Barefoot Confession

Hi Scott,
 
I just have to get this off my chest. For the last five years I worked in a job where I only did about one hour’s worth of work each week (there was a six-week period each year where it was quite busy and I would do maybe two to four hours a day). The rest of the time I would browse the internet, go on 60-90 minute walks while listening to podcasts, prepare food in a makeshift mini kitchen I had set up, watch TV series and movies, play retro video games online, just whatever I wanted that wouldn't look too obvious that I wasn't doing anything - although I'm sure people knew. I even negotiated a pay rise for myself while doing all of this - from $70k to $78k. I left that job with an absolutely glowing reference from my boss that helped me get my current job, where I do actually work most of the day.
 
Cindy
 
Hi Cindy,
 
I could kind of see how this could happen if you were working from home.
 
(Employers think they can track workers via apps like Microsoft Teams and Gmail that mark you as ‘away’ if your mouse doesn’t move for a period of time. What they don’t know is that sneaky employees are buying an undetectable “mouse jiggler” on Amazon for $15, which has 4,555 glowing reviews on Amazon).
 
Yet you did this from the office!?
 
Hopefully they replaced you with a pot plant.  And if I were the owner of that business, I would have placed your old boss – who gave you a pay rise and a glowing reference – on permanent gardening leave!

Scott.

The Betrayal

Hey Scott
 
We have – well had –  a much-loved receptionist. She was like a second mum to our child, even taking paid time off to go to the grandparent/important person day at her school. She was paid above award wages and has been looked after with bonuses and gifts for the last 17 years. Here is the kicker: I caught her stealing! Cash out of my wallet – on my birthday! The look on her face as I watched from the door was not one of guilt or fear of getting caught, but quiet intent, as if it was normal activity. I pretended not to notice, but I was shocked to my core. This was right before she went on holiday. While she was away, I called the local detectives and asked for advice. Here’s where I have a conflict: do we prosecute or not?
 
Sally

Hi Sally,
 
Should you prosecute?
 
HELL YES.
 
If I were in your shoes I’d want to see her face a (pre-morning coffee) Judge Judy.
 
And I’d also employ a forensic accountant to look over your accounts and see if she’s stolen money from the business, not just your wallet. If they find anything, you should hand that over to the cops and add it to the rap sheet.

I know the hurt and betrayal must be weighing on you, and the prospect of a drawn-out drama might fill you with dread, but I’d encourage you to see it through – not only as a sense of resolution for you but as a way of helping her next boss.

Scott.

We need to talk about your job

Years ago I employed a kid fresh out of uni, mainly as a favour for his dad, who said he needed some work experience.

I had low expectations, so I put him on the standard minimum wage and told him we’d revisit it after a three-month probation period.

The three months flew by, and then one night I got an email from him requesting a meeting. The first red flag was when he arrived at the office in a suit. The second was when he pulled out a printed list of demands that he and his mother had obviously war-gamed on the weekend. He cleared his throat and squeaked out his opening offer:

“I am worth $100,000 plus super … and 5% of the profits of the business, paid quarterly.”

“Are you on drugs?” I said, laughing.

He just stared at me.

He checked his notes. Clearly this wasn’t one of the responses his mother had scripted for him.

And then? And then he started crying. Sobbing. It was so … awkward.

Don’t be that guy.

Yet you do need to ask for a raise.

Why?

Well, if you don’t get at least a 5% pay rise this year, you’ll be going backwards.

That’s because the prices of things are inflating at the fastest rate in years … and they haven’t stopped climbing.

Think of inflation like being stuck on a treadmill that keeps getting faster and faster. You have no choice but to keep running, otherwise you’ll faceplant and be ricocheted into the poorhouse.

Okay, the scary movie is over and I’ve put the exercise equipment away.

So, what can you do? Two things:

First, understand that the employment pendulum has swung in favour of workers.

The jobless rate is edging in on 50-year lows, so many employers are having to pay up to attract new hires. So the obvious thing to do is spend five minutes googling to make sure you’re getting paid the current market rate.

Second, try the ‘Career Compounding Strategy’ that I lay out in my Barefoot Investor book.

