Should I Tell My Boyfriend to Shut Up?

Hello!

My husband and I are so close to having a 20% deposit for our family home. However, with the prices of houses being so ridiculously high right now, he wants to wait and meanwhile put our house deposit into shares in the hope that we will have more than enough money in a couple of years. Should I listen to my husband or tell him to shut up?

Willa

Hi Willa,

My first thought is to tell him to shut up.

My second thought is to get him talking. Here are some clarifying questions you might want to ask:

“You reckon the property market is too high and due for a fall. Why wouldn’t that be the same situation for the share market? They’re both just assets, right?”

Whatever he answers, follow up with this:

“No one can predict what’s going to happen in the share market, or the property market, in the next few years. It could go up, down, or sideways. That being the case, let’s run some scenarios now and see how we’d deal with them:

“What would we do if our shares tank 50%?”

(Wait to get his response. “It won’t happen” is not the right answer. Ask him how he’d feel watching your deposit cut in half. Would he hold his nerve?)

“What would we do if the property market increases while we’re risking our savings in the share market?”

(Again, wait to get his response.)

And, finally, hit him with this: “Are you unsatisfied with what we can currently afford?”

It sounds like that is the root of the problem … and there’s no shame in that at all. In a rampant debt bubble, young people starting out have to make trade-offs. Just make sure you’ve thought them through.

And that’s going to require a lot of talking, and thinking!

Scott.

Barefoot Endorsement, Please

Hi Scott,

A reputable friend has suggested I invest in a CFX project (cryptocurrency foreign exchange). From what I understand it is kind of like multilevel marketing and a type of cryptocurrency. I have looked into it and it sounds good. However, I am hesitant to pay out my hard-earned cash without some endorsement from someone like you. I am planning a baby as a single woman at 45 and I bought my first home only a year ago, so I am looking at ways to increase my income and secure my future. Thoughts?

Lilly

Hi Lilly,

You want my endorsement?

Okay, here goes: No. No. No. Lilly, oh god no. No.

Is that emphatic enough for you?

Now, I’m betting your ‘reputable’ friend isn’t a brand-new home owner who is about to become a mature-age single parent. Lilly, you simply can’t afford to get swept up in this rubbish.

If you want to increase your income and secure your future — and that’s an admirable ambition! — work towards a qualification or skill that you can use when you’re at home with your bub.

Scott

You are in a lot of trouble

After hours of crying, our baby finally dropped off to sleep in his mother’s arms ...

… and then her phone rang.

The noise startled our son, and he began wailing.

“ANSWER IT!” she thundered at me.

I dived on her phone and shepherded it out of the bedroom.

“Hello?” I whined.

“A warrant has been issued for your arrest. Press 1 immediately”, said the recorded message.

I was so sleep deprived that I complied, and was promptly transferred to a human.

“We have found a discarded rental car with 20 pounds of cocaine, fraudulent bank statements, and bloodstains on the seats — the car was rented in your name,” announced the man on the end of the line.

“Who is this?” I yelled.

“My name is Richard Solman. I am an Australian Federal Police Officer. My badge number is 78291. Write that down. Your case number is 4859885. Write that down, too. You are potentially in a lot of trouble”, he warned.

For the next few minutes our conversation reminded me of those I’ve had with my three-year-old when it suddenly dawns on her that her brothers are gone and she has my full undivided attention ... so she keeps the story going on, and on, and on, and on ...

Then Richard went in for the kill.

He reminded me that the call was being recorded, and then asked for my ID.

And after I’d given him my (fake) details, he announced that I’d been a victim of identity theft.

“How much money do you have in your main account, Mister Tape?” he asked.

“I have $13,823”, I said precisely.

This got Richard audibly excited.

“I’m sorry to say that your accounts and your tax file number are compromised. All that money is at risk. We think it could be an inside job … a staff member from the ING bank”, said Rich.

