What the Flip?

Hey Scott

I just read your recent column and I have one question: how the flip do you not carry a phone? I’m quite interested in the logistics of such a daring lifestyle choice in this day and age.

Ben

Hi Ben,

I’m the first to admit my life choices aren’t for everyone, or even most.

I went cold turkey last year and ditched my number, which had served me for 20 years.

Today I have an Apple Watch that serves as a tracking device for my wife, family and close friends.

In addition, it has an eSIM which allows me to make and receive calls (with AirPods), send voice-to-text messages, listen to podcasts, get directions via maps, order an Uber, and pay for things.

I also carry around a notebook and pen, and can often be seen writing things down, or staring blankly into space.

It started out as an experiment ... but I don’t think I’ll go back.

(Besides, I can always use my wife’s phone. Right, Liz?)

Scott.

Fingers in the Jam Jar

Hi Scott,

When kid #1 was born, I put $10,000 into an index fund for him. Kid #2 is now due and I’ve done the same. I have not set up the money in a trust, though. I DO NOT want to hand over the Jam Jar when they turn 18, unless the funds would help them with a home, business, etc. So do I have to sign them over at 18 to avoid capital gains tax? Or can I sign them over at 25, 30 or whatever?

Simon

Hi Simon,

Yes, if you bought them via a share broker, they’ll automatically transfer to your kids when they turn 18, and they’ll be free to cash them in and head off on a bender to Bali.

(An alternative to this is to purchase your index funds either in a family trust or via an investment bond, which allows you to nominate the age your kids can inherit the money.)

So you’ve just created a trust fund kid, right?

Wrong!

Here’s how I’m doing it with my kids.

Don’t hide the fact that you’ve invested money for them: it’s an awesome opportunity to show them how compound interest works.

But do let them know there will be NO handouts (and no Dad-sponsored Bali benders).

Instead, set up what I call the ‘Barefoot Ladder’:

Use the money to match them, dollar for dollar, for something they’re saving for: a car, a small business, a house deposit, plastic surgery (well, maybe not). Either way, you choose what it is — and they work for it. And the harder they save, the more they get.

Scott.

Night-Night, Barefoot

Hi Scott,

I have been a proud Barefooter for years. Last night my three-year-old son requested ‘The Doggie Book’ for his bedtime story. Thank you for being such a positive influence in our household.

Megan

Hey Megan,

That’s awesome! Take that, Bluey!

Scott.

The Greatest Investor You’ve Never Heard of

Let me tell you about one of the greatest investors you’ve never heard of.

His name is David Swensen.

Swensen was responsible for investing Yale University’s endowment (the money it uses to fund its education).

Over his career, he grew that pot from $US1 billion … to a staggering $US31 billion.

His returns were so impressive that Bloomberg said, “there’s David Swensen, Warren Buffett … and everyone else”.

With his track record, Swensen could have become one of the richest men on Wall Street.

And, early in his career, Swensen had countless opportunities to quit managing money for Yale and start his own hedge fund. If he had, he would likely have become a billionaire many times over. Rich enough to own an island, a fleet of jets, and mansions all over the world.

Yet here’s the really strange thing about David Swensen:

He didn’t.

Instead, he continued working for relatively low pay (by Wall Street standards) managing money for Yale.

Unlike most Wall Street fund managers, who get their significance from the investment fees they skim off the top, Swensen was driven by the fact that his investment gains helped the institution change young people’s lives.

Even better: while other ‘masters of the universe’ fund managers had plush offices and chauffeurs … Swensen helped out the university by turning up in front of a chalkboard to teach an investing course to students.

Tragically, Swensen died last week, way too early at the age of 67.

There was a lot written about his investing genius. (Interestingly, Swensen, like Buffett, was a vocal critic of expensive actively managed fund managers and argued that most people, including large pension and super funds, should invest in index funds.)

Yet there has been much more written about what author David Brooks calls his ‘eulogy virtues’:

The time and effort he put into mentoring the young investors he worked with. The encouraging letters he sent to his students. And the fact that he was still teaching that investing class just a few days before his death.

