Time for a Super Shakeup

What I’m about to share with you could possibly be the biggest change to superannuation since I wrote my book, The Barefoot Investor: The Only Money Guide You’ll Ever Need, a few years ago.

But first, a cute analogy to explain how Aussie super works:

Retail super funds, those owned by the banks and AMP, are the financial equivalent of Facebook. We all signed up for them years ago before we had a clue, then gradually worked out that they made their money by digitally shagging us — so they’re now well and truly on the nose.

Industry funds, on the other hand, are like Instagram: they’re just so hot right now. Post the Royal Commission, billions of dollars are flowing their way as people switch out of expensive retail funds.

The problem is that, when it comes to fees, all super funds are about as genuine as an Instagram selfie:

#it’s-not-all-about-fees-barefoot!

And, as a result, Australia has some of the highest investment fees in the world.

Yet this week the game changed: the world’s largest index fund manager, Vanguard, announced its intention to set up its own super fund Down Under.

Why is that such a big deal?

Because Vanguard is known as the ‘Amazon of finance’. The index fund pioneer is no pouty Instagram influencer: it has a history of aggressively, and relentlessly, lowering its fees. (Case in point: over the past decade alone, Vanguard Australia has cut its fees more than 25 times.)

Bottom line?

It’s high time for a super revolution, and my hope is that Vanguard helps deliver it. I’ll be watching closely to see what they come up with, and I’ll let you know what I think when they do.

Tread Your Own Path!

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

Your Advice Got Us Fired

In 15 years of answering readers’ questions, I have never, ever received one like this:

Subject:  “YOUR ADVICE GOT US FIRED!”

Dear Scott,

My girlfriend and I are both scuba diving instructors, and after reading your book we decided to set up a salary-sacrifice contribution arrangement with our employer.

Six months down the line I realised we had not been paid any of our contributions or in fact ANY of our super for two years!

I hate confrontation, so I wrote our boss a very professional letter asking for payment of super in full for both of us.

The next day I came to work … and found all our dive gear sitting out on the road and a furious dive shop owner yelling and spitting in my face telling me to get out!

Months of going in circles — being told by Fair Work to call the Ombudsman and then to call the ATO — have resulted in nothing. It has now been a year, and in that time the owner has bought himself a brand-new boat and a Mercedes-Benz!

Yet it’s not all bad. After reading your book, we saved and bought our first home, and then set up our own snorkelling business on the side — where we earn as much from one trip as we did in a week at that dive shop. 

Your book has changed our lives and we are happier than ever. So maybe it was the best thing that could have happened?

Dylan (and Lara)

Hi guys,

Congrats on getting your act together.

Yet as far as it being “the best thing that ever happened”, well I think you’ve got happy gas in your scuba tank.

Let’s be clear: this guy is a crook.

Don’t duck-dive this one, cobber, he deserves to go to jail. The only time he should think about wearing a snorkel, flippers and wetsuit is when he hits the showers in H-Block.

Okay, so that’s pure fantasy!

For the rest of us playing along at home, here’s how the world really works:

You steal $100 out of the till, your boss immediately calls the cops, and you’re charged with a criminal offence.

Your boss steals $5,000 from you, and they can … repay it without so much as a slap on the wrist.

No, seriously.

Next month the Government is set to introduce a one-off amnesty for bosses who have unpaid super, without penalty.

Now, given that in 2017 a third of Aussies (some 2.85 million people) were ripped off to the tune of almost $6 billion in unpaid super, according to Industry Super Australia (ISA), it’s time to do a financial deep dive.

Here’s you: “But I work for a big company — they’ll protect me.”

Here’s me: “Woolworths”.

Let me tell you a couple of things.

First, I’m betting that 2,849,990 of those ripped off Aussies had absolutely no idea they’d been robbed (the 10 blokes who worked for Clive Palmer had a decent hunch).

Second, almost every one of them got a payslip saying they had been paid their super.

Here’s the thing: don’t trust your payslip ... it’s as genuine as a Mercedes-driving dive shop owner.

Instead, trust your super statement.

So this week I want you to do me a favour:

Call your super fund and check that the money has actually hit your super account.

You may be surprised, and if you are, please write to me like Dylan and Lara did.

Tread Your Own Path!

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

Complexity Killed the Cat

Hi Scott,

I just wanted to say that I completed your survey about school banking. I found the questions really long-winded and complex! It almost felt like my Year 12 English exam (back in ’79). It’s strange, as your book is so lovely and easy to read.

