How to beat surging food bills

Around the farm, everything seems to be more expensive.

Yet nothing more than fertiliser, which has skyrocketed in price since I’ve been away, and is now at an all-time high.

I know what you’re thinking: “Dude, is this the Romsey Rag’s Farm Report or something?”

Well, hold up a minute, because what I’m talking about here has massive ramifications for 2022.

Global food prices have just hit a 10-year high — rising a staggering 30% this year — according to the United Nations.

A quick primer for those who figure their food magically comes from an underpaid dude on a bike:

Fertiliser is a key ingredient in how we feed the world. If farmers use less fertiliser, they’ll grow less food, which means that in poorer parts of the world there may be a lot of hungry people next year. And, as my old mate Tim Fischer used to say, “society is three meals away from a revolution”.

For you and me, this will likely mean even higher food prices next year.

So let me show you how to beat the price rise.

The average Aussie household throws out 11% of the food they buy, which works out to be chucking $1,038 per year in the bin, according to the annual Rabobank Food and Farming Report.

So, given we all have a jar of something funky in our fridge that pre-dates the pandemic, here are a few practical things we’ve done lately to curb our food waste.

First, we Marie Kondo’d our pantry.

You don’t need to ask “Does this spark joy?” but “Would this give me salmonella?”

When in doubt, throw it out. (However if it’s canned or non-perishable food, do your bit and donate it to your local Food Bank — they really need it).

Second, we steer clear of shopping at the supermarket. Instead we order online, so we don’t end up buying stuff we don’t need. Throughout the week we keep a running list on Alexa, but you can use whatever digital overlord that tracks your life. Heck, you could even go Boomer and keep a list of stuff on the back of the fridge. Whatever works.

Finally, every parent knows that one of the biggest wasters of food is fussy kids. Well, we cracked the code on that one: as soon as we got our kids growing their own veggies, they couldn’t get enough of them.
We also have chooks for eggy soldiers … and fertiliser.

Tread Your Own Path!

This is How a Heart Breaks

Dear Scott,

We can’t buy a home. My fiancé and I both earn good money. We have a healthy deposit and budget and want to buy so we can start a family. We’ve offered more than they were asking and been told no — the vendor took a cash offer instead. We told agents we are pre-approved first home-buyers, yet they just don’t call us back. I obsess over realestate.com, ringing as soon as something comes up, only to find it was sold while waiting to be uploaded to the site. The constant rejection hurts when it’s holding us up from doing what we so desperately want to do — have a baby. Will it end? My heart breaks for anybody earning the average wage or below it. The dream of owning your own home must be feeling like a heart crushing unlikelihood.
Just another beaten-down first homebuyer

Hi-ya

I have a few thoughts.

First, as a property investor myself, I get no joy from surging house prices, which have increased a staggering 21% over the past 12 months. This isn’t healthy for the stability of our country.

Second, I believe interest rates will rise, and when they do they’ll burst the housing market bubble.

Let me be clear: I have no crystal ball, and picking short-term economic moves is a mug’s game — just ask the Reserve Bank, which has been consistently wrong on all manner of economic forecasts.

Yet it gets clearer when you zoom out:

In 1990 official interest rates were 17.5% … today they are 0.1%.

Question: where do you think they’ll go over the next five to ten years?

I asked my eight-year-old this question, and he said “Up!”

“After all, they can’t get that much lower, Dad.” (Get this kid a seat on the RBA board!)

So when interest rates rise — and they surely will — it’ll be brutal for many people who’ve borrowed too much. I can’t tell you when that will be … the only thing I can say with great certainty is that you don’t want to be up to your eyeballs in debt when they do.

Finally, who says you need to own a home to have a baby?

Be a smart, savvy, cashed-up renter … rather than a postcode povvo.

Scott.

A Super Confession

Hi Scott,

My husband and I have been with Christian Super Fund for the past 20 years. Today they sent us a letter saying that they’ve been underperforming and that we should change funds. My husband is 61 and I’m 59. We don’t have much super. Should we be worried about this?

Jenny

Hi Jenny,

So it’s confession time at Christian Super:

“Forgive me, member, for we have sinned … we have consistently underperformed other super funds.”