Now, you don’t have to be an investment genius to gain the secret to Swensen’s true wealth. Simply put down your phone and spend a few minutes thinking about your own funeral.

Many people (men in particular) spend much of their lives pursuing things that look impressive on their résumé:

Fancy titles. Money. Power. Respect. Status trophies.

Yet the person delivering your eulogy won’t talk about the car you drive, the title you attained, the balance of your bank account … or any of the other things that society has you chasing.

Instead, they’ll talk about the kind things you did. The courage you showed. The difference you made.

David Swensen understood this. And his legacy lives on in the hundreds of students whose lives he changed.

Rest in peace, David Swensen.

Tread Your Own Path!

This is How to Get a Job

Hi Scott,

Something to brighten your day. My almost 15-year-old recently applied for (and got) her first job at a local ice-cream store. She based her application on your example in The Barefoot Investor for Families. Now my 11-year-old believes she should also be allowed to get a job at the ice-cream store. She even wrote an application letter following your book’s example. Let me quote you a few lines: “I want to work at Gelatissimo because I love ice-cream, and I want to bring the joy of sweetness to others. I am able to work at any time, any day, any hour. My biggest strength in the ice-cream business is eating ice cream.” This gave us a good laugh and we love her enthusiasm, though we won’t be letting her loose on the workforce just yet.

God bless, Janice

Hi Janice

Congratulations on your teen getting her first job!

As for your 11-year-old …

She had me right up until the part where she hinted that she’d be getting high on the boss’s supply.

Other than that … I’d hire her!

No brain-freeze for that girl … she’s not going to have a problem getting a job when she gets a bit older.

Now, for those of you following along at home, let me explain what Janice is talking about.

Most employers — regardless of whether its Macca’s, KFC or an ice-cream store — essentially ask these five questions:

Why do you want to work for us?

When can you work?

Why should I employ you?

Are you going to work hard?

Who can vouch for you?

So in my book I boiled down the answers to these five questions into a double-page, plug-and-play resume template teens can complete in one evening. However, it’s more than just a resume, because in the process of putting it together teens get two benefits:

First, they get a pre-written ‘cheat sheet’ they can take along and use for their interview.

Second — and more importantly — they learn empowering stories that will change the way they see themselves.

It’s an absolute killer … just not for 11-year-olds!

Scott.

Following My Dream

Hi Scott,

I am trying to follow my dream of buying my own home before I turn 30, even though I am on an average wage. But my accountant recently put me in touch with his property advisory team and they are adamant I should buy an investment property (with their help) as a way to pay less tax. It has got to a point where I have started ignoring their calls as they just will not listen to me. Am I being too stubborn or am I doing the right thing?

Tash

Hi Tash,

Interesting predicament.

Here’s what I’d email your accountant (feel free to use it):

Dear Mr Accountant,

I’m breaking up with you and your firm, effectively immediately.

It’s not me, it’s you … and your salesmen mates who keep hassling me.

Seriously, they remind me of a desperado date I’ve been on before (I know they only want one thing, and they won’t take ‘no’ for an answer).

It’s all a little creepy and, dude, I just don’t need that from my bean-counter.

Regards, Tash

If you have an uncomplicated set-up (pay-as-you-go job, no investment properties), you should be able to complete your tax return with myTax through myGov. And if you need to maximise your deductions, check out the ATO’s myDeductions app.

Put the money you save towards your house deposit, not these clowns.

Scott.

Fixed or Variable?

Hi Scott,

I am wondering, given current home loan interest rates, whether you still recommend a variable home loan with no frills and extras. Fixed-term home loan now rates are as low as 1.9%, so they are very tempting!

Erin

Hi Erin,

Yes, they’re low right now.

However, the banks have begun hiking their fixed term rates, especially their four- and five-year fixed-term loans.

Why?

