medal for charging fees for no service to dead customers, ripping off millions of dollars of retirees’ money)?

And why are school leavers the most financially illiterate of all Aussies, according to ASIC research?

The answer, I believe, is that up till now many schools haven’t given financial education the emphasis it really deserves — possibly because they wrongly assume that Commbank is taking care of it.

The best outcome from this ASIC review would be that schools finally understand that financial education is a core life skill, that is far too important to be outsourced to a bank that pays millions of dollars to market to our kids.

Thanks for reading,

Scott

The Business of Buckets

Hi Scott,

I love your book and love passing it on to other people. But what comes back to me from some of my self-employed friends is that do not have a steady income. What is your recommendation for these people in setting up their buckets?

Deb

Hi Deb,

My book sets out how I manage my own money: I’m self-employed, and it works!

When small business owners tell me that the buckets strategy doesn’t work for them, it’s nearly always because their business isn’t making enough dough.

And it’s also because they don’t keep their business and personal finances totally separate. It’s all mashed together.

So, the key for small business owners is to ‘know your numbers’ -- that is, the absolute minimum you need to earn in your business to keep the doors open and the absolute minimum you need each month to live on personally.

Then you set up your personal buckets up accordingly.But I also have some business buckets:

I transfer 40% of whatever the business earns into a seperate business savings account to meet my tax obligations. (Yes, it can sit there for months … but I’m conservative. I’m simply the bagman for the taxman.) In addition, I have a business Mojo account (for emergencies) and I keep a very close eye on our working capital, so I can always meet my obligations.

If you think this sounds difficult, try running a business without it.

Scott

Should I Go to Cash in My Super?

Dear Barefoot,

I am a single working woman, 61 years old, planning to retire in five years. I am now wondering if I should be concerned about my superannuation reducing with the recent share market losses. If it is going to crash again, should I be moving to cash rather than shares?

Susan

Hi Susan,

I totally get how stressful it must be.

The truth is that -- if a share market crash coincides in the years leading up to or proceeding your retirement -- it can have a devastating impact on your plans.

Right now, your super contributions are most likely going into a share investment option.

However, I’ve always said that in your last few years of work you should divert some of those super contributions, into a cash or fixed interest option within your super.

How much?

Well, that’s up to you (and your advisor). However a good rule of thumb is having a minimum of two years’ living expenses (less any age pension you’ll receive).

Now, let me be James Blunt: the biggest risk you face isn’t the short-term wobbles of the share market -- it’s running out of money before you die. I see people who find themselves in this situation all the time, and if they’ve given up working there’s nothing they can do.

Susan, right now you have the power to change things. It’s not too late. So make an appointment with your super fund’s financial planner and work out how much you need to retire on. Get a figure to aim at. And hit it.

Scott

The Sunday Night Ritual

Hi Scott,

We are two weeks into our ‘Barefoot family experience’. The kids are excited to be doing chores (who would have thought?!), and doubly excited to be watching their money grow in their jars. They are even loving the cooking challenge, and I amazed myself by leaving meal preparation completely up to them.At age 42, this is the first time in my life I have had thousands of dollars in the bank, instead of living week to week. It’s a huge relief to know that “I’ve got this” and, even more importantly, to show my children how to be financially smart for life.

Ben

Hi Ben,

If you’re looking for a way to get a huge reward with very little effort, you’ve found it. You are changing your family tree every Sunday night, mate. That’s what it’s all about, right? Well done!

Scott

The Do-Gooder

Dear Mr Foot,

I do not know if you follow the Facebook groups formed around your books. But there has been a lot of pushback on your idea of the ‘Give Jar’ and kids giving a portion of their money to those in need. Some people cover it up by suggesting you meant the jar is for buying gifts for family or friends. Others reject the idea outright. Is this the state of our country?

Jen

Hi Jen,

People may say I’ve become a do-gooder by getting kids to put some of their pocket money into a Give Jar, but I can tell you it’s got nothing to do with raising a little Bono (who wears sunglasses to the dinner table and lectures everyone about starving kids in Africa).

Rather, it’s the only way I know that you can ‘break the brat’ in your kids. (Well, other than hard work.)

Look, our kids are living through the richest time in history, in one of the richest countries on earth. As a consequence, all the lecturing in the world can’t make them see how good they’ve got it.

But action can.

In fact, a researcher called Tim Kasser did a study called the ‘Materialism Intervention’. He picked a group of spoilt brats and got them to keep a ‘give jar’, donate to people who need it, and do some volunteer work. He also set up a control group of kids who did none of these things.

