You can taste the danger in the air

Right before a bushfire, you can taste the danger in the air.

You can smell the smoke.

You can often see the flames flickering way off in the distance.

You can hear the fire engine sirens, and see the emergency services’ utes buzzing around.

You tune in to the ABC radio to hear the latest warnings from the authorities.

And then you brace yourself as the head of the fire roars through and destroys everything in its path.

It’s sheer madness. Utter destruction.

And then moments later it’s … eerily quiet. You can walk around and survey the damage.

Floods are the exact opposite:

All you hear is rain. Then the water starts rising. It’s relentless.

Yet the water doesn’t quickly recede. It just sits there and ruins everything you own, covering everything you hold dear with rot and faeces.

There is no quick escape. Most people are trapped, and isolated, and hungry, and traumatised.

I called up a colleague of mine, Kimbah, who is right in the middle of the floods.

“I’m really just heartbroken, Scott”, she said, her voice cracking.

Kimbah runs one of the oldest financial counselling services in the country. Her office is located in the heart of Lismore, in the grand old council building that was built in 1886.

“The last time the floods came through, the water made it into the office and reached about 40 cm up the wall, which meant the bottom of all the filing cabinets got soaked. So this time, I told the team to stack things on the desks … just to be safe.”

This time, the water level reached 3.3 metres.

This time, they lost absolutely everything.

Now, you don’t sign up to be a not-for-profit financial counsellor if you want to make a quid. You do it because you care deeply about your community. And right now Lismore, and surrounding areas, are suffering through what Kimbah calls “a catastrophe of biblical proportions”.

Yet I tried to pull Kimbah back into the business of financial counselling for her clients:

“You and I know that a coping mechanism for people in a crisis is to want to get back to normal … which often results in them making poor decisions with their insurance claims. That’s something you can help with …”

“What insurance?” she snapped. “It costs people $28,000 a year for flood insurance in Lismore. Who the hell can afford that?”

Drop the anchor!

To me, what we are witnessing here is a failure of the system.

All too often it’s the most vulnerable people in our communities that become the collateral damage of these ‘once-in-a-hundred-year natural disasters’ … that seem to come around every few years.

Thankfully, the Lismore financial counselling service has been faithfully serving their community for decades … helping them stay afloat.

And, come hell or high water, Kimbah assures me they’re not going anywhere. So if you’ve been impacted by floods, call the National Debt Helpline 1800 007 007 and speak to a financial counsellor.

Tread Your Own Path!

All Clear from COVID

Barefoot,

We stupidly made the decision to withdraw the maximum $20,000 from my husband’s super when it was on offer due to Covid. Now we want to give it back. Is it as simple as depositing it back into his super account?

Narelle

Hi Narelle,

Good idea.

Almost five million people have withdrawn a combined $37 billion in early release Covid payments. And, given there were no conditions on how the dough was spent, some of it ended up being spent on boob jobs and Botox.

The good news is that the ATO has given an update, saying “individuals can now recontribute their COVID-19 early release payments without it counting towards their non-concessional (after-tax) contributions cap”.

Oh-kay.

Basically, it means you won’t be penalised for injecting the money back into your super, rather than into your lips. Give your fund a call and tell them your plan. They may need you to fill out a form before you BPay the dough.

Scott.

We need to talk about your job

Years ago I employed a kid fresh out of uni, mainly as a favour for his dad, who said he needed some work experience.

I had low expectations, so I put him on the standard minimum wage and told him we’d revisit it after a three-month probation period.

The three months flew by, and then one night I got an email from him requesting a meeting. The first red flag was when he arrived at the office in a suit. The second was when he pulled out a printed list of demands that he and his mother had obviously war-gamed on the weekend. He cleared his throat and squeaked out his opening offer:

“I am worth $100,000 plus super … and 5% of the profits of the business, paid quarterly.”

“Are you on drugs?” I said, laughing.

He just stared at me.

He checked his notes. Clearly this wasn’t one of the responses his mother had scripted for him.

And then? And then he started crying. Sobbing. It was so … awkward.

