Your Investment Advice Stinks

Dear Scott,

I am a financial advisor and, while I like your advice on saving, I think your advice on investing stinks. A young person following your super fund recommendations would end up losing hundreds of thousands of dollars over their lifetime because of your weird fetish about always choosing the lowest fees, irrespective of asset allocation. Someone under 45 should be completely invested in growth assets, yet the fund you recommend in your book is one-third invested in defensive assets.

Evan

Hi Evan,

You are correct!

And that’s why my book, under the heading “What investment option should I choose for my super?”, says:

“A ‘balanced’ fund isn’t a bad option to start with. But if you’re under 45, invest in the ‘growth’ option.”

Thanks for giving my book a light skim, Evan.

Scott

You're a Phony

Mr Barefoot,

You, mate, are a phony. Your book does not give any hard plan to succeed. All it does is give lots of homilies and hope signals. What a wanker. You are so far up yourself it’s a joke. You are a joke. Your mother must have thought you could do anything without even trying. 

Kevin

Hi Kevin,

I’ve read this question half a dozen times and I still can’t work out what you’re talking about.

Kevin, you’re like the crazy guy standing out the front of 7-Eleven yelling randomly at strangers.

Oh, and leave my mother out of it!

Scott

You're Out for Yourself

I can tell there’s an ulterior motive to your constant bank-bashing. You act all high and mighty about getting the ‘money-grubbing’ banks out of our schools, but all you’re trying to do is weasel your own way into the classroom with your Barefoot Investor brand. It all smacks to me of self-interest — I certainly don’t want you in my child’s classroom.

Tim

Hi Tim,

It’s good to question everyone’s motives:

Am I trying to build my brand? Flog books to kids? Develop a marketing database?

No, no, and no.

I’ve put over $200,000 (so far) of my family’s money into creating my financial education program, and I don’t plan on having my Barefoot Investor branding on anything when it gets officially rolled out. It’s all not-for-profit.

So what’s my motivation?

The same thing that made me become a not-for-profit financial counsellor.When I went into finance, my dad gave me this advice:

“Just be sure you don’t become a wanker … look after the battlers, son.”

Scott

My Best Hate Mail of 2019

I get to about this time every year … and declare email bankruptcy.

Yet before I do there are a few ‘special’ emails that I collect throughout the year that deserve a special reply:

My hate mail.

Yes, I may have a bestseller or two, but it sure ain’t all exclamation points and semicolons here at Barefoot.

So let’s kick things off with the winner of my angriest email of 2019, kindly sent in by a bloke called Rodney.

(If you’ve ever dealt with someone mean, my answer may help you a lot.)

Take it away, Rocket Rod!

Subject line: You’re a Leech, Barefoot

I do not know how you can claim that the financial spin you spew out is all yours. I learnt the same processes as a kid, and I am in my 60s. You do not own common sense. Perhaps you spend too much time conning the education system into paying you. I wager these kids will not even know how to fill out a cheque, let alone stamp and write an envelope. (And by the way, we were taught these things in state school in about Grade 4.) Also, I’m not impressed by you and your feeding on those in hard times — I think people who do that are called ‘leeches’. Have a great day.

Rodney

Yes, that’s an email I received, and he really did end it with ‘Have a great day’.

Now, given Rod has made some assumptions about me, it’s only fair I make a few assumptions about him:

I reckon Rodney wakes up in the morning, turns on the wireless (hello, Alan Jones), and starts to get angry.

Real angry.

He yells at the radio. He barks at the cat. And he types angry (two-fingered) emails to me.

Now, at some stage you’ve probably had a Rodney in your life: maybe it was a jealous co-worker, or a bitchy friend-of-a-friend talking trash behind your back, or even a troll on social media.

The problem is that all this stuff can rob you of your self-confidence. And that can lead you to stay in jobs you don’t like or relationships you have outgrown, and it wastes the precious time you’ve got on the planet.

Years of dealing with haters has taught me that the best thing you can do is to delete them and move on with your life, and never give them another thought.

That’s the grown up thing to do.