His research found that kids who had the intervention showed sustained increases in self-esteem over time, whereas their counterparts in the control group experienced decreases in self-esteem. And the best part is, it lasted: 10 months after the initial study, those same ex-brats reported that their wellbeing was still improving.

And it will work for your kids. As a bonus, if you do my ‘volunteer challenge’ as a family, it’ll create memories you’ll cherish in 20 years’ time.

Oh, and I take the Groucho Marx view of Facebook groups: I refuse to join any club that would have me as a member.

Scott

I Faced My Financial Fire

Dear Scott,

On November 23rd last year, I finally came to my senses and left a violent relationship ‒ then began my ‘financial fire’. My ex-husband immediately did three things: clear out our bank accounts, redraw on our mortgage, and direct his salary solely to his account. At that time, my baby girl was only 10 weeks old, I was on maternity leave at half-pay, and I was drowning in unsecured personal debt.

Yesterday, October 1st, I settled on my new property. I am now a sole homeowner, and my girls (aged 3 and now 1) and I have our very own home. We can start again and move on with our lives. This is all because in December last year ‒ at rock bottom ‒ I read The Barefoot Investor. I set up my buckets, returned to work, and got myself a damn good lawyer. I have gone from financial hardship to no debt, except the mortgage. Words will never be able to express my gratitude!

Melanie

Hi Melanie,

Each week a handful of people write to me to say “STOP PROMOTING YOUR BOOK!”. Luckily, I’ve long given up listening to the ‘full caps crowd’. Why? Because I know there are women in domestic violence relationships who are reading this right now, and they need to know there is hope. Melanie, thank you for being a shining light, not only for all the women reading but for the young women you’re raising.

You got this!

Scott

The Best Travel Money Deal

Hi Scott,

I read an article saying that Australians are getting ripped off by $2 billion a year on foreign exchange, mostly by the big banks. I am heading overseas at the end of the year, so what would you suggest I do to get the best deal?

Rick

Hi Rick,

You’re right, the big four bank accounts are generally rubbish: on average they charge $5 ATM fees and 3% currency conversion fees. If you buy foreign notes before you go, you’ll be charged around 2.5% commission (at a bank), and triple that at the airport (no, no, and ‒ are you crazy? ‒ no!).

I simply use my zero-fee banking account that doesn't have currency conversion fees, and all international ATM fees are rebated.

Scott

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

This morning I arrived home from a family holiday from Bali

I’ve just arrived home from a family holiday.

As I opened my front door, I quickly realised I’d brought home a souvenir from Bali: bacteria.

Yes, I’m typing this bent over with a bad case of ‘Bali belly’. Yet nothing bad ever happens to a columnist, so I’m using my tummy troubles as an analogy for how the world financial markets are feeling right now:

Queasy.

And worried about what’s coming down the err … pipes.

Case in point, here are the headlines that greeted my arrival back into the country:

“House prices to fall 15%: Morgan Stanley”

“ASX plunges ‒ $50 billion bloodbath”

Pass the bucket!

However, I view these headlines as about as reliable as consulting Dr Google about my tummy troubles:

“Bloating? Cramps? Vomiting? You could have stomach cancer! And possibly rabies!”

So what is really going on with investment markets, and, more importantly, what should you do about it?

Well, at long last the markets have started paying attention to the fact that global interest rates are on the rise.

Yet this shouldn’t come as a surprise to my regular readers … I’ve been banging on about it for years.

In fact, way back in 2015 I wrote an article entitled “2018, The Year First Home Owners Get their Revenge”, in which I urged young people to start aggressively saving up for a 20% deposit so they’ll be prepared to take advantage of lower house prices.

And for people approaching retirement I’ve long advised to save up a buffer of two to three years of living expenses in cash (less any government pension payments) in their super, so they aren’t forced to sell when the real crash comes.

That’s the real rib-tickler: for all the doom and gloom headlines this week, global interest rates are still incredibly low, and they’ve only just begun rising. In my tummy analogy, what we’re experiencing is merely an uncomfortable rumbling.

Yet the truth is that we Aussies, by taking on record household debt at a time when interest rates are at record lows, have already swallowed the bug. As a result, plenty of overstretched people may well find their financial lives will end up in the toilet sometime in the next decade.

The most important thing to take out of this week is to ask yourself: am I prepared?

Trust your gut.

