What will Labor do to my wealth?

Hi Scott,Given the way the Liberals have self-destructed this week, it’s looking increasingly likely they’re not going to be in office next year. Yet the thought of Bill Shorten making it into office terrifies me. I am 54, earn $110,000 a year, and have an investment property. Should I be worried? How do I prepare?

Rod

Hi Rod,I wouldn’t advise basing your long-term investment decisions on short-term politics. (After all, the way Canberra craters, next year we could have Kyle Sandilands and his deputy Jackie O having a tilt at the leadership.)A good case in point is Donald Trump, who the experts suggested would be a disaster for the US economy, and who has (thus far) proved everyone wrong.Having said that, Labor’s proposed policies ‒ restricting negative gearing to new properties, and halving the capital gains tax discount ‒ will almost certainly serve up a short-term hit to our already fragile housing market.A study from RiskWise Property Research and Wargent Advisory suggests Labor’s proposed policies would cause a 9 per cent fall in house prices in NSW and Victoria, 7 per cent in WA and the NT, and 6 per cent in South Australia and the ACT. That’s a guess, of course, but an educated one.Investment legend Warren Buffett has said that he’s never based an investment decision on the current state of the economy, or on the politics of the day. That’s because he knows that, over the long term, the future is incredibly bright.

Scott

The Kind Stepmother

Scott,I have five beautiful new step-daughters. They all live nose-to-device, get cranky when offered advice of ANY kind, “don’t like to read”, and have a massive hole in their hand. All of them work, yet promptly spend it and/or are paying off maxed-out credit cards/bank loans (already!). They think living in debt is just life, what ‘everybody does’. Which of your books is best for young people with zero attention span? How can we get them interested in making a positive change?

Tania

Hi TaniaA cynic would suggest I trawled through thousands of emails to find one to plug my upcoming book.I didn’t … but maybe it’s the universe sending some self-promotional vibes my way? In any event, I’d suggest you get my new book, The Barefoot Investor for Families, which is now available for pre-order.If the girls are still living under your roof, you have more influence on them than you know. My new book sets out 10 very special ‘Barefoot Money Meals’ to give them experiences that will change the way they think about money. (I’d suggest you go straight to Chapter 4: ‘Breaking the Brat’.)Thank-you for reading,

Scott

Down the Rabbit Hole

Hi Scott,I have a spinal cord injury and am paralysed from the chest down. I am self-employed and lucky enough to have a wonderful wife and two great kids. Health-wise I probably have 10 good years left, as I have been in the wheelchair now for 20 years and kidney problems tend to happen at the 30-year mark. I am 46 and earning $80,000 and I want to put my kids through private school, but I also want to see them grow up, not just work and come home exhausted. What is your advice?

Chris

Hi Chris,I’d seriously consider not sending your kids to private school.Why?Because you say you have 10 good years to spend with your kids.Personally, I’d rather spend less time working -- and less time stressing about work -- and invest that time into your kids. If I were in your situation, I’d do two things. First, set up a direct debit into an online saver, so that you put your savings on autopilot. Second, spend that money on experiences you can do with your kids: travel, sporting events, hobbies.Good luck, and good health.

Scott

My Lover Works Too Hard!

Hi Scott,I am 23 and have fallen in love with a 28-year-old who earns $135,000 a year (a lot more than me). He works in construction six days a week (overtime on Saturdays) and he is absolutely set on buying a house ASAP. I love his commitment to the future and to us, but he is always tired and rundown and is rarely available to spend time with friends and family. Is he doing the right thing by working as much as possible? I would like him to take Saturday off occasionally, or am I being immature?

Christina

Hey Christina,I’m pretty sure my wife said the same thing about me when we first met!Sounds to me like your bloke has his head screwed on properly: he’s working hard for the future. You can get away with doing that in your twenties, before the triple Ms (marriage, mortgage and midgets). After that it gets tougher: your time isn’t your own. It’s often said that you spend your twenties learning and your thirties earning -- and that it sets you up for living a very different life in your forties and beyond.There are two books I’d suggest you read -- both of you I mean: The first is mine (obviously!), which sets out the Barefoot Steps that will keep you safe. The second is How Much Is Enough? by Arun Abey. This book has practical exercises that you can do, as a couple, to ensure you put work and the accumulation of wealth in its proper context.I’ll leave the final word to my dearly departed 92-year-old grandmother, who always advised:“Whatever you do, don’t marry a lazy person.”Good advice, Grandma.