Don’t be that guy.

Yet you do need to ask for a raise.

Why?

Well, if you don’t get at least a 5% pay rise this year, you’ll be going backwards.

That’s because the prices of things are inflating at the fastest rate in years … and they haven’t stopped climbing.

Think of inflation like being stuck on a treadmill that keeps getting faster and faster. You have no choice but to keep running, otherwise you’ll faceplant and be ricocheted into the poorhouse.

Okay, the scary movie is over and I’ve put the exercise equipment away.

So, what can you do? Two things:

First, understand that the employment pendulum has swung in favour of workers.

The jobless rate is edging in on 50-year lows, so many employers are having to pay up to attract new hires. So the obvious thing to do is spend five minutes googling to make sure you’re getting paid the current market rate.

Second, try the ‘Career Compounding Strategy’ that I lay out in my Barefoot Investor book.

Basically, it’s a step-by-step process that gets you to look at your job from your boss’s perspective, choose their three most important outcomes (not yours), and write ambitious goals for how you are going to achieve them in the next 12 months.

You then share those goals with your boss and ask for regular feedback throughout the year. You never talk about money or promotion in these meetings, but instead ask what extra you can do to help make your boss’s life easier, without sounding like a brown-noser or bursting into tears. That’s when you can ask for a promotion and a hefty raise. (For more info, borrow my book from the library.)

It’s simple, sure.

Yet very few people actually do it. And yet you will spend around 90,000 hours of your life at work. When you factor in sleeping, eating and Netflixing, there’s not a lot of life left over. So spending a few hours working out how to compound your income can have a dramatic long-term impact on your wealth.

Better yet, over the years I’ve received letters from readers who’ve used it to get 20% increases, and often a lot more.

And what ever happened to the young guy?

Last time I heard he was working at Macca’s. I wonder if is paying a profit share?

Tread Your Own Path!

The Young (and Miserable) Multimillionaire

Hi Scott,

My partner and I have followed your advice to a ‘T’ for the last 10 years. We started our own business, worked full time, flipped properties as our side hustle, and aggressively paid down our debt. And it’s worked — we now have $3.5 million dollars, all from nothing. But we hate our life! We are burnt out, stressed out and worn out — and we’re not yet 40. My question is: how much is enough?!

Ellen

Hi Ellen,

Congratulations!

If you own your own home and can live off $100,000 a year in dividends, I’d say you’ve passed the financial finish line.

If so, take a victory lap, spray some champagne around, and prepare to start playing a brand-new game.

You need to start thinking and playing not like a millionaire but like a billionaire.

The most important thing to a billionaire is not money – it’s time – the only thing they can’t buy.

Ellen, you’re already a time billionaire (and so is anyone under the age of 47 … you have, on average, more than one billion seconds left in your life).

In other words, flogging yourself to earn a lot more money from here won’t make you any happier.

So what will?

Having control over your time. That’s real freedom. Investing time in being with your family, in travelling, in trying new and interesting hobbies, and in helping your broader community.

Scott.

Barefoot Blows Renters an Air Kiss

Hi Scott,

I’ve read your newsletters religiously over the past few years (and generally loved them), but this is the first time I’ve been compelled to write back. I am frustrated with your take on OwnHome last week — not because what you said is untrue but because you basically did not offer an alternative option to people in this sad situation. You started off your piece talking about how people trying to save a deposit are going backwards due to how much house prices are going up (so far I was nodding in violent agreement as I was reading), but then you ended the piece by telling them to basically keep doing that same thing!

Peter

Hi Peter,

Fair point.

That being said, I don’t offer magic wands, and I tell it like I see it.

Still, it feels a little like getting angry at your personal trainer when she pooh-poohs your idea of getting lipo to lose your belly. You need to do some crunches, tubby!

That’s also why I’m wary of any company – or any government policy – that ‘helps’ people to sidestep saving up much of a deposit. Given the sums people are having to borrow in a rising interest rate environment, I think it’s irresponsible.

Look, it’s not a sexy position, but I believe that spending a few years saving prepares you for the tough times that will come. And when they do, you’ll need some (firm) skin in the game.

