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

I am NOT an Alcoholic

Scott,

I currently spend about $100 a week on alcohol ‒ it is pure habit and l love the taste too. I am not an alcoholic, but I do need some incentive to drop the habit, like a financial goal! What else could I be doing with that $100 that will give me the kick l need to replace booze with something more intoxicating?

Jane

Hi Jane,

I’m good, but I’m not that good.

There is nothing I can do with my trusty old Casio calculator that will beat the buzz you’re currently getting from boozing it up. (Case in point: on the form you submitted to ask your question on the Barefoot Investor website, there’s a box that says ‘Summarise your financial situation in one word’. You answered: ‘Tipsy’.)

At Barefoot, we talk a lot about having an Alpaca Attitude. It’s named after my two headstrong alpacas ‒ Pedro and Alberto ‒ who will spit, kick and stomp on anyone who tries to mess with their flock. In that regard, getting on top of your money isn’t that dissimilar to losing weight (see, I’m still hanging on to the Barefoot Bikini Challenge):

We all know what to do, but you need to come up with the why for you.

Scott

How a Barefooter lost 97 kilos, and saved fifteen grand in 18 months

I’ve decided to make a move into a new industry: health and fitness.

(I’ve even come up with a catchy name for my program: ‘The Barefoot Bikini Challenge’.)

Why am I so excited?

Well, I just read the following email from Claire, who has given me one of my most inspirational book testimonials yet.

Here it is:

“Hi Scott,“My fiancé and I started ‘going Barefoot’ in November 2017.

“At the time, we were living paycheque to paycheque at my in-laws’ house. I was also battling some demons in regard to my physical health, being obese at 170kg.

“Fast forward to now ‒ 18 months later ‒ and we have achieved the following:

• Paid for gastric sleeve surgery out of our own pocket ($5,000)

• Gone to America for three weeks

• Paid off one of our credit card debts ($3,000)

• Moved into our own property and bought brand-new furniture and appliances

• Paid for multiple things for our wedding using savings and not credit

• And ... still managed to save $15,000.

“What’s more, I have lost 96kg, which has eradicated my physical health problems. I have included photos from before and after starting Barefoot, because without your advice I don’t think I would have been able to have this surgery and achieve so much in such a short period of time!

Thank you,Claire”

Holy Guacamole!

96 kilos?

So, how did Claire nail the two biggest goals most people have (fitness and finances) in one hit, and so quickly?Well, it had nothing to do with fad diets or get-rich-quick schemes … which never work out in the long run.

And she certainly wasn’t spurred into action by continually beating herself up about her situation.

This reminds me of a book that legendary financial columnist John Beveridge wrote called Invest or Die.

Full. On.

Truth be told, my book has roughly the same stuff in it (just with less death threats and more date nights).

And the Barefoot approach worked for Claire:

She created rituals, like going to the pub for Barefoot date night. And while she was there she automated her finances so she didn’t have to rely on her willpower … or even think about her finances after it was set up. And the process of continual wins built up her confidence, little by little.

The outcome is that she’s not only changed her life, she’s saved her life.

Tread Your Own Path!

You’ll Be Proud of Me, Barefoot

Dear Scott,

I wrote to you when I was on maternity leave in October 2017 to tell you I had racked up a $17,000 credit card debt (you published my response as ‘Zero Balance Is a Trap’). Well, since returning from maternity leave I am down to my last $1,000 payment, I am winning at work, and I even have a new role! I followed all your steps ‒ I paid off $25,000 in debt, negotiated a pay rise, and paid for a wedding, all while managing a two-year-old. Honestly, Scott, you have changed the game for me and my family!

Natalie

Hi Natalie,

I didn’t do any of this, you did. A lot of people reading this right now who are just like you were may say their situation is hopeless. But you are inspiring them to get up and do something about it. What you’ve done at the start of your child’s life is to change your family tree ‒ from debt and disappointment to cash and confidence. Don’t underestimate just how much influence that will have on your kids.

You Got This!

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

Fearless Despite the Floods

Hi Scott,

It is 3am and I am wide awake checking the river levels from a mate’s house to see if our house has gone under yet — a bloody stressful time for our town (Townsville). Yet one thing I do not have to worry about is my important documents and my most cherished items. My ‘Fearless Folder’ and valuable are with me in my waterproof safe.

Once this mess is all over my kids have already decided that their Give jar will be going towards the recovery of Townsville for as long as it is needed. That makes my heart smile as they themselves may end up losing their possessions. These two things are giving me hope in a pretty crappy time. I thank you for that, and have no doubt there are many in Townsville doing the same.

Andrea

Hey Andrea,

Your joint’s flooding and you’re emailing me?

Seriously, I love the fact that you’re so calm in the face of a disaster: that’s what happens when you’ve got your money sorted, and your plan in place. Even better, you’re turning this into a powerful life lesson that you’re kids will remember.

You Got This!

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

Randy Andy

Scott

Today I called my bank to negotiate after seeing a special home loan rate advertised on their website. I followed your script and asked for the new rate. I was rebutted with “Sorry, that’s only for new customers”. When I replied with, “Well paint me red and call me Randy”, the operator laughed and said, “You’ve been reading Barefoot?”Then he gave me the lower rate. You saved me over $1,000 a year in a two-minute phone call. Thanks, cobber!

Andy

Hi Andy,

That’s totally wild!