Mary

Hi Mary,

Thanks for the backhander!

The questions were actually set by the corporate cops, ASIC.

Look, they’re bureaucrats, not Ernest Hemingway. However, they do have an important aim with their questions:

To work out what the community thinks about banks buying their way into classrooms.

And that’s why my submission was about giving people like you a voice.

In fact, 14,195 people contributed to my submission.

And, not surprisingly, 91% of them want to see ASIC get banks out of schools.Over to you, ASIC.

Scott

All My Eggs in One Basket

Hi Barefoot,

Following your recent post about expensive super funds, I had an appointment with a financial advisor at First State Super, where my fund is held. After doing a ‘risk report’ on me, the advisor suggested I essentially ‘put all my eggs in one basket’ by investing 100% in high growth. I am in my mid-thirties with a hubby and three kids under five. My question to you is: would you put all your eggs in one basket?

Emma

Hi Emma,

I actually think this is good advice.

I’ve said the same thing in my book: young people should be in high-growth super offerings.

I took a look at First State’s High Growth Option, and it has:

• 30% invested in Aussie shares (think CommBank, CSL, Woolies and a couple of hundred other companies)

• 37% invested in international shares (think Facebook, Apple, Nike and over a thousand other companies)

• 30% invested in unlisted assets (like the Sydney Convention Centre and various hospitals and other large projects)

• 3% in cash.

So, while it’s true that you’re investing in growth assets, it’s not like you’re putting all your eggs in one investment.

Emma, you have at least 30 years before you can access your super — that’s more than enough time to ride out the temporary dips of the share market. In fact, the biggest risk you face is not having your money in high-growth investments at all.

Scott

Dirtbag Roommate

Hi Scott, 

My housemate and I are both on the lease and we split the rent 50/50, paying separately. I am always on time, but my housemate is lousy at keeping up regular rental payments. So, every eight weeks or so, we get an email from the estate agent reminding us to pay. It is not fair. I am fastidiously going through my “Barefoot Steps” — saving to pay off my car loan and build up a house deposit. But I worry what damage my housemate’s bad rental history will do to my ability to get a home loan in the next couple of years. What do you think?

Lisa

Hi Lisa,

Well that sucks.

But it’s also a rite of passage: we’ve all had a dirtbag roommate at one time or another (or been the dirtbag!).

Will being late on your rent affect your ability to get a home loan? Unlikely.

For that to happen, your rental manager will have to be registered with a credit reporting agency, and they’re generally not.

Will it affect your mental health to live with someone who doesn’t share the same values as you? Absolutely.

So, in the first instance, I’d suggest looking into bill-splitting apps like easyshare or Splitr, and let the tech do the money-crunching and send gentle reminders. I’d also look at creating written rules around bill payments and household chores … and (if all else fails) moving out!

Scott

ProfitiX MetaTrader 5

Scott,

How safe is ProfitiX MetaTrader 5? My husband has recently signed up for this trading site at a cost of $300. I am nervous about the site as the reviews are not that great. He gets calls every other day from a lady from ProfitiX, who always signs off by saying things like, “Why not put in $2000, or $10,000?” My husband, who is convinced it’s legitimate, even lets ProfitiX log in remotely to his computer (via TeamViewer). OMG!

Jennifer

Hi Jennifer,

I totally love the name. It sounds like one of my son’s Transformers: “ProfitiX MetaTrader 5, BLAST OFF!”

You can almost feel the testosterone dripping out of it, right?

Now this will get me in trouble (send complaints to scott@barefootinvestor.com), yet in my experience women tend to have a much better BS radar than men.

And, Jennifer, your radar is working well: this is a currency trading platform.

Having your husband trade complex, highly leveraged instruments like this would be like me giving my six-year-old the keys to the car and telling him to stick it in “D” and give it a fang.

And the fact that your husband allows strangers to log into his computer tells me he’s not a highly analytical trader.

You need to protect him from himself: please take the Transformer from the sandpit.

Scott

I Am Adrian’s Mum!

Hi Scott,

In response to your column last week about the Commonwealth Bank’s school banking program, I am “Adrian’s mum from Year 4” and I’m also the school banking co-ordinator for the primary school. Yes, I am a volunteer. In fact there are four of us who volunteer on a regular basis. Even though I run the program, I support the idea of removing big banks from school banking programs and have watched with interest the changes you are trying to make in the sector. But the one thing that keeps the program going at our school is the kickback from the bank — around $800 a year. It is more than some of our other fundraisers! Anything that brings in dollars to the P & C is going to be difficult to get rid of.