For background, earlier this year 13 super funds were named and shamed by the regulator. The Government then forced these dud funds to write a letter to their (combined 1.1 million) members and not only confess their sins but recommend they switch to a better product using the Government’s YourSuper comparison tool.

Can you imagine if you had to do this to your girlfriend?

“Jenny, it’s come to my attention that I’m a jerk. I’ve underperformed for so many years that I’m writing to you today to suggest you go on Tinder and find someone who can truly listen, get along with your mother, and meet your needs without being passive aggressive.”

Personally, as a strictly low-cost index fund investor, I have very little sympathy for super funds that underperform the benchmarks over the long term. Even so-called ethical funds like Christian Super. Fact is, there are low-cost index funds that will screen out unethical companies. Use them instead. Then donate the extra money you make to causes that you’re passionate about.

Scott.

Father Warns His Son Not to Read Barefoot

Dear Scott,

I’m 17 now, and I read The Barefoot Investor for Families when I was 14. I was in Dymocks and saw your book. My dad sighed and said, “You won't like it, why don’t you pick out Harry Potter or something”. He eventually gave in and bought it for me. I’m so glad he did, because your book started my financial journey. On my 15th birthday, I opened a bank account. Since then, I’ve invested $5,000 in a diverse share portfolio (thank you, index funds!), started contributing to my super, and started a business doing data entry for medical firms. I owe you a lot.

Jed

Hi Jed

Dude, you are literally sticking it to the man … your old man!

Still, I bet he’s damn proud of what you’ve achieved: to be an investor (inside and outside of super!) and to have opened up a small business as a teenager?! Seriously, you rock.

Everyone talks about the power of compound interest, yet the truth is that almost everyone watches it pass by.

Not you.

You are setting yourself up to be a compounding machine.

Scott.

Multimillion-dollar Mortgage

Scott,

I’ve wanted to write to you for years, but have been too shy. I just wanted to say thank you. A few years ago we were on a wage of less than $80k a year — with a couple of million dollars in mortgage debt, and credit cards and personal loans up to our eyeballs. I was following advice from property investment books, so I thought we were setting ourselves up for success. How wrong I was. After reading your book, now we have no debt, one property and over $100k in Mojo. I literally never thought we would be in this position and feeling this secure. Thank you.

Ben

Hey Ben,

You were in debt of a couple million dollars on a salary of less than $80,000? In the world of financial influencers on Instagram, you’d be a success story … who was stressed out of his eyeballs and couldn’t sleep at night. Well done for treading your own path!

Scott.

My Boyfriend Owes me $85,000

Hi Scott,

I got into debt a few years back, but read your book and was debt-free by October 2019 at the age of 26. I felt amazing! Fast-forward to today and I’ve borrowed $85,000 via personal loans and dipping into my super … to give to my boyfriend. He had a rough couple years — lost his job and had custody battles with his ex — and I wanted to support him. But now I’m desperate. I have nothing in my savings and I live week to week. He’s trying to get a loan to put the debt into his name but his chances aren’t looking good as he has a bad credit rating and unexpected bills keep popping up. The bank says the loan will probably need to be secured. My friends have given me a hard time about it but I just wanted to help my boyfriend like he would have done for me. Is there anything we can do to get the debt out of my name?

Linda

Hey Linda,

I’m not going to judge you ... as I’m sure you’re already being pretty hard on yourself.

Okay, I can’t stop myself: I’m really dirty that you took money out of your super, Linda. That was for your retirement!

All right, I’ve got that off my chest so let me answer your question. If he’s got no assets, no income, and a bad credit rating, he’s going to struggle to get a loan. You could request to have his name added to the loans, but you’ll still both be jointly and severally liable: so if he doesn’t pay they’ll still chase you.

Here’s the deal: it’s up to him to pay it back. If he wants to prove his love and commitment to you, he’ll work two jobs (plus deliver pizzas at night) to pay it off. I’d sit him down and explain that you helped him out of love and because you knew that he’d do the same thing for you. Well, now it’s time for him to prove it.

Scott.

You’re An Embarrassment, Barefoot

Mr Pape,

You are costing your followers HUGE gains by sticking your head in the sand with crypto. Okay, so let’s put to one side the 1000%+ gains that have been made on various coins, and focus on income. Who doesn’t want a 17% return from staking coins? Crypto and DeFi (Decentralised Finance) are the future. The Barefoot Investor is the past. Wake up. You’re embarrassing yourself.