Tread Your Own Path!

Barefoot Money Meals

Hey Scott and family!

I know you are probably being inundated with emails and messages about your new book (which is just freaking amazing!) but I wanted to share our experience.

Today we did the Grandparents’ Dinner Party from Chapter 3. Our eldest, 11-year-old Zeek, invited his grandparents for dinner. I showed Zeek the Barefoot Burgers recipe and he was super keen, so he wrote his list and off we went to Coles. He got his own trolley, and had his list and $30 to feed seven people. Not only did he clearly see where the cheapest items in store were ‒ he came in nearly $6 UNDER budget!

That night he turned the burgers into rissoles with a pasta side dish, steamed veg, plus the most divine chocolate cake I’ve ever tasted! Zeek then brought the cake to the table and said, “I have an announcement: tonight’s dinner was bought, prepped, cooked and served all by me!”The grandparents gasped ‒ then he showed them his receipt, and how he’d successfully made seven meals (with some leftovers for dads lunch) for $24.25. We all cheered while he cut and proudly dished his cake to us all.Without your book I don’t think I’d ever have given Zeek the opportunity to do what he just did at his age. This has totally changed my view! He has requested that he cook dinner every Wednesday (‘Money Meal’ night). And we are all for it.I cannot thank you enough for the head-start our boys are getting. We are proud ‘cult’ members for life!P.S. Your mum’s rissole recipe is just wicked!

Georgine

Hi Georgine,

This is totally awesome.

Parenting is a tough and mostly thankless job. Yet what you’re doing is not only building up Zeek’s financial confidence, but creating memories that you’ll have long after he (successfully) moves out. So please keep taking pics!

Zeek, good on you mate. Keep working your way through the entire Barefoot 10 checklist, and keep me updated on how it all goes. Catch you round like a rissole (and I’ll pass on your mum’s kind words to my mum.)

Thank-you for reading.

Scott

Best Kids’ Bank Account?

Hi Scott,

My 14-year-old son wants a debit card. He is a good saver and has a few thousand dollars in his bank account. But he currently saves with BankWest and they have an age restriction of 16 years for debit cards. I am thinking of changing his savings account over to Suncorp, as I think their interest for savings accounts is 2.6%. Any suggestions for institutions that will offer a debit card to a boy of 14 years?

Mandy

Hi Mandy,

Ah, the BankWest Kids Bonus Saver!

It’s like a slippery dip on a hot Summer's day … with a dog turd waiting for you at the end.

It certainly looks good ‒ earn 4.75%***** ... but then you get … asterisked.

* In addition to setting up a BankWest Kids Bonus Saver you also need to set up another Bankwest account, the Children's Savings Account (which has a much lower interest rate).

** You only earn the bonus interest when you deposit $25 to $250 per month and make no withdrawals.

*** In any month that you don’t meet these conditions, the standard interest rate (currently 0.01% p.a.) applies.

**** After 12 months everything over $1 in the account will be swept into your linked Children's Savings Account, “so you can start afresh”, says Bankwest. Yes, you can start afresh … with all your kid’s cash in the lower interest rate Children’s Savings account.

Slippery!

Okay, so the account you mention, Suncorp, pays 1.4%, and a bonus 1.2% ‒ if you deposit at least $20 each month and make no more than one withdrawal each month ‒ so a total of 2.6%. They also allow kids over the age of 11 to get a debit card.It’s okay, I guess.

But I’d be tempted to go with the CUA Youth eSaver, which pays 4% p.a. with no pesky hoops to jump through, and link it to the CUA Everyday Youth Account, which will give him fee-free banking and a debit card for kids over 14.

(Note: I get paid nothing for mentioning CUA, though I do get a kick out of berating BankWest.).

Scott

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

You Made Me Rich! … Now What Do I Do?

Hi Scott,

Twelve years ago (May 2006), you wrote an article in the Herald Sun talking about why you were buying shares in Warren Buffett’s Berkshire Hathaway. I know the date because I followed your advice, and I am very glad I did!I remember looking at the share price at the time and was astounded that a single share could be worth $59.Well, it is worth $217 a share!Even better, the Aussie dollar has gone down since my purchase, so I am sitting on a 350% total return.I am wondering whether I should sell, because I could use the money to pay off my mortgage. And Warren Buffett, now 88 years old, is older than my grandmother. How long can he go on for?What are you doing with your Berkshire Hathaway shares?

Nina

Hi Nina,

I hope you bought a lot of shares!

