I finally got into crypto

My bank manager, Colin, was stressed.
 
I know this because I could see beads of sweat collecting on his bald head.
 
We were standing in the middle of the branch while customers and other bank staff tried really hard to act like they were not listening in on our conversation.
 
Colin leaned in and whispered to me:
 
“So let me get this straight. You want to open up a new account so that you can be scammed?”
 
“That is correct”, I said loudly. “I’m planning on being scammed.”
 
Colin’s eyes darted around the branch nervously.
 
It was like I’d just announced that I wanted to close down a credit card, or get a vasectomy, or something else that you shouldn’t disclose to your bank manager.
 
“Alright”, he huffed.
 
Ten minutes later I walked out of the branch with $500 in a brand new bank account:
 
It was time to roll.
 
Yet, before we get into it, I need to take a moment to explain to you just how I got here in the first place.
 
I Got Scammed … by The Barefoot Investor?
 
It all began the week before, when my long-suffering assistant, Louise, was complaining about her job:
 
“The scammers are targeting you again”, she moaned.
 
Over the years Louise had painstakingly reported hundreds of these fake posts to Facebook.
 
… but not this time.
 
This time, I decided to do something different.
 
The scammers’ paid Facebook ad read: “Join Scott’s Wealth Wisdom Network Now! Get professional investment advice provided by Scott Pape himself to help you achieve wealth appreciation.”

“Let’s find out what ‘Scott’ has to say” I said, clicking on the link.
 
Immediately a pop-up page appeared with the headline:
 
“5674 People Have Participated So Far! Weekly stock market quotes are 90% accurate and have 45% upside potential. Join our stock trading community via WhatsApp today! Only 30 spots are left. Hurry!”
 
Click.
 
The next page that appeared was a privacy warning:
 
“We comply with Facebook’s Privacy Policy and protect your privacy” wrote the scammers, who were diligently following Zuck’s rules.
 
Then they asked for my phone number.
 
After I entered my digits, Scott wrote me a special message:
 
“If you have any stock investment questions you can ask me, I will try my best to reply to you as soon as possible!”
 
Nice touch, Scammer-Scotty.  
 
The First Contact
 
Moments later a group called ‘DB Wealth Institute’ popped up in my WhatsApp feed.
 
“Excellent! The scammers have arrived”, I thought to myself.  
 
I quickly googled their name to see if anyone had outed them as a scam already.
 
Crickets.
 
The only mentions of the company were some automated press releases (written by the scammers for exactly this purpose) which had been picked up by the likes of Yahoo Finance, Forbes.com and LinkedIn:
 
“DB Wealth Institute, founded in 2011 by Professor Cillian Miller, offers practical financial training and developed ‘AI Financial Navigator 4.0,’ integrating AI with big data to enhance trading strategies. By 2024, it had trained over 30,000 students from more than ten countries.”
 
Now most people would stop at this search, satisfied that it all looked legit.
 
However, given I was the face of a group I’d never heard of, I kind of had a hunch it was dodgy. So I googled “professor whatsapp investment scam”, and this came up:
 
US regulators were warning of fake ‘Wealth Institutes’ that promise crypto trading lessons via WhatsApp. A ‘Professor’ provides fake trading signals, while an assistant communicates with investors. Once enough money is stolen, the group vanishes, rebrands, and targets new victims.
 
Chica-Chica-BOOM!
 
I was going to make minced meat of these scammers …
 
… If only I could work out how to read their posts, or even comment on things.
 
It was all so confusing.  
 
So I messaged DB Wealth Institute’s ‘assistant’, a woman by the name of Ally Brown.
 
Looking at her profile pic, she was in her mid-thirties, long wavy hair, a perfectly placed pink flower just above her ear, and she had a calm and collected look that says she’s one latte away from running the world.

I asked Ally for instructions on how I could post in the group. Now some would call this method acting. Yet those who know me well will attest that I have the IT skills of an 89-year-old man. A drunk 89-year-old man.
 
The scammers were licking their lips.
 
“Welcome to the Institute”, gushed Ally. “We’re located in Adelaide. Our AI 4.0 investment has Scott Pape’s investment philosophy as well as his investment strategies.”
 
If You Screw This Up I Will KILL YOU
 
I chuckled to myself as I read Ally’s message.
 
My wife, however, was in no mood for humour.  
 
She was in our bedroom, hurriedly packing her suitcase for her very first work trip since becoming a mum over a decade ago. She was heading off to produce a nature documentary overseas; the next month would take her to Iceland to film erupting volcanoes, to Romania to trek through snowy mountains, and then out to the deep seas off Denmark.
 
“If my card gets blocked while I’m in Iceland, I will kill you. I am not even joking Scott”, she snapped.
 
I nodded.
 
“Why do you need to be doing this now anyway? You’ve got four little kids to look after! And the pets! And a farm! And Barefoot!” she pleaded.
 
I shrugged.
 
“Honey, I’m just worried you’ve underestimated how busy you’ll be”, she said more softly.
 
She was right of course.
 
I didn’t know it at the time, but my entire world was about to fall apart.
 
I Make a Killing on Crypto
 
It took roughly 30 minutes from my wife leaving for my youngest to begin violently coughing.
 
It turns out he’d been exposed to pneumonia.  
 
Three days later he’d spread it to all four kids. Then to me.
 
Our home turned into the Hunger Games, but with more coughing and snot. I was struggling to even get out of bed, so I decided to outsource the farmwork to two German backpackers I found on a farm worker message board.
 