Well, I guess they’re picking up what the Reserve Bank is putting down: money may be dirt cheap now, but with the economy on steroids it’s unlikely to be in four or five years’ time.

So should you snap up a fixed-term rate?

Well, it’s a personal choice but, if you do, read the fine print: they’re generally not as flexible as variable loans and it may restrict how much you can repay. For most homeowners, getting the lowest variable home loan rate you can find, and paying it off as quickly as you can, still makes sense.

Scott.

Thanks, Mum

Hi Scott

I will be forever grateful to you for removing the noose around the neck of both me and my mum. A couple of years ago I read your book and was hooked — I set up my buckets and paid down my credit cards. Then I realised I could also help my mum. She had just hit 70, was desperate to stop working, had little super, had credit card debt, still had a mortgage, and was being crippled by strata and council rates. On New Year’s Day of 2018 I sat her down and suggested she read your book, which she did in a couple of hours. Before we knew it, her credit cards were gone and her dreaded bills were covered. Most amazingly, she sold her place, paid off the mortgage, and retired to the country. Honestly, the best gift you could give your mum is to rid her of money stress. (P.S. I’ve just purchased my own first home — something I thought would never happen.)

Thanks, Jess

Hi Jess,

What a fantastic story!

Let’s repeat that last line so everybody gets it: “The best gift you could give your mum is to rid her of money stress.”

Not flowers. Not chocolates. Not Apple gear.

You know who would love this idea?

Anna Jarvis.

Anna is none other than the Mother of Mother’s Day.

She created the first Mother’s Day in 1908, to honour her late mother … and all mothers.

Yet, just like Coca-Cola hijacked Christmas (ever wondered why Santa’s dressed in Coke’s corporate colours?), it didn’t take long for corporations to cash in and commercialise Mother’s Day.

But she wasn’t one to stand down; instead she fought them every step of the way.
Newsweek reported that she once had as many as 33 simultaneous Mother’s Day lawsuits on the go!

She devoted the rest of her life — and every cent of her savings — to fighting to keep Mother’s Day pure.

In a day and age where you can buy anything for your mum and have it gift-wrapped and delivered, spending time with them, and maybe even helping them out, is what Anna Jarvis envisaged all those years ago.

You Got This!

Scott.

Help! My Mother-in-law Breeds Siamese Fighting Fish

Hi Scott,

I get along well with my mother-in-law — it’s her business ideas that drive me nuts. One day she discovered the marvellous world of pet breeding, specifically high-end ragdoll cats. Quite good money for cute little kittens. She took a loan — from my wife — and off she went. But the kittens turned into old cats, with no buyers. That was 10 years ago, and it almost bankrupted my wife. Lesson learnt? No! She switched to great blue mastiffs (very Instagram worthy), but still no buyers. Lesson learnt? No! Next came Siamese fighting fish!

And that brings us to today. She holds to the idea of entrepreneurship like a lottery ticket, thinking her luck will change overnight. We have shown her that if she had taken the dole and saved it, instead of buying animals, she would be in a better position. Even those poor creatures would be better off anywhere but where she has them. But she doesn’t want help. How do you make someone so delusional see the red numbers?

Craig

Hi Craig,

She sure sounds like she’s having lots of fun!

You? Not so much.

To you, the answer to her problems is so simple it’s like shooting Siamese fighting fish in a barrel: “Stop doing this, you’re going broke!”

Yet she seems purr-fectly happy with her monetary menagerie, mate!

So let me give you the same advice I give any family member who writes to me:

Never, ever ‘lend’ money to your family or friends.

Give it to them instead.

Mentally, get to a point where you’re giving away the money: surrender any thought of it ever being repaid. Which is a decent strategy if you know she’s using it to breed pets she’ll struggle to later give up.

So on this Mother’s Day I want you to stop off at the butcher and get as many bones and offcuts as you can carry.

Then tell her the debt is forgiven!

(And never lend her money for ragdoll cats again.)

Scott.