Yet if you really want to mess with them, here’s how I do it, in three simple steps:

Step one: Call them up (that’ll completely freak them out).

Step two: Say, “I just want to be honest and let you know that your comments really upset me. What made you choose to behave like that?” (You’re being honest, vulnerable, and making them justify their behaviour.

Step three: Stay completely silent … lean into the dead air if need be … and let them fill it with their ramblings.

I’ve done this with trolls in the past, and it always plays out the same way: it becomes clear they hadn’t thought too deeply about me. I’m just caught in the crossfire of their deep-seated issues and insecurities. By the end of the call you end up pitying them.

Bottom line: Rodney doesn’t hate me nearly as much as he hates himself.

And that’s how I deal with haters — well, other than devoting an entire column to them …

Tread Your Own Path!

A 12 Year-Old Steals The Show

Hi Scott,

I am 12 years old and I have dysgraphia and ADD. My dad has been doing Barefoot for 12 months and now we are able to go to Bali for a holiday ... just me and him. My grandma has promised $25,000 to me from an inheritance she received from her uncle. I want to invest it in shares but Grandma keeps telling me they are too risky. How can I convince her to put some of the money into shares instead of the bank? What can I say to her to let me invest even a little bit? I have saved $600 on my own already!

Corey

Hi Corey,

I have to admit I didn’t know what dysgraphia was, so I googled it:

“Dysgraphia can appear as difficulties with spelling, poor handwriting and trouble putting thoughts on paper.”

Dude, you’re doing great!

Seriously, I’ve employed people way older than you who can’t express themselves half as well as you can.

You need to use those communication skills to help educate your grandmother.

Ask her about all the tough times that have happened in history: the wars, the depression, recessions, and financial crashes.

Well, over the past 120 years, the Aussie share market has returned, before inflation, a 10% per year return.

Next, go to the ASIC MoneySmart website’s compound interest calculator:

Type in $25,000 and then 10% for the return, which, over the past 120 years, is the long-term (pre-inflation) return that Aussie shares have achieved.

When you’re 30 (18 years) that $25k could be worth $140,000.

By the time you’re 60 (48 years) that $25k could be worth $2.5 million.

She’ll be one proud grandma.

Scott

Extinguishing Financial Fires

Hi Scott,

My mother’s home in Nymboida (northern NSW) was tragically lost in the bushfires that ravaged the community last weekend. My mother has spent the last 30 years building a beautiful home yet, within hours of evacuation, the entire place was wiped out. We contacted NRMA for a house and contents claim, only for them to insist we itemise everything — yet it’s all gone! In your book you mention you were able to demand payment in full after your house burned down. Is there a script that we can use to achieve the same?

Mel

Hi Mel,

Give your mum a hug for me.

Your mum has just gone through a significant, stressful life event — so understandably she may not be in the right frame of mind to make far-reaching financial decisions, let alone battle an insurance company.

There are two things to consider: reimbursement for your contents, and managing the rebuild process.

While I haven’t read your mum’s policy, most insurers have what’s known as a ‘sum insured’ value. Once they’ve established her home has been destroyed, they should pay that figure out as a lump sum for contents almost immediately. Don’t let them play games with your mum: go back to NRMA and tell them that it’s far too traumatic to make her itemise everything she’s lost. Tell them to pay up the contents insurance pronto (and if they give you any stick, write back to me).

But when it comes to getting a lump sum for her rebuild, I’d be wary. Yes, I did it, but I was confident of managing the entire rebuild myself (and investing the proceeds in the meantime). However, if the onus of the rebuild is on your mum (rather than having the insurer manage it), that could be pretty stressful … and that’s the last thing she needs right now. Let the insurer deal with it.

Scott

My In-Laws Lied

Hi Scott,

My retired in-laws are bad with money — in fact they had to sell their still-mortgaged house to pay off a $50,000 credit card debt. While they sold (over a six-month period), we paid their mortgage from our own house deposit account. And then they bought a new mortgaged house they could not afford, and lied to us about how much it cost! They will not listen to reason, and I am sure history will soon repeat. Do we help them again and sacrifice our financial future, or do we refuse and feel heartless for letting them suffer?

