Honouring My Friend

Dear Scott,

I recently lost a dear friend due to a sudden cardiac arrest at the age of just 29. She was financially independent and had learnt to be smart with her money.She put me onto your book, and since reading it I have been financially better off and have started saving for a 20% house deposit with my partner. I wanted to say thanks to you, and also I wanted to say I am so proud of my friend. Keep on educating, Scott!

Rachel

Hi Rachel,

I am sorry for your loss.

But what a great gift your friend left you with: a more confident financial life.

When I went to Brazil recently to look at financial education in poor areas, they spoke about it as being a multiplier:

You learn it, then you share it, and it quickly has a cascading effect across the entire community.

So, honour your friend by passing on the lessons you’ve learnt to someone else you love.

That’s a legacy I’m sure she would have been proud of.

Scott

The Triple Ms

Hi Scott,

I need to give you a massive thanks: we stuck to the advice in your book and it’s changed our lives. We saved $160,000 in three years — and that included a year of maternity leave, a wedding, and a baby girl! And, after all that, we’ve just managed to buy a modest home close enough to the Sydney CBD with a 20% deposit. No family guarantor, just us working and saving. To be honest, it wasn't that hard — we stuck to the buckets! So, from someone who was formerly blowing $100 a week on eggs for brekkie in North Bondi, thank you from the bottom of my heart.

Sam

Hey Sam,

You’re in the thick of the Triple M’s: Marriage, Mortgage, and Midgets!

There are plenty of young couples who throw their hands in the air and say it’s all too hard. Yet you and your husband have stuck at it for the past three years, and that’s why you’re kicking goals.

Scott

The Good Reverend

Hi Scott,

I’m just following up on your question last week, ‘Does Jesus Despise the Barefoot Investor?’

As an Anglican priest I love your books -- they are against debt, they are about living within your means, and they are about being generous. Yes, perhaps I would add a few Bible quotes to back up your principles, but it has been a book I’m happy to recommend. And, yes, there is a danger in making an idol out of money, but in this age our culture makes a bigger idol out of keeping up Instagram photos of so-called success.Blessings,

Rev. Stephen Bloor

Thank you, Reverend

I’ve actually had a lot of Christians write to me echoing your sentiments this week.

(Okay, and the odd religious nut who said I was going to hell. Seriously they did, claiming I run a cult!)

Thanks for recommending my book, I love hearing from people who've used it to get themselves out of debt and back on their feet.

Scott

The Kind Landlord

Hi Scott,

I would like to tell you about one of our tenants.She was an excellent tenant for four years, but fell behind during the last year and was not able to claw her way back. So I gave her a copy of your book ‒ and in the last eight weeks she has paid her arrears in full, and even started saving for a house deposit.

But what made me cry was what she told me next. Her son’s marriage break-up had left him in serious home loan arrears, with the bank threatening foreclosure – and he also lost custody of his children. He had attempted suicide twice in a week, and his survival could only be described as fate. He rang his mum to ask whether she could stay with him for the weekend. Armed with knowledge from your book, she worked with him through his finances. He has now been able to pay all his arrears and overdue bills, and can focus on repairing himself emotionally.

Your book has helped millions of people with their money. But in this case I think the effect has been rather more profound – with two households at risk of losing everything being able to stay in their homes.Yours,

Jane

Hi Jane,

As the election gets into full swing, it feels like landlords are being unfairly demonised as the enemy of the renter.

Not you.

Thanks for sharing.

Scott

Does Jesus Despise the Barefoot Investor?

Hi Scott,

I’m a committed Christian, and I’m also a committed Barefooter, which is why I felt a bit conflicted recently when I saw a blog post by a pastor on the Gospel Coalition website entitled: “Does Jesus despise the Barefoot Investor?”

He writes that your book should be setting off alarm bells for Christians because it encourages people to look to money for their safety rather than the Lord. Have you read the article, and, if so, what are your thoughts?

Daniel

Hi Daniel,

No, Daniel, I had not.

I’m used to hearing from disgruntled AMP financial planners … but now God’s trolling me?

Good Lord!

So, what do I think?

Not much, to be honest. He says my book “should be setting off alarm bells for Christians”, and he thinks that the Mojo account is sacrilege, calling it “a modern day idol”.