Basically, it’s a step-by-step process that gets you to look at your job from your boss’s perspective, choose their three most important outcomes (not yours), and write ambitious goals for how you are going to achieve them in the next 12 months.

You then share those goals with your boss and ask for regular feedback throughout the year. You never talk about money or promotion in these meetings, but instead ask what extra you can do to help make your boss’s life easier, without sounding like a brown-noser or bursting into tears. That’s when you can ask for a promotion and a hefty raise. (For more info, borrow my book from the library.)

It’s simple, sure.

Yet very few people actually do it. And yet you will spend around 90,000 hours of your life at work. When you factor in sleeping, eating and Netflixing, there’s not a lot of life left over. So spending a few hours working out how to compound your income can have a dramatic long-term impact on your wealth.

Better yet, over the years I’ve received letters from readers who’ve used it to get 20% increases, and often a lot more.

And what ever happened to the young guy?

Last time I heard he was working at Macca’s. I wonder if is paying a profit share?

Tread Your Own Path!

Bonjour Barefoot!

Hello Scott,

I am a French mum of four. I learned about you through a podcast of a young lady who calls herself Madame Fauchée (fauchée in French means broke!). So I wanted to buy your two books. But it is impossible to get them in France, so I bought your mp3s and listened while riding my bike to work. Your books are so interesting! I wish I had read them earlier. Now I would like to get my sons into them — particularly my youngest, who is 16. Is it still possible to do the Barefoot family with a 16-year-old? Finding a job at this age is not easy in France, especially at this time of Covid.

Merci, Suzanne

Hi Suzanne,

Frais!

(My son is learning French at school at the moment and he tells me that means ‘cool’!)

In Australia I’ve been piloting a program in high schools for students who are the same age as your son.

The program is called ‘The Bucket List’ and it involves students saving up for something on their bucket list (it could be a bike, travel, or moving out — whatever chews their croissant).

The way they get their money is by working (a key lesson!), at which point most kids fold their arms and say “There aren’t any jobs!” (It’s not just a French thing). However, there’s always work for teenagers, (because they’re cheap!). The trouble is, most don’t apply, or put in much effort.

So I get kids to do my Zero to Hero Résumé (which is also in my Barefoot Investor for Families book). The aim is to get them to write down positive things about themselves and learn how to sell themselves at a job interview. For your son, the aim is to have him earn his own money, set up his Barefoot buckets straight away, and start saving for a goal. You want him to get that feeling of winning, quickly.

Another challenge from the Bucket List program is to get your son to help you cut the costs of your household bills by negotiating a cheaper energy or phone provider. You could even offer to pay him a commission.

Here’s the end game: most parents complain about their teenagers — they’re lazy, they sleep all the time, and they have no idea about money or the real world.

I want you to brag about your son while he’s in earshot — how good he is at saving you money, how hard a worker he is, and how he wants to get a part-time job. He may act like he’s not hearing you, but he will take it in.

Au revoir!

Scott.

This is How to Get a Job

Hi Scott,

Something to brighten your day. My almost 15-year-old recently applied for (and got) her first job at a local ice-cream store. She based her application on your example in The Barefoot Investor for Families. Now my 11-year-old believes she should also be allowed to get a job at the ice-cream store. She even wrote an application letter following your book’s example. Let me quote you a few lines: “I want to work at Gelatissimo because I love ice-cream, and I want to bring the joy of sweetness to others. I am able to work at any time, any day, any hour. My biggest strength in the ice-cream business is eating ice cream.” This gave us a good laugh and we love her enthusiasm, though we won’t be letting her loose on the workforce just yet.

God bless, Janice

Hi Janice

Congratulations on your teen getting her first job!

As for your 11-year-old …

She had me right up until the part where she hinted that she’d be getting high on the boss’s supply.

Other than that … I’d hire her!

No brain-freeze for that girl … she’s not going to have a problem getting a job when she gets a bit older.

Now, for those of you following along at home, let me explain what Janice is talking about.

Most employers — regardless of whether its Macca’s, KFC or an ice-cream store — essentially ask these five questions:

Why do you want to work for us?

When can you work?

Why should I employ you?

Are you going to work hard?

Who can vouch for you?