If you thought the Berkshire Hathaway’s shares were expensive, just remember that what you bought was ‘Class B’ shares. The original ‘Class A’ shares are currently trading for $450,000 per share in Aussie dollars. That’s for just one share.

Yes, Berkshire is currently trading at all-time highs, for two main reasons:

First, Buffett’s decision to invest in his own shares, via a share buy-back.In other words, the greatest investor in history is essentially telling investors that he thinks his stock is cheap.

(Who are we to argue?)

And second, the US stock market is also at all-time highs. However, Berkshire is sitting on around billion in cash, presumably waiting to be greedy when other people are fearful.

For all these reasons, I’m not going to be selling mine. However, I’m in a different situation to you, and I don’t have a mortgage. Just make sure you need to factor in capital gains tax (CGT) when you eventually decide to sell your shares.Well done!

Scott

One Star Amazon Reviews

After 18 months of tapping and toiling away, I finally pushed my new literary baby into the big wide world.

And the very first review on Amazon?

One star.

(Amazon is being generous here, because you can’t click zero stars.)

Yet I actually punched the air when I saw it … true dinks!

I took it as a good omen, given my last book’s first review was also ‘one star’.

(An employee from my old publisher thought he’d try and generate some buzz, so he wrote my very first review -- “great read!” -- but then ballsed it up by clicking one star instead of five  … and it’s still there today.)

What am I getting at?

We’re living in a hyper-connected, hyper-critical digital age, and you can’t control what people say about you.

Case in point, this week a bloke wrote that he’d seen through my covert operation of writing a book for kids and had unpicked the darker side of what I’m plotting: “He’s just hating on Commbank because they are in the same space he wants to be in ... schools.”

Boom!

So, while revelations this week showed that Australia’s largest issuer of credit cards paid Queensland state schools almost $400,000 for the right to sign up school kids, apparently I’m trying to compete with them to sign up kids to … jam jars?  And I’m apparently trying to flog their parents my book … that they can borrow from their school library? (I have donated 10,000 books ‒ one to every school in the country, so parents don't have to go out and buy it).

Bottom line?

Make peace with the fact that if you’re doing brave things (working hard, starting something, backing yourself), you’re going to make some people uncomfortable. And when it comes, don’t be surprised by criticism. Embrace it. It’s a sign that you’re treading your own path.

Tread Your Own Path!

P.S Can you please do me a favor?

I’d really appreciate it if you leave a quick honest review here.

(Good, bad, or otherwise).

Can Grandparents Do This?

Hi Scott,

I ordered three copies of your book, one for each of my adult children, but I am worried they will be too busy to get time to read it. For my grandkids’ sake I really want them to actually do it! So my question is, is this something we should do as grandparents, or do you have another idea?

Barbara

Hi Barbara,

I’d say you have three options:

First, you can do it with your grandkids. Why not? It may well grow into a special bond that you create with them.

Second, you can read the book and break it down for your time-poor adult kids so that it’s really easy (all they need to get started is three jam jars and a scoreboard (you can print from my website ‒ www.barefootinvestor.com/resources ‒ for free). Then you can casually skip to Chapter 3: The Grandparents’ Dinner Party and introduce them to the concept of the Barefoot Money Meals while you’re enjoying your grandkids’ cooking!

Third, you can get them (your adult children, I mean) the audiobook and ask them to play it when they’re in the car.

Here’s to changing your family tree!

Scott

The Second Chance

Hi Scott,

I was so excited when I read last week that you donated some of your books to a father doing time in Bathurst Correctional Complex. I just wanted to say thank you. Having someone in your position say “everyone deserves a second chance … and many people inside are parents” means a lot.I work for a non-profit volunteer group called Second Chances SA. We work with prisoners, their children and their families to help them create a better future for themselves. It’s not easy, but it’s just so important for the kids. They’re the innocent victims of their parents’ crimes. It’s not their fault!

Helen

G’day Helen,

You’re in luck.At the beginning of my new book I make what I call ‘The Barefoot Pledge’.

It was inspired by my old man. When I told him I was writing another book he said: “Just make sure you don’t become a wanker. Look after the battlers, son.”

So for every 10 copies of the book that I sell, I’m pledging to donate one copy to a parent in hardship.

And having a parent in the clink would certainly be bloody hard, so I’m going to send you through some books.

Thanks for the hard work you do.

Scott

My Proudest Dad Moment

I am not like most fathers.

