Tiny Houses

Hey Scott,

I recently stumbled upon the YouTube phenomenon of ‘tiny houses’. Are these a great idea or a terrible one? I understand that the value probably does not go up, but it provides an opportunity to get your own place — for cash!

Jack

Hi Jack,

You’re right: tiny houses have terrible resale value.I know this because I’m looking to buy one … second-hand.

I can only assume the people who are selling have experienced the downsides of living in a confined space ...

When you take a dump, it stinks out your whole house (which is about as big as Daryl Somers’ dressing room’s dunny anyway). And, to make matters worse, you don’t have any toilet paper because some coronavirus-prepper has already raided your local IGA. Am I right?You don’t want to be turning around and booking a substantial loss on your tiny house.

So why am I buying one?

Actually I’m looking to buy a couple.

I’m going to dot them around the farm so me and the boys (okay, and the girl) can do mini-camping trips at a moment’s notice. It’s an investment in my kids, but it won’t make me any money.

Scott

The Road to Recovery

My wife slammed the door and said:

“You need to go and see someone.”

It was almost three months to the day after our house burned when things started to fall apart.

See, the world had moved on, but we hadn’t.  

And I found the black landscape that surrounded me, crept up on me and brought up black thoughts inside my head.

It was the darkest period of my life.

And it was that time that my wife booked us both in to see a counsellor who specialised in bushfire victims.

It really helped us.

So this year has been my time to take some of my hard-earned experience and give back: I’ve been working as a not-for-profit financial counsellor in bushfire-affected regions.

As part of that effort, earlier in the year I was summoned to Canberra for a roundtable on how best to help fire victims. I happened to sit next to Anna Bligh, former Premier of Queensland, and now head of the banking lobby.

She told me that it was around the 12-week mark that depression started to set in after the Queensland floods -- which matched perfectly with my own experience.

Well, we’re now approaching three months after the fires … the time when it all starts to fall apart. And, tragically, the community where I’m helping out has had its first suicide since the fires.

It’s a reminder that, while the nation has moved on to Toilet-Paper-Gate, there are plenty of people still dealing with the aftermath.

My experience told me that the media would move on quickly. But I wanted to tell the real story of recovery and what happens when the cameras stop rolling. So I kept them rolling — I had a documentary crew follow me to show the real, unglamorous reality of getting back on your feet. The Road to Recovery launches tonight on Foxtel.

I agreed to do the show for three reasons:

First, to raise awareness of the vital work that (underfunded) financial counsellors do in the community.

Second, to raise money for the Financial Counselling Foundation (I donated 100% of my time, and the network agreed to donate all advertising revenue).

And, finally, so that, even when the media world did move on, those impacted by the fires wouldn’t feel like the world had forgotten them.

I wanted to tell the story of what happens after a disaster … and what the road to recovery really looks like.

Tread Your Own Path!

Better Than Any Shopping Spree!

Hi Scott,

I am living proof that ‘paying it forward’ can work. I was sitting in a cafe with my son one day having lunch. He has cerebral palsy and is unable to feed himself, so I was feeding him and we were having a lovely time, oblivious to the world around us. When I went up to pay, the owner told me a complete stranger had already paid for our lunch, and had asked the waiter to pass on the message that I was an amazing mum. I was brought to tears by this kind gesture. Fast forward one month and my son was in hospital having an operation. In the recovery room, I overheard a lady asking the nurse about how to catch public transport to her hotel. She was from a rural area and was with her tiny daughter, who had just endured an operation. I went up to her and asked if I could please pay for a taxi for them. I explained that I was paying it forward and that it would be my pleasure to assist her. We hugged and had a bit of a cry. It was a moment of connection with a complete stranger. Better than any shopping spree!

Jenna

Hi Jenna,

Since writing that column, I’ve been overwhelmed with lovely responses like yours from people telling stories of how they’ve paid it forward — and they’ve all told me the same thing: the high they got from being kind far outweighs the small cost of helping someone else.

I’ve chosen yours because it shows how kindness has a knock-on effect. Maybe that lady you helped will pay it forward to someone else? Thanks for sharing, and whoever paid for your lunch was right — you do sound like an amazing mum!

Scott

Too Broke to Go Broke

Dear Scott,

I am one of those ‘bastard bosses’ you talk about — I am still about $40,000 behind on my employees’ super (including mine — I have not paid myself any super, ever). I am also going broke. After six years of trying everything to stay afloat, including selling all my personal assets, my company ceased trading at the end of last month.Now I am trying to work out what the hell to do from here. By the time I liquidate what’s left, there should be enough to pay out the employees’ super, but there will still be about $150,000 in debt, mostly to the ATO. I’ve been advised to hire a liquidator, to do things correctly and end up with more to pay to their super, but I have been told it will cost about $15,000. I know it’s all on me — but do you have any advice on what I should do next?