Next, he ordered me to get in my car, drive to my nearest bank branch and transfer my money into what he called a ‘safe’ AFP account for 48 hours … while they got to the bottom of the case.

And all the time I was thinking to myself, “Who would ever fall for this rubbish?”

The correct answer, of course, is “enough people to make it more than worth their while”.

(Generally the most vulnerable people in our society — those with mental health issues and the elderly, who can be confused and intimidated. Last year Aussies lost $36 million from spam calls.)

Hold the phone! Here’s my take:

Twenty-five years ago, the internet lowered the cost of sending spam emails to practically zero. And our inboxes got hammered. Well, for a while, that is, until email providers created spam filters to shield us from the 320 billion junk emails sent each day.

Yet the scammers have now doubled down.

Technology has now lowered the cost of calling to basically zero, and spoofing technology makes it look like they’re calling you from a local number. Which explains why Richard and his mates are just so damn busy. They’re making 500 million spam calls around the world each day.

Yet telcos are busy building the phone version of spam filters (with a nudge from the government). Telstra says it’s blocking up to 500,000 spam calls a day.

My prediction?

Spam calls will soon be as rare as spam emails in your inbox.

Until then … if anyone rings you up with a warrant for your arrest, and asks about a discarded rental car with 20 pounds of cocaine, fraudulent bank statements, and bloodstains on the seats ...

Just press 1 … and tell them it was Mister Tape.

Tread Your Own Path!

Shares for Kids

“Dad, do you own shares in … Woolworths?”

“Yes.”

“What about Coles?”

“Sure do, mate.”

“What about … what about ... JOHN DEERE?” screamed my five-year-old, his eyes bulging.

“Oh yeah!” I yelled, and then we high-fived.

Listen, as a father, a finance nerd and a farmer, that moment was a bloody royal flush.

It does not get better than that.

These days my portfolio is basically made up of both local and international index funds:

A couple of ultra-low-cost funds hold literally thousands of companies (well, a sliver of each), including the biggest companies on earth. In other words, you name it, and chances are we own it. (What’s more, when my kids get older and they ask me about the latest hot stock, the automatic adding nature of an index fund will allow me to say, “Yeah, I own that too”).

My kids have nailed the working, saving, spending and giving parts of the Jam Jar Strategy. Now I’m slowly introducing the idea of investing some of that money into shares, and learning about compound interest.

And it’s not just my kidlets.

This week I heard from Will, who asked:

“I am five years old and I want to buy some shares. Am I able to buy a share these days where I actually get a share certificate or something in the mail?”

Well, what I would tell Will is the same thing I’d tell my own kids (and what I’m actually doing with them):

As a parent you can buy shares on your kids’ behalf (in your name, but as a trustee for your child, via an online broker) and then transfer the shares to their name via a simple form when they turn 18, without incurring capital gains tax (CGT), as there is no change in beneficiary.

What shares should kids buy?

Well, when I was a kid, my father decided to pay me my pocket money via one share in BHP.

He said: “You now own a share in one of the biggest companies on earth, and they share their profits with you.”

I never got a share certificate … or the actual share come to think of it!?

Yet that day changed the course of my life.

So for kids I’d seriously consider buying either an Aussie shares index fund or an international index shares fund -- or better yet both. That way they’ll own thousands of the world’s biggest companies. Then parents can print out a list of all the companies they own, and put them on their wall: just for the bragging rights.

Tread Your Own Path!

P.S. Want to really compound the gains? Make sure it’s money your kids have earned themselves fair and square.

Good for My Soul

Hey Scott,

You copped some flak about your boys’ camping weekend, but I just wanted to say how much that story meant to me. In fact, I cried reading it. The great sadness of screens and possessions is that, too often these days, dads are not around. Hearing your stories of financial freedom and the life you’ve chosen to build is so good for my soul!

Simone

Hey Simone,

I once read, “If you want your children to turn out well, spend twice as much time with them and half as much money”.

That sounds about right to me.

Scott.