Casey

Hi Casey,

If I were you, my index finger would be in plaster from all the finger-waving I’d be doing at these financial fools. However, I’m not you, and I don’t have to sit across from them at Christmas lunch.

Ultimately, this isn’t about your parents-in-law, it’s about your marriage. Your husband would be conflicted: he’s caught between his parents and his wife.

So, to your question: do you keep helping them?

Three words: no, no, and no.

Again, easy for me to say, hard for you to do. So I’d suggest you go on a date night with your husband and explain that you’re willing to forgive and forget their past financial faux pas (because really what other choice do you have?).

However, from this point on, you want to make a pact that you won’t enable their poor behaviour again. Besides, as the flight attendant says: “In case of emergency, fit your own breathing device first.”

Then brace for impact!

Scott

Dead Broke in a Beamer

Christmas came early for my kids this year ...

Daddy finally got a job.

(Well, to be accurate, 220 hours of community service as part of my Financial Counselling qualification.)

On my first day, the three of them surprised me by getting up really early and having a celebratory breakfast with me (possibly with the aim of making sure I really did have a job to go to).

And when I returned home that night I was greeted — for the first, and possibly last, time — like David Boon coming home with The Ashes.

“Didja have a lot of meetings, Dad?” asked my six-year-old, beaming with pride.

In the schoolyard, real dads go to work and have meetings. (Not bum around the farm in their trackie dacks.)

It doesn’t matter that he can see me on TV, hear me on the radio, and watch me do book signings with lines a hundred deep: when I’m wearing a tie, carrying a keep-cup and battling the morning traffic, I am THE MAN.

So now that I’m a couple of hundred hours into this job I’ve learned that it’s like being a (financial) E.R. doctor.

No one wants to be sitting in front of me.

They’re often embarrassed, humiliated, angry, scared ... and completely strung out about their finances.

My job is to sit them down, calm them down, and assess their situation.

It’s basically financial triage: you patch them up, stem the bleeding, and send them back out (where you can). Or, if you deem their situation terminal, you tell their creditors and cut deals on their debts.

(This of course sounds sexy but, trust me, if your life gets to the point where a bank is willing to write off your debts, you’ll be celebrating with spuds and spumante.)

Above all, what I’ve learned is that this job is relentless.

Debt in this country is an epidemic, and people of all shapes and sizes stream through the door.

Like a bloke in his 40s that I saw today.

He arrived to our appointment in a BMW X5.

“Why does this guy need to see me?” I thought to myself.

He sat down, threw his fancy keys on the table, and buried his face in his hands.

He confessed that he’d leased the car five years ago and now couldn’t afford the final balloon payment. (And if you don’t know what a balloon is — don’t feel bad — neither did he.)

The upshot was that he was broke, and the Beamer would soon be repossessed.

Yet you know what?

To the outside world he’s THE MAN. He’s got an awesome car that he drops his kids off to school in.

By the time he came to see me, it was too late for him to avoid his mistakes.

But it’s not too late for his kids.

And what this financial tour of duty has taught me is just how much we need a financial revolution in our schools.

My client grew up thinking that success meant leasing a $100,000 Beamer … and he paid the price.

I want his kids to grow up knowing that success is driving a $15,000 Toyota … that you own outright.

Tread Your Own Path!

A Lifeline for Those in Financial Strife

Hi Scott,

No help needed! I just wanted to thank you. I work for Lifeline Australia and I talk to countless people who want to end their lives because of the financial trouble they have got themselves in. I cannot wait to be able to refer your non-for-profit service on to people in their time of crisis. You will change many more lives, just like you have changed mine.

Madeleine

Hi Madeleine,

Thanks for your kind words.Australia may be the second wealthiest country on earth (behind Switzerland), but we also have some of the highest rates of household debts in the world.Financial stress tears families apart and causes a lot of misery. Lifeline plays an important role in helping these vulnerable people. Thank you for the work you do.