Simon

Hi Simon,

I don’t think you’re a bastard boss -- you gave it a go and you couldn’t make it work. Fact is, more than 1,000 small businesses go broke each week in Australia, according to data analysts Illion.

One option you have is to pay your employees their super, directly into their funds, with any money you have left.

As for the ATO, there are two ways to go: appoint your own (expensive) liquidator, or wait for the ATO to eventually appoint their own. And if it works out that you’re personally liable, then really your only option is to negotiate a settlement with the ATO, or declare bankruptcy. My take?

The person who told you to see a liquidator was bang on. If you don’t, there’s a risk that you’ll open yourself up to even more trouble. It’s time to let the nightmare play out.

Scott

My Son is a Thief

Hi Scott,

Today my 8-year-old son stole $40 from my 10-year-old daughter’s purse, and then shouted all his friends at the school canteen. I am not sure how to deal with this one correctly so that both of my kids learn a lesson. Any advice from one dad to another?

Ted

Hi Ted,

That’s a doozy, dude.

If it were me, I’d get my Judge Judy on, arrange a kitchen table court, and dole out some tough justice.

First, I’d give your daughter the $40 back — after all, she’s done nothing wrong.

But there may be a lesson for her: 40 bucks to a 10-year-old is like $500 to you and me, so ask her whether at least some of that money would be better off in a bank account. (If she says yes, all you need to do is create a separate online saver in your name, and nickname it after her.)

She gets a shiny new account. Win!

Then I’d tell your son that he needs to pay you back the $40 … plus interest. (Personally, I’d make him pay it back double … but my wife says I’m often too hard on my boys.)

Walking the dog, polishing shoes, taking out the garbage, whatever … until he pays off every single dollar.

The final lesson is for you: lock away the jam jars till payday!

Scott

Why I’ve been buying shares in the share market ‘bloodbath’

“No wrestling in the kitchen!”, I yelled.

If I’d told them once, I’d told them a thousand times.

They just wouldn’t bloody listen!

My eldest son grabbed his younger brother around the waist, lifted him up, and attempted to do a signature ‘Stone Cold Steve Austin’ power move.

The problem was his little bro had obviously been bulking up on his Weeties, and under the weight they swayed one way, and then the other, and then ...

It was all too much, so he let go and his little bro’s face smashed straight into the corner of the dishwasher.

In the fake world of wrestling, it was a total knockout!

Yet there was nothing fake about the scene I was confronted with. There was blood absolutely everywhere, literally soaking his white shirt red.

“Kiss it better! Kiss it better!” he wailed, as his little lip flapped in the air.

I stood there for a few seconds in shock, staring at the gruesome scene. And, just as I was about to save the day, Liz rushed in, simultaneously screaming, scooping him into her arms, and scolding me for letting it happen (mums sure can multitask).

We rushed him to the hospital, and when he came out to the waiting room he looked like one of those girls who’s had a bad lip-filler job.

Kinda pouty.

Well, last week the stock market got a smack in the gob … and there was apparently a lot of blood spilt too:

“$1.5 trillion wipeout: Global markets plunge as virus panic grips investors”, screamed the headline in the SMH on Tuesday.

Crikey.

Of course another way you could write that headline is: “Share prices fall back to levels not seen in …  57 days”.

Look, I don’t want to make light of the current health crisis, and first and foremost that is exactly what this is.

Yet will investors still be talking about this in 10 years time?

Highly unlikely.

Here’s the truth: short-term uncertainty is the price you pay for higher long-term returns. 

When you look back at the last 30 years of the stock market on a chart, it’s a beautiful picture:

A $10,000 investment into Aussie shares in 1990 would be worth $136,000 today ‒ an annual return of 9.1%.

And that’s why I’ve been taking advantage of the pouty prices, and buying up stocks.

Because the truth is, investing is a little like parenting: 

One day you’ll look at a photo of you and your kids from 30 years ago … and you’ll smile and you’ll have forgotten about all the fighting, the sleepless nights and the wrestle-mania moves gone wrong.

These are the good old days.

Tread Your Own Path!