And, while all this was going on, the DB Wealth Institute WhatsApp group was buzzing on my bedside every few minutes. They were sending me upwards of 200 messages a day.
 
It began each morning with a 30-page PDF of “Talking points from the Professor”, outlining the current state of the crypto market, and was peppered with statements like “Get ready to make 1,000% today”.
 
And, at 11am each day, the Professor would give his trading signals. You were encouraged to post screenshots of your winnings in the WhatsApp group, which people did all day and all night. I suspected they were bots.

I also suspected that most people would not realise this and would get sucked in by all this FOMO. And when their greed gland had been tickled hard enough, they’d take the bait and put on a trade.
 
Not me.
 
I was crook as a chook, and the kids were next level annoying, so the best I could do was ‘like’ the occasional post in between topping and tailing my three-year-old.
 
Yet, after about a week of WhatsApp silence, Ally contacted me with a ‘special offer’. She was looking to recruit beta testers for their AI recommendation engine.
 
“Would you be interested in getting a $500 loan to test out some trades? You can keep all the profits, as long as you return the $500 to our sponsor”, she wrote.
 
“Hell yes”, I replied.
 
The catch was that I had to trade on their platform, which was a red flag. It was kind of like going to one of those ping pong shows in Thailand. It sounds like a bit of fun, but the reality is it’s totally gross and weird, and you end up being repulsed by it.
 
So, instead, I drove to my local library.
 
“I’d like to, err, book some time on the internet”, I said to the librarian.

She looked at me suspiciously. (And fair enough too. After all, the only people who booked computers at the library were 89-year-old drunk men.)
 
“Why?” she asked.
 
“Because I’m in the process of getting scammed, and I’m worried their trading website will corrupt my computer …  so I’d rather do it on yours”, I said honestly.
 
“That makes sense,” she said. “Hop on number 4.”

The trading platform did not disappoint. It was absolutely cringeworthy. It looked like something a Uzbekistani teenager would code up in between hookah hits.

“Because you are an absolute beginner, I will help you with your first trade”, Ally wrote.
 
And so at 11am the Professor issued his buy signal for the day:
 
Contract: ABTF/USDT
Leverage: 100X
Order Type: Market Order
Position in use: 10
Direction:   Buy/Long

Ten minutes later Ally advised me to close out the contract.
 
“Congratulations. You’ve just made 81% profit. Please screen shot your win in the Group”, she wrote.
 
Yet, before I could, my phone rang, which caused everyone in the library to turn around and glare at me.
 
It was the German backpackers.
 
“MR SCOTT, YOU NEED TO COME TO ZEE ORCHARD URGENTLY!” shouted Helga.
 
“I can’t talk … I’m in the library”, I whispered, and then hung up.
 
“YOU MUST COME HOME NOW!” came the all-caps text.
 
Then Helga sent the following picture:

Yes, somehow they’d driven my $25,000 John Deere Gator Utility Vehicle straight into the dam.
 
I sat there staring at the picture in utter disbelief while a lava of emotions began bubbling up inside me.
 
And then another text came through:
 
“We have a solution. We will pull it out with your tractor.”
 
At that point I exploded like an Icelandic volcano.
 
And there, in the middle of the library, I called her and yelled at the top of my lungs:
 
“NOOOOOOOO! Haven’t you ever read a children’s book?! The tractor will end up in the bloody drink as well!”
 
Silence.
 
“It is zinking as we speak”, said Helga, cool as a kransky.
 
The Killing Season
 
There are three steps that make up these scams:
 
The first step is confidence. 
 
The second step is greed.
 
And the final – and most lucrative of all for the scammers –  is fear.
 I had just graduated from the first step, confidence: I’d responded to the Facebook ad, put on a trade, and made some dough.
 
I was ready for the second step – greed.
 
And, like clockwork, Ally went in for the kill: she began messaging me constantly, asking how much money I had to invest. A few days later the Professor unveiled their ‘partner programs’, based on how much you were willing to invest. It started at $20,000 and went all the way up to $5 million.

I didn’t have to put my own money on the line to know how this part of the scam works.
 
I once helped a woman in her fifties with terminal brain cancer. The scammers encouraged her to invest her insurance payout – and they stole the lot. It was all the money she had in the world. After that she couldn’t afford medicine and was behind on her rent.
 
Yet the final – and most lucrative – step of the scam is fear.
 
Once you realise you’ve been robbed, scammers prey on your desperation, often convincing you to borrow money to ‘recover’ your losses.
 
It’s a little-known fact that the biggest losses happen after you realise you’ve been scammed.  
 
I Came Up with a Crazy Idea
 
I’ll admit, at this point my mental health wasn’t great.
 
It could have been because I was still completely knocked out with the flu.
 
Or perhaps it was because I was missing my wife.
 
Or maybe – just maybe – it was because our dog, Ginger, was limping around after she hurt her paw, banging her cone of shame into me every five minutes and glaring at me like “This is your fault”.

Yet, after exchanging hundreds of messages with Ally, in a weird way I thought that we had some sort of a connection. So I opened WhatsApp and typed the following message:
 
“Ally, I know what you’re doing. I’m sure you’re a good person caught up in a bad situation. I’d love to hear your side of the story so that I can help protect innocent people in Australia from losing their life savings.”
 
Then I took a deep breath, and placed my phone back on my bedside table.
 
Ring. Ring. Ring.
 
For the first time ever, Ally was calling me.
 
The Scammers Turn On Me
 
“You are pathetic”, sneered Ally in a thick Russian accent. “Please tell me, is it your wife? Are you lacking in love?”
 