Chris

Hi Chris,

First, an apology to my dear old mother, who always asks: “Why do you print the questions of people who attack you?”

(Because it keeps me amused, Mum.)

Chris, you have me all wrong: I’m wide awake, and watching finance being both disrupted and digitised.

The only difference is that I haven’t made it part of my belief system, as so many other people seem to have.

That’s how I can simultaneously admire and cheer on the next development of the internet (dubbed ‘web3’), while also calling out a lot of dumb, greedy stuff that’s going on. And there is a LOT of dumb stuff happening right now. Case in point, a crypto token that shares the name of the new COVID-19 variant ‘Omicron’ skyrocketed 1100% last weekend.

Why?

Because it has the same name. Seriously. It starts and ends right there. Then Monday came the hangover, and the coin nosedived 75% overnight. Yet at the time of writing, it’s still worth around $440 million. That’s some serious coin!

Finally, let me answer your question: “Who doesn’t want a 17% return staking coins?”

Me!

Let me explain why: for all the amazing technological progress that’s occurring right now, none of it changes the basic tenet of risk and reward. In a world of zero percent interest rates, any investment that offers a 17% yield is a red flag that you’re taking on an increased risk that you’ll lose your money.

I pray for you Chris.

Scott.

Three podcasts I’m listening to

The great thing about spending months on the road with your family is that you get to know them on a deeper level.

For instance, it turns out my wife has a quota — a set number of words she says in a day — after which she’s done.

As in no more chitty chat.

Just silence.

I discovered this little nugget about two hours into what would become a 300-hour journey … which gave me the green light to binge on podcasts guilt free.

Here’s my takeout: there are too many podcasts. Everyone seems to be doing one (well, except me) … heck even the blokes who did my irrigation have a show (shout out to the Irrination podcast!).

In other words, you need a filter, otherwise you’ll drown in drivel. And with that in mind, rather than giving you show recommendations, let me give you three single podcast episodes that really hit the mark for me:

Episode: How Zillow Failed at Flipping Homes
The Journal

Could you imagine if Realestate.com.au or Domain decided to start buying and selling houses for profit?

After all, they know how many clicks and sales each house, street, and suburb are getting ... and with all that data they could buy undervalued homes and make a fortune, right?

Well, this is exactly what happened with the biggest real estate listing site in the US, Zillow. In 2018 Zillow predicted their house-flipping operation would quickly become a $US20 billion business.

And today it is a … zero dollar business.

This episode tells the story of how Zillow had every advantage: big data, artificial intelligence, and a booming housing market, yet managed to lose $500 million in a short few years.

Episode: Walt Mossberg's Take on Mark Zuckerberg and More
The Sway

Imagine having dinner with a crusty old journo who spills the beans on what tech billionaires are really like.

That’s what this episode delivers, with legendary (now retired) tech journo Walt Mossberg as the guest.

Walt talks about back in the day having stand-up arm-waving arguments with both Steve Jobs and Bill Gates … but he says he still respected them because they had principles.

And his thoughts on the new guard?

Well, Elon Musk is as vain and egotistical as he is on Twitter, and Twitter founder Jack Dorsey comes off as a weirdo. And here’s what he says about Zuck: “In my encounters with Mark Zuckerberg, I’ve never been able to discover any principles.” Stick that in your Metaverse, Mark!

Episode: Is Cryptocurrency the Silver Bullet to Inflation?
David McWilliams Podcast

This episode is full of contrast; David McWilliams is a sensible, thoughtful Irish economist, and he interviews Max Keiser, a Bitcoin bull most famous for tearing up a $US10 bill on live TV and screaming, “The dollar is going to Zero, Buy Bitcoin!” McWilliams does his best to leave you with a balanced perspective, without resorting to screaming or ripping up money. Listen to this if you want to know more about crypto. Which brings me to my first question …

Tread Your Own Path!

Escaping in the Middle of the Night

Dear Scott,

When I read your book three years ago I knew what I had to do. My husband had always had a temper, and in the back of my mind I knew I had to leave him.

With each Covid lockdown he got more depressed and more abusive towards me and my two girls. Last month we fled with just our overnight bags. It was all a blur.