Scott.

The Bonking Fund Manager

Hi Scott,

One of the funds I invest in is the Magellan Global Fund. I’ve since found out that the guy who was running it was bonking someone he shouldn’t have been and now the company has turned south. Do I hold tight or jump ship with everyone else?

Hayley

Hi Hayley,

That was actually another fund manager, not Magellan.

Though Magellan has had a couple of bust-ups: they lost their CEO, and then the founder (and star stockpicker) revealed he was getting a divorce, and then went on indefinite ‘Eat Pray Love’ leave.

Not surprisingly, Magellan Global’s performance is in the toilet.

So what should you do?

Well, to answer that let me tell you about a totally different fund that was coincidentally also called Magellan (well, Fidelity Magellan):

It was an investment legend – averaging a 29.2% annual return, the best 20-year history of any fund, ever.

That meant investors’ money was doubling every two-and-a-half years.

Yet get this: the average investor in the fund actually lost money.

How?

Instead of just leaving their money there … they traded in and out … just like you’re thinking of doing now.

Finally, let me tell you how I deal with this personally:

I invest with a robot.

It has no feelings. It doesn’t bonk anyone. It’ll never retire. It simply and automatically rebalances my portfolio each year (dud companies out, growing companies in). And it consistently achieves higher term returns than 80% of star stockpickers. Even better, this top-performing robot fund is dirt cheap.

It’s called an index fund.

Scott.

I’m a Grown Man, and I’m Scared

Hi Barefoot,

I’m worried about what to do with my superannuation. I want to retire in the next 12 months as I turn 66 in July. But I’m scared that if Russia or China invade, this would have an impact on the share market which will directly impact my super fund. What do you think?

Bill

Hi Bill,

I have absolutely no idea what Putin or Xi will do, or the effect it will or won’t have on the market.

After all, who’d have thought a global pandemic would cause a boom in the share market?!

Yet, I am very sure that by pouting about Putin you’re overlooking your biggest financial risk:

Inflation.

If you’re retiring on a fixed income, you need to ensure that money won’t be whittled away.

The price of stuff is currently rising at the fastest pace in 11 years. Ronald Regan once described inflation as “violent as a mugger, as frightening as an armed robber and as deadly as a hit man”.

So, how do you outrun inflation?

Generally by investing in businesses that can put their prices up. Of course, doing that buys you a ticket on the stock market rollercoaster … which will work out so long as you don’t jump off mid-ride!

Seriously, Bill, I don’t think it’s good for your wellbeing to worry about things you can’t control. I’d suggest you sit down with a financial advisor and work through a strategy that will make your money stretch.

Scott.

Am I a Greedy Landlord?

Scott,

I own an investment property in an area where rent prices have basically doubled during COVID. Do I keep my good tenant of nearly 10 years who is now on very, very low rent, or chuck him out to cash in on the double dollars with new tenants? The tenant could actually be making money as he has two rooms to sublet, and the rent from these could exceed the entire rental. The rent is actually so low now that it is embarrassing me — I feel stupid!

Helen

Hi Helen

You’re embarrassed? Really?!

Helen, there are plenty of things you could be sheepish about, but this is not one of them.

Helen, stomp your hoof, you’re a rolled gold daddy ram!

Here’s another way to frame your situation:

You’re a savvy investor. The value of your property probably went up 30% over the COVID period, while you were still able to provide a secure roof over the head of your tenants who were likely going through a really stressful time.

Am I saying you should let them rent it out well below the market rate?

No.

What I am saying is that you renegotiate while also being considerate of the people who’ve been paying off your investment. If they’ve been good tenants and have maintained your property well, they’ve earned the right to sit down and make a fair deal with you. Good tenants are hard to find. Giving a little often goes a long way.

Baaa!

Scott.