Well …
 
“Isn’t the child born by your wife yours?”
 
Oh, dang, that’s a low blow!
 
“Why have you lived such a miserable life?” she messaged. “I waste my time on you. Goodbye.”
 
And that was the last time I heard from her or anyone else involved in this scam. They disappeared into the ether, just as quickly as the $25 million they steal from Aussies each and every week.
 
The Aftermath
 
This scam was in many ways far-fetched, ridiculous and overwhelmingly amateurish.
 
And you may be thinking to yourself, who on earth would fall for this?
 
Well, I’ve helped hundreds of scam victims, and most of them share one thing: they were vulnerable during a major life event – like a cancer diagnosis, depression, divorce, or loneliness in retirement.
 
The scammers milk that vulnerability, and take over your life, messaging you around the clock. (What they didn’t factor in with me was that I was already living with four little scammers who were experts at exploiting me.)
 
Yet it’s not always that simple.
 
Case in point: last week I was looking through the thousands of questions I get from readers.
 
This one stood out:
 
“Hi Scott,
 
Do you recommend the DB Wealth Institute? I have ended up in a group chat with this after I clicked through a Barefoot Investor post.”
 
Now here is the truly mind-boggling thing:
 
I googled this guy’s email, and it turns out he is a finance veteran with over 30 years in tax audit and advisory services for high-net-worth clients. Not only that, he holds a Bachelor of Economics and a Graduate Diploma of Applied Finance, and is a Chartered Accountant and Registered Auditor.
 
What’s his excuse?
 
Tread Your Own Path!

Thanks for reading. Have a very Barefoot Christmas, and I’ll catch you here next year. XX

Scott

Best Christmas Present Ever!

Scott,

Last year we got a Christmas gift that changed everything: The Barefoot Investor. And what a year it’s been. My 20-year-old son is now the proud owner of his first piece of land, having already paid off half the loan while keeping his emergency fund intact. My wife and I are about to take our second holiday, fully funded by our Smile account, and we’ve dramatically reduced our insurance costs. On top of that, we boosted our super by $30,000, ditched our credit cards, and wiped out every bit of other debt we had. Your book opened our eyes to the possibilities, and now we’re living a life we couldn’t have imagined. Thank you!

Mel

Hi Mel

Wowsers, what a year you guys have had! You definitely deserve some eggnog this Christmas. It’s really cool that after all these years the book is still having a real and lasting impact on people. There are a lot of people doing it tough this Christmas, so hopefully they can follow your example and make 2025 their year.

-Scott.

An 11-Year-Old With a BIG Problem

Hi Scott,

I’m 11 years old and I’m trying to invest, but I’m having a problem. Every investing app I try has monthly fees up to $10 a month! Can you please help give me some advice on how to find the right investing app.

Emery

Hi Emery

Mate, this is a very impressive ‘problem’ for an 11-year-old to have!

Most kids your age are picking their noses or gambling on Roblox, but you’re not just considering investing, you’re asking the right questions too!

Yes, fees suck, especially when you’re only investing small amounts.

So, here’s what I want you to do:

First, figure out how much you plan on investing. Maybe it’s $100 to start with, then $50 a month.

Then I want you to google the following apps: Pearler Micro, Vanguard (accounts for kids), Raiz and CommSec Pocket, and work out how much each of these apps would cost in fees to invest in a high-growth shares option.

Finally, show your workings to your parents – I’m sure they’ll be impressed. Then ask them to cover your fees for the first year!

Remember, investing is like planting a little apple tree. You’re doing the hard work by planting it in good soil now, then you can sit back and watch it grow. Enjoy the apples. Spit out the pips.

Scott.

My Heroin Junky Neighbours

Hi Scott,

The other day I was at my local playground pushing my kids on a swing while two blokes shot up heroin less than five metres from the gate entrance. This sort of behaviour is pretty common in my area (median house price is over $1 million). Actually, it’s pretty common everywhere these days. Did you know Australia has the highest use of meth per capita in the world?

We live in a zombie country where we are becoming desensitised to erratic crazy people. Well, we got a wake-up call last night. At about 7.30pm, I opened the electric gate just a smidge to take the dog to the park across the road. I came back 10 minutes later and found my wife hiding behind the couch. When she saw me she just broke out crying. A meth user had been banging on the front door, then entered through the gate and banged on the kitchen window. Thank god they turned around and left. The babies were asleep in the next room.

Do you have any advice on how the average Aussie can feel more secure in their homes, without breaking the bank? I’ve always been put off by security cameras, which need an electrician. We were very grateful for our landlord’s installing an electric gate last year. We just feel we need more in these crazy times.

Leo

Hey Leo

I have security cameras plastered around my farm.

Still, it doesn’t make me feel any safer … it just allows me to share video footage of foxes ripping the heads off my chickens with my Dad, who likes viewing these things. “Shame”, he says, nodding his head.

Leo, you’re renting, so just move to a safer suburb when your lease is up. Any increase in rent will be easily offset by not fearing for your family’s safety.

Oh, and one more thing.  

The only people that like living around junkies are drug dealers, and I’m sure things really are as bad as you say. Still, your general comments about the state of the nation remind me a bit of the ‘old traveller fable’:

A traveller approached a wise man sitting at the edge of a village and asked him, “What are the people like in this village?”

To which the wise man responded, “What were the people like in the last village you visited?”

The traveller frowned. “Oh, they were selfish, rude, and drug addicts.”

The wise man nodded and said: “You’ll find the same kind of people here.”