A Very Barefoot Will

Hi Scott,

My beautiful mum passed away recently. She was a big fan of yours. Each Sunday we’d catch up and she’d ask me what ‘Barefoot Scott’ had written this week, often chuckling at your straight-talking responses. After she died, we found that she had left instructions (in her fire-proof Bunnings safe) about a hidden ‘Mojo’ envelope — to help us out until her will was resolved. We also found an ING account named ‘Holiday’, ready for her next big trip. As sad as I felt, I had to smile with pride. It wasn’t about the money, I was just in awe that Mum had done all this in her late seventies, and with very little too. Kudos, Mum!

Jenny

Hi Jenny

Love it!

A lot of people think that Barefoot is about money-grubbing finance.

Yet, at its core, what we talk about here each week is how to look after the people we love.

And, in that sense, your mum was a true Barefooter.

Thank you for sharing your story.

Scott.

The best Mother's Day present

Many years ago, I was invited to a very exclusive finance dinner.

As luck would have it, I found myself sitting next to a VIP ... the chief of a large international bank.

He leant in, shook my hand, and began telling me all about his sprawling bank, which employed tens of thousands of staff and had millions of customers.

And then he said something that totally shocked me:

“We lend money only to women.”

“What?”, I blurted out.

“My bank lends money to small businesses. And we’ve found that when we loan money to women they use it to improve their living situations and educate their children … whereas men often squander it.”

Bingo, bango!

The famous bank chief I was sitting next to was none other than Muhammad Yunus.

Back in the seventies, Yunus did something that no one in his native Bangladesh had ever done before: he provided small business start-up loans to women — poor, uneducated women who lived in the backblocks.

People thought he was crazy.

See, at the time, 99% of loans were to men. If a woman applied, she was often laughed at and dismissed: “Go get your husband to apply.”

Yet Yunus understood the power of the mothering instinct ... these women wanted a better life for their children.

Yunus bet this would drive these mothers to work hard, to look after their kids ... and to repay their loans in full.

And that’s exactly what they did.

The result was that millions of people were pulled out of grinding poverty, and Yunus was awarded a Nobel prize.

Of course it doesn’t matter if you’re in Bangladesh or Bendigo — women tend to be more focused on financial security.

And you don’t need a Nobel prize to work out why: they have to be.

That’s because women are, on average, poorer than men.

They are more likely to do more unpaid work. They are also more likely to take time off their career to raise children. And they still get paid less than men, according to the Human Rights Council of Australia.

The result?

They have less money compounding over their working lives, so they retire with around half of what men have in super.

And so, on this Mother’s Day I’ve got a special request for you:

If you know a mum who’s struggling (whether yours or not) give her the gift of financial knowledge.

Offer to take her out on some Barefoot Date Nights. Help her work through the steps.

Odds are she’ll remember that more than the supermarket flowers she gets every year!

Tread Your Own Path!

Barefoot Brockovich!

Dear Scott,

I see the Dollarmites have been kicked out of Queensland schools!

Woohoo!

Dollarmites: 0
Barefoot: 1

You’re the Erin Brockovich (with smaller boobs, I hope) of banking and finance. Keep sticking it to them, Mr Pape!

Melinda

Hi Melinda,

Thanks for the kind words and, yes, another one bites the dust!

Your scoreboard needs updating though:

So far Victoria, the ACT and now Queensland have kicked CommBank out of their classrooms.

That means I’ve still got to meet up with the following education ministers: Sarah Mitchell (NSW), Sue Ellery (WA), John Gardner (SA) and Jeremy Rockliff (Tas). This will give me the opportunity to state my case:

First, having CommBank bribe their way into classrooms really is like having Ronald McDonald teach kids food nutrition (“Would you like a bank account with that?”).

Second, and much more importantly, our schools need to make it a priority to teach kids the real-life money skills they’ll be tested on every day of their lives.

That’s why I created the Money Movement, and it finally looks like the scoreboard is turning!

(I’ll report back next week and let you know how I go trying to get a meeting with the education ministers.

Scott.