Cashier Kindness

Hi Scott,

How fantastic that you shouted that guy his meal! I was myself behind a lady in the queue at Coles recently and saw she had her groceries scanned and bagged, and for good measure her son had started tucking into some snacks from the bags. She then realised that her card was not in her wallet, and started fretfully taking the bags back out of the trolley. Without hesitation I handed my card over to the cashier to pay for the lady’s shopping, and I would not allow her to pay me back either. Best $70 I’ve ever spent, helping out a fellow mum during a crappy part.

Melanie

Hi Melanie,

One night I went to a chew-and-spew and found that I’d forgotten my wallet.

It was chopsticks at midnight over an $18 pad thai … I seriously thought the restaurant owner was going to call the cops on me. (And it would have been much worse if my little tacker was tucking into some san choy bau!)

So I can completely understand how that woman was feeling.

Today we rush around so much that occasionally you forget your wallet … and isn’t it nice that for that woman, at that moment, you were there as a smiling face?

The truth that all givers know is that the giver always gets the most out of it.

Hopefully she went home and explained to her kid that even in this day and age of division … isn’t it good to know that there are good people who can help?

(Unlike the owner of the  Chinese restaurant … a big chop-suey to you, Mel!)

Scott

Living the ING Life

Hey Scott,

Long time reader, first time asker! I would love your thoughts on ING's latest superannuation offering — ‘Living Super’.

Stephanie

Hi Stephanie,

Not much.

It’s kind of like walking into your local pub and choosing between the 35 craft beers they have on tap.

They all have flashy logos and pompous names, but they all taste pretty much the same. Yes, ING allows you to buy individual shares, but industry funds offer the same thing.

And, while their portfolios are made up of sensible index funds, they’re really not that cheap.

(When you’re buying index funds, cost is one of the major factors.)

Bottom line: there are cheaper, and better, products out there in my opinion.

Case in point: arguably the best fund manager in the world is the not-for-profit Vanguard, and they’ll be coming out with their own super offering later in the year.

Hold my beer!

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.

How to Blow $50,000

Dear Scott,

My fiancé and I work in hospitality, earning around $55,000 each. We love the industry we work in, but unfortunately it does not pay well. We are saving to go to Vietnam next year, but after that we need to save for our wedding and honeymoon, which will be about $50,000 in total. After that we need to save for a house deposit. We have a baby, and my fiancé works days and I work nights so childcare costs are minimal. But getting a second job is out of the question. What is a good way to save as quickly as possible?

Emma

Emma!

Are you on drugs? Or …  are you planning on supplying drugs at your wedding?

You can’t be seriously considering spending an entire year’s wages on one day!

Fair dinkum, I’m tapping the keyboard so bloody vigorously right now that I’ve woken up the dog, and she’s moving gingerly to the back door. (She knows the score.)You wrote to me for my advice, so I’ll give it:

I think you’ve got your priorities completely out of whack:There is zero correlation between how much you spend on your wedding and how long your marriage will last.

There is, however, a high correlation between money worries and divorce.

If I were in your shoes I’d first use that money to build up your Mojo, then put the rest towards a deposit on a home.

What about the wedding?

Well, you’re in hospitality, so why not ask your workmates to help you plan a rustic, authentic backyard wedding?

Years from now it’ll become your family legend: you started with nothing, and created something amazing. 

Scott

Have you Googled yourself lately?

Picture this.

You wake up one day, flick on Sunrise, and Kochie is in a flap:

“Overnight the internet was hit with the biggest coordinated data hack inhistory. Everyone is exposed”, he warns.

You whip out your phone and check your accounts, but it’s too late:

All your secrets have already been flushed out into the world: all your (private) messages, all your (private) photos, all your passwords, all your credit card and bank details … everything is out there.

Here’s you: "Yeah … nah. That is not gonna happen.”

Here’s me: “I have three words for you: Jeff. Freaking. Bezos.”

Word has it that the wealthiest person on the planet clicked a dodgy WhatsApp link that hacked his phone.

The result?

The internet got to see a pic of a very different type of ‘package’ that Jeff had delivered to his girlfriend.

(Suffice to say the old boy was Amazon ‘Primed’.)

Here’s the point: Bezos has built a trillion-dollar internet business. Yet even he got hacked.

Right now your kids are swiping at your phone with their grubby, jam-stained fingers,poking around at one of the hundred apps you’ve downloaded and long forgotten about.

So the question is: are you feeling lucky, punk?

I’m not.

And you shouldn’t either: according to the Government’s Australian Cyber Security Centre, Australians are reporting cybersecurity incidents every 10 minutes — and in 2018 almost one in three Australian adults was affected by cybercrime.

So here are three things that I do to avoid getting hacked.

