What I’m doing with my money

It’s 5am. 

I’m at the farm, sitting here at the kitchen table, staring at my screen …  and watching the US stock market get absolutely hammered. It has plummeted close to 5% since I went to bed last night, in response to Trump’s ‘Liberation Day’ tariffs.

Journalists and media pundits absolutely live for days like this. There are so many ‘bloodbath’ headlines. So much clickbait casserole. So much ‘breaking news’. 

And every article is saying pretty much the same thing: Trump’s tariff plan is stupid. That it will plunge the US economy into a deep recession. That it will have devastating impacts around the world.

Scared yet?

Look, it makes total sense that you may be thinking to yourself:

“This is a really uncertain time to be investing. None of this sounds good. Maybe I should just sell my shares and move my super to cash until this clears up.”

Well, let’s talk about that.

I have a coffee in my hand. The kids are still asleep. It’s just you and me. Today I’m going to tell you what I plan on doing with my own money. But, before I do, let me give you my take on the Trump tariffs.

First, this is not meant to be sound (or sane) economic policy – it’s a negotiating strategy. Trump views the world in terms of winning and losing, and he wants every country on earth to lose, so that he (and America … but mostly he) wins.

Second, and even more importantly, he’s just told every American that the global system is rigged, and that America is being unfairly treated. 

Now, I don’t think that’s true. In fact, since World War II, free trade has lifted more people out of poverty than at any other time in history. Yet facts don’t matter. 

Besides, this line of argument gives Trump someone to blame when the economy tanks: he had the guts to stand up to the global bullies – it’s their fault, not his.

Third — and let’s be honest, most predictably — he’s keeping the world’s attention glued to him like a toddler with a tambourine.

So, back to you.

You’ll hear people say that now is a very ‘uncertain time’ to be an investor.

Yeah, nah.

The truth is that it is always an uncertain time to risk your money. If you think it’s safe, you’re simply not paying attention. However, what history teaches us is this: the price you pay for earning long-term life changing compound gains is having to stomach short-term uncertainty.

And here’s the thing about trying to protect yourself in the share market: you don’t just have to be right once – you have to be right twice. First, you’ve got to guess when the market will fall further. Then you’ve got to guess the exact moment to jump back in. And spoiler alert: no one rings a bell when it’s safe to invest again. (Just ask the people still waiting to buy back in after the Covid crash.)

So what should you do instead?

Simple. My advice hasn’t changed since I wrote The Barefoot Investor.

If you’ve got a home loan, focus on boosting your super contributions to 15% and pay off your mortgage like your future depends on it – because it does. That’s the plan. Boring? Maybe. But it works.

Then, in the final three years before you retire – whatever age that is for you – consider getting your super fund to invest your future employer contributions in cash. The goal is to build up a buffer of three to five years’ worth of living expenses (after any pension payments you may receive), so when the market drops you don’t have to stress or sell. You’ve got time on your side.

As for me? I’ve paid off the home loan. So every month – rain, hail, or full-blown Trump tantrum – I throw money into three low-cost index funds. The louder the noise, the cheaper the shares.

Tread Your Own Path!

How Low Can My Shares Go?

Hi Scott,

I stupidly put $9,000 into shares before Trump, when prices were high, but now they’ve gone backwards! Yikes! I haven’t sold them (yet), but I’m just wondering how low can they go? Obviously these tariffs and trade wars are biting, but will it end? And how can we tell when the lowest point is reached? And will it ever recover?

Helen

Hi Helen, How low can your shares go? Well, my back-of-the-envelope calculations say that you’re down about … $700. Boo. Bloody. Hoo. Helen.

Seriously, if you’ve going to invest, you should be prepared for your shares to (temporarily) be cut in half. 

It’s happened before! 

Yet here’s the key: the market has always bounced back, and then gone higher. And that is why we invest: it’s because the share market really is the greatest wealth-building tool in history … but only if you allow your money to keep compounding.  So, here’s your three-step survival guide:

First, only invest in index funds with money you don’t need for at least five years.