Lifeline: 131 114

Scott

We Bought a $3,000 House

Hi Scott,

My wife and I are some of the many victims of first homebuyer advertising.You know the ads — “If you have $3,000, you can buy a home!” And as a young couple we did not fully understand the impact of getting a loan to get a loan. We bought our home in 2014, at the top of the Perth market. Five years on and our house is valued at $70,000 less than what we owe. I have a well-paying long-term job ($200,000+) and my wife stays home and looks after our four wonderful children, but we are depressed.What options are available to resolve this?

Jarrod

Hi Jarrod,

For those of you playing along at home, you may wonder how Jarrod could buy a home for $3,000.The answer lays in his statement, “we did not fully understand the impact of getting a loan to get a loan”.

The $3,000 claim is just advertising spin to get potential postcode povvos through the door.

Then they’re hit with the reality stick:

You still need to come up with the deposit, so the developer’s finance arm will often arrange a high-interest unsecured personal loan to cover the deposit, on top of the mortgage (which is also much more expensive than what most people pay, because you have no history of savings plus an expensive personal loan to repay!).

But it gets worse.

These cheap starter homes are built in cheap starter suburbs, and they’re generally the first to drop in value when there’s a downturn. And that effectively locks buyers in: they can’t get the capital growth to refinance, and so they’re forced to continue struggling to pay off their expensive loan. It’s a vicious circle. Three grand to be in the doghouse!

So, given it’s a stinky sandwich, what would I do in your situation?

Well, if you’re content to stay in the home long term, it doesn’t really matter what the value is in the short term.What matters is clearing your debts. And in that regard you’re more fortunate than many postcode povvos — you’re earning good dough, so focus on knocking off the personal loan you took out for the deposit. Pronto.

Scott

Taxing Question from a Woolies Worker

Hi Scott,

I am one of the thousands of people Woolworths has underpaid over the past decade, and I am now waiting for them to pay it back. The first payment will supposedly be made before Christmas. I do not know at this stage how much I will get, but it could be quite a bit.

My question is: what can I do so that I do not pay a HUGE amount of it in tax?

I have moved on from the job and just do not want the Government taking everything. Could I get Woolworths to pay the tax perhaps?

Tim

Hi Tim,

I highly doubt that Woolies is going to pay your tax.

However, I spoke to the ATO this week about it. They said you’ll be entitled to a tax offset to ensure you don’t pay more tax than you would have if you’d been paid correctly at the time.

And how is that worked out?

All you need to do is include the lump sum payment (including any amounts of tax withheld from them) in your tax return and the ATO will calculate the amount of any offset.

And what about your super contributions?

Woolies will also have to pay you additional super, which may cause you to go over your contributions cap. If that happens, the ATO will either disregard the excess or allocate it to another year.

Basically, the ATO understands you’ve been sold some broken eggs, and they’ll try and unyolk them for you.

Scott

Help! I'm with 28 Banks

Hello Scott,

I am with 28 different banks (including credit unions). Some charge monthly, some are purely online. I was wondering what you would recommend as a single bank — who I’m probably with already — to consolidate it all together. I am also with MyBudget, who are helping me with my unpaid bills. I am 35 years old and earn $82,000. What should I do?

Brad

Hi Brad,

You seriously have 28 different banks?!

What do you use for a wallet — a suitcase?

People see you down the street: “There’s Brad at the ATM again, rifling through his suitcase of debit cards ... trying to remember which one has the money on it.”

Then again, some people collect stamps, or tattoos, or husbands, so whatever floats your boat.

Now you can have 28 banks if you really want … but one MyBudget is way too many.

MyBudget is just awful.

If you’re broke and can’t pay your bills, you sure as hell can’t afford to spend thousands of dollars a year on a glorified budgeting app. (I wonder if MyBudget suggests that their expensive ongoing fees are the most important bills that need to be paid?!)

Now, after years of promiscuous banking, you want my advice on being a banking bachelor?