I’ve Been Conned — by My Parents

Dear Scott,

I feel frustrated, confused and taken advantage of. Back when I was just 22 (I am 28 now), my parents could not pay their mortgage and somehow conned me into taking ownership of their house. They promised me money, tax cuts, all the greatness in the world. Stupidly, I said yes and I now have a $500,000 mortgage under my name. They pay for the loan, though they are frequently late, and Mum loves to withdraw from the equity too. I have tried to get my name off the loan but they keep resisting. Worst of all, because I do not live there, I get shafted at tax time. Is there anything I can do?

Zoe

Hi Zoe,

Oh wow.

I’m only getting your side of the story, but let me try and piece together what’s going on:

It sounds like your parents live beyond their means.

And so, to take the pressure off themselves, they decided to make you their landlord … at least on paper.

At which point that pressure transferred onto your shoulders.

So, what should you do?

Well, don’t lose sight of the fact that the most valuable asset in this situation is the relationship you have with your parents.

So your first step is to blame me, the Barefoot Investor.

Tell your parents that you wrote to me and I suggested that you talk to an accountant (one who doesn’t know your parents). Ask the accountant to review the situation and advise what you should do. They may find you have significant equity in the property and you’re getting a great return. Or they may find it’s a money pit and you’d be better off selling (it’s your house, after all!).

Whatever the decision, I’d let your parents know that this is what the accountant has advised. In other words, blame me, blame the accountant, and try to keep your relationship intact.

Scott.

The Virgin Investor

Hi Scott

We are pretty excited that our 16-year-old daughter is about to start her first job. Now to work out which super fund for her to join! Following the advice in your book, we have started the process of searching for a low-cost fund. I like the look of Virgin Money Super, which charges a $58 admin fee plus 0.39% of the balance per annum. My concern is that it is a new fund and the investment options are all high risk, not to mention that Virgin Atlantic filed for ‘Chapter 11’ (hopefully not all the Virgin-branded businesses will meet the same fate). Would appreciate your advice.

Daniel

Hi Daniel,

Virgin Atlantic is not the same as Virgin Money. It’s just another one of Richard Branson’s many Virgin brand extensions. (He once tried Virgin Brides — a wedding dress business that didn’t survive its honeymoon). Virgin Money is actually owned 100% by the Bank of Queensland.

Which is kind of confusing, right?

Well, try looking at their fee structure!

They’re actually higher than you state: you left off the investment fee (0.116%) and indirect fees (0.09%).

But don’t feel bad for missing these details.

The fact is super is bloody confusing … and that’s exactly how the industry likes it.

You’re an awesome, well-meaning dad trying to help out your kid, and it’s a disgrace that it’s this hard.

Thankfully, in last year’s budget the Government announced they’re building a new comparison tool called ‘YourSuper’ which is slated to be available by 1 July this year.

So, for now, I’d probably stick with her default fund, and then when YourSuper is launched I’d encourage you to cut the apron strings and let your daughter select her own super fund using it.

You could even bribe her with a new pair of shoes if she can find a good high-growth option in a low-cost fund. Because the money she saves getting this right will eventually buy her a whole new wardrobe.

Scott.

You’re a Dog, Barefoot

Hey Scott,

I am 23, a medical receptionist, and have been trading crypto since lockdown — and killing it, especially in DOGE (Dogecoin). I read your article on DOGE, and it was a joke. Who do I trust more, some hack from Australia or THE WORLD’S RICHEST MAN — genius Elon Musk? You don’t get rich buying index funds, loser.

Kerrie

Hey Kerrie,

Don’t bite me!

All I was doing was quoting the creator of Dogecoin, who said:

“It doesn’t make sense. It’s super absurd. The coin design was absurd.”

Dogecoin was set up as a joke. It has no tangible value, other than as a gambling chip at a crypto-casino ... which just so happens to have Elon Musk sitting at the table.

Why is he buying Dogecoin?

I have no idea.