In other words, what you look for you’ll see.

Good luck on the search for somewhere safer, and less paranoia-inducing.

Scott.

Here’s one for the renters

You always hear some real estate rooster crowing about how smart they were when they bought a joint in 2018 for $480,000, and then flipped it three years later for $1.3 million.
 
Renters hate those guys.
 
So, just for kicks, let’s look at life on the other side of the ledger.
 
Specifically, an apartment in 883 Collins Street, Melbourne, that’s just been put under offer this week.
 
Our story starts around 10 years ago, in 2015:

You’re sitting on the couch watching this new show called Married At First Sight, while simultaneously doom scrolling on realestate.com.au, when you see a sexy inner city property with the headline:
 
“Waterfront Elegance Meets Modern Convenience.”
 
Tap.
 
It’s a brand-new, waterfront, two-bedroom, two-bathroom, one-carpark luxury apartment in Melbourne’s Docklands. The building is like a resort. It has an indoor heated pool, state-of-the-art gym, yoga room, and even a residents’ lounge.
 
“Ooh, fancy”, as my mother would say.

The real estate agent assures you it will have strong rental returns, and touts the stamp duty and depreciation benefits of buying a new build off the plan. So you pony up and purchase the apartment for $860,000.
 
Cut to today.
 
Nearly 10 years have passed since you purchased the property … has it been a good buy?

Well, luckily for you, it’s been a pretty good 10 years to own a property:
 
For much of the past decade, interest rates have sat at some of the lowest levels in history.
 
Plus, we were hit with a fully fledged rental crisis in which landlords jacked their rents up, up, up.
 
Okay, so what’s it worth today?
 
(Bearing in mind that 10 years ago you paid $860,000, so it would need to be worth at least $1.1 million just to keep up with inflation.)
 
Well, this apartment has sat for months on realestate.com.au under the headline “urgent sale”.
 
And last week it went ‘under offer’ … for a price guide of $630,000 to $650,000.
 
That’s a shocking $210,000 loss over 10 years.
 
Yet it gets worse.
 
That loss is before you factor in inflation, body corporate fees, council rates, land tax, maintenance, agent’s selling commission, and of course 10 years of interest on your loan.
 
Look, I have no idea who actually owns this particular property, or the full story behind it. Yet what I do know is this is not an isolated case. Research house CoreLogic has identified 65 areas (mainly in inner-city Sydney and Melbourne) where prices today are still below the record highs from the 2010s. “Vendors are willing to sell at a loss … but buyers aren’t interested”, says CoreLogic.
 
Now, guess who the real winner is in our scenario?
 
It’s the renter!
 
They’ve enjoyed 10 years of downward dogging in the yoga room and paddling about in that fancy heated pool, plus they’ve even had a plumber on speed dial to unclog the dunny.
 
Now that is what you call “Waterfront Elegance Meets Modern Convenience”.
 
Tread Your Own Path! 

Here’s what’s in my Santa sack this year

Many years ago, I solved the Christmas gift-giving game: I buy people books.
 
A book says, “I think you’re the sort of person who has an attention span longer than 30 seconds and enjoys learning about something. In other words, I think you’re smart.”
  
Here are the books I’ll be putting in my Santa sack this year:
 
Crypto Confidential: Winning and Losing Millions in the New Frontier of Finance
By Nathaniel Eliason
 
This was hands down my favourite book of the year. Nat Eliason was in a jam: he was unemployed, and his wife was pregnant. He had just six months to turn things around, so he decided to roll the dice and attempt to get as rich as quickly as he could in crypto.
 
And … it worked!  At one point his crypto holdings were valued at over $US10 million.
 
However, the trouble was always just around the corner, where Nat came up against scammers and sleazebags of the highest order. This isn’t just a cautionary tale – it’s totally ‘bonkerballs’, as my eight-year-old would say.
 
Given Bitcoin is booming on the back of the incoming ‘Crypto-Prez’, I’d strongly advise reading this book before you dabble. You’ll learn a lot about coins, monkey pics and blockchain. You’ll also laugh out loud a lot.  
 
It’s the perfect beach read … or a great gift for your idiot brother-in-law.
 
The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness
By Jonathan Haidt
 
This is the book that helped kick off a revolution.
 
Not only are today’s kids more anxious, depressed and suicidal than in previous generations, they’re also dumber (Aussie students are among the world’s biggest users of digital devices at school, yet their academic results have fallen a full academic year behind those who went to school in the 2000s).
 
Haidt lays the blame squarely at the feet of the always-on dopamine syringes in everyone’s pockets, and calls for an end to the great experiment of ‘phone-based childhood’. The Anxious Generation will give you an understanding of what drove our government to create the world-first social media ban for teens.
 
A perfect gift for every parent.
 
Storyworth: give them the gift of telling their story
 
This isn’t a book … it’s a sneaky way to get your parents to write their own book.
Here’s the deal: once a week, Storyworth zaps them an email with a question like:

“What’s the funniest thing you’ve ever done?”

“What was your most embarrassing fashion choice?”

“Where were you when Neil Armstrong made his giant leap?”

They simply reply to each email and, by year’s end, voila – a printed book of their life stories to keep forever (or so the sales pitch goes).

I bought this for Christmas for my mum a few years ago. She loved it. In fact her Storyworth ended up rivalling The Lord of the Rings in length.
 
Let’s face it – Storyworth is just a clever way to help the older people in your life crank out their memoirs, one email nudge at a time. Genius, really.
 
Tread Your Own Path!