I’m All Ears

Hi Scott,

My nine-year-old daughter started a business making earrings and hair-ties last year during lockdown. It’s grown so much she now has a few thousand dollars in her bank account! We have an agreement that she must split the money into reinvesting in her business, saving for the future, and saving for a short-term goal like an iPad (which she actually brought at the end of last year as a reward for hard work). Given the rate her business is going, I’d like to help set her up more for the future, but I’m not sure how to go about it, as I’ve never done this myself. I’m probably not the best role model for money with her. Can you provide any advice?

Tammy

Hi Tammy

Oh I LOVE THIS.

Let me tell you a little secret: you don’t need to know all the answers.

As parents we feel like we should, yet it’s usually better to work alongside your kids and help them work it out themselves. This is exactly what my next book is about. And I’d like your daughter to be a part of it!

So I’ll put my hand up to be both a customer (my wife likes earrings) and her financial coach.

I’ll be in contact next week.

Scott.

How you can move into a million dollar dream home, today

He doesn’t buy craft beers. She sips Nescafé Blend 43 from a tin.

They live in a feral sharehouse, all so they can save $623 a week to put towards their house deposit.

And here’s the kicker:

While they scrimp and save … the prices of properties around them are going up $1,990 a week.

Do you see what’s happening?

Despite all their hard work and sacrifice … they’re going backwards.

There’s no celebratory champagne after winning the auction … just second-rate slurps from a dirty teacup in a sharehouse … and the sinking feeling they’ll NEVER crack the market.

And then, in their darkest hour, there is hope:

A few weeks ago there was a spot on the nightly news that talked about a brand new product called OwnHome (backed by CommBank), which promises to “save for your dream home, while you live in it, meaning you can kiss the renter’s life goodbye”.

Understandably, it caused my inbox to light up like a kid on Coco Pops.

Here’s the guts of how OwnHome works:

OwnHome buys your dream home and rents it to you for three to seven years.

The rent is expensive. On a $1 million home, you’d pay $70,500 a year. A large part of that rent goes to OwnHome, while a smaller part goes to building up equity in the property.

You agree to buy the property from OwnHome in, say, five years for $1.2 million. (Because OneHome sets the price, you’ll pay for the home at the start of the contract; currently they increase it by 3.8% a year).

And, if you’d done this deal five years ago, you’d be well ahead.

So is this really a breakthrough product?

Not really.

Despite OwnHome’s fintech vibes, and the fact it was on the news, this is not a new strategy. It’s called ‘rent to buy’ and it’s been around long before Billy Ray had an achy breaky heart.

Straight up: I’m not a fan (of Billy Ray, or rent to buy).

Why?

Let me count the reasons:

First, because there’s a power imbalance

The sellers (like OwnHome) are generally savvy investors who set the terms of the deal in their favour. Whereas the renters are making an emotional decision which is often driven by FOMO (Fear Of Missing Out).

Second, because there’s a chance the renters could lose everything

Over the years I (like many other financial counsellors) have helped renters who got an achy breaky heart on these deals. How does that happen, Billy Ray?

Well, if interest rates go up and house prices go down:

You risk not being able to afford (or being able to qualify for) a home loan to buy it (OwnHome is not a lender). You also risk overpaying for a home that’s dropped in value since you agreed to buy it.

And here’s the stinger: if you walk away from the house, you also walk away from all the dough you’ve put towards it. In the example I used above, that would translate to around $165,000.

In other words, the $165,000 you’ve put towards the home would be goneski, and you wouldn’t be able to use it to purchase another, cheaper home.

Third, because you’re probably better off renting and saving

Get this: OwnHome itself admits that “in many situations using OwnHome is slightly more expensive on a monthly basis than renting and saving”.

Or, in other words, don’t believe everything you see on the nightly news!

Tread Your Own Path!

Stuck in Reverse

Hi Scott,

My daughters swear by your advice and said I should run our problem past you. My husband and I are in our eighties and have had a reverse mortgage for 12 years, without paying anything back. We are getting worried that the longer we live, the less our three kids and their families will end up with when we are gone. I rang the bank and asked if they could lower the interest rate but the answer was “no”. Do you have any suggestions?