Maybe it’s about his insatiable appetite for attention. Perhaps it’s to stroke his own ego. Maybe it’s both.

Yet while Musk is a genius, and the world’s (second) richest man, that doesn’t automatically mean you should take financial advice from him.

After all, his decision to throw millions at Dogecoin is like you or me buying a scratchie.

He’s worth $US190 billion!

He could drop $200 million down the back seat of his Tesla and he wouldn’t even notice it.

Billionaires are different to people like you and me. They don’t have to worry about things like buying a home, or paying off their HECS, or funding their retirement.

Most of us do.

And to achieve them we need to invest intelligently for the very long term. And history has proven emphatically that the most intelligent long-term investment is a broad-based index fund.

No joke.

Scott.

Dirty Rats

“Tick-tick-tick-tick.”

Our family wagon was having a moment.

The indicator seemed to be hyperventilating, ticking madly at triple speed.

‘Probably nothing’, I thought to myself.

Then a red warning light began flashing: ‘brake light failure’.

Okay, so brake lights are kind of a non-negotiable.

I detoured to the local mechanic’s, just to be on the safe side.

“You got rats!” he announced after popping the bonnet.

“They’ve chewed through nearly all the wiring … I’m surprised you couldn’t smell them.”

I was not surprised. Our family wagon is a house party for a mouse party: half-eaten Cruskits, discarded Vegemite toast, rotting peaches, even the odd nappy. It’s revolting.

So serves us right, right?

Well, our other car — my car — is a strict ‘no food zone’, yet as soon as I got home and opened the door I knew Mickey and his mates had spent the weekend partying there too.

(Life on the farm has its drawbacks.)

Yet what happened next floored us:

The insurance company got the mechanic’s bill to painstakingly strip back both cars and redo all the wiring … and decided it would be cheaper to write off both our cars instead!

So, being the Barefoot Investor, I set off to buy two used cars.

And that was when the real trouble started.

My first call was to a mate who works at a used car dealership in the bush:

“Sorry, I’ve got no stock”, he said. “I sold the last two cars on the lot to a dealer in Perth! He’s transporting them over there for god sakes! In my 25 years in this industry, I have never seen anything like it.”

He was right.

Over the next few weeks, every used car I looked at was priced around 30% higher than Redbook (the industry pricing database) indicated it should be.

What was going on?

Aren’t cars supposed to fall in value?

Normally, yes.

In fact, by as much as 40% over the first five years.

Why?

Well, mainly because we Aussies purchase around 1.1 million brand-new cars each year. (A staggering figure given there’s only 25 million of us on the island!)

Yet in 2020, like most things, the car market had a bingle.

We still wanted to buy cars, especially to escape the great unwashed on public transport.

Yet, because of COVID-related factory closures, the global car industry supplied 23% fewer cars in 2020 than normal. And so demand spilled over to the used car market: Moody’s Analytics found that second-hand car prices increased 36% last year — the biggest on record.

In other words, for the first time ever, the demand for cars outstripped the supply.

So in the end we split the difference and bought both a new and a used car.

Which shows just how fortunate we are.

Spare a thought for young people: not only have they borne the brunt of the COVID layoffs (being part-time and casual workers), but the cost of their first set of wheels has just gone up by a third!

If that’s you, don’t panic.

Truth is, you have a wonderfully long road-trip full of adventure ahead.

And remember, one day that open road may turn into a school run. You’ll find yourself behind the wheel of a people-mover, with cranky kids in the back and a woeful whiff of rotting peaches (and mice droppings) coming through the vents.

Soak in the smell of freedom while it lasts!

Tread Your Own Path!

You Alarmed Me!

Hey Scott,

A bit confused about your column ‘Financial Markets Are a Dog’s Breakfast’. Are you saying the stock market is a farce and will fail due to all the extra money printing and zero interest rates? I am a big-time Barefooter who is heavily investing in stocks right now, so would you please explain what you mean?