Second, have enough Mojo – cash in a savings account – so you can sleep at night and not panic sell.

Finally, be like me – only check your shares once or twice a year. You’ll be much happier and wealthier for it.

Scott

Markets Crashing

“Grab your dressing gowns … we’re going on a magical mystery farm field trip”, I announced to the kids.

Their little eyes lit up as we trekked out of the house, through the gate, past our rapidly evaporating dam, and down to our 200,000-litre rainwater tank.

“How much water is in our tank?” I asked the kids.

My eldest started knocking the side of the tank – and found it was as hollow as Albo’s re-election pitch.

“It’s practically empty!” he gasped.

“Exactly!” I cried.

And so, with my little troops lined up in their jimjams, I went into full ‘Drill Sergeant Dad’ mode:

“And do you know what that means?” I said, eyeballing each of them.

“No flushing the toilet anymore?” giggled my four-year-old.

“No, that’s disgusting! It means that, until we get a good rain, you’re all sharing a bath!” I said sternly.

End of field trip.

Welcome to life on the farm.

“Farmers in Western Victoria grapple with the worst drought conditions in almost two decades”, said a headline from the ABC last week.

Uh-huh.

The article continued:

“BOM senior meteorologist Zhi-Weng Chua isn't seeing any drought-ending rain in the forecast.”

What a … BOM-mer!

Yet hang on a minute, how does the Bureau of Meteorology know what the weather will do in a month’s time?

They don’t!

And this is exactly like the share market right now.

“Aussies super in freefall because of Trump” …

“Fortunes lost in blink of an eye” …

“Markets are in crisis today as Donald Trump’s reign sparks terror across America. And we might not be able to escape the fallout” …

… screamed the headlines this week.

Holy Hector!

Yet another, way less exciting, way of writing that headline would be:

“Stocks have fallen to levels not seen since …  last August.” 

I know, I know, I’m hitting you with the sensible stick. And the question you really want to know is … is this the start of a much bigger Trump slump that will actually see your super in freefall?

Well, the honest answer is that I have no idea. However, what I do know is that the world has faced much bigger threats than Trumpty Dumpty and his untrusty sidekick the Muskrat:

Like World War I, World War II, the Great Depression, the Spanish flu, the Vietnam War, the Korean War, the Holden Captiva, the Global Financial Crisis, Covid. 

And, throughout all that, since 1900, the Aussie share market has had 101 ‘up’ years and 24 ‘down’ years.

When you look at the yearly returns over that time, what stands out is there weren’t that many years where there were thumping gains, or wipeout losses. 

So, predictably, the clickbait headlines are dead wrong: ‘freefalls’ simply don’t come around very often. Instead, most years are pretty boring – averaging around 10%–20% gains.

Put another way, if you chipped $1 into the share market in 1900 you’d unfortunately be dead by now. However, your great-grandkids would be able to buy a (semi) decent joint in Sydney: that buck would have grown to $4.2 million.

Okay, so that’s the history. Yet we live in the here and now, where sophisticated algorithms are programmed to scare us so we devote the best years of our lives staring at their overlords’ ads.

Well, here are my best tips for surviving this market drought:

Many years ago I sold all my individual shareholdings and moved to low-cost index funds, and then deleted the ‘Stocks’ app on my phone to stop me from doom scrolling share prices throughout the day.

It worked. 

Here’s the irony, though: over the past couple of months I’m ashamed to admit that I’ve been checking the BOM app at least five times a day. So this week I deleted it.

After all, do I have any control over when it will rain next?

No!

(Okay, sure the thought of doing a naked rain dance in the middle of the paddock crosses my mind every so often, but on the whole I’m much happier not having the lack of rain a constant depressing reminder in my pocket.) 

Besides, am I so stressed out that I would actually consider selling the farm?

Hell no!

Truth is, I see my share portfolio exactly the same way I see the farm: 

I don’t really care about the price of my farm, only the bumper crop of dividends that the land delivers me each and every year. That’s why, in addition to automating my regular share purchases, I now rarely check my portfolio of index funds, and I am much happier for it. 