No Batteries Required

Hi Scott,

We got both my boys the Barefoot Kids book for Christmas over a year ago. In the last four months, Charlie has made over $100 from recycling cans and bottles. Charlie and our eldest son, Patrick, who’s 11, have also begun buying and selling Pokemon cards on eBay! Understanding how to make money, appreciating it, showing gratitude for their situation, sharing and being kind are ongoing lessons. Thanks for writing and sharing your books!
 
Peter
 
Hi Peter
 
Please pass on the following message to Charlie and Patrick:
 
Boys, good work on the little business you’ve got going. I’m really proud of you!
 
Now, there are still a couple of weeks before Christmas, and I’ve got another challenge for you:
 
I want you to take some of that money you’ve earned and buy some nice presents.
 
First, for your mum and dad, and brothers and sisters. 
 
Then I want you to go to Kmart and buy a gift for a little kid your age – it could be a book (Barefoot Kids?!), stickers or something else awesome – and then place it under the tree in the store.
 
You’ll be a Secret Santa for someone who really needs it.
 
Merry Christmas!
 
Peter,  thanks so much for giving me the perfect opportunity to plug Barefoot Kids for Christmas. There’s something really quite magical about that book. Kids devour it and then go off and do awesome things that make their parents (and grandparents) proud.

-Scott.

My Greedy Obnoxious Brother

Hi Scott,

In 2022, my stepdad passed away and shocked us all when he left all his $6.5 million in assets to my half-brother (his biological son), leaving my sister and me with nothing. To make things fair, our mum (divorced from him 10 years ago) updated her will to split her assets 50/50 between my sister and me.

When Mum passed recently, she left us about $3 million each. Now, our greedy, obnoxious half-brother is contesting her will. We expected this, of course. Yet our mum’s lawyer said her updated will was “bulletproof”. Yet now our trust lawyer says our brother can tie it up in court for years, and we might have to settle for $1 million. Any advice?
 
Brenda
 
Hi Brenda,

I’m really sorry to hear about your mum (and your half-brother).
 
The truth is that no will is bulletproof – nothing can stop an ‘eligible’ person from challenging a will.
 
However, that’s the million-dollar question:
 
Does your half-brother even have standing to challenge your Mum’s will? In most Australian states, unless they can prove financial dependence on the deceased at the time of death, stepchildren aren’t ‘eligible persons’ under family provision laws.
 
I spoke to my lawyer, Dr Brett Davies, and he says you should chat with a litigation lawyer to see if old greedy guts is just bluffing or if he actually has a leg to stand on to challenge your mum’s estate.

If his case is weak, he could walk away with nothing – and he might even have to cough up for your legal costs, and the estate’s!
 
Regardless, tread carefully and get expert advice. In deceased estate disputes, the only guaranteed winners are the lawyers (something Brett didn’t mention!).

-Scott.

A Knife to the Throat

Hi Barefoot,

My dad, who’s 60 and nearing retirement, got a call from an Aussie company pitching an SMSF to trade daily using AI (red flag – he didn’t contact them first). They claim to use only 2% of your super per day to avoid “losing everything”. He’s already invested $500 and says he’s made $25 but is being hounded by daily calls. When I asked, “what would the Barefoot Investor say?” he admitted it’s probably a bad idea, but he seems hooked by the promises. Please give him a call to help me convince him – his number is (deleted).
 
Kate
 
Hi Kate
 
Well, I called your Dad, and he’s a ripper of a bloke!
 
Now, I didn’t have a lot of time, so here’s what I said:
 
“I’ve never heard of these guys, but they sound like a bunch of crooks. And if you transfer your super they’re probably going to steal it.”
 
Unfortunately your father was a little unsure about what specific forms he’d signed to set up his SMSF, so I advised him to call his existing fund and make sure they would not allow the transfer out.
 
He agreed.
 
Then I hung up and called the Assistant Federal Treasurer.
 
Yet he was too important to take my call, so I spoke to one of his underlings.
 
Now, I didn’t have a lot of time, so here’s what I said:
 
“Let’s say you and I are having a coffee down the street when a bloke in a balaclava walks into the cafe and yells ‘give me all the money in your till!’. What would we do?”
“We’d call the cops!” I said, answering my own question. “And they’d be there in a flash. And they’d arrest him and throw him in jail.”
 
“However, when a decent, hardworking bloke is about to get robbed of his entire life savings with a pen rather than a gun, the only thing the authorities can offer is the wet-lettuce-leaf response of ‘Report it to Scamwatch’.”
 
Silence.
 
“Well”, said the political minion, without a lot of conviction, “you could ring ASIC and report it, and also … ummm, maybe … the Federal Police?”
 
So I did that as well. Still, there weren’t sirens, stun-guns and handcuffs on offer … it had more of a cat-stuck-up-a-tree feel to it.

Thankfully, your father is okay. He dodged a bullet that is currently being aimed at thousands of naive investors.

 -Scott.

What Is Wonder Woman Worth?

Scott,
 
I’m wondering what your thoughts are around the hourly rate for a stay-at-home parent? I am unable to go back to work while we have young kids at home, one of whom has a chronic illness. My wonderful partner is supporting the family on his income. Although being the main caregiver is one of life’s most important jobs, it is seriously undervalued and underpaid. If I were to get paid a wage, what would it be?
 
Wonder Woman (aka a mum)
 
Hi Wonder Woman,
 
My wife Liz left me last week.
 