Harriet

Hi Harriet,

Let me say this right up front: I’m still invested in the share market, and I don’t plan on ever selling.

What I was referring to last week was the frothy end of the market — like Dogecoin. The fact is that money-printing and low interest rates are driving up the prices of everything, and some of that is spilling over to crazy stuff like Dogecoin.

Look, there’s a lot of easy money being made right now (which explains why almost every 22-year-old kid I meet these days seems to be an investment guru.)

Yet history tells me these things don’t last.

So what should you do?

Well, you could follow my lead and do nothing.

As I explain in my book, you should think of your share portfolio like a little apple tree. You’ve planted it. There’s no need to move it, or worry about it. Just leave it to do its thing. And in 20 or 30 years’ time, just like an apple tree, it will produce amazing apples that will feed you and your grandkids.

Finally, to your question: the stock market is not a farce. Over the long term the riskiest thing you can do with the share market … is to not invest in it.

Because at the end of the day, Harriet, she’ll be apples!

Scott.

Scooting Away

Hi Scott

I would like to thank you for your Barefoot Investor for Families guide. I have two girls — almost four and almost six — and we have implemented your ‘3 jam jars, 3 jobs, 3 minutes’ regime. It is amazing how much can be achieved with a spray bottle and cloth. My eldest daughter just bought her first scooter with her saved money. Her pride in her achievement is priceless.

Regards, Maxine

Hi Maxine,

You nailed it:

It’s amazing how much can be achieved with a spray bottle and cloth.

Here’s the thing: every parent tries pocket money at least once, and it generally fizzles out after a while.

Yet if you’re reading this, just have a look at Maxine’s daughter’s eyes … and tell me it’s not worth an hour of your time on a Sunday to wrangle your kids to get them to do their jobs.

Something amazing happens to a kid when they work hard, save up, and buy something on their own.

Congratulations, and tell your daughter that’s the coolest scooter I’ve seen in a long while!

Scott.

Barefoot Valentine’s Day

Hello Scott,

Our relationship began in an online Barefoot group about two years ago — and we just got married last month! We are hard-working teachers who enjoy being thrifty. We have an ETF share portfolio and an investment property, and we are enjoying the financial freedom of following the Barefoot Steps.

To be together we have had to contend with personal tragedy, extended border restrictions that separated us for months, and a two-week quarantine. We have also had some unexpected medical expenses in this bizarre year. But the whole time we repeated “We’ve got this!” Our wedding was small, uncomplicated and focused, with the same happiness observed as at weddings that cost 10 times what we spent.

Thanks again, Simon and Michelle

Hi guys,

You made my day.

When I started writing this column, I had no idea it would turn into a community.

Yet, over the past 17 years, thousands of Barefooters from all around the country have read along with the questions in these pages each week. Sometimes they thump the table … shake their head … and ask “how the hell did they get themselves into this mess?”

But every now and again a question pops up that has everybody cheering. And, today, yours is it.

Happy Valentine’s Day!

Scott.

First Home Hell

Barefoot,

I have been saving as much as I can. By mid-year we should have a deposit and could start looking at buying rather than renting. I know your normal advice is to buy a house when you can afford it. But does that still apply when these inflated house prices seem like a bit of a false economy?

Doug

Hi Doug,

I feel for you.

Property prices are getting juiced because of low interest rates.

And the Reserve Bank has said they’ll keep rates at (basically) zero for at least the next three years.

Here’s how this is playing out in the real world.

Greater Bank has a one-year fixed home loan rate of just 1.69%!

The lowest on record.

At the same time, the average rate on a bank savings account, according to Mozo is just 0.18%!

Also the lowest on record.

In other words, right now property prices are at record highs and are rising faster than most people can save. Which is great for people like me who own property, shares or other assets. Yet it’s absolutely horrific for anyone starting from scratch, trying to save and scrounge up a first home deposit.

So, what to do?

Well, there’s all kinds of advice people will try to give you:

Ranging from the practical (save a 20% deposit, take a long view) ...