So that’s my first tip: don’t check share prices. Just don’t.

Second, don’t listen to forecasters (as Judge Judy once quipped: “Don’t pee on my leg and tell me it’s raining!”). 

Finally, understand that this downturn will not last. 

Know that it never lasts. 

In fact, what history does show is that the larger the downturn, the higher the future returns. Or, in other words: don’t throw your babies out with the bathwater.

Tread Your Own Path!

Can you trust AI to research investments?

Hi Scott,

Love your work! Do you have any advice on using Microsoft AI Copilot for investing? I asked it two related questions about AI-chip maker Nvidia’s biggest drawdown in 2018 and got two different answers:

"What was Nvidia’s biggest percentage drawdown in 2018?" → Copilot said -30.82%.
"What was Nvidia’s biggest percentage drawdown in one year?" → Copilot said -50.26% (also in 2018)

This inconsistency has shaken my faith in using AI for information to help me invest better. Thoughts?

Darren

Muchas Gracias Senor Darren!

You’ve perfectly demonstrated why I don’t take financial advice from AI. (And it’s not just Microsoft, I just asked Lucy the same question, and she came back with “a fall of 57%” …  which is also wrong).

Still, some of the smartest minds are pouring millions into building AI models to outsmart other investors and squeeze out profits. Today, short-term algorithmic trading now dominates the stock market, with bots executing thousands of micro-trades for razor-thin gains—far faster than any human can react.

And that’s partly why I ditched stock picking and stuck with trusted long-term low cost indexing—because beating AI at its own game is a losing battle.

Yet here’s my question to you:

How does knowing what Nvidia did in 2018 help you make a buck in 2025?

It doesn’t.

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.

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.

Why is the smartest investor in the world ... selling?

Strap yourself in … the Trump trade is on, and everything is going up.
 
The day after Donald won the election, the US stock market surged 1,500 points – the biggest post-election gain in 128 years.
 
Even better, Trump says we should be preparing for a ‘golden age’ of investing returns as he slashes corporate taxes and loosens up those annoying rules and regulations for his billionaire buddies.
 
MAGA!
 
However, there’s another billionaire who’s been doing the exact opposite … he’s been selling down his holdings as share prices climb.
 
Even worse, that billionaire just so happens to be none other than Warren Buffett, the greatest investor in history.
 
What’s going on?
 
Well, Buffett famously doesn’t try to time the market, and he pokes fun at anyone who believes they can. However, he does have a valuation yardstick that lets him know when the market is out of whack.
 
It’s called the ‘Buffett Indicator’, and it takes the total capitalisation of US stocks and divides it by US gross domestic product (GDP). The idea being that if stock prices rise faster than the economy grows then it may be a sign of a bubble.
 
The Buffett Indicator flashes warning signs to investors when it surpasses 100%.
 
As it did at the height of the Dot.Com bubble.
 
… and before the Global Financial Crisis.
 
… and at the beginning of the Covid crash.
 
So where is it sitting today?
 
208%.
 
That’s the highest it’s ever been (“HUGGGE” in Donald Trump language).
 
In other words, the Buffett Indicator is screaming “SELL”.
 
And that’s what Buffett has been doing. He’s been stockpiling record amounts of cash, presumably to allow him to once again be “greedy when other people are fearful” (which is how you become one of the richest people on the planet).
 
Okay, so by now I’ve probably thoroughly confused you.
 
Which billionaire should you believe?
 
Well, I’m inclined to believe both of them … though I think Buffett will win out in the end, if for no other reason than he generally does.
 
Let me be clear: stocks could (and probably will) rise from here.
 
However, in the long run share prices always revert to their long-term averages, which means there’s a possibility that returns over the next 10 years are not as likely to be as good as those of the last decade.
 
Right now, few investors are thinking about what may be lurking around the corner.
 
