You’re a Joke, Barefoot

Barefoot,
 
You are a joke. Telling people to put their money into a savings account while the fake CPI numbers are off the charts with inflation! The real CPI would be unimaginable. Inflation is blatant central banking and governmental theft. Case closed. If you really want to help people, teach them about sound money, like the gold standard. You’re only slightly better than the fake news financial pundits on MSM (mainstream media). Our currency is completely manipulated by the RBA and government policy. FIAT is garage. Stop brainwashing the public with your Keynesian bulldust.
 
Luke
 
Hi Luke,
 
It sure is nice to be back at the crease … and the first ball is a bouncer aimed at old Barefoot’s head!
 
So I’m guessing you made a typo when you said “FIAT (as in government-backed currency) is garage”. I’m sure you meant to write “garbage” but I’m going to run with “garage”, because the savings strategy in the Barefoot Steps is all about having a getaway car ready for when life happens. It’s not about a financial return, but a psychological boost. And it works.
 
Now, let me take a swing at a few of your deliveries:
 
First, gold-bugs like you (and their children, Bitcoin bros) believe it’s only a matter of time before the world goes to hell and we end up with hyperinflation, like in the Weimar Republic in 1920s Germany.
 
And that could end up happening.
 
However, for me, the world is far too complicated to bet on any one binary outcome, much less waste what could be decades of your life waiting around for it.
 
Second, you can live your life believing that the powers that be are manipulating and lying to you.

Yet that’s not a worldview that equates to happiness, sunshine and cupcakes.
 
Finally, since the dawn of time capitalism has worked, and that is the driver of the Barefoot Steps: you systematically save and invest in profitable businesses and hold them for the long term.
 
Is that all too idealistic for you?
 
Maybe.
 
Yet which outlook leads to a more peaceful life?

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!

I’m a Grown Man, and I’m Scared

Hi Barefoot,

I’m worried about what to do with my superannuation. I want to retire in the next 12 months as I turn 66 in July. But I’m scared that if Russia or China invade, this would have an impact on the share market which will directly impact my super fund. What do you think?

Bill

Hi Bill,

I have absolutely no idea what Putin or Xi will do, or the effect it will or won’t have on the market.

After all, who’d have thought a global pandemic would cause a boom in the share market?!

Yet, I am very sure that by pouting about Putin you’re overlooking your biggest financial risk:

Inflation.

If you’re retiring on a fixed income, you need to ensure that money won’t be whittled away.

The price of stuff is currently rising at the fastest pace in 11 years. Ronald Regan once described inflation as “violent as a mugger, as frightening as an armed robber and as deadly as a hit man”.

So, how do you outrun inflation?

Generally by investing in businesses that can put their prices up. Of course, doing that buys you a ticket on the stock market rollercoaster … which will work out so long as you don’t jump off mid-ride!

Seriously, Bill, I don’t think it’s good for your wellbeing to worry about things you can’t control. I’d suggest you sit down with a financial advisor and work through a strategy that will make your money stretch.

Scott.