To the patronising (buy out in Woop Woop and sit on milk crates for a few years) ...

To the pathetic (“I’m 23 and own 75 rental properties, it ain’t that hard if you have a system”).

Yet there are no easy answers.

So instead I want to leave you with this thought:

Interest rates are only going one way from here … up.

I don’t know when. But if you’re taking out a 25-year mortgage, well, chances are you’ll see hikes.

And that’s why I’ve consistently advised people to stick with what works …

Save up a 20% deposit, find a home you’re happy to live in for 10 years, buy it.

Forget about what the market is doing.

Scott.

Fire Alert

Hi Scott

My beautiful friends, who have three children under eight, were caught in the Gidgegannup fires yesterday. They escaped with the clothes they were wearing, their cats and their toothbrushes. They lost their home and all other possessions. If there is any advice or assistance you could suggest to them, it would be ever so appreciated. I know I am being rather presumptuous but I thought asking you may be my best way to help them.

Deb

Hi Deb,

I called your friends this week and offered them a hand.

Anyone struggling with money can call the National Debt Helpline on 1800 007 007, or the Small Business Support Line on 1800 413 828, and speak to a financial counsellor like me.

Your question really hit home because this weekend marks the 7th anniversary of Liz and I losing practically everything we owned in a bushfire.

Like your friends, we didn’t think it was going to happen to us.

So, here’s a five-minute peace of mind booster.

Pull out your phone and call your insurance company and ask them how much you’re covered for, and what events you can claim for. Bonus points: while you’re on hold, take a video of your house and all your possessions. (And, as an extra bonus, your conversation will be recorded, which you can call on if you ever have to make a claim.)

Scott.

A dog of an investment (that is rocketing)

Hayley thinks I’m a genius.

The young mum wrote to me this week after reading my Barefoot Investor for Families book.

She’d gotten to the part where I mentioned an investment that has rocketed 1,500% this year.

What was the investment?

Dogecoin.

Here’s what I wrote:

“Maybe you’ve picked this book up at the Romsey Op Shop in the year 2040. Maybe that guy on Twitter was right and the global currency is now Dogecoins. (Maybe not.)”

I was joking, of course.

Then again, so was the Aussie who invented Dogecoin, Jackson Palmer.

He and a mate typed up the cryptocurrency code when they were bored one afternoon in 2013.

“It was a piss-take”, he told the Wall Street Journal earlier this month.

Palmer created Dogecoin as a parody of all the scammy cryptocurrencies that were being launched in 2013. (The text on the Dogecoin logo reads “wow much coin how money so crypto plz mine v rich very currency … wow”.)

Yet that was then … and this is now.

And after a series of tweets from Elon Musk and Snoop Dog, and a riotous ramp by Reddit day traders, today the value of all the Dogecoins is … wait for it … $US10 billion.

Palmer, who gave away all his Dogecoins years ago, clearly wants nothing to do with the mongrel he created:

“It doesn’t make sense. It’s super absurd. The coin design was absurd.”

Woof! Woof!

Look, I kicked off my career twenty years ago at the height of the dot.com boom, and I can tell you it has nothing on the craziness that’s happening today.

Then again, back at the turn of the millennium the world’s central banks weren’t barking mad.

Today the US Federal Reserve has its printing press on overdrive and is flooding the world with trillions of freshly minted dollars. At the same time, interest rates are set at (basically) zero and will remain there for the foreseeable future.

With so much money sloshing around the world trying to find a home, is it any wonder some of it goes to the dogs?

“We are now living through the greatest disconnect between financial markets and the real economy that we have ever seen”, says billionaire and investment expert Mohamed El-Erian.

He’s right.

Financial markets are a dog’s breakfast.

I have no idea when it will end, but I have absolutely no doubt how it will end:

Badly.

Mark my words, there’s a punchline coming.

And it’s only when the joke lands that we’ll work out who finds themselves is in the doghouse.