She’s flown to Europe to produce a documentary for the next three weeks (“or so”). In the lead-up to her departure she sat me down and took me through what I call ‘Liz-gistics’:
 
It’s an actual spreadsheet that tracks the movements of our four kids. When I put all their activities into my calendar it honestly looks like a failed game of Tetris. The next few weeks are absolutely terrifying.
 
So, how much is a stay-at-home parent worth?
 
Well, I went looking and found a study by salary.com which calculated that stay-at-home mums work a whopping 96 hours a week, and therefore it says they should earn at least $230,000 a year. Yet that all sounds kinda clickbaity and not particularly useful.
 
Look, the home is not a workplace. If it were, I’d have taken my three-year-old to HR for verbal bullying, harassment and workplace assault after he threw his Vegemite toast at me because I mistakenly cut it into squares rather than halves.
 
My simple answer to your question is that you and your partner should share the money that comes into the family, based on the family money buckets you’ve set up.
 
However, and this is important, part of that set-up should include individual Splurge buckets: a set amount that you can enjoy without judgement or guilt from the other.
 
Oh, and you should also have a family Smile bucket so you can jointly save up for things that you’ll enjoy as a family. Working together is how you win.

-Scott.

Too Much Temu

Hi Scott,
 
I’ve just been clearing out my mother’s motor home and storage shed after she passed away. She had SO many (UNOPENED) packets with random labels, apparently all from Temu. Checking her Temu account, she had spent over $1,000 in the last five months!
 
Alex
 
Hi Alex
 
As I wrote last week, Temu has turned shopping into gambling: it’s so cheap you’re willing to take a punt on whether you’ll actually use it or not (and besides, you only need to buy a few more things to qualify for free shipping, or discounts, or both).
 
I also think they’ve tapped into the inner six-year-old in all of us: who doesn’t love the rush of waking up on Christmas morning and seeing all the presents Temu Santa has left for us? The problem that you’ve nailed with your mum is that it’s mostly just stocking-filler rubbish that you’ll discard by New Year.

-Scott.

I Can’t Sleep. I Can’t Eat. I’m a Walking, Shaking Mess.

Hi Scott,
 
I can’t sleep. I can’t eat. I’m a walking, shaking mess. We put our home up for sale in the first week of March for $1.25 million, on the advice of our agent. (At the time I thought it was on the high side, but I didn’t say anything.) It’s been eight months now and we haven’t got a single offer! Our agent has gone missing in action, and we don’t even have open-for-inspections anymore. My husband, on the other hand, is cool as a cucumber. He’s sure someone will come along and buy it. I’m climbing the walls, not just because we’re up for thousands of dollars in selling costs regardless of whether we sell or not (!), but because we’re stuck in limbo. I want to move interstate to start our new life (and my new job!) but we can’t do anything until this bloody place is sold. What should we do?
 
Wendy
 
Hi Wendy
 
I can feel your stress through my computer screen!
 
My wife says that I am too blunt, but she’s currently overseas, so I’m going to say what I damn well please:
 
Your asking price is too high.
 
If you haven’t sold your home within six weeks of listing (let alone eight months!) you have one of three options:
 
First, you can take it off the market and wait till prices recover.
 
Second, you can rent it out for a period of time.
 
Third, you can meet with your agent and discuss aggressively lowering the price so you can attract a number of bidders, and let them sort out what the market value is.
 
Which one does your head tell you is the best option?
 
Remember, it’s very likely you’ll be buying and selling in the same market. In other words, if you sell your home for less than you expect, chances are you’ll buy your next home for less than you expect.
 
The stress you’re feeling comes from a lack of control. Waiting and hoping isn’t a strategy that will work in this market. You need to take action!
 
Good luck!

-Scott.

What’s in store for property prices

Let’s take out the crystal ball and see what’s in store for property prices.
 
Nationally, they continue to creep higher – they’re up a very respectable 6.7% this year.
 
Yet it’s also clear that the market is losing steam, especially in the tinsel-towns of Sydney and Melbourne, where there are currently more homes for sale than at any time in the past five years.
 
Why?
 
“Owners struggling with mortgages at the moment are thinking, ‘I’d better get out and take advantage of relatively high prices’,” AMP chief economist Shane Oliver was quoted in the news as saying.
 
I think that makes sense.
 
But hold your handbags!. Another expert, Louis Christopher from SQM Research, predicted this week that prices could boom 10% nationally next year if we get a rate cut (or two) early next year.
 
I also think that makes sense (especially in Perth and Brisbane, where there’s a lack of supply).
 
So the question then becomes: how likely is it that homeowners will get some ‘relief’ from high rates?
 
Well, in January economists were almost unanimous that we’d get a rate cut this year.
 
Didn’t happen.
 
And now they’re equally unanimous that we’ll get rate cuts next year.
 
Tik. Tok.
 
Perhaps that’s why Treasurer Dr Jim Chalmers describes current interest rates as being “stubbornly high”.
 
Interesting. So Jim is suggesting that interest rates are behaving much like my three-year-old does when I won’t buy him a Big M at the local Romsey IGA. He collapses on the floor and starts howling like a wolf, and then goes limp as a jellyfish when I try to pick him up.
 
Now that is stubborn.
 
So, let’s zoom out and take a look at the historical chart.

From this perspective, current rates don’t look ‘stubborn’ – or particularly high –  to me.
 
The truth is that interest rates movements are as unpredictable as my three-year-old. (Just ask the former Reserve Bank Governer Philip Lowe, who famously shanked his ‘lower for longer’ forecast … despite the fact that he was the one who set the rates!).
 
Look, despite the crazy amount of airtime we give economists and experts, history has proven that they’re actually no better at picking the longer-term movements of interest rates than a dart-throwing monkey.
 