Well, you should give your rose to whichever bank you want. After all, all authorised deposit-taking institutions (ADIs) are covered by the Government’s deposit guarantee up to $250,000, and none pay any interest worth crowing about these days. Yet if you really want to get a handle on your money you need to focus: after you’ve chosen your one and only, set up different savings and spending buckets, and begin banking on yourself.

Scott

My Year of Being a Tafe Student

It all began on a Date Night last year, when Liz said to me:

“You’ve sold over a million copies of your book … what’s next?”

“Well, I’ve been thinking a lot about that”, I said. “And I think I’d like to go to … TAFE.”

Liz stared at me blankly.

“I’d like to study for a Diploma of (not-for-profit) Financial Counselling”, I continued.

“So”, she replied warily, “this will be a correspondence course you’ll do at night … after the kids are in bed, right?”

“Well … not exactly. I’m thinking I’ll head back to class … just like my old uni days.”

At this point, Liz began chewing her food very slowly, and raised her eyebrows.

“But you’re a married man, with a full-time business, and three children under the age of six!” she protested.

“Precisely!” I said.

So this year I’ve been one of those super-annoying mature-age students.

It’s been a lot of fun … I’ve sent selfies to my staff as I enjoyed a lazy beer on the lawn on a Thursday arvo while they worked (losers!) … but I’ve also learned a hell of a lot.

I have the finance part covered, obviously.

Yet learning the art of counselling people who are, in many cases, suffering severe stress and trauma — they may have fled a family violence situation, lost their home, or fallen gravely ill — is both challenging and rewarding.

Helping people who can never repay you is a real honour.

And now, a year on, I can happily say that I made it through my lectures (both in class and when I arrived home late … where my new-found counselling skills have come in handy).

There’s just one thing left for me to do before I graduate. The course has a practical component that I’m still completing: I’m required to spend 220 hours volunteering in the trenches … more on that next week.

Tread Your Own Path!

Sleepless Barefooters

Hi Scott,

My wife and I recently welcomed our first child, a boy.

While at the hospital, I noticed your book was in the hospital library with the caption ‘Great Books to Read Aloud to Babies’.

We have a copy at home that I have tried reading to our son, but he does not seem too interested right now!

Anyway, I wanted to ask for your advice on what type of bank account I should set up for him.

Regards,

Anna and Steve

Hi Guys,

Congratulations!

But I don’t think babies need bank accounts.

f you’re just going to use it for some grandparents’ birthday gifts and a few bucks here and there, you’d be better off creating an additional online saver in the lower-income-earning spouse’s name, and then nicknaming that account after your child. (That’s important -- names have power -- if you don’t, you’ll probably forget after a while and end up spending the money.)

However, if you’re thinking about saving long term for his future (10 years plus), you definitely don’t want to have that money in a bank account: better to invest it in the share market. I write about that in my book too.Feel free to read all about it in your rocking chair. However, I’d suggest you stick with Where’s The Green Sheep? and save my book for a few months’ time when you and your wife can tackle it together on a date night at a restaurant!

Scott

Problems with ING

Hi Scott,

Last week my husband and I were hit by scammers, who “ported” (transferred) all our business mobiles from Telstra.

We contacted Telstra, who assured us that our mobiles could be recovered, and that they would report the matter to their fraud department. Little did we know what was to happen next … The scammers found our details on social media, and once they knew our dates of birth and address they hit all our bank accounts.

Thankfully, ANZ and CBA blocked them first go. Yet ING gave them access to all our accounts! With ING, all the scammers needed was to recover the customer number: there were no security questions asked — maiden name, school I attended, favourite pet, nothing!

All our savings, including our redraw facility, were drained within three days: a total of $15,000.

ING does have an “online security guarantee” but they are not honouring it because we did not notify them on the day our mobile was scammed!

I know you are one of their biggest supporters, but after banking with ING for 15 years (and I must admit it’s the best little savings account I’ve ever had) I’ve now lost all respect for them.

Please help me to get ING to upgrade their security. After all, what are the security questions for if you don’t need to use them?

Gina

Hi Gina,

What a horrible situation!

Now let’s get a couple of things clear:

First, I have zero association with ING, other than being a fellow customer.