 Case in point: The share market is not only at record highs, but the latest US Consumer Confidence figures show that investors strongly believe that stocks will continue powering ahead. In fact, investors haven’t been this confident that stocks are a no-brainer since (checks notes) …
 
 … since 1987, when stocks savagely plummeted 25% in a single day.
 
Still, as I said a few weeks ago, history has proven that it doesn’t matter who is in the White House. What matters is that you hold through both the good ride (like today) and the inevitable crash.
 
 Buckle up!
 
 Tread Your Own Path!

You’re Telling me NOT to Invest in the Stock Market?

Scott,
 
I’m 50 years old and confused. You recently said: “Don’t save up a deposit in the share market; instead park that money in an online saver or term deposit”. But isn’t the point of investing in shares that you can have the financial freedom to do what you want, like buy a dream house?
 
Barry

Hi Barry,

How would you feel if after years of saving you found your dream home to buy … and that same day the share market fell and wiped out 25% of your deposit savings?
 
You’d be pretty bummed, I’d reckon.
 
I’m not saying that’s going to happen to you, but I am saying that it’s happened at least once before.
 
That’s why the Barefoot Steps are very clear: until you own a home, the majority of your long-term investments should be via your super. In other words, save for your deposit in a high-interest online saver or a term deposit – not in shares.

Scott.

Warren Buffett’s $5.4 BILLION Warning to investors

Scott,
 
Why haven’t you written about your idol Warren Buffett selling BILLIONS of dollars worth of his Bank of America shares? Sounds like he knows something we don’t …
 
Chris
 
Hi Chris,
 
So I’m guessing you picked this up from that prestigious financial news digest Daily Mail – which ran this typical Daily Mail headline this week:
 
“Warren Buffett’s $5.4 BILLION warning to investors after he dumps popular stock – and Wall Street better pay attention”
 
“Oh my god”, I thought to myself.
 
Then I spat out my coffee and violently jerked my mouse towards the headline on the screen.
 
DOUBLE-CLICK!
 
However, as I read the actual article, I started frowning. Shockingly, it didn’t live up to the headline.
 
(Does it ever?)
 
Yes, it’s true that Buffett has sold $5.4 billion in Bank of America shares (well, the actual figure is $7 billion, but … close enough).
 
So, is he sending investors a warning?
 
No.
 
How can I be so sure?
 
Well, firstly, because the 94-year-old has said publicly thousands of times over his career:
 
“I have never made any investment decision based on an economic prediction.”
 
So there’s that.

Yet what was missing from the headline was context:
 
His Bank of America sale represents … just 0.7% of Berkshire’s overall assets.
 
(And he still owns a whopping 882 million Bank of America shares, worth US$33.7 billion.) A more likely explanation is that he was taking a profit, given the stock is up 70% since October.
 
Anyway, just for kicks, I decided to get my Daily Mail on and ask ChatGPT to come up with a clickbaity headline on Buffett that investors could actually use.
 
Here’s what it came up with:
 
“Shocking Move: Warren Buffett Bets His Entire Fortune on Just ONE Stock”
 
It’s true.
 
For context, in his will, the 94-year-old billionaire is investing his inheritance into one low-cost index fund.
 
The reason is that Buffett argues that index funds are the best investment for everyone and advises that we should be buying them consistently throughout our lives, saying:
 
“The temptation when you see bad headlines in newspapers is to say, well, maybe I should skip a year or something. Just keep buying.”

Scott.

Guru Predicts Tesla Shares will Go Up 1,000 per cent

Hi Scott,
 
I’m wondering if you have changed your tune on investing in Tesla? Ark Invest guru Cathie Wood has just added to her stake in the company in anticipation of the robot taxi revolution. She forecasts it will be a $10 trillion global market, says Tesla will capture the bulk of that, and predicts it will boost Tesla’s share price tenfold. Elon is obviously a genius and he has said that robot taxis are the future for Tesla. So, given the share price has been whacked recently, is now the time to buy some shares?
 
Trevor
 
Hi Trevor
 
Well, paint me red and call me Randy, but I’m shocked.
 
