The Millionaire Mentor?

Hi Scott,
 
I’ve only just turned 18, but my question is actually for my 16-year-old brother. Recently, he has become increasingly interested in building his own business and learning how to be successful. A couple of weeks ago he found a ‘mentor’ who is apparently successful and is helping him start his own business.
 
He was giving his advice for free to my brother, but has now decided there should be something in it for him (which is fair enough). However, what he wants is $1,200 for three months of mentoring, or $400 each month from my brother. This is a lot of money for a 16-year-old still at school, who in a year of working on his business has not gotten a single client yet.
 
My parents have talked to him about it but he is adamant about it being beneficial. It is not my place to do anything but I do not want him to get scammed or waste his money. What should I do?
 
Sarah
 
Hi Sarah,
 
First up, your little brother is blessed to have such a loving, protective big sister looking out for him.
 
So what do I think you should do?
 
Well, it sounds like your brother is young, hungry and impressionable … like most 16-year-old boys. So I’d help him get some perspective by asking him the following question:
 
How successful is this mentor if he has to resort to putting the hard word on a schoolkid?
 
Answer: not very.
 
I’d also point out that a successful businessman would set their price before they started a project, rather than retrospectively plucking a figure out of their backside months after, as he’s apparently done.
 
Your little brother is learning a lot from this mentor, but unfortunately it’s how not to behave in business.
 
So what do you do?
 
When I was your brother’s age I fell in love with books, because they were my mentors. I could escape into someone else’s world and learn from their mistakes, wins and wisdom.
 
So, what I’d do is to go to a bookshop and buy him these books:
 
How to Get Rich, by Felix Dennis (one of the UK’s richest self-made men).
 
Shoe Dog, by Phil Knight (the founder of Nike).
 
Oh, and I’d also throw in the classic How to Win Friends and Influence People by Dale Carnegie, and of course The Barefoot Investor!
 
Finally, let me just say this: when you’re young, the best mentors are older people who take the time and effort to see the potential that you don’t yet see in yourself. That sounds like you, big sister.

Scott.

My (brief) time in jail

The prisoner walked into the jail meeting room, sat down in front of me, and stared into my soul.
 
“Hello”, I said nervously.
 
Silence.
 
At the back of the meeting room there was a big clock on the wall that ticked loudly every second … perhaps a passive aggressive reminder that the prisoners were ‘doing time’.
 
A full 60 ticks later she opened her mouth.
 
“When I came in here …”, she whispered, softly enough that I had to lean forward (even though I knew I should not have been leaning forward), “I brought only the clothes on my back … and your book.”
 
“Okay”, I said, even more nervously.
 
“Okay”, she repeated without blinking.
 
I was in a women’s prison completing the mandatory workplace experience component of my Diploma of Financial Counseling … and what an experience it was!

Now, there are still people who see TAFE Vocational Educational Training (VET), compared to a university degree, as the educational equivalent of Aldi. But I strongly disagree … and I have both qualifications.
 
It’s said that uni is for learning and VET is for earning: VET/TAFE qualifications are more practical, shorter, and are generally much cheaper.
 
And I think it’s a very rational choice for a lot of teenagers who have no idea what they’re going to be when they grow up.
 
After all, not only does the research say that the average person will have five careers over their lifetime,  the World Economic Forum says that two-fifths of workers will be disrupted by technological change (read: AI) within the next three years.
 
And that’s why I was surprised this week that the Government released the Australian Universities Accord Report, which set out an ambitious goal of doubling the number of university placements over the next 25 years.
 
Does it really make sense to spend $40,000 on a degree you may never use?
 
(Today many people are finding their HECS-HELP debts are rising faster than they can pay them off. Last year the debt was increased by 7.1%; this year it will jump by another 5%.)
 
Don’t get me wrong. I don’t want my doctor to have a ‘Diploma in Appendix Removal’ from Broadmeadows TAFE. There is absolutely a need for quality tertiary education.
 
However, it’s also true that many universities have become highly profitable diploma mills: rapidly ratcheting up their fees, jamming in full-fee-paying Chinese students, and all too often delivering a Zoom-like learning experience. Which may explain why the number of students studying for a degree has fallen by more than 13% since 2016.
 
TAFE courses, meanwhile, are widely available and increasingly well funded. In fact, the prisoner I was speaking to was getting her life back on track from behind bars by doing … a VET course.
 
Tread Your Own Path!

Our Kids Don’t Know How Broke We Are

Hi Scott,

My family is in a highly stressful situation. Currently our children all go to private schools that cost us a combined $35,000 a year, yet we are struggling because I am the only one working, as my husband has been out of work for over six months. I can’t tell my children that they will need to leave their school because we can’t afford it! However, we have absolutely no money to spare. We are desperate. We have paid for the first term, but the new bill will be issued in April. We are extremely stressed. What can we do?

Pari

Hi Pari,

Oh boy, what a stressful situation.

It’s all wrapped up in the emotions of guilt and shame and the desire to provide for your kids.

So the make-or-break factor is your husband getting work … any work, even if it’s not in his area of expertise. You just need money coming in the door.

And you’re not the first parents who have been in this situation. The key with all creditors is communication: let the school know what’s going on and ask for their help.

Yet you’ve probably already tried that.

So here’s another way to think about it.

Politicians often say you should never waste a good crisis – and it’s actually good advice. Pari, you’re in a crisis right now, so it’s a good idea to put everything on the table and look at your options.

And the bottom line is this: if you can’t afford it … you can’t afford it.

Putting your kids into a decent public school won’t damage them. In fact, if they’re old enough, talking to them straight about the realities of your financial situation could be one of the great learning lessons of their life.

Scott.