I figured he was using my name for clickbait (okay, so we’re both sinners in that regard). Yet, just to be sure I wouldn’t be turned away at the Pearly Gates, I forwarded the article on to my mother, a deeply religious woman who not only goes to church on Sundays but backs up on Tuesday nights too.Here’s what she said:

“You don’t make a god out of money! And you help a lot of people that no one even knows about.”

God bless.

Scott

Fighting the Fire

Hi Scott,

Earlier this week I lost my rental house and most possessions in the Bunyip State Park fires. I just wanted to say that reading your book earlier this year has helped me deal with what I’m going through. I have a much more positive attitude having read your own fire story. This book helped on a different level than finances. Thank you!

Lucy

Hey Lucy,

My heart goes out to you.

For us it felt that part of our identity was lost in the fires … photos, family heirlooms, all our possessions.

What helped us was framing the experience as part of our story: we got knocked down, but that we got up again.

That’s what life is about … rising from the ashes and saying “I got this”.

You Got This.

Scott

My Son Likes You, But He’s an Idiot

Barefoot,

My university-educated adult son read your book. It seems to have inspired him, maybe a little too much. I have had to sit down and set him straight on what you got wrong in your book, namely your blind faith in, as you call it, ‘low-cost index funds’. This is terrible advice! It is not hard to find professional fund managers who consistently outperform the indexes, and you are doing a disservice to your readers by not highlighting that. As I explained to my son, you are committing them to a lifetime of mediocrity!

David

Hi David,

Sorry it’s taken me so long to reply to your email ‒ I’ve been saving this one up.

See, ratings agency Standard and Poor’s have a scoreboard that tracks how professional fund managers in Australia perform against a basic index tracker fund, and this week they released the results for 2018.

(Drum roll.)

Last year 87% of actively managed Aussie share funds failed to beat a simple, ultra-low-cost index fund.

It’s kind of staggering when you think about it.

In what other industry do professionals offer so little value to their customers? (Okay, well apart from politics.)

After all, aren’t they highly intelligent people with (often) masters degrees and decades of experience? Who work 12 hours a day poring over companies’ financial reports? And yet consistently get trounced by a computer that simply buys every stock in an index? And why am I ending each sentence with a question mark?

Like you, I have a son, though he’s only three, so we listen to a lot of Wiggles.

Our favourite song?

The Wonder of Wiggle Town: “The kittens hide, the mice all hunt … the spoons are sharp, the knives are blunt … it's back to front.”

Now I don’t want to get all Wiggly on you Dave, but the Singing Skivvies’ song has similarities with the stock market: what you call mediocrity ‒ investing in a low-cost index fund ‒ is, ironically, the surest way to win on the stock market.

Toot Toot, Chugga Chugga!

Scott

Top of the Class

Hey Scott,

I was indoctrinated into the ‘Barefoot cult’ around Easter this year, and it has changed my life. I am a business studies teacher in a low socio-economic high school in Brisbane’s south and, since reading your book, have been going on about it to my class. I kept on answering the students’ questions … until I decided to purchase a copy for each of them. When I gave them the books, they high-fived each other and said “This is going to change our lives!” I have cleaned out one Big W store and am making my way round the others. Thank you!

Kim

Hi Kim,

Teenagers? High fiving each other, about something other than a student free day?

You’re using the force, sister!

Without knowing it, you’ve just completed the money class I’m trialling in schools:

Step 1: Is to teach the teachers, so they can lift their own financial confidence. (It’d be pretty hard to talk to a bunch of kids about the dangers of credit cards when you have credit card debt yourself!)

Step 2: Is to teach the kids.

Step 3: Is to encourage the kids go home and share what they’ve learnt with their parents.

My motto is: if you help the kids, you help the parents. And if you help the parents, you change the nation.

Thanks for your support!

Scott

The Most Moving Message I Received in 2018

Throughout the year, I’ve received thousands of messages from Barefooters.

This is the one that moved me the most:

Dear Scott,

Five years ago our middle child was diagnosed with brain cancer, at five years old. We had to move to the city for his treatment, and my husband had to commute for work as much as our situation allowed. This meant we had to find funds for rent as well as mortgage and bills, all while living off a very limited wage. We didn’t even qualify for a credit card, though after reading your book I’m so glad we didn’t get one.