For years I’ve been highly skeptical that fully autonomous driving would happen.
 
Yet I’m happy to admit I was wrong.
 
Waymo, Google’s robotaxi company, has not only got driverless taxicabs, they’re now taking 100,000 paid rides each week in the US (up from 50,000 a few months ago).
 
Even better, they’re safer than us humanoids. Well, at least the company claims that their robots are much safer: they’ve recorded just 0.4 injury-causing collisions per million miles driven, whereas humans are involved in 2.78 per million miles.
 
So, in major cities at least, it looks like robotaxis really are the next big thing.  
 
Yet it’s here that guru stock picker Cathie Wood and I conk out.  
 
I wouldn’t want Cathie in the cockpit of my portfolio: her Ark Invest has destroyed US$14 billion in wealth over the past decade, according to Morningstar, which tracks her funds.
 
And, looking over her Tesla research, I can understand why. It’s pure spin from a fund manager who is trying to boost the stock price of a company she already owns.  
 
How did she come up with the ‘1,000 per cent’ return assessment?
 
Well, Cathie is predicting that, in less than five years, an unbelievable 90% of Tesla’s future earnings will come from something that doesn’t exist yet:
 
Robotaxis.
 
To be fair, Elon Musk announced that Tesla was on track to have 1 million robot taxis on the road … by 2020.
 
Today?
 
Tesla has zero robotaxis. In fact, the fine print on their website says that Tesla’s Autopilot feature “does not make the vehicle autonomous”.
 
Now I don’t doubt that Tesla will move into robotaxis … but this brings us to the crucial point: 
 
Will these robots make investors rich?
 
On this point, I’m still very sceptical. After all, in China, the main selling point of robotaxis is that they’re cheap as chips. According to a report in the Global Times, base fares start as low as 4 yuan (83 cents), compared with 18 yuan ($3.73) for a taxi driven by a smelly human.

That sounds like a driverless race to the bottom to me.

Scott.

Artificial Intelligence Stole $300,000 From Me

Hi Scott,
 
I have just read your response to Craig regarding Robert Irwin and Trade 6000 Alrex. I just want to confirm what you have said and warn Craig to ignore this and any other get-rich-quick offers on the internet. I got sucked in by a deep-fake advertisement of Elon Musk and lost over $300,000 – plus at least five years of my life going through stress with the follow-up scams telling me it could be recovered.   Without going into the whole catastrophe, just be aware that it starts off as such an amazingly easy process – you think to yourself “Why isn’t everyone doing it?” The answer is because not everyone is as gullible as me! Please do not use my name.
 
Anonymous
 
Hi Anonymous,
 
Thanks for sharing.
 
Scam losses are like cockroaches: for every one who admits it, there are hundreds hiding in the dark.
 
Your experience mirrors the hundreds of conversations I’ve had with other victims.
 
Losing the dough is financially shocking and in many cases life-changing.  
 
And, as you’ve said, dealing with the follow-up scams (“We can recover some money for you … if you give us more money”) can go on for years and can give victims PTSD.  
 
(Which is why anyone who has been scammed should go to IDCARE.org – call 1800 595 160 – and have them douse their online profile with hospital-grade bleach.)
 
The money loss is one thing, but by far the biggest losses I see with scam victims is with their mental health. Most of the time their self-confidence is shattered by the experience – their sense of shame and disgust eats away at them.
 
I totally understand why you don’t want to share this experience publicly. However, I’m pleading with you to share it with a counsellor, who can help you move forward. The scammers stole your money – don’t let them rob you of your future.

Scott.

A warning to all investors

Last week I watched my share portfolio get hammered as markets plunged across the globe.
 
And in response I’m doing something I rarely do …  I’m issuing a warning to all investors:  
 
It’s time to play dead.
 
Seriously.
 
I’ll have more on the how and the why in a moment, but for now let’s dip our hat to the headline writers, who well and truly earned their peanuts last week. Take this one for example:
 
“Bloodbath strikes Australia’s sharemarket … $102 billion wipeout!”
 