This has been the toughest year of my life, but because of you I had a secret Mojo account that has allowed me to rent a tiny apartment and buy the essentials. We have financial security and personal safety. Thank you from the three of us.

Lisa

Hi Lisa

I’m so sorry for what your family has gone through.

Now we Barefooters are a big community, and I want to speak directly to the thousands of women who are reading these words and are currently living in a dangerous situation: you don’t have to wait to save up the money to cover the bare necessities, but you do need to have a support team around you before you go.

Speak to a financial counsellor (1800 007 007) about getting the basics in place. In many cases the counsellor can organise things quickly, including crisis payments, temporary accommodation, basic necessities, and dealing with your bank (they don’t advertise it, but I’ve found the banks do a bloody good job supporting women).

Family violence affects one in six women — of every age, in every wealth bracket, and in every suburb. Each year it feels like the rates of reported family violence get worse, but thankfully the help available gets better too.

Scott.

Here’s Something SHOCKING

Scott,

My mother has been diagnosed with dementia and will be going into 24-hour care. She has a caravan-park-living boyfriend who is a raging alcoholic and has increasingly isolated her from everyone and everything. Mum was never a drinker, but he has religiously fed her alcohol every morning from 9am onward! On the very first night I met him 10 years ago, virtually the first thing he said to me was, “You don’t have to worry about your inheritance — I don’t want anything from your mother”.

I found this strange at the time, and with recent developments I believe he’s been playing the ‘long game’ from day one.

You see, Mum owns her own house, solely purchased by her. But (according to her friends) he has been trying to gain access to her bank account and trying to get her to sell her house. He’s also taken her to her lawyer to ‘update’ her paperwork.

He has told everyone that Mum and I (and my siblings) are estranged, but he won’t allow me to visit, he sorts her mail, he screens her calls, and he hangs up on me when I call. I am financially sound and have never wanted or expected anything from Mum. As far as I’m concerned, her house is hers, and it’s her equity to support her for whatever time she has left. Is there a way to make sure the boyfriend doesn’t take everything, leaving her high and dry?

Nella

Hi Nella,

Congratulations, I believe you’ve just asked the longest question I’ve ever published.

The first thing I’d do is ask your mother if she has signed an enduring power of attorney (POA).

Explain to her that whoever is named on the POA can make financial decisions on her behalf, like accessing her bank account or selling off her property. Obviously, while she’s of sound mind the person holding her POA should only act as directed by her. Yet when and if your mother loses her mental facilities the POA continues on …

So what can you do if he’s already stitched up the POA?

Well, I spoke to my lawyer (Dr Brett Davies) and he said you could go to court and apply for an overriding ‘administration order’, which in most cases overrides and replaces the POA.

The court will hear the stories from both sides and decide who is best to control your mother’s assets while she lacks the mental capacity to do so. Even better? The administration order has the ability to outline who your mum can associate with.

Boom!

Scott.

Have I Been Gone Too Long?

Scott,

I know you’ve written about it in the past but for the life of me I can’t find it. What is the product sold at Bunnings for removal of scale from toilets?

Thank you! Drinda

(A note to the reader: I swear on my Bunnings sausage this is a real question I received this week. Still, I can’t work out whether I’ve been gone too long and she’s forgotten who I am … or if I really am in the toilet?)

Hey Drinda,

Holy crap!

Now I’m not licensed to give toilet cleaning advice, but, since you asked, I’ve had good results using Hillmark Scalex Descaler. It costs around $12 a tube, and it’ll do a good job providing you use it with warm water.*

* Disclaimer: past performance is not a reliable indicator of future performance.

Scott.

My crypto confession

It was a privilege just to be there.

We were deep in the outback on a guided tour run by First Nations people. Our host, a traditional elder, showed us incredible ancient rock art, pointed out animal tracks, and told us dreamtime stories.

It really was a spiritual experience.

At the end of the tour, our host came up to me and asked:

“What do you like?”

“Oh, all of it”, I gushed.

He looked a little perplexed as he pulled out his phone.

“Here’s what I like,” he said, gesturing for me to take a look at his phone.

What was on his phone?

His crypto portfolio.

Wow.

Here I was, in the middle of the Never-Never, with the oldest living culture on earth, and we were discussing … Dogecoin?