Can I Block My Husband?

Hi Scott,

I dread my parents passing away! Apart from the emotional devastation, I am petrified about the financial impact the inheritance (built during a lifetime of hard work) may have. I wish to invest it to secure my family’s future, but my husband will want to spend every cent. He refuses to do a budget and will not ditch the credit cards, and I fear this will be another area in life where he will cause havoc. Do I have any right to block him (without divorce)?

Kim

Hi Kim,

Yes, technically, you could block him.

Here’s how:

First, you’d get your parents to set up a three-generational testamentary trust (which means their assets are automatically placed into a trust after they pass).

Second, you’d name a relative -- who is on your side – but independent-- to be the trust executor.

Third, they’d (hopefully!) keep a tight grip on what the trust money gets spent on.

And then you’d all live happily ever after!

Well, actually, let’s role-play this for a second:

You: “I’m getting an inheritance from Mum and Dad, but I’m not allowing you to spend any of it.”

Husband: “Huh? Why?”

You: “Because … I actually don’t trust you with money … you’ll just end up blowing it.”

Stop.

Kim, how do you think the rest of this conversation will play out?

Badly, I’d suggest.

It sounds like you need couple’s counselling to focus on the underlying issues in your marriage.

Regardless, I like the idea of a three-generational testamentary trust, mainly for the flexibility it affords in tax planning. Still, while your parents are getting their lawyers to draft this up, ask them to include a ‘divorce protection trust’ in their wills.

Just in case.

Scott.

The Barefoot Barn

On the farm we’re building a barn.

Okay, honestly, it’s an old-school man cave, with a pool table, a dart board and a very big library.

“It’s very analogue, Dad”, says my eight-year-old.

He’s right of course. There’s not a screen in sight. Yet at least my kids are used to it — over the years I’ve gone out of my way to do things with my kids that encourage them away from screens.

In fact, I joke that my aim is for them to be bored a decent amount of time. After all, that’s when ideas are formed, and connections are made. Instead, we now live in a world where we are constantly distracted, and manipulated, into what to think and believe.

And so I was interested in a study last month by Reviews.org which found that “Aussies spend 17 years of their life staring at their phone”, which works out to be 5.5 hours a day for the average Aussie.

My first thought was “that sounds pretty high”.

So I grabbed my wife’s iPhone and checked her usage (‘settings > screen time’):

“5 hours a day.”

And my screen time?

“Zero”, because I don’t carry a phone (though my wife argues strenuously that I add to her daily limit).

Worse, the study found that the average Millennial spends a massive 7.3 hours a day staring at their phone.

That’s kind of crazy when you drill down on it. Deduct sleep (eight hours) and school (where phones are banned or frowned upon) and the average young Aussie spends almost every other waking minute staring at a screen.

Astounding.

Now, I’m certainly no shrink, but my thinking is that if you’re devoting seven hours of every single day to doing something, you’re well on the road to having an addiction … which is exactly how the tech titans have engineered it.

Here’s the point: the most valuable currency in the world isn’t Bitcoin, or dollars, or Dogecoin.

The true currency of the internet age is attention.

When you capture and control people’s attention, you have power.

(Just ask Dogecoin investors, or Donald Trump.)

That’s why Big Tech will continue to use their psychological tricks (nudges, notifications, outrage) to steal more of your attention. And it’s also why they’re trying to hook us younger: kids as young as six have Messenger Kids, and Instagram has announced it’s launching a kids’ version, with a spokesman for Facebook’s Australian operations saying the platform would “fill a distinct gap in apps for children”.

What’s the bottom line?

Well, I know I’m fighting a losing battle. This is the world our kids are growing up in.

Yet I’m taking a leaf out of Steve Jobs’ book. When the founding father of technology was asked by a New York Times journalist asked what his kids thought of the iPad, he gave an unexpected reply:

“They haven’t used it. We limit how much technology our kids use at home”.