Scott

Happy Campers

Hi Scott,I am camping with my husband (first time ever) and have stopped to read your Barefoot email. I was really pleased to see your praise for financial counsellors. They really are unsung heroes and great advocates too. As a social worker, I know how often these invariably calm and focused people help those who are vulnerable and in dreadful debt (not always large amounts, but soul-destroying high interest). They systematically help people begin to navigate a way out and to regain hope in their futures.

Sam

Hi Sam,I tried to get my wife to go camping once … didn’t work out that well. We’re coming off the largest debt boom in history, and as a wealthy nation we need people like financial counsellors (and social workers) who can help our most vulnerable Aussies. Everyone needs someone fighting in their corner. The Minister for Social Services’ office contacted me after last week’s column to arrange a fireside chat. I’ll keep you posted.Thank you 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

Does My Bum Look Big in This?

Hi Scott,Recently on Facebook a woman around the same age as me (36) asked how much super others had. This resulted in many women of a similar age posting that, despite taking time out to raise kids, their super was well into six figures. Curious, I ran my numbers through some online calculators and freaked out! I am currently single, earning $58,000, with no kids, and have only $56,000 in super. What can I do, apart from after-tax contributions, to boost my super?

Leanne

Hi Leanne,You’ve just asked the financial equivalent of ‘does my bum look big in these pants?’First up, I wouldn’t give a pixel about random people crowing on social media about the size of their … assets.Second, your balance will generally be a function of when you started work, whether you take time off (for kids, illness, Eat Pray Love), and what you earn (the more you earn the higher your employer contributions, and the greater your ability to chip extra in).Still, I’m as competitive as anyone, so I hunted down the figures for you (see table above):The average super balance for a woman your age is $48,874, according to ASFA.Yet what really matters is what your super looks like on the day you retire: the average balance for people at the time of retirement in 2015-16 was $270,710 for men and, frustratingly, only $157,050 for women.Thankfully, you’ve still got over three decades to fit into your super spandex pants.Here’s what I’d suggest you do. Go to the Government website moneysmart.gov.au, head over to their superannuation calculator, and punch in your details.Actually, I’ve already done it for you, and here’s what I found: based on your age, income and super, you’re on track to retire with $247,623. (This figure is in today’s dollars … after taking into account inflation.)Not bad, but let’s move the dial. If you switched from your super fund’s default ‘balanced’ option into a ‘high growth’ option, the calculator suggests you’d boost your fund by about $20,000, to $267,941.And if you switched to a low-cost fund, you’d increase your end balance by almost $50,000, to $297,609.Better in your pocket than a bank executive’s!And once you buy your first home, you might consider salary-sacrificing an additional 5.5% of your wage into super (making 15% overall -- see ‘Barefoot Step 5’ in my book), which would boost your end balance by more than $150,000 to $402,663.Yet the single best thing you could do right now is to work out a way to earn $5,000 more a year.You can do that by preparing well for your end of year review -- by working hard and setting performance goals -- and then asking for a raise. Or starting a side hustle. Being single gives you more flexibility to try some of these options. There are a lot of ways to do it (again, see my book).And one more thing, don’t compare yourself to anyone else.The only person you’re competing against is yourself.

Scott

How do you measure up?

When you’re tubby, you can’t hide it. Your muffin top is on display for the world to see.

When it comes to wealth ... you can hide a lot of financial lard in a leased Lamborghini.

Yet if you flashed your financials to the world, how do you think you’d measure up?

That’s a question I was asked this week from Leanne, a 36-year-old reader, so I thought I’d use it as an opportunity for everybody to down their daks and let their super balance wobble about.

Here’s a chart from the Association of Superannuation Funds of Australia (ASFA) which shows the average super balances for men and women based on age.

How do you compare?

And if you’ve read this and you’ve come up short, my answer to Leanne will help you buff up your super.

Tread Your Own Path!

Barbie and the Rocker

Let me tell you about a 59-year-old woman who makes billions of dollars a year.

Her name is Barbie, and, after years of being in the (toy) doghouse, she’s suddenly cool again. Last week toy conglomerate Mattel reported a 12% rise in sales of the buxom blonde:

“Mattel is trying to lure customers back by recasting the toy’s image to play up not only the nostalgia but a newer notion: they’re beneficial to child development”, says the Washington Post.

Crikey.

When I was a kid, all Barbie did was promote an unrealistic body image.

(Doctors have said that if Barbie were real she’d only have room for half a liver and a few inches of intestine. Yet apparently there is room for a much bigger brain.)

Okay so Mattel hasn’t upgraded her liver, intestines or brain … but they have added a touch of tech.

Enter Hello Barbie.