Dumpster Diving

I have a rotary phone, a fax machine, a pager on my belt, and a CB-radio in my ute.

I’m joking.

(Alright, so I do have the CB in my ute, but that’s none of your damn business, Victor Charlie, Charlie).

While you’d think going to the olden days may save you from being hacked, the truth is it’s even more dangerous: the easiest way to steal your identity is not to hack into your computer … it’s to simply fish through your rubbish bin.

So I do whatever I can to stop receiving snail mail, and instead get everything emailed instead. When I went full digital, I scanned all the old mail I had lying around — and destroyed it. (On the farm we have an incinerator … but if you’re in a more urban setting a $40 shredder from Officeworks is fine.)

Always Use Protection

On all my accounts I’ve turned on two-factor authentication (Google it). I also use Dashlane to securely store my passwords, Malwarebytes to protect my computer, and TunnelBear as a VPN (to keep web browsing secure). For about $100 a year, it’s cheap insurance.

Also, my social media accounts don’t give away my location. (Unlike Terry the Tosser: “Here we are inMykonos #richlife” … and back in Melbourne your house is getting robbed,#thuglife.)

Stay Alert

I have a premium alert service set up on my credit file (and given I have no credit, it shouldn’t be dinging too much). However, if you get scammed, your credit file is one of the first places it will show up, as scammers apply for credit in your name.

Here’s the deal: you don’t have to be mega-rich to be scammed -- in this interconnected world, we’re all targets.

So don’t wait for the big hack to come to realise you weren’t covered.

Because,as the Amazon founder himself will tell you: 

There’s no returns policy once your junk is on the internet.

Tread Your Own Path!

My House Burnt Down, Now I Really Am Barefoot

Hi Scott,

I know you probably won’t read this, but you were ‘on my list’. You see, since my house in Mallacoota burnt down, I have been shown the most amazing acts of generosity and human kindness, and I have a list of the people I want to thank.

So while I go through the emotional process of figuring out my new life, thanks to your book I am not immediately worried about money. That’s huge! My partner and I are even contemplating taking a six-month hiatus and travelling around Australia. Seems like good timing while we don’t have any ‘stuff’.

Emily

Hi Emily,

Welcome to the ‘no stuff’ club!

The truth is that, as for all of us, almost everything you buy will end up in a rubbish tip, but in your case you’ll receive a cheque for it!

When it happened to my wife and me, we felt an overwhelming sense of freedom, like a weight had been lifted off our shoulders. Which it had — we literally didn’t have any clothes.

Seriously, though, over the following 12 months we didn’t really buy anything, and it changed the way we thought about ‘stuff’ forever — for the better.

Go travelling, and make some memories!

Scott

Beware of 60-Year-Old Hussies!

Hi Scott,

My mum passed away two years ago, and it seems like my 80-year-old dad is being swooped on by several single women 20 years his junior. He lives alone in a lakeside community several hours away from us (my two brothers and me). We are concerned that he will be swindled out of his house and savings, so we have suggested he get his will and power of attorney (POA) sorted. We honestly cannot see what these women see in him, but his ego might tarnish his ability to protect his assets from clever predators. Do you have any family asset protection strategies that we should be aware of?

Dan

Hi Dan,

If you were my son, I’d give you a clip around the ears: “We honestly can’t see what these women see in him.”

Way to cut down your old man!

Then again, if you are dealing with the power of 60-year-old ‘predators’ (your words, not mine!), you’ll have your work cut out for you.

That being the case, I don’t feel qualified to answer this question, so I’ve called up my lawyer, Brett Davies. Here’s what he had to say:

“If your father is of ‘sound mind’, he is free to deal with his assets as he sees fit.“If it is clear he is of ‘unsound mind’, then you are free to use a POA. In fact, in most states you are duty-bound to do so, to protect the person who gave it to you. But the POA is only to help your father — you cannot use it solely to protect your inheritance.

“If he is of unsound mind, you can act against his direction, as he would lack mental capacity. For example, you could have bank accounts moved out of his control. But be careful — if you are wrong (i.e. your father is of sound mind) then you have broken the law. When in doubt, it may be prudent to go down the path of an administration order, which is when a court decides mental capacity, not you.”

Barefoot translation: by all means let your old man enjoy himself, just make sure he protects his nuts. 

Scott

Cashing in on the Coronavirus

Hi Scott,

I’ve been watching (from afar!) the spread of the coronavirus, and I am worried that people are underestimating the long-term financial repercussions if it is not contained soon (and I don’t trust the Chinese government’s figures). Despite this, the Australian share market is up this year, but I am growing increasingly worried. In fact, I am thinking that, with the market now at record highs, it might be time to take some money off the table and wait for a correction before getting back in. What are your thoughts?