I was speaking to a banker the other day who said that his call centre staff know when they’ve got a Barefooter on the line, following my script to get a better deal. He also said that if they’re a good customer they’ll “more often than not get a discount”. That’s not because the bank staff are kind hearted, but because they’ve also read the book, and they know my next step. They know that that customer (if knocked back) will move to another bank and get a better deal.

Thanks for reading,

Scott

Boxing at Retirement Shadows

Hi Scott,We read your book and loved it. However, we got a little confused near the end when talking about superannuation approaching retirement (which we hope to do in two to three years). My husband and I are each putting away extra super to bring it to 15%. Does the entire 15% need to go in as cash, or just our extra contribution over our employer payments? And will HESTA do this for us?

Mary and Phil

Hi guys,What haunts me is the letters I received back in 2008 from people just like you.They were on the cusp of retirement, and then the Global Financial Crisis pummelled their portfolios.Finance professors call this ‘sequencing risk’. Yet it’s really just bloody common sense: if you’re retiring you should have enough money to ride out a downturn without having to be a forced seller.As Mike Tyson says, “Everyone has a plan, until they get punched in the mouth”.Well, that’s why I believe it’s prudent to build up a cash buffer in the final years before they retire. I like three years of cash (minus any age pension payments). Though I’m conservative.You should call your super fund and ask to speak to one of their financial advisors, who can help you structure your super, so the market doesn’t land a killer blow this close to the final round.

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

The Super Hero

Today I want to introduce you to Mia, who this week became a quiet hero to hundreds of thousands of Aussies around the country … without them even knowing it.

Mia is a single mother of two kids.

Recently she read my book, and got up to the part where I encourage readers to check their super fees by reading the fund’s PDS (Product Disclosure Statement), and their super statements.

So that’s exactly what she did.

When she checked her MLC (a division of NAB) Masterkey Personal super statement, she noticed she was being charged a $20 monthly ‘Plan Service Fee’ … and had been since way back in 2012.

So she called up MLC, and was told that the fee related to an accounting firm … that she’d never heard of.

“I have very little in super, I’m a migrant and a single mum. I have never, ever seen an advisor or got any financial advice”, she told the MLC rep. A polite brush-off was all she received.

But Mia persisted.

(After all, twenty bucks may well be peanuts to the NAB, but it’s a lot to a single parent with a tiny balance.)

Yet, after multiple phone calls, MLC basically told Mia not to call again: there was nothing she could do.

But Mia persisted.

She spent hours reading through super legalese, and commented (in an email to me) that she found much of it eye-popping, and painstaking: “I can’t tell you the number of times I dozed off trying to read and understand some parts of the PDS and that fine print. It took me weeks, but at the end it was worth it!”

That’s because MLC finally admitted that the plan service fee was a mistake. And they not only offered to pay her back, but as a ‘goodwill gesture’ offered her an additional $400.

But Mia persisted.

“I thought, are you kidding me … a ‘goodwill gesture’?’”

So she lodged a complaint with the Superannuation Complaints Tribunal.

And after months of back and forth, guess what the result was?

Last week MLC was ordered to repay a whopping $67 million to 305,000 members for dodgy ‘plan service fees’!

There’s another word for ‘fees for no service’ ‒ it’s called theft.

Yet for some reason the law draws a distinction between being robbed with a pen and being robbed with a gun.

Now, I’m sure that she wasn’t the only person who complained. Still, Mia is a hero. She persisted, stared down an arrogant bank, and won ‒ not only for herself but for 304,999 other customers who all deserved better.

Tread Your Own Path!

I’m on My Way!

Dear Scott,

I’ve just closed the last page of your book (I read it in one sitting, couldn’t put it down). I left an abusive relationship and my three kids and I live on the very edge of poverty. I can tell you now that if it wasn’t for my kids I wouldn’t be here. A big part of that is living hand to mouth and being afraid of not making the rent.

I felt like my kids had the worst draw ever when it came to me. Tonight is the first night I have felt positive in a very long time. Your book is uplifting and amazing, and I feel I suddenly have a clear path lit up for me. I have booked my first ‘date night’ for this Saturday (by myself at home, but I’ll make something nice!).

I’m taking the very first step right now. I will write again in a year. Thank you!

Dina

Hi Dina,

Thank you for writing … and for talking to me on the phone just now.(I called Dina up after I read her letter.)

The entire Barefoot community is looking forward to celebrating your story when you update us in July 2019.

You Got This!

Scott

I Feel Defeated

Hi Scott,

I am a 21-year-old single female. For as long as I can remember I have wanted to buy a house, because my family rented and we did not have financial security growing up. I have been conservative with my spending, worked two jobs and managed to save $90,000, but house prices are skyrocketing. This is not even enough for a deposit on an entry-level unit in far outer-east Melbourne. I feel absolutely defeated. Maybe it is better to invest money in ETFs (Exchange Traded Funds) and just rent for life?

Anna

Hi Anna,

You need someone to sit you down and show you just how amazing you are, and that person is me.

You should be really proud of yourself. There aren’t too many people who’ve saved up $90,000 on their own steam. Fewer still who have achieved it at age 21, by scrimping, saving and working two jobs.

There’s absolutely no reason to feel defeated. On the contrary, I’m here to tell you that you’ve already won.

See, financial security doesn’t come from a dollar figure, or buying a house.

It comes from behaviour. It’s the grit to work hard, sacrifice and save, and you’ve got that by the bucketload.

So, after years of doing this, let me make a few predictions:

First, to answer your question, you will buy a house ‒ when the time’s right.

Second, you’ve already changed your family tree ‒ you will never be financially insecure.

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

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