After our son passed away, we spent years trying to claw our way back from financial ruin, and it was near on impossible — until I was told about your book eight months ago. I thought I would struggle to read it (that the financial terms would go over my head), but you had me laughing, crying and captivated to the end.We honestly thought we were in for a lifetime of debt, but thanks to you we are already breathing easier. We are in a far better position than we were, and the improvements we’re making are noticeable. And with your new ‘Families’ book our children are learning to be smart with their money too. We’ve started the jam jars with our little ones, and our teens have both got jobs and set up their bank accounts to include savings. I am so proud of them and completely loving that I have been able to give them the headstart I never had.

I can honestly say that if not for your advice we would never have reached a position of financial freedom. So from the bottom of my broken heart, thank you.

Jennie

Thank you for writing, Jennie.

I’ve chosen your letter to end my column on for 2018 because you epitomise what Barefooters around the country are doggedly working towards: looking after their family, and gaining financial control.

That you’ve soldiered on through your heartbreak is a testament to your strength.

You Got This.

And to you ‒ the person reading this ‒ thank you for helping me spread my message to people like Jennie.

This wraps up my columns for the year. I’m taking the school holidays off to hang out with the family, and will be back ready and raring to go in 2019.

Tread Your Own Path!

Scott

Spreading the Love

Dear Scott,

I am the Team Manager for Domestic and Family Violence Programs for Mercy Community. I am not asking for anything ‒ I just wanted to let you know that I am applying for a grant as part of Queensland Women’s Week to put together financial packs for women in refuges to help them with their financial literacy post-separation. The grant is for $3,000 and I am aiming to buy 100 of your Barefoot Investor for Families book for the packs, along with supporting information. If you object to this, please get in touch.

Carmel

Hi Carmel,

I object! You shouldn’t have to pay a cent for those books!

Supporting some of the most vulnerable people in society — abused women and their kids — is critically important work. So I’ll send you 100 copies of my old book, The Barefoot Investor, and 100 copies of my new book, The Barefoot Investor for Families. Thanks for what you do.

Scott

Bailing Out My Boyfriend

Hi, I’m a huge fan!

My boyfriend is currently working overseas, and we plan to ‘go Barefoot’ when he gets back so we can tackle our debts. My accountant suggested we first pay off the personal loan my boyfriend got, which he consolidated his credit card debt into -- a loan that was only possible with my name on it. The accountant suggested using my inheritance, which I currently have in our joint offset account. Trouble is, my boyfriend now has another credit card and I worry I would be bailing him out again! What should I do?

Mel

Hi Mel

Your accountant is just looking at the digits:

The interest on the personal loan is costing you more than the offset, so you could save money by extinguishing that debt. And given you’ve already contracted an STD (Sexually Transmitted Debt) -- that is, you’re now both jointly and severally liable for repaying the loan -- it makes total sense financially.

However, if I were in your situation, I wouldn’t repay the loan.

(Actually, I wouldn’t have co-signed the personal loan in the first place, but I’m a little Judge Judy like that.)

First, because you don’t want to set up the expectation that you’ll reward his dumb behaviour.

And second, because you’re already giving him a helping hand. By keeping your inheritance parked in your joint offset account, you’re already effectively lowering your mortgage repayments, giving him a fantastic opportunity to ditch the credit card and domino his debts.

I’d sell it this way: this is an excellent way to show his commitment to both the Barefoot plan, and you!

Scott

The Best Thing I Ever Saved For

Dear Mr Pape,

I bought your book while in severe financial difficulty — I actually had to save money for six weeks just to buy it! Anyway, I am 10 months in and will never look back, having managed to pay off $25,574.23 worth of debt. I still have a fair way to go, but I am churning through it. Thanks heaps!

Callum

Hi Callum,

Dude, you could have loaned it from the library!

What I love about your email (okay, testimonial), is how detailed you are with your digits:

You haven’t just paid back ‘twenty five grand’, you’ve calculated it down to the cent!

A report this week by NAB found that 20% of Aussies said they don’t have even a cracker saved up.

Don’t let that be you.

If you’re following my plan, you should have nailed the first step: open your separate Mojo account, with an initial $2000 deposit. And if you don’t have a spare $2000, look around your house and see what you can flog on Gumtree.

Scott

I Faced My Financial Fire

Dear Scott,

On November 23rd last year, I finally came to my senses and left a violent relationship ‒ then began my ‘financial fire’. My ex-husband immediately did three things: clear out our bank accounts, redraw on our mortgage, and direct his salary solely to his account. At that time, my baby girl was only 10 weeks old, I was on maternity leave at half-pay, and I was drowning in unsecured personal debt.