Scary stuff.
 
However, you could rewrite that headline as:
 
“Shares fall to levels not seen since January.”
 
Not so scary.
 
However, if I was allowed to write the headline last week, here’s what I’d have written:
 
“Investors rejoice: shares go on sale!”
 
Most people are still working and are therefore still adding to their superannuation, so they should be cheering on the chance to buy at lower prices.
 
No one ever does, of course. Instead, they totally freak out!
 
And that’s why, many years ago, I made the decision to put my investing plan on autopilot. Each month I automatically buy the same index funds.
 
It’s what I call a ‘one and done’ decision, and it works in my favour: you see, the truth is that, on average, the share market has a drop of 10% or more almost every year. And it’s also true that shares have never failed to recover and hit new highs.
 
So, finally, why do I think it’s time for investors to play dead?
 
Well, Fidelity, one of the biggest asset managers on the planet, did a study on their top-performing client accounts. Guess what they found? Over 10 years, the best returns came from clients who had either forgotten about their investments, or were dead!
 
Tread Your Own Path!

If the economy is so screwed … why is the share market at all-time highs?

I was in at the ABC the other day when a young Gen Z bloke who worked there (whose hairdo made him look like one of my alpacas) nailed me with a killer question:

“If the economy is so screwed … why is the share market at all-time highs?”
 
Great question!
 
He’s dead right, of course. For most people the economy is ‘stuffed’. And it’s not just a feeling. Over the last year household incomes in Australia have dropped by more than in almost any other country in the world.
 
Yet, while our politicians are busy flogging the supermarkets with their own $20-a-kilo lettuce leaves, it’s not making much of a difference. Prices keep going up.
 
It’s shocking, and depressing ... and yet it does beg the question:
 
Does the share market know something about the future that we don’t?
 
Nehhhy …  spits Pedro the alpaca.
 
In fact, the share market has predicted nine out of the last two recessions!
 
Seriously, though, the question of why the share market is at record highs right now has a long answer.
 
(Interest rates coming down? Donald Trump going up? Artificial intelligence replacing us all? Who the heck knows? Not this alpaca farmer.)
 
Yet the short answer is actually pretty darn simple:
 
Shares mostly go up.
 
That’s right. Most years shares go up. That’s because the share market is really just a collection of businesses that make a lot of money and compound it over time.
 
The chart below tells the story:

The other thing you should know is that the term ‘record highs’ is a newspaper headline writer’s best friend: each day the share market goes up by even a point, it’s a new record high! The next day it may dribble up another couple of points. Another record high!
 
Now it is true that the share market occasionally crashes (though no-one can accurately predict when it will happen). Yet, as the chart shows, shares always recover.
 
That’s why I told the ABC kid the same thing I tell everyone:
 
Follow the Barefoot Steps, and become an investor.
 
Just don’t wait for the alpaca-lypse!
 
Tread Your Own Path!

Investing in Nvidia

Hi Scott
 
Given that artificial intelligence is going to change the world, up-end entire industries and render millions of people unemployed (hopefully not me!), I am thinking about investing a large part of my superannuation into Nvidia, the AI chip maker that is dominating the industry. But I just wanted your thoughts first. Do you invest in it?
 
Gary
 
Hi Gary,
 
So we’re currently at peak AI hype.
 
Investors are obsessed with the potential of artificial intelligence … and the chance of making a quick buck has got them treating Nvidia like a casino chip:
 
Last week Nvidia became the world’s most valuable company. This week it suffered the biggest three-day loss of any company in history ($646 billion), according to Bloomberg.
 
Something tells me that the croupier hasn’t yet called “no more bets”.

So would I invest in Nvidia?
 
Yes, I would. In fact I do. I own Nvidia (among hundreds of other stocks) through my international index funds, and that’s enough for me.
 
But would I go balls and all into Nvidia at it these prices?
 
Well, you could ask ChatGPT … but I’m a strong no.