So here’s my advice:
 
Don’t be stubborn, and don’t listen to experts (including me!). If you’re making buying or selling decisions, you need to deal with the facts in front of you.
 
And that goes for you too, Jim. I know you’re hanging out for a 10% pop in prices before the election in May, but you can’t count on it!
 
Tread Your Own Path!

Should I Go to Cash?

Hi Scott,
 
Love your emails!
 
I’m sure you'll get a million questions to this effect, but what should we do with our super based on Warren Buffett’s indicator? Do we move our super investments to more conservative options (cash, etc)?
 
Hayley
 
Hi Hayley
 
I can’t tell you what you should do, but I can tell you what I’m doing:
 
Nothing.
 
Here’s the problem with converting to cash ahead of a crash:
 
You have to be right twice.
 
As in, you not only have to pick the right time to sell your shares and move to cash … but you have to pick the right time to buy in again, just before the market recovers.

And, as my wife will tell you, I’m rarely right once … let alone twice!
 
When you look at the long-term track record of the markets, things have turned out exceedingly well if you follow another piece of advice from Buffett:
 
“The trick is, when there is nothing to do, do nothing.”
 
And that’s good enough for me!

-Scott.

Young and Stupid

Hi Scott,

Our Year 12 economics teacher just read out one of your Q&A newsletters in class. An 18-year-old guy had written to you confessing he’d spent $8,000 on a credit card. He said he felt a burden to share it because many Aussie teens fall into the same trap. It dawned on me that I’m now eligible for a credit card too. The $$$ symbols flash before my eyes, just for a moment. It clearly illustrates just how easy it is to fall into stupid mistakes being young, and I really don’t want to be stupid. So I’m simply writing to say thanks. I’ll definitely be getting your book!

Annie
 
Hi Annie
 
You’re right, you can get ahead of most people in life simply by avoiding doing the ‘stupid’ stuff. That’s how people stay in loving relationships, out of jail, away from debt collectors, and with their adult teeth intact.
 
Yet if you really want to thrive, and live an amazing life, you need to go one step further. You need to actively build up the belief that you, Annie, are a really savvy woman with money.
 
How do you do that?
 
You prove it to yourself with the little actions you do, starting today.
 
Yes, you avoid credit cards, but you also open an investing app and start buying index funds. Yes, you avoid Afterpay, but you also set up your buckets and start saving for a house deposit, even if it’s years into the future.
 
I’m a self-serving grubby author, but I’ve always thought my book makes a good graduation present.
  
Good luck!

-Scott.

I Don’t Want to Adult Anymore

Hi Scott,
 
My husband and I are in our twenties. We have just gotten our first mortgage and have had a real shock at how much it costs to be adults, and frankly we don’t like it. After living with my parents for three years, and two kids later, we are finding it tough. Our mortgage is just under 60% of our income, so I don’t know how I can get our expenses to under 60%. We both work full time and our kids are in daycare. My husband is an apprentice plumber and I’m in the public service. He tries to get cash work but it’s hard competition out there. I’m just not sure how we can survive considering we got our mortgage only three months ago so refinancing is not really an option. Any tips?
 
Bindi

Hey Bindi,
 
Yes, being an adult totally sucks.
 
And, just when you think it couldn’t get any suckier, you’ll get hit with your council rates, then house and contents insurance, and the hot water service will go to god … all on the same day.
 
Now I’m assuming you went through the ‘Bank of Mum and Dad’ to help secure the loan, because you wouldn’t have gotten it on your own.
 
In that case, you serve as the ‘after’ mugshot of what happens when you give kid-ults a hand-out disguised as a help-out.
 
You’re reaching for the ripcord three months after you got the loan?!
 
Surely you looked at what your repayments would be before you signed on the dotted line?!
 
Bindi, I’m reaching for a paper bag because I’m hyperventilating at the moment.
 
BREATHE, BAREFOOT!
 
Okay, so my breathing is back under control. Let me put away my paper bag and my passively aggressive double dose of exclamation and question marks and give you some advice.
 
You’re parents now, so it’s time to behave like responsible adults.
 
So I want you to call your bank and tell them you’re in hardship. Show them your budget. They’ll likely allow you to switch to interest only on your home loan – which will reduce your repayments – perhaps until your husband finishes his apprenticeship, and he starts earning some decent coin.
 
Until then, enjoy the baked beans, do your Santa shopping on Gumtree, and sell whatever you can to get at least $2,000 Mojo in the kitty.
 
You will get through this, and it will make you stronger and wiser.
 
Promise.

-Scott.

Haul

When I was a kid we’d drive to the ‘big smoke’ (Mildura) once a year to do our Christmas shopping.
 
For my mum shopping was a social event.
 
She’d meet up with her friends. She’d try things on. And, if the sales assistant did a good job on her, she might even pop it on laybuy (stuff was expensive back then).

And while my mum was having the time of her life, my old man was … standing out the front of the shop. The thought of going into an airconditioned shop for a bit of a ‘looky look’ never crossed his mind. So he either stood in the 40 degree heat reading the newspaper, or made small talk with the other dads that were doing the same thing.
 
Isn’t that outdated with a side serving of sexism?
 
Sure, but that was my childhood.
 
Twenty years later, the internet changed shopping forever.
 
It went from being a real-world social event to a solitary pastime. There is no friction, no waiting, no talking, and an unlimited range of everything. You buy (often with Afterpay), enticed by free shipping, knowing that you can simply send it back if it doesn’t fit. The internet essentially became a giant shopping mall, and there was a sale happening all the time. (Next week: Black Friday … followed by Cyber Monday. Ho, Ho Ho!)
 