That was the first time I fully grasped that crypto really has gone mainstream in Australia.

Earlier this month Commbank announced they’ll soon give their 6.5 million customers the option to trade crypto smack bang on it’s banking app. My bet is the other banks won’t be far behind them. (After all, the Big Four are about as relevant as incontinence pads to Millennials, so they’re desperate to show the kids they’ve finally unchained their ballpoint pens from their desks.)

Bitcoin is one of a staggering 7773 cryptocurrencies in the world.

For the record, I think what’s going on in the crypto space is absolutely fascinating. We’re in the early stages of a revolution, watching the financial industry be both disrupted and democratised. Clearly, this is the future.

Yet history also teaches us that in every gold rush there are scams, cons and bubbles just waiting to be popped.

This time is no different. If anything it’s worse — today a majority of Gen Z investors in the US think crypto will make them millionaires, according to a new survey by data analytics firm Engine Insights.

It won’t happen.

There are now a staggering 7773 cryptocurrencies, according to Coinmarketcap (compared to 180 traditional currencies across the world!).

Let me be clear: I am sure that a handful of these will be genuinely transformational (don’t ask me which ones). And I’m also just as sure that the vast majority of these coins will end up being worth digital diddly squat.

Still, now that crypto has gone mainstream, it’s me who needs the reality check. Statistically, there’s a good chance you own crypto … or at least you’re thinking about it. And if that’s you … all I can say is best of luck!

Tread Your Own Path!

The best investment I've ever made

Today I want to tell you about the best investment I ever made.

It was always going to be highly speculative — a total punt — that could have blown up spectacularly:

In July we set out for a family road trip: all six of us (including a teething baby!) in a motorhome.

The plan was to do the East Coast, getting up as high as The Daintree before heading back to Victoria.

Yet each time I checked the Victorian news there always seemed to be a giant picture of Dan Andrews, head cocked to one side, looking perplexed and angry.

We were heading back … but to what?

Rioting in the streets. Lockdowns. Earthquakes. Oh, and COVID. Lots’a COVID.
So we decided that now was a very good time to do a lap of Australia.

Well, actually, I decided that, and then I put it to the family.

Liz promptly pooh-poohed the idea as she was worried the kids would miss too much school. Yet the kids wanted to keep the adventure going, so they came up with a great idea:

They would film a weekly TV show they called ‘RV News’.

The eight-year-old was the host, and he’d throw to his little roving reporters (his brothers and sister). Together they researched where we were going, talked to people, and showed off the attractions to their audience (consisting of their grandparents, their classmates back home, and, many years from now, their own kids).

We ended up getting 13 episodes in the can. Now that’s great for the kids, but let me tell you about some of the saucy stuff that didn’t make it into ‘RV News’.

The Good

We kept it real on the road, often free camping.

One night we stayed on a 20,000-acre cattle station where they let you camp by their horse stables for a few bucks.

During the afternoon, the station owner drove past and must have taken pity on us — a big family sitting in the stinking hot Queensland sun — and generously invited us up to the homestead for dinner.

However, when we arrived, his wife stared at us in horror and promptly disappeared into another room.

Weird.

As I sat down at the table, she re-emerged and placed a copy of a local women’s magazine in front of me. She’d opened it to a page where she’d been interviewed about her life on a large property. One of the questions the interviewer had asked her was, “If you could have dinner with any celebrity, who would it be?”

She had said, “The Barefoot Investor”.

Throughout the trip I met plenty of Barefooters, and it was always a treat (even the oldies who took photos of me like I was a zoo animal — they’d barrel up unannounced, stick their phone in my face, and then spend the next few minutes trying to work out how to take a photo).

The Bad

We were doing our best to stay one step ahead of the COVID lockdowns. And the talk around the campsites was that getting into Western Australia was as hard as crossing North Korea’s demilitarised zone.

And WA didn’t disappoint.

To enter the state you were required to spend a minimum 14 days in the (low-risk) Northern Territory. Fair enough. We dutifully followed the rules and were approved, which came in the form of a downloaded QR code via their G2G app.

We approached the WA border — which is literally out the middle of nowhere— and were met by three police officers. It was 40 degrees, the baby was crying, and the kids were melting down.

I wound down my window, smiled, and showed one of the police officers the QR code.