So in my book I boiled down the answers to these five questions into a double-page, plug-and-play resume template teens can complete in one evening. However, it’s more than just a resume, because in the process of putting it together teens get two benefits:

First, they get a pre-written ‘cheat sheet’ they can take along and use for their interview.

Second — and more importantly — they learn empowering stories that will change the way they see themselves.

It’s an absolute killer … just not for 11-year-olds!

Scott.

Here’s what could happen in 2021

Let’s discuss what could go wrong in 2021, and what you can do about it.

Of course newspapers are chock-full of experts making predictions about “what’s in store for the next year”, so, before I throw my hat in the ring, let me shake the sauce bottle:

How many smart sausages this time last year wrote, “We predict that a pandemic will sweep the planet and lock many of us down in our homes. Our recommendation: stockpile toilet paper in February.”

That’s the err, rub, right?

Well, for what it’s worth, my view is that the next few years could be financially brutal for many businesses, for those workers who are laid off or underemployed, and for retirees who have had their investment income slashed.

However, it’s because of all this misery that things in 2021 could actually get a little … loose.

Here’s the two-hander:

The Reserve Bank has set rates at (effectively) zero to stop you from saving and encourage you to borrow up BIG.

The Government is even attempting to scrap responsible lending laws to get the party in full swing.

Heck, the RBA has given us a timeframe, having all but promised donut rates for the next three years.

What could possibly go wrong?!

Well, lots actually.

Like it or not, we’re living through a giant financial experiment: never has the world had so much debt. Never have interest rates been this low (they’re at thousand-year lows, according to Merrill Lynch).

And so the lesson I’m taking out of 2020, our annus horribilis, is this:

Life is unpredictable.

The truth is we spend most of our lives stressing about things that never happen. And then one day a bat flies the wrong way, and the next day people are going the biff over bog roll.

Think about it: the riskiest things — the ones that knock you on your backside — are often a bolt out of the blue.

For my family it was a fire that burned basically everything we owned.

For others it could be a relationship breakdown. Or an illness. Or an economic meltdown. Or a global pandemic.

So how can you and I prepare for them?

By asking yourself the following questions, today.

Barefoot’s Top Five Questions For 2021

1) “Is my money safe?”

Here’s the bolt out of the blue: you need to access your money quickly, but all your investments have tanked.

If you have money that you need to draw on in the next five years invested in anything other than a bank savings account or term deposit,you may well lose a chunk of it.

Like what?

Like property funds that offer a high rate of interest, or the share market, or cryptocurrency, or any other type of managed investment.

(The share market is not a safe place to hold your money in the next five years. However, it’s arguably the safest place to invest your money over decades, as it will outrun inflation.)

Here’s what you can do about it:

Keep any money you’ll need to spend in the next few years in a bank account (or term deposit) that is covered by the government deposit guarantee (up to $250,000).

Yes, that may sound like overkill, especially with interest rates this low. However, it’s not about the interest you earn (which is pitiful), it’s the sleep-easy factor of knowing you’ve got a backstop. That’s worth more to me and my mental health than any gain I could make in the market.

2) “How long could I last if I lost my job?”

Here’s the bolt out of the blue: your boss calls you into his (virtual Zoom) office on Friday … you’re being laid off.

It’ll never happen to you, right?

Well, I believe the lasting legacy of COVID is to radically change the concept of what we call work.

Think about it: employers have been thrown in the deep-end of the productivity pool this year. Many have had to deal with a reduced workforce who are working from home.

And, now things are getting back to normal, I wonder how many will look at last year and think to themselves:

“Maybe I don’t need all the staff I once had. And, even if I do, if they’re all working remotely … maybe I can hire cheaper workers somewhere else in the world?”

And yet one in five of us Aussies has less than $1,000, according to ME Bank’s latest biannual Household Comfort Report.

Here’s what you can do about it:

Follow the Barefoot Steps; after you’ve set up your buckets, domino-ed your debts and bought your first home (but not yet paid it off), the next Barefoot Step is to boost your Mojo savings to three months of living expenses.

I had a woman write to me in September telling me she thought having three months of Mojo was a total overkill. Yet, when they both lost their jobs, she said, “It was the most important thing in our world. It allowed us to breathe.”

3) “Am I covered?”