Rita

Hi Rita,

I totally understand that the money Commbank pays cash-strapped schools is welcome.

Yet the point is it comes with strings, and it’s your kids who’ll pay for it in the end.

Part of my submission to ASIC will raise your point, and I’m going to add that we need the government to put some money into this.

I’ve always said the CBA understands the value of our kids — it’s time our government did too.

Scott

Tired of earning less than 3% on your money?

I’ve got an old bloke who comes out and services my tractor.

Mostly we talk about hydraulics, but the other day he rifled through his overalls and pulled out an ad he’d ripped from a newspaper. Then he handed it to me with his grease-stained hands.

The ad was from an outfit called “IPO Wealth”, whose tagline is: “Are you tired of earning less than 3 per cent p.a. on your idle money?”

“They’re paying 5.3 per cent for a 12-month term deposit,” my mechanic mate said.

(It turns out he’s an old cocky who has the proceeds from the sale of his farm invested in low-earning term deposits, which is enough to qualify him as a “high net worth investor” suitable to invest with IPO Wealth.)

I studied the ad, which had a picture of a Great Dane towering over a hairless chihuahua.

“What do you think?” he asked.

“I think you’re the chihuahua!” I laughed.

He did not.

“But it’s a term deposit … so it’s safe, right?” he said tentatively.

“Well, that depends,” I replied. “Where will they invest your money?”

He shrugged his shoulders. I shrugged my shoulders.

Then he snatched the paper back from me, stuffed it in his overalls and turned back to the tractor.

Awkward.

So later that night I did some research.

It’s clear that IPO Wealth is marketing its product as an alternative to term deposits.

“The fund is considered by our investors as an attractive alternative to term-based investments, investment property and stock market investments”, their website says.

And it’s clear they’ve spent a shedload of money on advertising, including creating infomercials with appealing retired women talking about their investments with IPO Wealth.

And it’s also clear it’s working: IPO Wealth says it has taken $100 million in deposits in the past two years.

So where is all that money invested?

Well, it’s hard to tell. The fund lends depositors’ money on to a related party, a privately held investment group called Mayfair 101.

Mayfair 101 says its policy is “not to publish a list of its entire investment holdings as many of these assets are private companies”.

Bugger that!

So I got on the phone and spoke to them directly, and they confirmed that Mayfair 101 has spent $31.5 million buying Dunk Island (an island south of Cairns that was wiped out by Cyclone Yasi in 2011) and has also invested in various cryptocurrency-related companies, a food app, and a host of other investments across 11 countries.

My old mechanic mate clearly didn’t understand that this was not a traditional bank term deposit (which would be covered by the government’s bank deposit guarantee if something goes wrong).

Yet I totally understand his frustration: with interest rates at all-time lows, it’s bloody hard for retirees trying to live off their interest.

My worry is that income-poor retirees could be sold a pup:

They may believe they’ve got a Great Dane guarding their money … only to find out later it’s a hairless little chihuahua.

Tread Your Own Path!

Sounds ... Spriggy

Hi Scott,

I have just finished a call with a friend who was telling about a money app for kids called ‘Spriggy’. As far as I can tell, it pays no interest, has a yearly joining fee, and only allows access by a custom, kid-friendly Visa card (decorated with a cute cartoon pig). My friend has now been asked to send cash to it as a way of paying for a present for a friend’s child. Good thing or just a trap?

Sharon

Hi Sharon,

Spriggy is an app that lets parents pay their kids’ pocket money into a linked account with a prepaid card.

According to their website it’s “a tool to prepare your kids through practical experience”.

But there are a few reasons I’m not a fan:

First, it costs too much: $30 per child per year … so if you’ve got four kids it’s $120 a year.

Of course, eventually your tween will need a bank account. When that time comes, you should challenge them to choose a no-fee high interest rate account (rather than paying $30 a year for a glorified app).

Second, not everything needs to have an app (with a monthly fee).

Yes, money is fast becoming numbers on a screen, but kids are inherently visual creatures. The reason I champion three jam jars and a simple scoreboard on the fridge is so that kids see the coins hitting the jar and the money piling up.

Parents, put down your freaking phone and connect with your kids over the family dinner table. This is not about the money, it’s about developing strong behaviours. You are the killer app.