Here’s how Mattel describes the latest round of plastic surgery they’ve performed on the world’s favourite rake-thin, six-foot-tall, FF-breasted doll:

“The number one thing girls have asked for, is to have a conversation with Barbie. Well, using WiFi and speech recognition technology … now they can! Girls want to learn, tell stories and make friends … and for the first time Barbie recognises what girls are saying, and can respond!”

Uh-huh.

Here’s what’s really happening:

“A microphone records little girls’ private conversations. It transmits those conversations to cloud servers where they are analysed by algorithms and are listened to by employees of Mattel and its technology partner, Toy Talk, and they are shared with unnamed third parties”, says Susan Linn, from Campaign for a Commercial-Free Childhood.

Creepy.

“Hello Barbie asks many questions that would elicit information about a child, her interests, and her family, which could be of great value to advertisers”, says Angela Campbell, Director of Communication at Georgetown Law School.

Clearly this is outrageous.

We need to protect our vulnerable little children from a conglomerate that is openly spying on them.

They’re kids, for goodness’ sake!

I mean they’re not old enough to understand the long-term ramifications of giving up their privacy, and having their data sold and later used against them. As adults we obviously wouldn’t fall for that, right?

Wait a second …

Yes, some of the fastest-selling tech gadgets on the planet right now are Amazon Alexa and Google Home ‒ voice-activated speakers that are constantly listening in on our conversations. Oh, and then there’s the cute-looking Alexa Alarm Clock, which has an in-built camera and microphone … in your bedroom?!

Barbie may be off her rocker, but we’re all being played like toys by big tech conglomerates.

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

Is This a Scam?

Hi Scott,

I recently received an unsolicited phone call from an investing group offering to invest my savings in their share trading scheme. A promise of 18‒22% sounds attractive, but I could not find them or their associated company on the ASIC website. Is this a scam?

Trudy

Hi Trudy,

Yes it is.

Scott

Should I Buy a Pizza Hut Franchise?

Dear Scott,

My partner is considering buying a Pizza Hut franchise. He knows that most franchisees have had a hard time, but he is going into business with a friend, and both have previous fast food management experience. Also they will be working as managers, so will get a salary as well as profits. He thinks they can make it work. He has had a hard time finding a job since he left his last job (he was not happy there), so he thinks this will be the best option at his age (40). Should he do it?

Linda

Hi Linda,

Personally, I wouldn’t buy a food franchise for all the pizza in Penrith.

However, I’m biased by what I’ve seen over the years, namely, decent hardworking people getting financial food poisoning from the likes of Pie Face, Donut King and Michel’s Patisserie. Many of them invested their life savings into buying an 80-hour a week job, and were left broken and broke.

It could be different for Pizza Hut, though a quick Google served up a 2015 class action that “alleges Pizza Hut parent company Yum Brands breached its duties to its franchisees by denying them the chance to make a profit”.

I don’t know how much profit there is in $6 takeaway pizzas, but I think it’d be hard to make a crust. Maybe suggest he calls up any of the dozens of Pizza Hut franchisees who are currently offering their business for sale, and ask them.

Scott

“Housing to Fall 50% by 2020”

Hi Scott,

After reading your column on mortgage stress, I was curious what you think of American demographer Harry Dent’s predictions for Australian property. He seems like a pretty educated man and his predictions seem terrifying ‒ our housing market could fall by over 50% by 2020, according to him.

Neil

Hi Neil,

Harry Dent has, in his own words, “predicted nearly every major economic trend over the past 30 years”.

True.

Though that’s possibly because Dent predicts the future like my two-year-old plays ‘How many fingers is Daddy holding behind his back?’

Namely, by yelling out random numbers and giggling hysterically: “12!”, “4!”, “382!”

Or in Dent’s case, his financial finger game is about predicting how much Aussie property prices will crash:“55%!” (2009), “60%!” (2011), “50%!” (2014). All wrong. Not only did prices not fall, since 2009 they’ve risen nationally by 69%.

And now he’s saying prices will fall “50% by 2020”.Mind you, he’s had no more luck picking the Dow Jones index: “40,000!” (2004), “5,600!” (2014), “3,000!” (2018).

(The Dow is currently at 25,000.)

Dent’s economic theory is based on tracking how the life-stage spending of Baby Boomers affects the share market and property prices. And that’s one point we agree on: that our demographics eventually become our destiny. Yet, as Dent has also proven, that doesn’t mean it gives him a crystal ball that will pick future prices.

The bottom line is this: you have zero control over what the market does, but total control over what you do.

Plan accordingly.

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!

No Credit Card for You!