Nick

G’day Nick,

First, let me lay my cards on the table:

I don’t know much about the coronavirus.I don’t know whether it will become the next global pandemic that Bill Gates sagely once predicted “could come from China and infect up to 30 million people within six months”.

I don’t know if it will trigger a share market correction.

Traders have already factored into their decisions that the ‘factory of the world’ is effectively shut, that our biggest source of tourists is not delivering at the moment, and that the bushfires have devastated major parts of Australia. Yet that’s all old news.

It’s what happens next that matters to the share market, and, just in case you’re slow on the uptake, I DON’T KNOW ANYTHING.

So, what do I know?I know … that over the past couple of hundred years we’ve endured a lot of bad things: wars, recessions, depressions, pandemics — and through it all the stock market has never failed to hit new highs. Case in point: $1 invested in the share market in 1888 would have grown to $226,560 today.

I know … that it’s impossible to profitably trade in and out of the markets. That’s because if you decide to sell you have to be right twice: first when you sell and second when you eventually buy back in.

I know … that the bulk of your long-term returns will come from dividends, not share price movements. That’s why I focus on the income I receive four times a year and not the value of my portfolio.

Oh, and I also know that I can’t catch the virus from drinking beer. Other people aren’t as sure: since January, Google searches for the phrase ‘Corona beer virus’ rocketed 2,300% globally.

Don’t drink and trade, Nick!

Scott

A weird way to spend $40 that’s guaranteed to make you happy

This wasn’t going well.

“You want to do what?” asked the waitress.

“I’d ... like to pay for that guy’s lunch”, I said, pointing to a 50-something dude sitting in the corner.

“Do you know him?”, she asked.

“No, I’ve never met him.”

She crossed her arms, cocked her head, and eyeballed me:

“So ... why are you paying for his lunch?”

“Because it’s a nice thing to do”, I mumbled.

“That is … so  … weird”, said the waitress, holding out the EFTPOS machine.

Okay, so that wasn’t the reaction I was expecting.

Still, the moment I walked out of the restaurant I had a spring in my step as I thought about the chain reaction I’d just set off. The dude would go up to pay, and be given the good news. Then he might choose to pay it forward. And on, and on, like a Mexican wave.

Hokey?

Abso-freakin-lutely.

Then again, I spent $5,000 on a 10-day family cruise that gave me the runs (and the kids head lice).

Buying a stranger a meal cost me $40 and it put a smile on my dial that lasted the rest of the day.

Here’s the deal: collectively we donated $500 million to the bushfire efforts last month.

It felt good to give, right?

That’s because the ‘science of spending’ tells us that we get a bigger kick out of spending money on other people than we do on ourselves. In other words, there’s a genuine psychological benefit to being generous.

So now you’ve got a taste for it, why not take a few more swigs from the kindness cup?

Now, you could be a weirdo like me and buy lunch for some random, or coffee for the guy behind you in the line. 

Or you could just buy a few extra tins of baked beans at the supermarket and donate them to Foodbank (I’ve recently seen how valuable these can be for fire-affected communities.) 

The generosity was the best thing to come out of the horrific bushfires, so let’s make it stretch!

Tread Your Own Path!

We Lost Our House, But We’ve Got This

Hi Scott,

Your latest column came just as we were getting a grip on losing our house in the NSW fires. Thanks for sharing your fire story ‒ it helps to remember others have been through this too. Having our finances in order has made this much less stressful. People have also been so generous ‒ we have been overwhelmed by the support. Although my own copy of your book is now up in smoke and probably drifting out over the Pacific somewhere, it has done its job and we’re grateful for what you do.

Thank you, Scott. We’ve got this.

Nate

Hi Nate,

Well done!

Do you want the good news or the bad news?

The good news is: like me, you have your Mojo, and so you’ll hopefully be okay financially.

The bad news?

Having your money sorted doesn’t give you a free pass on dealing with any of the emotional stuff you’ve been through.

I learned this the hard way: in the immediate aftermath of the fire that burned my house down, I did what most blokes do ‒sprang into action and did everything I could to get things back to normal … right now!

Looking back on it, I can see it was really a symptom of the stress I was under. Honestly, it wasn’t until my wife sat me down and suggested we speak to someone that I started to loosen up.