“We don’t care about the QR app”, she said.

“Sorry?”

“It could be faked”, she said sternly.

“How? I mean, it’s your own app, right?”

She shook her head dismissively.

“I want to see the photos on your phone … all of them.

“And your bank accounts.”

I stared at her blankly.

She must have thought I was a few stubbies short of a six-pack, so she spoke slowly but forcefully:

“Log into your bank account. Log into your personal pictures. Hand me your phone.”

So I did.

The policewoman took my phone and stepped away from our motorhome. About 15 minutes later, she started looking agitated.

“Tell me about THIS photo”, she said, holding my phone up to my face.

“Uh-oh”, I said.

“UH-OH?!”, she parroted back, her eyes bulging.

My phone had incorrectly tagged a recent photo as having been taken in Queensland, not the NT.

“It’s Apple’s ‘uh-oh’, not mine, officer”, I laughed.

The policewoman did not laugh.

At this point Liz leaned over, elbowed me in the ribs, and politely explained the IT error to the officer.

She listened, grumbled, but had no choice but to wave us through.

The Jackpot

I’ll tell you, I have never, ever felt wealthier than I did on our trip.

I got to totally unplug from everything and (in the words of my editor) “drop off the face of the planet”.

(It’s true, after not hearing from me for months the newspaper had all but given up on me ever returning.)

Yet what I earned in return was the privilege of spending large, uninterrupted dollops of time with my family.

See, as a parent, the days are long but the years are quick ... and you only get a very short time to really influence your kids. Because when they turn 18 you have to share that influence — with their friends, with their bank, with their Instagram account, with their boss. None of whom care as much as you do.

Thankfully, life is simpler on the road. It has to be. You’re literally strapped into a confined space. There can only be one song playing at a time (Johnny Cash for me, Adele for Liz, and The Lion King for the kids). And there’s only so much you can cram into a motorhome when you have six people living in it.

What we discovered was that we didn’t need or miss our ‘stuff’ at home. It was a diversion. More space often means more junk. More places to hide.

Instead, we traded convenience and possessions for freedom and adventure … and a funny thing happened. The petty fighting stopped. The outbursts stopped (even from Dad). The kids pitched in and we became a united crew, all looking out for each other.

That’s not to say it was easy … far from it!

When the baby would wake in the middle of the night teething (most nights), we would all wake up. Each morning we’d find ourselves like John Lennon and Yoko Ono with six people in our tiny bed. The kids lived out of their school backpacks. We all wore the same stuff for days on end.

We’d pull up at a campsite and bemused grey nomads would look at us like clowns piling out of a Mini Minor:

“Look, George, there’s another one! And … a baby! All living in that tiny motorhome!”

“You’re brave!”, they’d jokingly tell us.

Maybe.

On the final day of the trip, we quizzed the kids about what was their best experience.

Our (often painfully shy) six-year-old piped up and said:

“I think I’m braver than I was before this trip.”

Tread Your Own Path!

Thanks for reading,

Scott.

A Brighter Flame

Dear Scott,

September three years ago I bought your book, when I could least afford it. At the time I was burdened by six-figure debt (posted on the fridge door so I was aware of it every day). I did as I was directed — I took you and the book to dinner every week. I didn’t go bankrupt. I made the calls. I cried with you. And screamed at you. And learned from you. And survived.

Today I buy your book as a gift for my friends, like a scented candle but with a brighter flame when ignited. I can see the black line fast approaching — the red line is in my rear vision mirror. I answer private calls these days. I wanted to say thank you for literally saving my financial life, and please thank your darling family for loaning you to me while I was dying inside and outside a shambles.

Janine

Hi Janine,

This is probably the nicest letter I’ve ever received … and a fitting one to end on.

Thank you. You Got This!

Scott.

You Ruined My Life, Barefoot

Scott,

I read your book on a holiday at the age of 18. Now at 22 I have had full-time employment for nearly two years, am earning $45,000 a year, and have saved up $60,000 (a lot of hard work and sacrifice in that). But I feel lost. This money has brought me no happiness, just a burden in the back of my head that has stopped me living my life to the fullest while young. And it’s you who got me into this mess.

Matt

Hi Matt

I got you into this mess?

Well I plead guilty to that charge, Your Honour!