Yet in the last few years shopping has gone Tik Tok on us.
 
The fastest growing retailers on the planet right now are Temu and Shein.  
 
Here’s the model: they sell outrageously cheap junk direct from factories in China (essentially they make it on demand) and deliver it to your door in a throwaway plastic bag.
 
And this week Amazon joined the fray by launching their very own copycat service called Haul.
 
“Say hello to crazy low prices: unbelievable finds $20 and under”, the banner says on the Haul app (though Amazon has said that most of their junk – my term – will be priced under $10, and some under $1).
 
And in doing so they have announced a new chapter in retailing:
 
Shopping is now a form of gambling.
 
Yes, gambling.
 
On Temu you can buy three outfits for $20. An entire dinner set for $8. An iPhone charger for $1.25.
 
And when you hit ‘buy’, you’re taking a gamble:
 
You know it’ll likely break, it’ll be dodgy, or the sizing will be way off.
 
Yet if you wear even a couple of items from your haul, that’s a win, right?
 
And because it’s all so incredibly cheap you’re not going to bother sending it back.
 
Anyway, I spent some time on the site, and here’s my shopping review:
 
It’s the shopping equivalent of MAFS.
 
You don’t need anything on this site. You’ll be dumber for buying it. Like MAFS it’s just plastic junk designed to drill your dopamine and leave you unsatisfied.
 
And it’s also terrible for the environment.
 
Here’s the lifecycle:
 
It goes from some factory in China, to your joint, to your cupboard, to your big red bin, and then to the bottom of Sydney Harbour (or wherever those garbo trucks go).
 
Tread Your Own Path!

Social Media is the New Smoking

Scott,
 
Australia made global headlines this week after the Government moved forward with a plan to ban under-16s from accessing social media. I know you’ve been all for this, but, as a mother of three teenagers who are permanently attached to their phones, I wonder how practical it will be in the real world. Would love to hear your thoughts.
 
Zara
 
Hi Zara
 
It sounds like your kids are in the same leaky ship as many others – Mark Zuckerberg’s SS Algorithm – and it has well and truly sailed. And just like the rest of us aboard, they are doing unpaid, stressful, around-the-clock work for a billionaire.
Personally, I think these proposed laws will be about as successful as the age limit for drinking or smoking: the reality is that if kids want to drink or smoke they will. There’s always someone with a fake ID, or a loose parent who’ll buy booze for their underage kids.
 
This is how life happens.
 
Still, I think the Government should be congratulated for kicking big tech in the shins (though I draw the line at their ‘Misinformation and Disinformation Bill’, which seems a little too Orwellian).
 
As they say in the classics, “and so it has begun”:
 
Social media is the new smoking.
 
It’ll take a while to fully catch on, but, make no mistake, that is where we are heading. The problems that social media is causing young people are too big and too important to ignore. Eventually – and hopefully not too many years from now – we’ll collectively turn on them.
 
This is how life happens.

Scott.

HECS Debt is Bad Debt!

Hi Scott,
 
I understand that HECS debts don’t attract a traditional interest rate, but mine goes up like 25% a year, which is way worse. Also, I believe that there was a rule change and HECS debts now no longer die with us, which means our poor kids could be left with nothing.

Sarah
 
Hi Sarah
 
I’m taking it that you didn’t study statistics at uni … your HECS debt has not gone up by 25% in a year!
 
HECS debt is designed to keep up with ‘today’s dollars’ by increasing the debt by whatever the Consumer Price Index (CPI) does each year. No one gave a toss about this until 2023, when a bout of high inflation increased HECS debts by a massive 7.1%.
 
In response to that bill shock, HECS debts will soon be matched to whichever is lower out of the CPI or the Wage Price Index (WPI). And once legislation is passed it will be backdated, which would bring down the 7.1% in 2023 to 3.2%, and the 2024 rate of 4.7% to 4%.
 
The other thing to know is that the wage you need to earn before you start making repayments is increased every year, and there are plans to make the repayments more in line with marginal tax rates.
 
Finally, you do not have to pay off your entire debt when you cark it (and nor do your kids).
 
The executor of your will is required to file all tax returns up to your date of death. If your annual HECS repayment is owing, it’s paid from your estate. Any remaining HECS debt is then written off by the Government.

Scott.

Stoned on Weed Stocks

Hi Scott,
 
Do you know what is happening with the medical cannabis companies? I had shares in AC8 and CGB and both have been delisted. Others are only worth 1/100th what I paid for them! Should I be freaking out?
 
Andrew
 
Hey Andrew,
 
Dude, it sounds like you’ve been well and truly smoked.
 
A few years ago it felt like everyone was getting high on cannabis stocks. I vividly remember a mate of mine – a comedian – trying super-hard to persuade me to have a toke on his favourite pot stock.
 
No joke!
 
Now I don’t doubt for one second that there’s a huge market for medicinal marijuana, as well as for plain old Mary Jane. Case in point: more Americans smoke dope each day than drink alcohol, according to data collected by the National Survey on Drug Use and Health.
 
Still, the reality is that traders blew up the valuations of these start-up businesses way too much. Now the market has come off its high, and there are a lot of marginal businesses that aren’t worth anything like the prices investors paid for them in the boom.
 
Should you be freaking out?
 
I think the time to freak out was a long time ago. I’ll leave the rest to you, Scooby-Doo.

Scott.