Tread Your Own Path!

ING Makes Life Difficult

Hi Scott,

Today I received an email from ING (I am sure you did too) saying that in March 2021 there would be an extra criterion to meet to get the best interest rates for the Savings Maximiser — at the end of the month your balance has to be more than what it was at the start of the month.

What annoyed me was that it was framed as a great opportunity for customers to save, even though it is clear the bank wants to make more money and pay less interest! I called ING to give my feedback and was told it is what all the banks are doing. Is that true?

Full disclosure: I am someone who will be disadvantaged by this for a time as I will be going on maternity leave. We have saved hard into our ‘Fire Extinguisher’ account to cover the period I won’t be working. We won’t be able to save more during this time, meaning we won’t qualify for the best interest rate. Maybe I am getting more worked up over this than I need to be, but I would appreciate your perspective!

Bec

Hi Bec,

This move by ING reminds me of a girl I once dated at uni.

When we began dating, things were simple, open and transparent.

Yet it got way more complicated as time went by ...

“Are you going to the pub to avoid me?”

“Don’t you dare pat my cat like that.”

And my favourite: “What do you mean when you say ‘good morning’?”

In the end, there were so many emotional hoops to jump through, it all became too freaking hard.

ING is fast becoming like my ex-girlfriend.

I was attracted to them because of the simplicity: they paid a leading interest rate, with no fees.

Unlike other offerings, they didn’t play those teaser rate and ‘bait and switch’ games.

Well, until now.

Their marketing guys have obviously decided they’ve got enough customers, so from March 1 they can afford to burn off a few, and trust the majority will stick.

So, Bec, I called up ING and spoke to them on your behalf.

They told me they plan on paying a higher rate of interest than they are now (though they wouldn’t confirm how much it would be).

They also said, “You know, Scott, technically you could transfer a single dollar and still get the interest”.

Yet that just gave me flashbacks to my uni dating days.

I mean, why make us jump through hoops? We’re already going steady!
So, Bec, what to do?

Well, many people may be better off with ING’s higher rate. But in your situation, you’re probably better off with UBank, Up, or even ME Bank, who don’t (yet) play these silly games.

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.

Break Neck Barefoot

Hi Scott,

Just over three years ago I read your book, and took action. As my husband runs his own company, the first thing we did (after setting up our buckets) was to put aside three months of Mojo. To celebrate our daughter turning four we visited a water park, but it ended in tragedy with my husband breaking his neck. This resulted in a week in the spinal unit and three months in a neck brace, unable to work. The only thing that got us through was having our Mojo to fall back on. Since then he has also been attacked by a dog at work and suffered from a case of the shingles, and each time our Mojo got us through. Who would have known that a $25 book would have helped and saved us so much!

Yours in health, Wendy

Hey Wendy,

Fair dinkum, I thought I’d had it rough in 2020, but your husband wins the COVID cup!

What I took out of last year was an appreciation of just how risky the world really is.

My advice?

Keep your Mojo close (and don’t pat a growling dog).

Scott.

Making Babies on the Stock Market

Hey Barefoot ...

New Year’s resolution number one for 2021 — invest in shares.

HELP!

There are so many options and so much conflicting information out there. Superhero, CommSec, Vanguard ... EFT, index fund, AFIC, Raiz ... It is doing my head in. I have read the ins and outs on most websites but still have no idea where to start or what features I really need.

Superhero offers $5 trades, and it seems to be marketed directly to me — a millennial starting out in the share game — but is it too good to be true?

I just want to pay low or no fees (I do listen to you sometimes!) and be able to sit back and watch my money make babies.

I would LOVE a simple, no-fuss, Barefoot-style guide to getting into shares before I’m an old lady regretting not following through on my 30-year-old New Year’s resolution.

Thanks for helping me kill the finance game thus far. In the last five years I have bought a house and paid off a pesky credit card ... now I am ready to take the next step!

Nat

Hi Nat,

The share market is so hot right now.