Still, steady up, cobber. You’re talking like you’re a washed-up author with four kids about to get trapped in a Winnebago for months.

Who are you comparing yourself to?

If I popped sixty thousand clams in the pocket of an average 22-year-old, they’d think they’d won the lottery.

Yet I’d argue that you’re actually luckier than any lotto winner. That’s because you’ve spent the last few years developing what I call ‘million dollar habits’. You may dismiss what you’ve achieved, but I won’t: developing a strong work ethic and a savings habit will serve you well for the rest of your very long life.
Yet what’s even more impressive is that, at your tender age, you’ve worked out something that 50-year-old coked-up lawyers haven’t:

Money doesn’t make you happy.

(Though a severe lack of it can make you very unhappy.)

So now — while you’re still just 22 — it’s time to develop a new set of habits:

Having fun!

The best things in your twenties don’t cost much: camping, sport, pashing random people at parties … and reading good books. What really helped me when I was in my twenties was reading about people who’d lived their life and worked out what was important. It’s only by studying the past that you can prepare for the future.

And trust me, Matt, your future is incredibly bright.

Scott.

My Friend’s Husband Wants To Murder Her

Scott

I have a young friend who is married and has three young children. She has an AVO against her violent husband, who threatens to kill her. The AVO has been breached. She is NOT divorced and no financial settlement has been agreed to yet. The husband has the children three days a week, and the court date to sort this out is soon. I see that under the Superannuation Industry (Supervision) Act a “spouse and ex-spouse” can get all their partner’s super, plus death benefit. What happens to my friend’s super payout should her husband kill her? How can she protect her super so that all funds would go to her children? Also, if the house is owned as joint tenants, my understanding is that the title passes on death to the survivor, is that right? I hope you can shed some light on this serious matter.

Susan

Hi Susan,

This is a very serious matter, so let me shed some light on it for you:

Her financial affairs won’t matter much if she’s dead.

The ONLY thing that matters right now is her safety (and the safety of her three young kids).

Susan, now is not the time to fret about her finances, but to stop her from being murdered.

Each week, on average, in Australia, a woman is killed by her current or former partner.

All too often women in this situation feel trapped and helpless. They are not. There are people who will help her and look after her, and they’re available 24/7 by calling 1800 RESPECT (1800 737 732).

We can — and will — sort out her finances later. Part of the value of this column is showing people each week that they are capable of moving monetary mountains.

For the moment, though, do whatever you can to keep her safe.

Scott.

This Will Be My Last Email for a While

For the past few weeks I’ve had a Billy Joel song in my head:

“You may be right … I may be crazy ... But it just may be a lunatic you’re looking for.”

You see, I’m writing this to you hunched over in the back of a motorhome that’s currently parked in the seaside town of Tin Can Bay, Queensland.

Liz and I have embarked on an epic family adventure: a 3,500-kilometre road trip that has taken us from the family farm in Romsey, Victoria, all the way up to Cooktown, Queensland. For three (or four) months. In a Winnebago. With our four kids.

“Turn out the lights, don’t try to save me!” as Billy sings.

We actually took off a month earlier than we planned … we made the snap decision to make our getaway a few weeks ago, sensing that the borders may close.

In truth it only added to the sense of adventure. After all, this was months in the making; earlier this year I went to the post office and bought a huge map of Australia and sprawled it out on the kitchen table.

Planning out the trip — pinning lots of thumbtacks on the map and googling interesting places — is almost as much fun as going. We’re going to the Big Banana, the Big Mango, heck we’re even going to the Big Bloody Prawn!

I’ve never seen the kids so excited … well, until last night anyway.

Late last night my eight-year-old stirred from his sleep and noticed the glow of my laptop.

“What are you doing, Dad?” he whispered.

“I’m writing my column … and responding to a heap of emails”, I sighed.

“Oh”, he said.

Silence.

“You work really hard, Dad. So I guess you can’t take the time off and spend it with us.”

I closed my laptop and stared into the darkness. He snuggled up and gave me a hug.

I realised that for almost 18 years I’ve ended every column with the tagline “Tread Your Own Path!”

This morning I’ve decided it’s time to actually live it. I’ll be taking a break from these columns for a while, and investing in my kids. I’ll catch you on the flipside.