Yesterday, October 1st, I settled on my new property. I am now a sole homeowner, and my girls (aged 3 and now 1) and I have our very own home. We can start again and move on with our lives. This is all because in December last year ‒ at rock bottom ‒ I read The Barefoot Investor. I set up my buckets, returned to work, and got myself a damn good lawyer. I have gone from financial hardship to no debt, except the mortgage. Words will never be able to express my gratitude!

Melanie

Hi Melanie,

Each week a handful of people write to me to say “STOP PROMOTING YOUR BOOK!”. Luckily, I’ve long given up listening to the ‘full caps crowd’. Why? Because I know there are women in domestic violence relationships who are reading this right now, and they need to know there is hope. Melanie, thank you for being a shining light, not only for all the women reading but for the young women you’re raising.

You got this!

Scott

The Warrior

Dear Scott,

I just want to thank you from the bottom of my heart. I am a veteran who can’t work due to injuries and PTSD from service. I am also a single mum. When my ex left he took everything, including my super, leaving me with nothing but a mortgage that was behind and credit card debt ‒ living only on a veteran pension. I fell into the cycle of taking high-interest small loans, and just fell further and further behind.

Three weeks ago I grabbed your book in a last ditch effort to save my financial life ‒ and it has! Up until then I was constantly $400 (at least) under what I needed to pay the bills. But I sat down to work out what to pay, and I had money left over ‒ this has never happened before! I have now negotiated down the debt payments and insurances, and cancelled things I don’t need. Best of all, I am able to afford food, and have even saved $800 into my Mojo account. I still have a long way to go, but it’s a start to what will be a bright future for my daughter and me. Thank you for giving me back my life.

Tegan

Hi Tegan

Thank you for your sacrifice to our country, and for your story.

Look, plenty of people read my book … and do nothing. You’re using it to take control back over a situation that was, until recently, totally out of control.

As you’ve no doubt learnt from the army, the enemy is indecision. Once you make a decision, and start taking action, you’re already free. From then on it’s just a matter of time until you achieve your goal.

Yet the best thing? Your daughter’s watching you, and this is a life lesson that will stay with her.

You got this!

Thank-you for reading,

Scott

You’re a Self-Promoter, Barefoot

Hi Scott

Love your work but am getting a little tired of all the self-promotion of your book. Yes, it’s great and I have bought it, put it to good use and made some gains. I also love reading your column for the weekly advice, but it seems that your every response encourages people to buy your book. Is your column at risk of becoming a grand-scale advertorial and therefore undermining your independent credibility?

Bill

Hi Bill,

I apologise profusely, and I will stop in three months.

Promise.

(Bill, just skip over the next question; it’s only going to make you angry.)

Scott

What About Helping ‘Tweens’ Too?

Scott,

Last night I was reading your book and my 11-year-old son asked me about it. I was reading the chapter about credit cards, so I explained the dangers of them to him. Would you consider revising your book and targeting ‘tweens’ like my son? He is faced with so much more ‘negative temptation’ than I ever was. He talks about an online shopping site called Wish, and he also talks about gambling because of those horrible Lottoland and Sportsbet ads. I think your advice and guidance would help reinforce some good financial messages for kids.

Nikki

Hi Nikki,

As luck would have it, I’m currently writing a new book ‒ The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need ‒ that helps parents to raise financially fit kids of all ages, including tweens. While my last book focused on doing ‘Barefoot Date Nights’, this one focuses on the entire family having ‘Barefoot Money Meals’.

It’s due for release in September. (Calm down, Bill. I told you not to read this!)

Thank-you for reading,

Scott

Proud, Angry, Happy!

A couple of day ago I finished reading your book, and immediately phoned my bank (Suncorp). My husband and I have had our home loan with them for close to 10 years. I told them I was currently paying 5.02% and would like them to reduce the rate. The woman I spoke to said the bank would review it, and after a few minutes on hold she came back and said my new rate was 4.02%. I must admit I had a little cry — not sure why … proud … angry … happy! I will be phoning them every six months from now on. (I have also bought three more copies of your book and given them to my nieces.)

Melanie

Hi Melanie,

Let me channel my inner Oprah: You go, girl!