And that’s why I’m holding out in my old-fashioned analogue barn for as long as possible. After all, my kids have got plenty of time before they become adults ... and stare at their phones for 17 years.

Tread Your Own Path!

Budgeting For Women

Scott,

I just wanted to let you know how much I appreciated your column last week, where you replied to Roseanna, a domestic violence survivor, and provided some really sound advice on how to escape her abusive and controlling partner while still remaining financially safe. I work in the family violence sector and almost every woman I have worked with has a story of an abusive partner incurring huge debts in her name, without her knowledge or consent. And many women, through coercive control, are not able to work and therefore have no access to money, employment, stability or super. So to see some really practical steps written in an empathetic way is heartwarming.

Kate

Hey Kate,

Thanks for the kind words.

Before I began working as a financial counsellor, I often wondered to myself “Why don’t these women just up and leave?”

Then I saw first hand how many women — and their kids — get financially trapped in these dangerous situations.
Helping them find a way out financially is one of the most important things we can do for them — and the effects can last for generations.
That’s what financial counsellors do, and the long-term economic benefits (over generations) make it an incredibly important and wise investment for the Government.

Speaking of which, here’s something interesting:

Right now financial counsellors are sweating on the upcoming federal Budget to finally unveil a sustainable industry funding model to keep us doing this important work. We’re told this budget will have a strong focus on women … so it should be a done deal, right?

Next week is Mother’s Day, so if you have a story about a Barefoot Mum please email me at scott@barefootinvestor.com and I’ll do my best to celebrate them!

Scott.

All I Wanted To Be Was A ‘Good Mum’

Dear Scott,

My husband bailed on me when my son was just 18 months old, leaving me with the most beautiful boy in the wide world but nothing much else. He grew into a teenager but by then things were not going well. One night, I was on the floor gasping from the weight of uncertainty and crushing fear, thinking I might not be able to provide for him, or even to keep our home. All I ever really wanted to be was ‘a good mum’ but I was flattened.

Thankfully, some dear friends gave me your book, and I read the whole thing in a day. I bawled for a good hour at ‘You got this’, then went back to page one and worked through it step by step. Since that time, I have set up my buckets, taken control of the mortgage, paid off my car loan (five years early) and negotiated two payrises. Although our Splurge and Smile buckets are small, we save up for special times together and life is good. So, from the bottom of my heart, THANK YOU. Your books and advice have changed my life and my son’s life.

Rosie

Hi Rosie,

You did it! You are a good mum!

You may not realise it but, to quote Paul Simon, you’ve got diamonds on the souls of your shoes.

Your struggle is a family legend that has the potential to influence your son’s life for the better.

So, over a Sunday dinner, talk about gasping on the floor, feeling totally defeated … and, importantly, how you rose up. Refer to the struggle and the triumph over and over again.

The subtext to the story is: “We get knocked down, but we get back up again, and we win.”

That’s the stuff your son is made of … and it’s part of his story too.

Scott.

How Can I Escape My Abusive Partner?

Scott,

I am 29 and living with an abusive partner. After years of disinterest, he suddenly wants to ‘go Barefoot’ — now that I have a new job! I am wondering how I can follow my own Barefoot path and still keep money hidden away so I can escape this relationship. Perhaps I should follow your book with my partner AND open another account on the side. Any advice?

Roseanna

Hi Roseanna,

My heart goes out to you — there is no excuse for abuse.

Now, to your question: should you do the Barefoot plan with him?

Hell, yes.

In fact, I want you to take the lead on it. It is, after all, the perfect excuse to get things sorted, without him realising you’re actually plotting your escape.

So, gather up all your financial details: super, debts, savings and bills:

Whose names are they in? Who has the authority on the accounts? Is there any money owing?

Keep copies of everything.

And, most importantly, if you can, do all of this at work … never from home.

Reason being, he may have access to your mobile, your home computer, and probably your snail mail. Worse, on some devices (like Apple) you can be tracked (via the Find My iPhone app), or he may be able to read your text messages on another Apple device (like an iPad).