I’m not telling you to see a psychiatrist — most Aussie blokes would rather drink a shandy than see a shrink — but I am suggesting you sit down with a few mates every now and again and talk through how you’re feeling.

Scott

Milking the Cows

Hi Scott,

My uncle is a dairy farmer who lost everything in the Gippsland bushfires. But he still has to milk the cows every day, so he can’t get away from it. Even though there’s the $75k fund for him, we’re concerned it’s not going to last long. I also worry about his mental health too. What can we do for him?

Casey

Hi Casey

(I can picture my editor now saying “this isn’t finance!” And you know what? He’s right. And you know what else? I don’t care.) Look, I know just how tough fire-affected farmers have it right now.

Generally it’s the farmer’s wife who comes in to see me, and they often say the same thing: that their husband hasn’t left the farm since the night of the fires — they can’t as they have too much work to do.

As one cocky told me: “the cows won’t milk themselves.”

Can you imagine how hard it would be to work and live in a place that’s been decimated by fires?

Well, one idea, which came from the local community, is to get students from the agricultural colleges to do a few days work placement at these farms. The students could take over the farm so the farmers could get away with their family somewhere that’s not black and burnt, for some much-needed respite.

So, Casey, it may be time for you to take the udders by the hand and help out your uncle!

Scott

Greetings from fire-affected Cudgewa

I raised my hand to volunteer as a financial counsellor in fire-affected regions … and promptly had it slapped down.

“Are you mad?”, she said.

I was standing in front of the woman who was in charge of deploying financial counsellors to disaster zones.

Her beef?

“You’re a bushfire survivor yourself. What happens if all those emotions get triggered again?”

I assured her I’d be fine, and I was soon on my way to the Victorian-border town of Cudgewa, which had been ravaged by bushfires. And that’s where I’m writing to you from today.

She was right about one thing, though — I have been hit with plenty of emotions doing this job.

Let me share some of them with you.

First there was … shame

On the drive up I looked at the dashboard:

44 degrees.

“This is unbearable”, I whined, and then repeatedly hit the little snowflake button to crank up the air-con.

And then I turned a corner … and saw a chain gang of Blazeaid volunteers ‒ most of them in their seventies ‒ who were covered in sweat, and dirt and ash, as they put up fences for farmers trying to contain their livestock.

What a snowflake I am, I thought.

There was … kindness

When I arrived in town, I was invited to speak at a community meeting to discuss all the help that was available to the hard-hit community.

The bloke next to me was a young tradie with a hipster moustache and tatts.

Over the Christmas break, like all of us, he’d sat and watched Australia burn.

But what can one young bloke do?

Turns out, a lot.

He put a note on Facebook saying, “If anyone needs a hand rebuilding, I’ll give it a go, for free. And if any tradie wants to join me, let me know.”

And guess what?

Plenty did ‒ 14,000 of them, in fact — all offering to help, for free.

There was … relief

I set up a desk in the middle of a basketball court and was officially open for business.

People started shuffling in. I could see in the way they walked up to me that many of them were struggling.

They certainly weren’t in the right headspace to read through a 35-page insurance product disclosure statement.

(Seriously, are you ever?)

These people are expected to make financial decisions that may well shape the rest of their lives, while suffering from a bad case of ‘bushfire brain’.

So here’s what I told them:

“You need to focus on yourself, your family and your friends. Let me focus on your finances. I’ll call and negotiate with your insurance company, talk to your bank, and check out all the grants you’re entitled to. Then I’ll come back with a plan that’ll help put you back in control.”

You could see the relief on their faces.

There was … regret

Last Saturday night I headed to the local pub for dinner.

On the way, I walked past a house and saw a bloke sitting on his porch with his head stooped low. I waved, but he didn’t look up.

And I didn’t think much of it, until the next day ...

… when I walked past again and saw an ambulance parked in his driveway.

I immediately feared the worst. After all, research shows that after a disaster like a fire communities will experience an upsurge in gambling, family violence, drug use … and even suicide.

Thankfully, he’d just taken a bit of a turn, and the ambos were all over it.

Yet I couldn't shake the feeling of regret that I didn’t stop and take 30 seconds to say, “Hey, how are you doing?”

And finally ... I was humbled

On Friday night we had an informal ‘Beer with Barefoot’ at the Cudgewa pub, and I shouted the bar (country people sure can drink!). 

And get this: towards the end of the night a local bloke named Josh — who’d lost his family home and everything in it — presented me with a gift: a framed photo (see pic) he’d taken the day after the fires.

Yes … he gave me a present. How amazing is that?

Tread Your Own Path!