Second, what you’re talking about is identity fraud, which affects thousands of people (and every major bank).

Still, I called ING and asked them, “Why doesn’t ING ask security questions like the other banks do?”

They told me that they have disabled their online retrieval function, which means that they now force customers to call the contact centre, where they are faced with additional security questions.

They also assured me they had a dedicated team that constantly monitored and updated their security. Finally, it is totally outrageous that they declined to refund you … so I asked them about that too. Thankfully, they have now agreed to fully reimburse you for your losses. As they bloody well should.

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.

The $32,000 Couch

Hi Scott,

Ten years ago I got a ‘buy now, pay later’ $4,000 ‘living room package’ at a retailer (couch, TV, coffee table). Actually, the deal was that they gave me a GEM Visa with a $6,000 limit … so another $2,000 credit, which I stupidly spent. Fast forward 10 years and I am still struggling to pay it back. I am a single mother with a chronic illness, and while I really want to work I just haven’t been able to. Yet so far I have paid back $32,000. Last year, while I was in hospital, my debt was sold to another group, Lion Finance. They arranged a $10-a-week payment plan, but my debt has increased by $1,000 in the last year. I need your help!

Lisa

Hi Lisa,

Your email makes me sad, and incredibly mad. (So today I’m going to be a little bad.)

What a bunch of … bankers.

The business model of these institutions is basically to take advantage of people like you who don’t understand the complex contracts they’ve signed up to.

Yet you have acted honourably: you made a 15-minute mistake and have steadfastly paid a huge price for 10 years because of it.

Now you’re probably thinking to yourself, “Well, I’m just a single mum on a disability benefit, there’s nothing I can do … these finance guys have the upper hand”.

No, they don’t.You have the upper hand.

Together, we’re going to get this debt wiped -- to zero.

Don’t get me wrong. Generally, I’m in favour of people paying back their debts, but you’re in a special situation:

First, you’ve repaid the principal plus more than your fair share of interest over the past decade.

Second, the Lion Finance deal is disgusting: you’re repaying $520 a year, yet your debt rises by $1,000! On a Centrelink income, you’ll never, ever, clear it. They’ve effectively trapped you for the rest of your life.

And, finally, what are they going to do if you stop paying?

Well, they’ll probably huff, and puff, and threaten to blow your house down. But the truth is they can’t do anything: you don’t have any capacity to repay the debt, and you have no assets.

So this week I want you to call the National Debt Helpline on 1800 007 007 and ask to speak to a financial counsellor. Tell them your story, email them the paperwork, and request a debt waiver.

Time to stand up to the bullies.

Scott

What Nobody Tells You About Living Through a Bushfire

Here’s what no one tells you about living through a bushfire.

First, nobody thinks it’s going to happen to them.

On the day the fires hit my area, I sat at the kitchen table of my farm thinking everything was fine. (I was a member of the local CFA, and my pager hadn’t gone off — yet.)

What I didn’t know was that the areas surrounding me were already being evacuated.

As I jumped in my ute, the ABC radio announcer said of my area: “It’s too late to leave. You must take shelter now to protect yourself.” And in that instant, my entire world turned upside down.

The second thing nobody tells you is that the road back from losing everything in a bushfire is a long one.

The harsh reality is it takes years for people to get back on their feet, and for communities to rebuild.

As I write this, I’m looking out to the paddocks on my farm and I can still see blackened trees staring back at me.

Which brings me to the third thing nobody tells you:

Everybody moves on, quicker than you think … and the survivors are left trying to put the pieces back together.

Yet right now people haven’t moved on. It’s still the biggest story in the country, and we need to harness that.

There are plenty of amazing organisations with their sleeves rolled up helping people who need it most, like the Australian Red Cross, who are supporting communities affected by fires in NSW, QLD and SA.

Empty out the Give Jar.

Tread Your Own Path!