Bottom line? Protect yourself.

While you’re at work and have some privacy, call the following numbers:

First, call 1800 RESPECT (1800 737 732) for free confidential information, counselling and referrals to other support services.

Second, call your bank’s hardship department (google it). Each major bank has dedicated teams set up for their customers who are experiencing family violence. Ask them to set up an account in your name (with a separate, secure internet banking password), which will serve as your getaway fund.

Third, call the National Debt Helpline on 1800 007 007 and ask for a referral to a free financial counsellor in your area, who can work with you to not only help plot your escape but ensure you have financial security after you leave.

Finally, read Rosie’s story below.

You got this!

Scott.

How Not to Buy an Island

Hi Scott,

A couple of years ago you warned retirees about investing with a company that owned Dunk Island, who were promising high returns. Well, I just read about Dunk’s repossession. You predicted this!

Mandy

Hi Mandy,

Yes, I predicted it … and so did a lot of others in the media.

Collectively we did our best to warn people of the dangers of investing in a high-risk investment that marketed itself as a safe alternative to bank term deposits.

Look, this is my seventeenth year of writing this column, and over that time I’ve seen plenty of outfits come and go promising high returns with low risk. And every time they lure in the financially illiterate, and do a hell of a lot of damage.

Case in point: it’s been reported in the media that Pauline Hanson’s One Nation hosed $500,000 after investing with the cowboys at Mayfair.

Please explain?

Scott.

The crypto test

Last Saturday night I found myself standing alone at a bonfire party, staring thoughtfully at the flames.

A guy walked up to me awkwardly.

“Would you like a beer?” he asked.

“Well, sure!” I said.

He handed me a beer.

“Now … can I talk to you about … Bitcoin?”

“Oh … kay.”

Truth is, I’ve spent a lot of time thinking about and learning about crypto, and the future of decentralised finance. It’s a fascinating area … but I think I may have wasted my time.

That’s because all I needed to do was buy the joke crypto Dogecoin, which, at the time of writing this, has returned a staggering 8,300% year to date (though the price is volatile and has dropped in the past few days).

Let me say that again:

The best-performing cryptocurrency stretching back six years — the top dog — is Dogecoin.

Remember, Dogecoin was set up as a ‘piss-take’ by its Aussie founder. It has zero tangible value. It is worthless.

And to prove what a ‘chump’ I am, I wrote about the dangers of Dogecoin in this column 10 weeks ago … and since then it has increased by 400%!

Woof, woof!

So do I feel a twinge of regret for not getting in?

No.

For much the same reason that I’ve never contemplated putting 1% of my net worth into the pokies (“Just in case, you know, I win the jackpot”).

Here’s the point:

Life is really hard when you believe you can make a quick buck from magical dog memes.

It’s stressful being a gambler.

There is no skill involved, and the odds are stacked against you.

You see, in order to make real money you have to sell. And every man and his dog is planning to sell out of Dogecoin right at the top. Every single one of them. It’s called the ‘greater fool theory’ (i.e. you only win when some greater fool buys in at a higher price), and history is littered with people who abruptly discovered that they in fact were the fool.

Wise old billionaire Charlie Munger advised: “The first rule of compounding is to never interrupt it unnecessarily.” In other words, you’re being tested right now. If you’re persuaded to sell your boring index funds and lay down with dogs, I can almost guarantee you’ll eventually end up with financial fleas.

Tread Your Own Path!

When It Rains It Pours

Good evening Scott,

A year ago I was in debt and had just had a marriage breakdown. Then I read your book. Since then, the debt has been paid off, I have an emergency fund, I have buckets! Which is a good thing, because I have just lost everything in the Port Macquarie floods. I was not covered for flooding, but I will survive. So thank you, you have really helped!

Angie

P.S. If you want to send me another book, feel free. My old one is out at sea.

Hi Angie

My book is all about getting yourself in the financial position where you’re able to face your financial fire — or flood!

You Got This!

(A brand-new book is in the post.)

Scott.