Photo Credit: Joshua Collings

Diary of a Bushfire Victim

On a scorching day in February 2014 my wife, our 7-month-old son and I stood looking at the smouldering rubble that was once our home.

We had absolutely no idea what lay ahead for us.

Today I’m going to share with you what happened over the next 12 months, in the hope that it might give some hard-won advice to the 1,800-plus households who are facing their ‘day one’ right now.

One Week On: Kind People Will Send You Junk

Liz came back from the post office with a trolley full of stuff:

Strangers sent heartfelt letters, gift vouchers, brand new clothes and toys.

Yet among the many packages we received there was one that really ‘stood out’:

Someone had sent us what looked like a wooden carving.

They’d attached a scribbled note around the base with a lacker-band that read:

“This beautiful piece of art has been sitting in our storeroom gathering dust for years ... and we’d like you to have it”.

Right.

“Is it just me, or is this thing kind of … suggestive?” asked Liz, holding it out in front of her.

“Well, it’s a wooden knob, honey.”

And history repeats: relief workers have told me recently that some fire-affected communities have makeshift rubbish dumps for the junk that people have sent to fire victims.

That being said, it’s likely the first bits of mail fire victims will likely receive will floor them: the Red Cross sent us a cash cheque, and a hand-knitted ‘trauma teddy’ for our son.

Makes me tear up just thinking about it.

And then there was the junk mail ...

Two Weeks On: Bad People Will Try and Take Advantage of You

We had someone (who’d clearly read Rich Dad, Poor Dad too many times) who dropped leaflets into our mailbox, offering to buy our property on the cheap.

There were also leaflets offering short-term loans.

You see, the smell of smoke is like perfume to payday predators (who by law are allowed to charge up to 400% interest per annum). Makes me dry-retch just thinking about it.

And history repeats: right now, consumer advocates are warning people to watch out for (unregulated) insurance claims management firms who promise to manage the insurance claims process in exchange for a percentage of the insurance settlement.

One Month On: You’ll Realise Your Insurance Payout Isn’t Enough

Yes, even I got caught out.

Our house was covered.

Our contents were covered.

Our farm fences were … partially covered.

I mean how expensive is 10 kilometres of fencing?

Quite a lot, in fact!

(Thankfully the awesome volunteers from BlazeAid swung to our rescue and helped rebuild our fences.)

And that’s why I’ve made a point of annoying people about checking their insurance every year.

In fact, a few years back I even fronted a Victorian Government campaign called ‘Insure It, It’s Worth It’.

The stats are horrifying: half of Australians don't have enough home insurance for when disaster strikes.

What does that mean?

It means that statistically many bushfire victims will not be able to cover the cost of their rebuild.

(And the cost of rebuilding will skyrocket — often upwards of 20% — as a result of having to comply with new bushfire building codes, and a general spike in building costs.)

So, what happens then?

Well, insurance companies have the call on whether they repair, replace or cash settle a claim.

And when there’s a shortfall between the payout figure and the cost of the repair or rebuild, the insurance company will generally tally up a cash settlement.

And then?

And then they’ll send a cheque … but probably not to you.

What?!

Yes, in many cases not only are people underinsured, they will also have a mortgage. And when you have a mortgage, the bank is the legal owner of your home.

It’s a total disaster.

Know this: with most insurance policies there may well be additional things to claim, like payments for temporary accommodation, and other disaster allowances.

And it’s in this situation that financial counsellors shine; they’ll stand by you, and work with you.

Three Months On: The Easter Eggs Start to Crack

We ran on adrenaline for about three months.

And then, around Easter, the Duracell bunny ran out of puff.

I’m not ashamed to admit that I started to get really depressed. (It’s actually quite common: an expert I was speaking to recently said the 12-week mark is when people need some extra help.)

You see, everyone had moved on with their lives.

Except us.

We were reminded of it every day: the smell, the blackness, and sleeping in someone else's bed.

When we were at our lowest, three things helped:

First, on the black, scorched land we planted an apple tree.

Second, Liz bought a sign (and Blu-Tacked it to the wall) that said: “Home is wherever I am with you”.

Sounds corny, but it really helped me put things in perspective. It was the first thing I saw when I walked in the door each night. And when I wrote my book — based on our experience with the fires — I dedicated it to Liz, with that message on the first page.

Third, we went to see a counsellor who specialised in bushfire recovery.

One Year On … and Beyond: There Are People Who Can Help

In truth, I spent the first 12 months desperately waiting for everything to go back to normal.

You know what I ultimately learnt?

Things don’t go back to normal.