Launa and Reg

Hi Launa and Reg,

Reverse mortgages are the financial equivalent of a rottweiler dressed up as labrador:

Essentially the bank gives you a lump of dough, and you don’t have to pay anything back.*

(*But the bank charges fees, plus an interest rate that is generally higher than a home loan.)

Nice doggie!

The bite comes years down the track when people find that the bank owns much more of their home than they thought possible; they’ve experienced compound interest in reverse.

Because of this, reverse mortgages taken out from 18th September 2012 have had to include a ‘negative equity protection’ so you can’t end up owing the bank more than your home is worth. However, you may have missed out on this important safeguard.

The fact is that a reverse mortgage is a very complex dog, and one that was pushed on a lot of retirees without a lot of explanation. So, I’d like you to ring 1800 007 007 and speak to a not-for-profit financial counsellor who will be able to read through your contract and see if there are grounds to push back and negotiate with your lender.

Scott.

So My Husband Spent my Redundancy on Grog

Dear Scott,

I just discovered that my husband of seven years, and the father to my children, has spent half of my $40,000 redundancy on grog and other rubbish. I suppose it’s my fault for trusting this man (a former accountant!) with our family finances. The trouble is, bill-paying gives me anxiety, and I am useless with numbers. I’ve always been ‘kept’. My question is: what’s the best way to set up bill payments and track where our money is going? Feeling very overwhelmed right now.

Renae

Hi Renae,

Let’s flip it.

Your stress and anxiety are coming from doubting your husband, and yourself.

I understand how overwhelming it must be for you right now, so let’s start at the beginning.

Step 1: Schedule a Barefoot Date Night. Bring a copy of my book, or listen to it via audiobook on the way.

Step 2: Set up your buckets. Look at your daily expenses that are going into your ‘Blow’ bucket and see how much, as a percentage of your income, that’s taking up, and go from there. You don’t need to do a spreadsheet. You don’t have to track every last cent. I’ve never had the self-discipline to do it, and I don’t expect you to either.

Step 3: Let me tell you a little secret: it’s not really about the money. Once you get on top of things it’s going to change how you look at your husband, and most importantly yourself.

Scott.

This could change everything

Let me tell you about Mark Zuckerberg’s favourite book … and how it could change your world.

It’s a science fiction novel, written in the nineties, called Snow Crash.

And it’s actually become an underground cult hit in Silicon Valley, for reasons you’ll soon understand.

Here’s the premise of the book:

The global economy is in ruins, and governments have lost their power to a handful of giant corporations (sound familiar?). To escape their depressing reality people don augmented reality goggles and slip into an alternate internet-enabled universe, which they call … the Metaverse.

Zuck loves the idea of the Metaverse so much that he’s making it a reality: he’s not only rebranded Facebook as Meta, but he announced he’s spending ten billion bucks this year alone building the Metaverse.

Sadly investors didn’t like the idea of Snow Crash … and instead turned it into a share crash:

Last Thursday Meta’s shares suffered the largest one-day crash in US corporate history. The internet giant’s shares plunged 26%, wiping more than $US240 billion off its market value.

And the great cyborg-CEO personally took a $29 billion haircut.

Interestingly, Bloomberg reported that Zuck held an ‘all hands’ staff meeting the following day where sources said he appeared red eyed, wore glasses, and warned his team that he may tear up because he had “scratched his eye”.

Uh-huh.

(Mate, it’s okay to cry, you just rubbed out two Gina Rineharts in one day!)

Here’s my take:

Zuckerberg – the boy wonder billionaire – is losing for the very first time in his career.

See, today, the most successful site on the web isn’t Facebook, or Google or Instagram, it’s Tik Tok.

The Chinese app is currently adding eight users each and every second, and the overwhelming majority are kids. (Meanwhile your Aunty Karen is ranting about face masks on Facebook.)

So, rather than compete head on with Tik Tok, Zuck seems to be doubling down on what made him a billionaire:

Capturing, and then exploiting, our attention.

“From the very beginning our main objective was how do we consume as much of your time and conscious attention as possible?” admitted Sean Parker, Facebook’s founding president.

And it worked shockingly well.