I Turned $15,000 into $8 Million

Hi Scott,

I don’t have a money question to shock you, but more a story you’ll probably shake your head at. Many years ago, I turned $15,000 into $3.2 million in crypto. It took just over two years, and when I got there I was clueless as to what to do with that much money. I had every opportunity to turn it into real goods and services here in country Victoria. But, because it was the start of a bull run and YouTubers were saying it was going to go way higher, I held on to make more money. In fact, I locked the funds away in a smart contract where I could not access them.

Then the ride really began. The feeling was incomprehensible when it hit $8 million … saddening back at $6 million … sickening at $4 million … total denial at $1 million … and I stopped looking below $500,000. I felt embarrassed. Ashamed. I went on an emotional rollercoaster I never knew existed.

Over time I forgave myself for not being content with $3.2 million and for getting caught up in FOMO. Today, I rarely recommend crypto to people I know. I feel like my experience is similar to the time I got pummelled by the ocean thinking I was better in the surf than I actually was.

John

Hey John,

As they say in therapy, thank you for sharing.

It shows real insight and wisdom that you were able to forgive yourself.

So here’s another way to think about it: if you wrote to me saying you’d turned $15,000 into $200,000 (or however much the crypto is worth now), I’d say you were the luckiest man around.

And I’d focus on the big jackpot you’ve got sitting in your lap right now … in 25 years’ time, you’d give up all your money to wake up and be the age you are right now.

It’s time to create your own luck.

Scott.

How I invest my own money

On Sunday night, after the kids were fast asleep (for the third time), I lay in bed and opened my calendar to check what I had on for the week ahead. And up popped my favourite ‘event’:
 
“Check your dividends, Big Boy!”
 
"OH YEAH!" I exclaimed, loud enough to startle my sleeping wife.
 
She squinted at me: “what is it?!”
 
“It’s dividend week!” I told her wide eyed.
 
“You’re … a weirdo,” she sighed, and rolled back over to sleep.
 
One hundred percent, though she knew that when she married me. Yet, I thought you might find it interesting to hear how I invest my money.
 
Let’s get into it.
 
These days I have roughly 95% of my net worth in a handful of low-cost exchange traded funds (ETFs).
 
Which ones?
 
An Aussie shares index fund, and a couple of international shares index funds.
 
That’s it.
 
While I’m classified as a ‘sophisticated investor’ I believe in my bones that keeping things simple is the ultimate high net worth strategy – and one which will deliver higher returns than the vast majority of professional fund managers. Even better, it means I spend as little as four hours a year managing my investments.
 
How?
 
Well, to start off, I don’t have a trading app on my phone.
 
Why not?
 
For much the same reason that I don’t have social media apps on my phone: when I’m on the throne, the only thing I want to be scrolling is toilet paper, not TikTok.
 
I don’t want to check my share prices every day, or even every week. It’s a trap that leads to stress, and overtrading, and ultimately, to flushing your returns down the toilet.
 
Here’s what I do instead:
 
I have all my investments on autopilot, automatically buying a set dollar amount of the above funds each month. (It used to be expensive to do this, but today you can trade for a few bucks, or in some cases for free.) 
 
When you buy, you can google their historical payout dates and put them in your calendar, like I do. And that means I check my share prices just four times a year … like this week when my dividends come through. That way you can do something more productive with your time … even scrolling TikTok on the tot! 
 
Tread Your Own Path!

Barefoot OnlyFans?

Hi Scott,
 
I’d like to learn to do forex cash trading as a side hustle to supplement my income (so eventually I might be able to move to part-time work and have more time to spend with my daughter, who’s eight and was diagnosed with anxiety last year). Can you recommend any online trader training and trading access platforms? I’ve started searching for options but am bamboozled by the plethora of trader-training companies out there. And it bothers me that some of them take ongoing commissions and monthly fees as well as significant training charges ($5,000 to start with!), not to mention all the hard-sell emails and phone calls I’m now receiving! Any advice would be much appreciated.
 
Linda
 
Hi Linda,

You dabbling in forex is like me joining OnlyFans as a side hustle.
 