Scott

Apples with Apples

Hi Scott,

What is the best way to compare super funds ‘apples with apples’ — to make a reliable comparison of percentage return and fees all bundled into one? My wife and I have spoken to a private wealth/financial advisor and, while his fees are very reasonable, the annual fee (1.1%) for the super platform he is recommending is a killer. Especially when you consider the fund’s workload does not increase as our balance increases. I do not understand why these guys ask for a percentage rather than a set fee. What do you say?

Rick

Hey Rick,

Good on you for trying to wrap your head around this, mate.

This week ASIC released research that found that almost two-thirds (64%) of consumers aren’t able to locate all relevant fees in the PDS for a managed investment, and less than half (47%) are able to locate all fees in the PDS for a superannuation fund.

And that’s exactly how the highly paid finance lawyers who draft this sludge want it!

Simply put, your advisor wants an ongoing percentage of your assets because that’s in their best interests:

Your fees are their income.Let me cut through the legalese and give it to you straight.

Head over to ASIC MoneySmart’s fee calculator and put in the following: a starting balance of $100,000 and $10,000 invested a year invested over 25 years will grow to $1.62 million.

Yet the effect of that 1.1% fee per annum will be a massive $503,423.

I’ll leave it up to you to determine whether that’s ‘very reasonable’.

My view is that it would be reasonable to pay an advisor a professional hourly rate to set up and review your situation. I also think it’s reasonable to invest with low-cost index options from the likes of Vanguard.

Scott

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

I Spent $2,000 on Powerball Last Night

Hi Scott,

I spent $2,000 on Powerball last night and apparently did not even win my tickets back. I feel pathetic.

On my way to work this morning, I began to listen to your book (for the second time) on Audible and decided to write to you — and be honest with you (and myself). My husband and I are both 33. Not young, not old. We have three home loans and a car loan, and plan to have a baby soon. I also have a hard copy of your book on my desk and feel I am on my way to financial freedom, but it seems a long way to go.

Bridget

Hi Bridget,

I’ve answered thousands of questions, but I have never had someone tell me they spent two grand on a lottery.

Powerball? Is that even still a thing? I remember it looking like some tricked-up vacuum-cleaner spitting out coloured balls. The odds of winning Division 1 Powerball (according to their own website) are 134 million to 1.Here’s you: “Yeah, but you gotta be in it to win it, right?”

Here’s me: “Yeah, but if you think that way, make sure you steer clear of vending machines.”

(Statistically, you’re more likely to be killed by a vending machine falling on you — 112 million to 1.)

Okay, enough of the gags: there’s something deeper going on here.

You’re either an addicted gambler, in which case you should get professional help, because it’s an illness that won’t go away untreated (call Gamblers Help on 1800 858 858), or you’ve got a feeling of hopelessness about your situation.

Either way, there are no shortcuts to anywhere worth going.

Yet know this: you don’t have to hit the jackpot to feel good about yourself or your financial situation.

Instead, when you see a path out of despair (and hopefully my book can help you with this), each step you take will build your confidence.

From there, it’s just a matter of time: you’re already free. 

Scott

It’s time to knock out Dollarmites

Today I feel like a financial Rocky Balboa.

See, I’ve been fighting CommBank’s Dollarmites for 15 long years … and haven’t so much as landed a punch.

By rights, my trainer should have thrown in the towel and put me out of my misery.

After all, I’ve been fighting a $142 billion company, with 50,000 employees.

Yet I am the Italian Stallion (or the Barefoot Brawler?), so I kept on fighting!

And like all good cliched underdog stories, I’ve finally landed my first punch:

ASIC has officially launched an inquiry into school banking and is inviting public submissions.

Bam! Right on the kisser!

The deadline for entries is 31 October, so I’m busy writing a ‘knock-out’ submission.

Yet to do that, I need a favour from you.

I want your thoughts on Dollarmites. All you have to do is complete a two-minute survey on my website: barefootmoneymovement.org.au

I’ll include all reader responses as part of my submission.

Oh, and there’s one more thing.

While I’ve written War and Peace on Dollarmites, I’ve never actually seen it from the inside — that is, I’ve never run a Dollarmites school banking program.

How can I do a killer submission without having seen the other side of the coin?

Here’s the story: CommBank’s school banking program may reportedly be worth $10 billion to the bank, yet they’re such scrooges they don’t even pay people to run it!