It’s like TikTok.

In fact, there are a lot of young gurus giving trading tips to millennials on social media.

I may be getting old in the toe, but there’s a lot of stupid stuff happening in the market right now, and a lot of it is being targeted at young, inexperienced traders.

Mark my words: this will not end well.

Yet you are killing it.

You say you want a Barefoot-style guide to investing before you end up a regretful old lady?

Well, here it is:

You’re already through the fourth Barefoot Step (Buy Your Home), and now you’re onto Step 5 (Increase Your Super to 15%).

That is your next step. Do it, and you’ll be investing in the share market, compounding your returns over the (very) long term, and getting a tax deduction to boot.

Tik. Tok.

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.

“I Don’t Need Your Help but Wish to Criticise You …”

I don’t need your help but wish to criticise your answer to “Should I Pay My HELP Debt?” Your first response should have been “of course”, but you treated the subject as most recipients do, with a dismissive attitude on how to avoid it. As an older Australian, I need to tell you: it’s a loan and recipients have a responsibility to pay it back. Emphasising that it dies with you also indicates your attitude. Poor form for a self-proclaimed responsible purveyor of advice.

Gordon

Hi Gordon,

Thank you for your criticism.

So your basic premise is this: ‘If you owe a debt, it’s your duty to pay it off as soon as possible.’

However, that is not the premise of the Government.

They have set HECS-HELP up without a commercial interest rate, and with repayments based on your income.

And they’ve discontinued the discount for repaying early.

It’s almost as if they don’t want you to repay early!

These bloody kids get a good deal, right?

Maybe. But, Gordon, remember that as an older Australian you had free university. And you also had affordable housing.

Young people today have neither.

Scott

Barefoot, where the bloody hell are you?

I’m back!

Let’s kick off the New Year with the #1 question people have been asking me over the past few weeks:

“Barefoot, where the bloody hell are you?”

Answer: I took the school holidays off.

My thinking?

Well, I only have 18 summers with my kids, and I want to make each and every one count.

Yet with COVID, our options were a little ... limited.

So I came up with the ultimate trip: camping at a remote national park, some 500 km away.

“Are you crazy?” asked my wife (who wisely stayed home, having just given birth to our fourth child).

“No doubt”, I said, as I bundled my two eldest boys into the ute and set off on our grand adventure.

My thinking was this: last year taught them to wash their hands for 20 seconds, to sneeze into their elbows, and to socially distance. So this year I wanted to give the boys the gift of good old-fashioned grubbiness.

And grubby we got!

We didn’t shower for a week. We did our business in the bushes. We ate off a rusty communal campfire hotplate that hadn’t been sterilised with antiseptic wipes. We slept shoulder-to-shoulder in a tent.

At the crack of dawn our flimsy tent would start getting lighter, hotter, and smellier ... nature's signal it was time to get up and spend the day together, swimming, bushwalking, and playing board games by the fire at night.

Rinse (in the ocean), and repeat.

Sounds delightful, right?

Okay, so let’s take off the rose-tinted glasses:

It was a rewarding holiday, but it sure wasn’t relaxing.

The trip took us eight hours (that’s 56 hours in preschooler time).

Seriously, 20 minutes in, I heard from the back: “Daaad, how much longer?”

And when we got there, we had to set up camp, and sleep three-deep in a stinking hot tent.

And, unlike a resort or a beach house, there was nowhere to hide away from each other.

And no mobile reception, so nowhere for us to hide away from each other mentally either.

And no restaurant cooking us a hot meal … instead we lugged food and drinking water hundreds of kilometres into the bush (and Dad’s cooking skills are already a little, shall we say, agricultural).

Still, it didn’t matter.

See, I’m in the memory-making business, and that holiday is one that none of us will ever forget.

After the year we’ve had, we all need to be reminded of how little it costs to make memories.

After all, think back to your most precious memories: I’ll bet they didn’t cost you a cent.

Tread Your Own Path!