Here’s the bolt out of the blue: your house burns down, and you’re not fully covered.

Statistically, if you’re a normal little vegemite you will be underinsured. And the moment you’ll find out is after the fire, or the car accident, or the illness, or … the rats.

(Yes, one of the downsides to living on a farm is rodents. They somehow managed to get into both our cars and eat through $35,000 of interior and electrical work).

Here’s what you can do about it:

Dig out your insurance policies and check what you’re covered for you may need to increase it. If you’re unsure, call your insurer and ask them to review your policy. Life is full of dirty rats, so just make sure you’re fully covered for anything.

4) “Is my partner on the same financial page?”

Here’s the bolt out of the blue: your partner walks out on you.

Relationships Australia tells us the number one reason for relationship breakdowns is fights about money.

Here’s what you can do about it:

The monthly Barefoot Date Night is the cornerstone of my entire plan.

Making a monthly ritual of getting on the same financial page as your partner — and working through the Barefoot Steps — is the most powerful thing you can do to ensure you don’t end up losing half your assets.

If you don’t schedule it, you won’t do it. (We have ours on the first Tuesday of every month, which coincides with the monthly Reserve Bank meeting: how hot is that?)

And remember, money talk goes better with a wine (or taco) in your hand.

5) “If I got hit by a bus, would my family be able to put everything together?”

Here’s the bolt out of the blue: you leave your loved ones with a financial Rubik’s cube of frustration.

Picture your partner (or parents) sitting alone, distraught and grieving, trying to piece together your financial life.

They have no idea how to access your bank accounts, the password to your email and social media, your funeral wishes or even where your will is.

Here’s what you can do about it:

Spend an afternoon getting everything in one place.

At Barefoot we call it the Fearless Folder, and once it’s done you lock it away in a secure safe.

The feedback I get from people who have done it is that it’s Marie Kondo-cathartic to have it all sorted.

What’s more, it’s the final way you’ll say “I love you” to your loved ones.

And there you have it.

Each and every week, I show up and answer your questions.

Yet to really prepare for 2021 you need to ask yourself the right questions, and get the right answers for you.

Tread Your Own Path!

The Simpsons is showing its age

The Simpsons is now 32 years old ... and it’s starting to show its age:

You know the opening credits where Homer hears the hometime whistle at the power plant?

That’s actually a throwback to the 19th century, when very few people owned watches, so factories used whistles to signal to workers the start and end of their shift.

In other words, Homer got paid to belt uranium sticks until the whistle blew, at which point he’d race out of the joint so fast he’d end up running over his son each night.

These days, of course, our bosses don’t have whistles … or even a workplace!

And yet you and I know people who think they can still get by simply showing up and whistling away the time.

Well, that may have worked 32 years ago in cartoon land, but it won’t cut in the era of COVID.

For the first time in a generation we’re facing a recession, and most businesses will be looking to cut the fat.

Scary thought, right?

Well, let me introduce you to one person who I guarantee won’t get D’oh’d!

Her name is Melanie, and she wrote me the following message last year … before COVID:

Hi Scott,

In the ‘Grow’ chapter of your book, you advise people who are preparing for their annual performance review to narrow their position description down to three fundamental tasks, and then write ambitious goals to work on for the next 12 months. Well, I actually did it, and not only was my boss impressed that I had prepared for the review, but he decided to give me a pay rise right now because of the contributions I had made to date! Before reading your book, I would never have had the confidence to take control like this. I’m off to celebrate — now I can afford a $15 bottle of wine!

Melanie

I know what you’re thinking.

You’re thinking, “That was last year. Now I’m not looking for a raise ... I just want to keep my job.”

Agreed.

But if you want to keep your donuts, you need to do exactly what Melanie did:

Decide on three ambitious work-related goals, tell your boss about them, then set a diary reminder to do one small thing each day that gets you towards those goals within the year.

Simple, right?

Sure. But not easy. That’s why few, if any, employees ever do it.

And that is exactly the point: it’ll make you stand out in a very good way. And if things go nuclear at your workplace in the next 12 to 18 months, you’ll be in a stronger position than your co-workers — all in the time it takes to watch an episode of The Simpsons.

Toot! Toot!

Tread Your Own Path!