Instead, you’re forced to find a new normal. And sadly, for many, it’s very different from the life they enjoyed before the fires. And all too often these people fall through the cracks and face years of ongoing hardship.

That’s what inspired me to spend 2019 becoming a community-based financial counsellor.

And right now there are counsellors who are being deployed to fire affected areas.

I’m one of them.

We won’t be with you for just a week, or a month, or three months, or even a year … we’ll be with you all the way, for as long as it takes.

Hang in there.

Tread Your Own Path!

Disaster Numbers
Insurance Law Service -- free legal advice and support: 1300 663 464
NSW - Disaster Response Hotline: 1800 801 529
Victoria - Disaster Legal Help: 1800 113 432
Queensland - Bushfire Legal Help: 1300 004 924
Lifeline Australia - phone 13 11 14 for a free 24-hour crisis support service

My thoughts on the fires

“It’s over … isn’t it Dad?”

His lip began to quiver.

“Yes ... I’m afraid so mate”, I said, putting my arm around him.

This happened just last Monday. We had the car packed, ready to head to the remote enclave of Cape Conran, East Gippsland, for a family camping trip.

For the last few days Liz and I had been nervously watching the Victorian Emergency app. Fires had sprung up around the area, yet the officials were, at the time, only advising ‘caution’.

Little did we know that in 24 hours the area would become a disaster zone.

Needless to say, our trip was cancelled — but that’s nothing compared to what others have gone through in the past month.

I don’t know about you, but I’ve been overcome, watching our country burn.

The tragedy of people losing their lives.

The animals burnt alive.

The livestock that has to be put down.

It’s all just … too much.

Each night I sit in my living room watching the news; the media chases down victims, wanting to capture the heartbreaking moment when they return, only to find they’ve lost everything they own.

“How do you feel?” the reporter asks, sticking a microphone in their face.

I’ll tell you how I felt when it happened to me.

Rage.

Yet what the cameras don’t show is what happens next. Often one of the first people they’ll turn to is a not-for-profit financial counsellor.

That’s what happened to me back in 2014, when my own home burned to the ground:

I walked into my local library, which had been transformed into a makeshift emergency centre for fire victims. I stunk of smoke, and sweat — and looking back on it now — I was simmering with anger.

Yes, we’d lost our home — and everything in it — but I resented the idea of being a victim. The only reason I was there that day was to get a special pass so I could get through the roadblocks and visit my farm.

The woman I spoke to was a not-for-profit community-based financial counsellor.

“Look, you’ve got a young family — a little baby — and you’ve just lost everything. That’s a big hit, so let’s take a few moments to talk about how you’ll cope financially”, she said firmly.

“Just give me my pass”, I snarled.

She leant in, gently put her hand on mine, and whispered:

“Honey, I know it will be difficult for you, but you’re going to need to let people help you over the next 12 months.”

I needed that.

And so do the people who are going through the same thing right now.

I’ll tell you … it’s times like this that inspired me to devote 2019 to becoming a financial counsellor. And so, now that I’m qualified, I’ve put my hand up to be deployed with the disaster relief effort.

It’s a privilege. An honour. And something that gives meaning to what I went through six years ago.

I know I can fight their insurers, stand up for them with their bank, and generally make sure that money issues don’t compound their grief and loss.

Yet what I also want to give them is some perspective, and some hope.

You see, six years ago our farm was declared a disaster zone (see pic).

Practically everything on it burned to the ground.

We felt like things would never, ever get back to ‘normal’ again.

Yet slowly, it did.

Fast forward to today.

We did end up going camping this week … on our own farm.

Right now the Australian Red Cross is supporting communities affected by fires, and you can go here to donate.

Empty out the Give Jar.

Tread Your Own Path!

Thanks From My Family

Hi Scott,

I got your book three years ago and since then have put your simple solutions into action. Fast-forward to this year, the hardest year of my life. My wife and I had our first little boy in January and could not be happier, but unfortunately my wife developed postnatal depression and was even suicidal at times. Thanks to the ‘Mojo’ account we had set up, I was able to take three months off work to care for my family. So thank you from the bottom of my heart.

James

Hey James,

I’m really glad things are working out for you.I might get a lot of hate mail, but messages like yours are the ones that keep me going.

The truth is I don’t write for everyone, and that’s okay. I only write for my tribe, the people who get what I’m about. They aren’t flashy. They work hard, avoid debt, maintain their Mojo, and look after their family. They think long term and keep things simple. Just like you and me.

You faced your financial fire, mate, and you got through it.You Got This!

Scott