Instead, the school has to rope in Adrian’s mum from Grade 2 to run the program as a volunteer.

Yes, Adrian’s mum is the bag lady for a bank that made $8,600 million in profits last year!

Well, Adrian’s mum, you can relax and get a mani pedi. I will personally volunteer to come to your school and run the program for a week.

(Disclaimer: I’m not giving away any stupid corporate-coloured toys and I’m not wearing a mascot suit, though I’m happy to teach your students and teachers my version of financial education.)

They’re on the ropes: it’s time to get the eye of the tiger!

So, Barefooters, head over to barefootmoneymovement.org.au and fill out the two-minute survey. (And if you want me to run your school’s Dollarmites program for a week, let me know that as well.)

Help me do it for Adrian!

Tread Your Own Path!

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

My Bank Gave Me $25,000

Hi Scott,

I am 24 and started my first full-time job this year, as a graduate teacher. I am travelling soon and my parents recommended I get a credit card for emergencies. As a Barefooter, I have never had a credit card, only debit. But, as I am planning to have it for travel, not long term, I applied for a fee-free credit card through my bank, ANZ. I have no credit history, no loans (other than HECS), and no assets other than my savings. Lo and behold, ANZ gave me a $25,000 limit! I was stunned.

Penny

Hi Penny,

Sweet Mary Magdalene!

If you were normal, you might be tempted to max that sucker out.

And if you were normal enough to do that, you’d probably be normal enough to make only the minimum repayments, which (according to the ASIC calculator) would take you … 58 years to pay off, and close to $100,000.

So you’d be debt free when you were 82 years old!

However, I’ve got a feeling you’re anything but normal (the fact that you’re emailing me is a good sign). I’m sure you understand that the bank’s aim is to get you into as much debt as they can, for as long as they can.

If you want to cover yourself for emergencies while travelling, here’s what I’d do instead:First, make sure you have adequate travel insurance, and some cash set aside for travel emergencies.

Second, call the bank and make them lower your credit card limit to, say, $5,000 for your trip, and then close it immediately when you get home.

Don’t get sucked into the idea that a high credit card limit helps your credit score: if anything, these days a high credit card limit hurts your chances of being approved for a loan.

Happy travels!

Scott

Student Digs

Hi Scott,

You generally advise your readers to buy a house first and invest later, but I am wondering if this is always the best approach. I am currently trying to decide whether to invest in a student accommodation apartment. It costs only $150,000 and I have enough for a 20% deposit. I am thinking the rental income will pay itself off and I can make extra repayments as well. Meanwhile, I will continue to save up for my house deposit. What would be the risks?

Leonard, Your #1 Fan

Leonard,

Be honest: you don’t really want to buy a dog-box in the sky.

What you really want to do is speed up the time it takes to save a house deposit. Other people try doing it with shares, thinking it’s better to own shares in, say, a bank (and be paid a dividend) than to have money in their miserly savings accounts.

Compared to saving up money in the bank, you can currently earn a higher income from property or shares, but your capital will not be secure. And that’s the biggest risk you face: a few years down the track you may find a home you really want to buy ... but the banks will knock you back because you own a ‘same-same’ student apartment that’s worth less than you paid for it.

Scott

Big Brother Banking

Scott,

I recently read an article about what CommBank can do with people’s personal data, and I am deeply disturbed. I would be willing to pay a bank to manage my money and do absolutely nothing with my data just for the right to privacy, but that isn’t how the world rolls these days. Then again, I don’t like the idea of hiding my cash in a mattress — and my employer won’t pay me in cash. Do you have any thoughts on this topic? Do I just need to take the metal colander off my head and stop being so paranoid, or is Nineteen Eighty-Four happening already?

Deanna

Hi Deanna,

Commbank aren’t messing around. Earlier this year they announced they’ll invest $5 billion in an app that will give customers ‘nudges’. Do I trust Commbank to nudge me the right way, or will they nudge me from behind? Who knows? Judging by what was uncovered in the Royal Commission, I’m going to put on a tight pair of pants.

Now, to your question, has Nineteen Eighty-Four already happened?

Of course.Big tech hoovers up all our personal data … well almost all our personal data. The one thing they can’t track right now is what we spend our money on. Yet. But, Mark my Zuckerbergs, that’s the precious data they’ll all be gunning for in the not-too-distant future. The banks have finally worked out that they’re really in the technology business, and that they have a giant target on their backs.