Scott Pape

The Best $5 I Ever Spent

Mr Pape,

We do not know each other, yet you are the one who has single-handedly turned my life around. Last year I was stuck in $13,000 of debt on top of a large mortgage and was living pay cheque to pay cheque. I was headed towards a financial breakdown. Then I picked up your book at an op-shop, and it was the best $5 I ever spent. Reading it kept me up all night, but finally I could see how to start changing my life. Fast forward 12 months and all debts (other than the mortgage) have been paid off and I have a modest $10,000 in Mojo. You don’t know how relieving it feels to go to bed not worrying about money!

Monica

Hey Monica,

As I was reading your story, it made me think of an interview I was doing the other day.

Journo: “What are your top five tips for saving money?”

Barefoot: “Tips are the fairy floss of finance … they look good, but they evaporate in your mouth.”

The journo was not amused.

My guess is that it wasn’t the finance tips in my book that made the difference for you. Rather it was taking the time to reframe your situation and develop a different mindset about what you could achieve.

Your story also made me think about how cool op-shops are. My three-year-old daughter loves our local one. The other day, she used her ‘Smile’ money to buy a princess dress for the bargain price of $3.

Good stuff! (Oh, and there’s nothing modest about having 10 grand in Mojo.)

Scott.

Pressing Problems

Hi Scott,

I am a single mum of five children and I started my own ironing business one year ago. I would like your advice on how to stay on top of things, as all the money I make goes towards paying bills or buying groceries. I don’t have any credit cards, because I hate the idea of buying things with money that doesn’t belong to me. I’m trying to work out how to be financially healthy and become a good role model to my children. Can you help?

Jane

Hi Jane,

Let me iron out the wrinkles that you seem to have in your self-confidence:

You’re not a good role model for your kids, you’re an excellent one.

Let me count the ways.

First, you don’t spend money you don’t have.

Second, raising five kids on your own is a full-time job: many people in your situation wouldn’t work at all.

Third, you’re not only working, you’ve been smart enough to build a little business that allows you to parent and earn an income from home.

The only thing you need to do is to tell your kids what you’re doing. The old advertising rule of thumb is that people need to be exposed to a message 20 times before they’ll remember it. Same goes for you and your kids. You want to tell the humble legend of Jane, working hard for her family against the odds.

In time they’ll appreciate what you’re doing for them. One day they’ll be really proud of what you’ve done.

I’m going to send you a free audio version of my book so you can listen to it while you iron. Work your way through the Barefoot Steps and you’ll never look back.

You Got This!

Scott.

I’m 19 and Have Already Blown My Credit Rating

Dear Scott,

I am 19 years old. When I turned 18, I applied for multiple loans, not knowing that doing so would affect my future. I have recently tried to get a phone plan through Optus in my own name but they rejected me because of my history. Now I am starting to save for a home loan. I have checked my credit rating on Credit Savvy and it’s 631, and I want to bring it up to the highest it can be. But how do I do this? I have been googling for days but nothing useful has come up.

Eryn

Hi Eryn,

True story: when I was 18 years old, my mates and I thought it would be a fun idea to buy a bottle of Jim Beam and mix it with home-brand cola. And then …

Bingo, bango!

I don’t remember much about the night, though I do remember the next morning … violently.

Here’s the killer: since that day I’ve never drunk bourbon (or any spirit for that matter).

Yes, that’s right: all these years later, and I still can’t bring myself to do it.

Which is actually not a bad outcome!

Eryn, that’s how I’d frame your bad credit rating: you messed up when you were still a teenager (like we all do). However, you’ve shown me that you’ve learnt from it. Seriously, how many 19-year-olds are saving for a house deposit, and writing to the Barefoot Investor?!

Think of it as a good thing — you got it out of your system early.

So here’s my advice: aggressively pay down your debts, and then commit to saving for a deposit. Don’t worry about your credit score; it’s a vanity marketing metric from credit agencies, not banks, and therefore about as important as your Uber passenger rating.

What really matters to a lender is having a history of savings and a clean credit report. And there’s the rub … there are things you do as a teenager that stick with you for life … like, say, getting a tattoo. However, a bad credit report will legally drop off in five to seven years, which coincidentally will be about the time you’ll be hunting for your first home.

Bottoms up!

Scott.