Even better, like ‘O’ I can give you the equivalent of a free car:

If you’ve got a $300,000 mortgage, with 15 years left on the clock, that five-minute telephone call has saved you $27,618. A few taps on the MoneySmart mortgage switch calculator suggests that, if you maintain the same minimum repayments as your current loan, you’ll save $36,908 over the life of your loan and be debt free 15 months earlier!

Thank-you for reading

Scott

I Am Never Looking Back

Dear Scott,

Six years ago I left my ex, due to him punching me. It was the right thing to do, but it certainly set me back financially. That is why I have found your book so amazing. I already feel much better about my situation. I have my new fee-free accounts set up with better interest rates, have been on the phone to my super, and have split my money into ‘buckets’. This is the start of financial control, for my sake and my children’s. While I still feel anxious ‒ as a single parent with a mortgage and $8,000 of debt (personal loan and credit card) ‒ I feel more in control, and I know I’ve got this! I am never looking back.

Tanya

Hi Tanya,

What you’ve done is taught your kids two amazing life lessons.

First, that domestic violence is not acceptable.

Second, that you are strong enough to stand on your own two feet financially.

Thank-you for reading,

Scott

Mortgage or Super?

Hi Scott,

On page 156 of your book it says: “So with your home deposit saved and your house bought, it’s time to give your super contributions a boost.” Could you please settle an argument for my husband and me? Do you mean house bought as in mortgage paid off, or do you mean purchased but still paying off the mortgage?

Kirsten

Hi Kristen

After you buy your home, you boost your super.

As the little girl on the taco ad says, “Why not do both?”.

To clarify, here are the relevant Barefoot steps:

Step 4: Buy your home.

Step 5: Increase your super to 15 per cent.

Step 6: Boost your Mojo to three months of living expenses.

Step 7: Get the banker off your back.

Now, there are three reasons you should follow the steps and the little Mexican girl:

First, for the average wage slave, super is still the best tax dodge going round.

Second, you’re diversifying your nest egg ‒ most people end up retiring with too much home and not enough super.

Third, it puts your retirement savings program on autopilot. The current compulsory employer contribution of 9.5 per cent isn’t enough ‒ you need 15 per cent if you want to spend your golden years swilling sangria in Spain rather than necking a stubby in Shepparton.

Finally, if you follow the Barefoot Steps, you’ll use your ‘fire extinguisher’ account to eventually hose down your home loan quicker (Step 7), which will have you livin’ La Vida Loca sooner.

Thank-you for reading.

Scott

The Scary Stepmother

Dear Scott,

I need help to do a ‘full life’ money plan for my 21-year-old stepson -- and I am getting migraines! Here is how I picture it: he puts 12.5% of his wage into super, gets married at 25, has a good job, takes out a 30-year mortgage, and has two kids (reports show that two kids at private school costs $800,000 by the end of Year 12!). He then retires at 67.5 years old and has a ‘reasonable life quality’ of $42,500 income a year, with around $500,000 saved in super. Is all this possible? Can you help?

May

Hi May,

I just read your question, and I’ve got to be honest … you’re kind of freaking me out right now.

Your heart is obviously in the right place, but you may as well be lecturing him about the danger of venereal diseases.

First, you’re never going to convince a 21-year-old guy that he’ll one day be 67.5 years old.

Case in point: a young Mick Jagger once said, “I’d rather be dead than singing ‘Satisfaction’ when I’m forty-five”.

Second, no 21-year-old bloke wants to have, as you put it, “a reasonable life quality”.

He wants Satisfaction, goddammit!

Here’s what I’d say to him:

Most things don’t matter that much, but there are a couple of things that really do:

Make sure you do well-paid work that you enjoy, and become obsessed with saving money.

Let’s deal with work first: fact is, you’re going to spend 90,000 hours of your life at work. Add in sleeping, Facebook and sitting on the can, and there’s not much time left over. You’ll spend more time at work than you do with your family and friends. So you better make sure you enjoy it, and you better make sure you get paid well.

And saving: if you want to stay poor, do what everyone else does and focus on spending your money. If you want to become wealthy, focus on saving and investing your money. When you have savings, you’ve got freedom. You call the shots. You’re in control.

Then give him a copy of my book, encourage him to work hard, and have him follow the steps.

He’s got this.

Scott