Scott

Pass Me a Bucket

I glanced in the rear-view mirror and saw that my six-year-old had crossed arms and a cross face.

“What’s wrong, cobber?”

He screwed up his little face and pointed his finger at a billboard that we were whizzing past.

“Banking Buckets!” the billboard said.

My son had cottoned on to the fact that BankWest has been ripping off the ‘Bucket Strategy’ from my book.

(My Bucket Strategy uses zero-fee transaction accounts and linked online savings accounts.)

He was not impressed.

“They should get their own ideas, Dad”, he said.

“Agreed!” I said proudly.

Then, not long after, ME Bank sent a marketing email showing people how to set up their ‘Splurge’ bucket.

I forwarded it to ME Bank’s head of marketing with the subject: “WTF?”

So while I’m as dark as my son at banks shamelessly piggybacking off my book … there’s also a part of me that’s proud of having made saving something worth ripping off.

The bucket strategy -- which is so simple it can be scrawled on the back of a serviette -- has probably helped well over a million Aussies gain control of their money.

In fact, I’ve created an entire high school money program around them: it’s called ‘The Bucket List’.

I get the teachers to bring large plastic buckets into the classroom. I even had one in Perth who drilled a hole in a bucket in front of his class to illustrate the idea of credit cards putting ‘a hole in your bucket’.

Kids inherently ‘get’ something as visual as buckets. And in the program I tell them that I don’t care who they choose to bank with, so long as they go ahead and set their buckets up. The key is to create a lifelong habit of saving, which of course is the number one rule of creating wealth.

And if you, or your kids, have set up your buckets and started saving, well … as Holden says in their more recent television ads: ‘You Got This!’

Tread Your Own Path!

Barefoot Goes to Brazil

She leaned in and whispered, “If you want the good stuff … you really need to go to … Brazil.”

I was speaking to the ‘Queen’ of global financial education: Elaine Kempson, from Bristol University.

She was telling me about a groundbreaking school money program in Brazil that she urged me to see for myself.

“Not only is it the largest study of its kind in the world … but it’s absolutely world’s best practice” she said.

So, later that evening over dinner, I leaned in and whispered to Liz: “I need to go to Brazil”.

At the time, my four-year-old was necking the tomato sauce bottle and my two-year-old was flinging mashed potato.

I thought Liz was going to lean in and give me a Brazillian.

“So what makes Brazil so special?” she deadpanned.

I explained the painful truth: a lot of the money spent on financial education is wasted.

Yet what was different about Brazil is that their program focused on teaching the kids and their parents.

Guess what happened?

The school money program showed a ‘trickle up’ effect on the parents’ financial knowledge and behaviours.

I’ve always said that your money behaviours and values are learned around the dinner table from your parents. Yet it turns out that the skills of good money management can also come from the kids.

And that’s why my Barefoot Money Movement schools program is based on the following principle:

‘Teach the kids. Help the parents. Change the Nation.’

So I’m off to Brazil to see what I can glean and bring back here for our kids.

If what they did in Brazil really is world’s best practice, our kids deserve nothing less.

I’ll be back in a couple of weeks.

Tread Your Own Path!

The Generous Generation

Hi Scott

I just wanted to share with you a lovely story. I run a charity called Mums Supporting Families in Need. We provide material aid to vulnerable families in Victoria. Yesterday we had a young girl (grade 6) to come in and volunteer hours with her school. She handed me an envelope with a note that said.

"At home I have three jars: splurge, smile and give. Here is $25 from my giving jar for you to put towards something you are needing."

I love that your concept teaches even our young generation of giving.

Jodie

Hi Jodie,

Last week I hung out with a grade three primary school class in Hervey Bay.

As part of my primary school program, ‘The Jam Jar Project’, the kids sold some of their unwanted toys and books in a school ‘Toy Frenzy’, and ended up raising $31 in their class ‘give’ jam jar.

Then the kids debated the best place to give the money: the local animal shelter? The children’s hospital?

They ended up making a group decision to give it to a local homeless shelter.

On their final graduation celebration class, a representative from the shelter came in and was officially presented with the ‘give jar’ money from the kids.

She brought with her a bowl, cereal, and fresh fruit, and explained to the kids that because of their hard work and generosity, they would be able to feed 25 people in their local community breakfast the next morning.

I sat at the back of the class and saw the absolute pride in the kids eyes.It was one of my proudest moments too.

Thanks for sharing.

Scott