Hi Scott,

Today I opened accounts with ING Direct and applied for a credit card. I also transferred money from my current bank to ING. With my credit card request, it was denied because I am retired and do not get a weekly payslip. My wife and I get over $40,000 a year tax-free, own our home, and have very little debt. Their decision to refuse me, even though I have an exceptional credit history, smells of discrimination to me. Your thoughts?

Doug

Hi Doug

Yes, it sounds like the bank is discriminating against you … though is that a bad thing?

Given you’re retired and living off $40k a year, it could be argued that you can’t actually afford a credit card.

If you don’t pay it off each month, the interest bill will make everything you buy 20% more expensive. And if you are paying it off each month, why bother?

Rewards points, right Doug?

Unfortunately rewards points are ‘so 2016’.Analysis from comparison site Mozo has revealed that the big four banks have slashed the value of their rewards points by a whopping 96% since 2016. Here are the figures: if you spend $24,000 a year on your credit card, you’ll receive, on average, just $12 back in rewards.

And if you forget to pay your CBA credit card bill you’ll be hit with a $20 fee, plus backdated interest.

How’s that for discrimination?

Scott

Reminder: I first wrote about this years ago and highlighted the low fees. Today there are better bank accounts on offer. How do I know? Because my readers constantly email me about them! So before you do anything, google the best accounts on offer now.

Public Versus Private

This week was the cut-off for enrolling our oldest son into Primary school.

It’s been a highly stressful time for my wife, who’s been agonising over our choices: public, private, Catholic.

Not me.

I’m a big fan of public schools, especially for primary school. And so, when I went along to the open day for our local public school I asked just one question:

“Who is your school banking with?”

My wife rolled her eyes and then proceeded to warn me against writing about this highly contentious topic:

“You shouldn’t write about public versus private schools … you’re going to to upset a lot of parents who’ve already made their choice.”

Excellent point. But I’m a finance guy ‒ and I don’t give a semicolon.

So here goes:

In Australia, around 35% of kids go to a private school, which is one of the highest percentages in the world.

And it’s bloody expensive. Private school fees have been growing at twice the rate of inflation. Australian parents spend, on average, $50,000 on their kids’ education, according to a report by NATSEM (the National Centre for Social and Economic Modelling).

And many parents can’t afford it. The Australian Financial Review recently reported that a quarter of parents borrow for their kids’ private school education, and one in seven run up a credit card to pay for school fees.

So is it a good investment?

Well, multiple long-term studies have proven that there is zero correlation between school fees and academic results (if you want to get a real eye-opener, read Free Schools by David Gillespie).

Still, some parents argue that if you send your kid to a private school they won’t be hanging out with a bad crowd. Then again, the best drug dealers go to private schools (or at least they did when I was a teenager).

So if school fees aren’t a predictor of a child’s success, what is?

Well, the biggest predictor of your kid’s happiness and success in life is how much time you spend with them.

Here’s the point: parents are often forced to work longer hours just to pay the ever-increasing fees. Personally I’d rather dial down the cost and spend more time with my kids, which would make me less stressed to boot!

So our son has been enrolled in a local public school. I think he’ll be fine. After all, I’m going to put my hand up to teach the school’s financial education class.

Tread Your Own Path!

A Total Disaster

Hi Scott

I am a 50-year-old widow with an eight-year-old. After nursing my partner through cancer (he lost his battle on Boxing Day), I have just refinanced my house to consolidate some credit card debt. I have also borrowed an additional $100,000 to invest. My financial planner suggested this as a way of getting my mortgage down. Now I am starting to panic about maybe doing the wrong thing, but I don't see any other way of reducing my debt quickly and setting myself up for retirement. I am really nervous.

Rachel

Hi Rachel,

I’m really sorry for your loss.

Now I don’t know your personal situation, only what you’ve written. So, like everything I write, this is general advice from a guy who doesn’t have a vested interest in flogging you anything.

I’ve had the privilege of working with many widows over the years, and if I was sitting across from you there is absolutely no way I’d advise you to borrow $100k to invest.

Why?

Because your partner just died, and you have a young child. This is not the year to be making major financial decisions. It’s the year to hold on and grieve.

Yet I totally get that you’re clutching for security when your life has been turned upside down.

However, this isn’t the way to do it. The truth is that debt always makes life more complicated. It always makes life more stressful. And heaping on more stress right now is the last thing you need.

You have 20 years (or so) before you retire ‒ so there’s no need to panic. Amazing things can happen when you work diligently towards a commonsense goal, but the first thing to focus on is getting yourself right.

Scott

Should We Refuse to Pay?