See, most kids grow up watching their dad get into his work clobber and head off to work each day.

I, on the other hand, spend months at a time in my tracky dacks, heading upstairs now and then to tap away at a computer.

The very same computer my kids watch The Wiggles on. For all they know, I could be spending my day with Dorothy the Dinosaur.

Yet every father longs to be a hero to their kids.

So last year I decided to take my four-year-old son to a bookstore to show him my bestselling book.

The only problem?

I couldn’t find a single copy. It wasn’t on the shelves. I looked everywhere. Desperately. Not even one.

“Your book. It isn’t here, is it Daddy?” he said, squeezing my hand.

As luck would have it, a shop assistant walked past, recognised me and said “follow me”.

She took us out to the storeroom and showed us a sign pinned to the staff noticeboard that read: “Barefoot Investor … Because of theft, NO copies will be kept on the floor.”

True story.

Daddy’s book was popular … with thieves.

Recently, for the launch of my new book, my publisher asked if I could go to the printers’ and sign some copies.

I didn’t have to be asked twice. See, my son (now five) is obsessed with machinery. This was my chance to show him plenty of big machines … and plenty of copies of my new book.

The day turned out to be one of the highlights of my career:

Not just because of the sight of a hundred thousand copies of my book rolling off the presses.

But because I’m incredibly proud my book was printed in Australia — and, as luck would have it, only an hour from our family farm, at McPherson’s Printing in Maryborough, country Victoria.

The workers really turned it on for my son and me (and my dad, who tagged along too — they got three generations of Papes who are fond of a good conveyer belt!).

When we returned home from our adventure, I seriously felt like Gary Ablett (Junior or Senior, take your pick).

“It was the best day of my life, better than Christmas!”, my son announced to his mother.

“So, I guess you want to be an author like your dad when you grow up, hey?”

“No, I want to be a printer!”

Tread Your Own Path!

How Do You Get Paid, Barefoot?

Hi Scott,

I may well be the only person who had never heard of the Barefoot Investor, until this week! I heard you on ABC Radio’s Nightlife and bought your book the next morning. I’ve now finished it and can’t wait to get my investments going for my daughter (four years old). Yet the one thing that makes me a little unsure is that you have these product recommendations in there (zero-fee bank accounts, investment bonds, various super funds). What do you get out of mentioning them?

Steve

Hi Steve,

Awesome question.

Everyone should ask questions like this, because you need to know how people earn their money ‒ and if they’re getting any kickbacks.

So, how do I get paid?

Well, these days I move a lot of books, and I also have an investment newsletter, that’s how I get paid.

In the past I have done paid speaking gigs (for companies, for AFL and NRL clubs, for government departments like ASIC and the ATO, and for banks and super funds), though I haven’t been on the speaking circuit for years.

Yet given you’re new to Barefoot, Steve, let me get one thing very clear: I don’t get paid to recommend any products. Rest assured that anything I write about in my books ‒ the bank accounts, the super funds, the investment bonds, whatever ‒ are simply the lowest-cost, best-value products on the market, and I don’t receive even one cent for any recommendation. And I never will. That’s how I roll.

Having said that, I’d encourage you to do your own research, and, if you can find a better bank account or a cheaper index fund, go with it. Then let me know ‒ because one of the reasons I update my books every year is to keep hunting down the best deals.

When there’s a better deal in the market place, I’m all over it. No fear, no favour.

Scott

Why are you wearing Mummy’s makeup?

Writing a book is a weird experience.

I’ve spent months holed up on the farm, tapping away on my lonesome.

Yet this week couldn’t have been more different … ‘Lights! Camera! Action!’

Yes, I’ve been on the dog and pony show promoting my new book, The Barefoot Investor For Families.

I’ve spent the week spruiking my book on radio and television … generally being interviewed by people who hadn’t read it, weren’t likely to, and often asked the exact same questions.

Then last night I came home to an awkward question from my son:

“Dad ... are you wearing Mummy’s makeup?”, asked my five-year-old.

“It’s for the TV, cobber.”

(Some fathers wear hi-vis and steel-capped boots to work … I wear powder and lip balm.)

Yet what got me through the week was the Barefoot community.

You guys have been sending me awesome pictures of your kids, bringing the book to life and creating new family rituals. Please keep sending them through (scott@barefootinvestor.com) ‒ they absolutely make my day.

So it’s only right that I answer your questions about the new book in my column this week.

Now let’s get into it (after I powder my nose).

Tread Your Own Path!