From Zero to Five Kids

Hi Scott,

My wife and I — who have had an ongoing struggle with infertility — foster three children. And it has been awesome. However, we have just been given news that has floored us. Last week our doctor called to say we’re pregnant … with twins! Having just picked myself up off the floor, I am trying to figure out how to fast-track our savings to raise five kids. You have helped us wipe out $55,000 worth of debt and save $40,000 for a deposit thus far. We would appreciate any extra advice you can give us now.

John

Hi John,

Now there’s a plot twist I didn’t see coming. I have three children under the age of six, and the most common greeting I get from people is “You look tired”. But you two have gone from a comfy Kia to Toyota Tarago territory in just one phone call!

If we’re looking ‘glass half full’, remember that you’ve already paid off $55,000 in debt and saved up a solid deposit in the bank.

Yet the truth is that one of you will have to take time off work, and, with twins, probably for quite a while.

My advice?

Well, I wouldn’t be rushing to buy a house anytime soon. Instead, the money you’ve saved up should stand as your financial buffer, at least until you’ve worked out the lay of the land. The last thing you need right now is mortgage stress. You’re already going to have sleepless nights — no need to add to them.

Scott

My Super Crappy Boss

Hi Scott,

I feel like everybody learns to check their super the hard way — by not being paid it at some point thanks to a super crappy boss. I am a 22-year-old uni student and have mostly had hospitality jobs while studying. I have in fact done two years of hard work with no super, thanks to the slimy owner of one of those neon-coloured hole-in-the-wall doughnut shops (that Instagram is so obsessed with).

I contacted the ATO, I contacted the Fair Work Ombudsman, and I even maintained contact with the boss himself after I rage-quit. In the end I lost my time as well as my money. The company just ‘phoenixed’ (went bankrupt, started a new company, then ‘bought’ the restaurant from the old company free of super debt). Scott, after you have got banks out of schools, the next thing you should throw your weight behind is stronger punishments for super theft.

Kelly

Hi Kelly,

Since last week’s column, I’ve been inundated by people telling me similar stories to yours, and a lot of them are young people working in hospitality. It seems there really are a lot of crappy bosses out there.

To add some salt to your doughnut, I should point out that you didn’t just lose two grand. From age 22, with compounding over your lifetime, that money would have grown into tens of thousands of dollars!

And that’s why this theft — and that’s what it is — needs to be stamped out.

I also don’t understand why the Government is offering a no-questions-asked amnesty on bosses who haven’t paid super. I guess some employees might receive a bit of what they’re owed, but I reckon it sends the wrong message.

The people I feel for — apart from you, of course — are the honest business owners who are doing the right thing, paying their staff the correct wages and super, yet are competing with the likes of George Calombaris. Now that’s a doughnut.

Scott

I’m on Lithium

Hi Scott,

My wife and I received $370,000 from the sale of our house, which I decided to invest into an Australian lithium producer. But over the last six months the share price has halved, leaving me (on paper at least) with a very distressing loss. My question is: do I let this ride until things pick up, or am I in a situation that could get even worse?

James

Hi James,

This could get much worse — especially if you haven’t told your wife about the share price plunge yet.She will likely process your confession as follows: you have taken her security — literally the roof over her head — and gambled it away at the casino.And you know what? She’s right.

Dude! What the hell were you thinking? Are you on lithium?

A quick google shows me that it’s been a wild ride for lithium stocks lately. Two headlines from the same publication, just four months apart, tell the story:

November 2018: “Why I think these lithium miners offer great growth potential for investors.”

March 2019: “Have lithium stocks hit rock bottom?”

I have three (boring) rules when it comes to investing:

First, I don’t like investing in speculative companies that don’t have a track record of making money.

Second, I don’t like investing more than 5% of my portfolio in any one stock.

Third, I would never, ever invest money I thought I might need within the next 10 years (say, to buy another house) into the stock market. While good in the long term, shares are just too risky in the short term.

I’m afraid you’ve broken all three of these rules. And, if you’re tempted to keep playing at the casino, remember that things can always get worse from here.

My advice is to stop listening to investment gurus who can’t predict the future, and start listening to someone who has a real interest in your future: your wife. Sit down and make a plan together. 

Scott