The average Aussie now spends 5.5 hours per day on their phone, which equates to 16.6 years – or around 33% of their waking life staring at a screen – according to a study by Reviews.org.

Yet it’s not enough. It’s never enough.

The next play is to suck you into your phone and engulf you in a virtual reality – the Metaverse – that you rarely come out of. And Mark Zuckerberg’s megalomaniac ideas (and those of his other tech-tobacco farmers) will control and monetise everything.

Okay, so I admit that this is all sounding a little like a weird sci-fi novel, so I caught up with a very successful tech entrepreneur I know, who cashed out of his last tech business for a cool $200 million, to discuss the Metaverse.

He put it this way:

“If you have a teenage kid, you have likely already experienced a version of the Metaverse: online gaming. Kids go into that world and don’t come out for hours … even days”, he said.

“Yet, thankfully, no one really trusts Meta …”, he said reassuringly.

But then he added:

“... however, if Apple releases its rumoured virtual reality glasses … humanity is screwed.”

Tik. Tok.

Tread Your Own Path!

Update: ‘Rich Girl Loses it All’

Hi Scott,

We met five years ago at a book signing at Dymocks in Melbourne. I told you that I felt like Barefoot was the financial parent I never had. I admitted to you that I was extremely spoiled, always getting whatever I wanted, whenever I wanted. That changed when I was 14 and my father died, and I found myself on the streets, where I had $1.92 in my bank account, and was at a crisis point … when I found you.

So let me give you an update on what I’ve been doing for the past five years: I have worked six days a week at a bookkeeping job. I have now saved up enough Mojo to cover my income for two years, which will allow me to study full time to get a Bachelor of Commerce. Never have I felt so free as I do now. Even better, my partner and I are about to buy our first home. Thank you so much!

Courtney

Hi Courtney,

I remember you!

I was wondering how you would go turning things around after experiencing so much trauma in your life.

And now I have my answer.

You Got This!

Scott.

Anti-Vaxxer Worries About Getting Sick

Hi Scott,

I have been fired due to vaccination mandates. I wonder how this will impact my insurance within my superannuation? Will I lose my insurance? Or will it affect my permanent disability insurance? What advice do you have for those of us out of work?

Alex

Hi Alex,

Great question. Just being fired doesn’t stop your insurance within super.

However, by law, super funds will cancel insurance on accounts that haven’t received a contribution for at least 16 months. They’ll write to you before they do it, but it’s good to be on the front foot. If you want to keep your insurance, you’ll need to call your super fund and/or make a contribution to your account.

Scott

I’ve Uncovered an Awesome Travel Tax Rort

Scott,

I am seeking confirmation of a tax rort that would help everyone who is looking to travel. Have I been living in a cave? I’ve recently been advised that if you can incorporate a personal/professional development component relevant to your job while on holidays and you can then claim part of it as a tax write-off. Example: a prison officer (me) travels overseas on holidays and visits Alcatraz and speaks to someone regarding their role and the differences we face, and this could be considered professional development. Is this right?

Dirk

Hey Dirk,

I’m guessing you got that tax advice from some of the white-collar crims you’re watching over, right?

Because it’s not correct.

First, you need to prove there is a direct connection between your job and the expense – and I highly doubt that having a yack to another screw in the States would cut it with the taxman.

Second, even if you can prove it, you’ll need to apportion it appropriately. In other words, you may be entitled to claim the cost of the entrance ticket to Alcatraz as a tax deduction … but not the $3,000 in international flights, accommodation and minibar.

Scott.

Barefoot, You Offer the WORST Advice I Have EVER Heard

Scott,

I have to respond to your advice last week where the husband had lost $57,000 trading crypto. That was literally the worst ‘non-advice’ I have ever heard in my life! You don't even know what he was trading, for one. If he's invested in blue chip top 10 cryptocurrencies (Bitcoin, Ethereum, Solana) then, for the most part, it’s a long-term strategy like with any other stock. Giving non-advice like this is just making that woman panic and will probably result in her persuading her husband to sell at a huge loss. I call it non-advice because your advice, “invest your short-term savings in your bank account” – with 0.01% interest per year! Seriously!?