Barefoot,

My husband and I (stupidly) bought a timeshare in Vegas back in 1997 ‒ we had just got off a plane and were feeling very jet lagged! We have tried a gazillion avenues to offload it ‒ we even offered it to a number of charities for free. My question is: if we stop paying the maintenance fees, will that affect our ability to get into the US when we travel there (we have family there)? Alternatively, do you know how we can offload it?

Melanie

Hi Melanie,

You’ve been paying this timeshare for 21 years ‒ you’d get less for murder!

It’s like an ugly chihuahua ‒ you can’t give these things away.

As for payment, I’m afraid you signed up to Hotel California: you can check out any time you like … but you can never leave.

In other words, you signed a legally binding contract to continue making payments, and timeshare operators reserve the right to sue you for payments you fail to make, and they often do in Australia.

As for overseas operators, well, I’d think it’d be unlikely they’ll chase you, but I’d definitely seek legal advice as to what the ramifications are.What a nightmare!

Scott

You’re Being Unfair, Barefoot

Dear Scott,

I read your article last week on Wyndham timeshare, and I think what you said was a little unfair.

We have been with Wyndham for around 10 years, and it has been great for us because we were able to pay without borrowing, and we enjoy great holidays. The accommodation is actually really good – large rooms with modern accessories and plenty of facilities (pool, gym, mini-golf, tennis court, etc).

We did the numbers, and in our situation and on our package we believe we will be ahead after 30 years. So we took the chance that we will live beyond 60 and have free holidays thereafter, plus other benefits. It is not incredibly great value, but it has suited us and we are happy to lock in holidays for the rest of our lives (health permitting).

Max

Hi Max,

You sound like you have “Stockholm syndrome” (definition: “Feelings of trust or affection felt in many cases of kidnapping or hostage-taking by a victim towards a captor”).

Did you really sit in that high-pressure sales seminar, doing your sums, and say to your wife:

“Honey, by my calculations we’ll be ahead in … 30 YEARS … let’s do this!”

You’ll only be ahead if you totally disregard the time value of your money ‒ and you don’t mind staying at the same hotel chain for the next 62 years. Consumer complaints have prompted ASIC to review timeshare holiday schemes. Let’s hope they rub these shonks out, because they’re a complete rip-off.

Here’s why:For consistency, let’s say you pay the same fees as I described in last week’s column: to get 12 nights’ accommodation in their hotels, every year for a lifetime, it’ll cost you $122,909 over 62 years … though likely significant more because they can jack up their ongoing fees by as much as 5% a year.

The same money invested in a share fund would be worth $3.7 million. And the true value of the upfront timeshare payment is less than $10,000, which is what other timeshare hostages are trying to sell them for on Gumtree.

Scott

Ground zero of the mortgage crisis

Let me take you to ground zero of the mortgage crisis.

Right now the National Debt Helpline (1800 007 007) is receiving so many calls that they’re at breaking point.

The helpline refers people in the most dire situations on to community-based financial counsellors ‒ yet the demand is so intense that the wait time for someone to actually sit down in person and help has stretched out to three months!

(And it’s only getting worse. As I reported last week, a study has suggested that one million people may find themselves in mortgage stress if ‒ when! ‒ interest rates move upwards by just 0.1%.)

Hang on, who are the financial counsellors and what do they do?

These guys are the unsung heroes of the financial services industry. They’re free to use. They’re independent. And in your darkest hour they’ll stand shoulder to shoulder with you and fight for you when no one else will:

For the guy who’s just been diagnosed with a terminal illness …

The mother who grabbed her kids and fled from her violent husband in the middle of the night …

The young woman with a brain injury who doesn’t understand the (deliberately confusing) payday loan contracts …

The father who was laid off from work and is just trying to keep food on the table …

Yes, the ongoing Banking Royal Commission has shown us ‒ over and over again ‒ that we need these heroes.

Yet the truth is that the financial counsellors are having their own financial crisis: there are not nearly enough of them on the ground. I believe so passionately in what they do that I’ve donated 10% of my book royalties to the Financial Counselling Foundation … yet it’s a drop in the ocean.

There is only one man who can truly help: Dan Tehan.

Dan is the man, because, as the Federal Minister for Social Services, his portfolio funds the community-based financial counsellors. Dan has made recent announcements on financial counselling funding, but this only extends existing funds and doesn’t grow the services to meet demand. You need to fund ’em, Dan … it’s a growth industry!

So here’s my call to you, Dan Tehan. The financial counsellors need someone to stand shoulder to shoulder with them and fight for them when no one else will.

Now’s your chance, Minister. Make us proud.