No one is going to pay to see me wobble my dad-bod around the farm. After all, I’m competing against very good-looking people (who also know how to milk a cow).
 
Just like you will be competing against billion-dollar hedge funds and the biggest financial institutions in the world, both of which not only employ the best traders but spend millions on their AI trading algorithms.
 
My thoughts?
 
You will lose, and with fast-trading forex the odds are that you’ll get wiped out quickly. Stay away from the gurus cold-calling you – they’re all bad news.

Scott.

Did You See That Post on Facebook?

Hi Scott

With all the rumblings in the news and socials about the world economy collapsing, we are a bit worried about our super and savings – we are getting a bit long in the tooth and are ready to retire in 18 months (we’re in our early 60s). My brother keeps saying we should put our money into silver (he buys silver coins). I just don’t know how I can go down to the shop to buy my bread and milk with silver. Is it a viable investment option? What happens to our super and our savings in the bank if it all tanks? (Apparently they can take it all and leave you with nothing, banks included.)

Mia

Hey Mia,

Let’s break down a couple of keywords in your question.

First up, “socials”.

For God’s sake do not get your news from Facebook … or any financial advice for that matter.

Second, “brother”.

Your bro may be a lovely dude, but if he is advising you to put your super into silver I would suggest he’s been reading too much Facebook himself.

Third, “they” (as in “they can take it all and leave you with nothing”).

Who are “they”? The Government? Bill Gates? Jeffrey Epstein?

That sounds like yet another comment on Facebook.

Look, Facebook’s algorithms have one aim: to keep you staring at your screen (and their ads) for as long as possible. So they are programmed to find emotional, scary, and downright crazy posts and amplify them. The end result is that these posts are served up on you and your brother’s Facebook news feed so many times that it feels like everyone is thinking it.

But they’re not.

Oh, and by the way, do not put all your money into silver. No one is going to take all your money and leave you with nothing. The Australian Government guarantees deposits up to $250,000, and it will not go broke.

Instead, here are two things you can do that will make you happier and wealthier:

First, consider starting to build up a cash buffer within your super fund. You could make extra contributions and direct that into cash so you can ride out any pullbacks in the share market when you retire in 18 months’ time.

Second, delete Facebook. Seriously. Stop trading your precious time and attention just to make a billionaire even richer.

Scott.

We are terrified

Scott,

My husband is retiring this week. We are not sure if we should withdraw his super or leave it in his fund. We would place it in a high interest account if that is the better choice. We are terrified the market is going to keep going down. What should we do?

Linda & Steve

Hi Guys,

It’s been a rough time. I can understand how stressful it must be for you.

First up, you should not panic and take your money out of super. When you are in the retirement pension phase, your income is tax free and protected in the case of bankruptcy. Besides, you can put some of your super into a high interest cash and fixed interest account within your super.

And that’s exactly what you should be considering doing. In my book I suggest people a few years out of retirement to start building up a cash buffer of a few years’ living expenses (minus any pension payments), so that you have enough money to ride out downturns like we’re experiencing.

Many people in your boat are taking on a lot of otherwise ‘hidden’ risk in their super funds because of large unlisted assets, and overly aggressive one-size-fits all portfolios. So you should definitely call your super fund and tell them you’re freaking out about the market, and sit down with one of their financial advisors.

Scott.

Blood on the Floor

Scott,

Thank you for helping me over the last few years. I have managed to both save and pay some large life bills thanks to sticking to your simple plans. However, I just lost a big chunk of my investment money with the current market wobble. I’m optimistic it will be back on par with 3 years, based on what history has shown us, although a little nervous. My question now that push has come to shove, and blood is on the floor, do I keep buying my index funds, or pause?

Thanks,

Ollie

Hi Ollie,

This isn’t blood, it’s a paper cut!

Our market is down by roughly 10% in the past 12-months, which is totally and utterly normal.

The stock market is the only place where prices go on sale … and everyone runs out of the shop!

My suggestion?

The only thing you need to pause is looking at your share prices each day.

Scott.