Elliott

Hi Elliott,

Seriously.

Look, I have no problem with people buying magical dog coins or anything else that tickles their greed gland.

But I wouldn’t be risking my house deposit on it.

If you’re ‘banking’ on the money being there within a few years to buy a house, you really should protect that capital, even if it means you’re not earning interest.

That’s just common sense, I would have thought.

Scott.

So My Husband Revealed His Debts

Scott,

After I finished your book I asked my husband to come clean on our finances, as we had had separate accounts. And O.M.G. his credit card debts were out of control! I told him “we are a team or it’s over”. Then I got him to read your book. Then I got the kids to read the book (I was honest with them about our finance mistakes). Then we slowly turned our situation around together. We no longer have any murky undertow in our relationship, and we are happily married again. Thank you!

Belinda

Hey Belinda,

That’s epic.

You not only saved your finances, you likely saved something much more valuable: your family. And while I’m handing out the high-fives, good on you for being honest with your kids about your financial mistakes. That’s a teachable moment. I often get parents to blend up their credit cards in front of their kids while they tell them “from now on our family doesn’t do debt”. That’s a powerful visual lesson that helps kids not repeat your money mistakes.

Scott.

Let Me Entertain You

At the park, my kid started playing with his kid, so we began chatting.

He told me he was in the ‘lifestyle marketing’ business. I told him I was in the ‘fat lambs’ business.

Meanwhile, his wife appeared to be working very hard on taking photos of their kids.

“Instagram”, he nodded. “She’s got quite the following”, he added proudly.

“That’s interesting. I think I have 500,000 followers on Facebook”, I said.

At that point he stopped talking, turned, and stared at me like I was a fat lamb.

“Really?”

“Really, though I haven’t really posted much for a year … or maybe two.”

And at that point he began licking his lips. He was about to smother me in marketing mint jelly:

“You could get paid … like … fifteen hundred bucks for ONE POST. You have a brand, so all you need to do is engage your audience each day with a mix of inspirational content and sponsored posts. The key is to be aspirational. Post lots of videos and pics of your family. With that follower count you’ll have advertisers beating down your door”, he gushed.

“Well, that sounds absolutely … horrible”, I said.

Look, there’s a reason I don’t post much on social media: the only thing I dislike more than social media influencers and so-called celebrities is the social media companies that profit from them.

After all, leaked internal research from Facebook (now Meta) found that most users feel worse when they see celebrities and influencers in their feeds … because they compare themselves and come up short.

So let’s you and I take a look at a traditional social media status-anxiety-inspiring post:

“Let me entertain you! Robbie Williams shows you through his $50 million Hollywood Hills mansion.”

On Instagram, superstar Robbie Williams showed his fans through his Hollywood mansion. Wearing a cowboy hat and leopard-skin undies, the singer strutted us across his 20 acres of manicured gardens, with pools, tennis court, and home that’s so humungous it has 27 toilets.

The takeaway?

Robbie’s rich, famous, cool enough to pull off budgie smugglers in public, and is altogether living a fabulous life … and you’re a loser, schlepping around your dump (with one loo) in your trackies.

Okay, so here’s what living ‘the good life’ looks like in reality.

On the ‘This Past Weekend’ podcast, Robbie was candid about the realities of owning the mansion:

“What I didn’t take into account is that house insurance is $700,000 a year. Taxes are $400,000 a year. And I need two gardeners, three housekeepers, a house manager, security detail, and two nannies. I walk into the kitchen and there are eight people there … and none of them are my family. It’s a life tax … a head tax … you just can’t enjoy it.”

Later in the podcast Robbie admitted he suffers anxiety and depression … and rarely leaves his home.

In other words, while you sit on your throne scrolling through your feed, poor old Robbie is anxiously trying to take a dump in a different dunny each day to get his money’s worth.

Okay, so that’s Robbie. You don’t compare yourself to him. Yet it all filters down on social media.

Case in point: how much do Aussies think they need to live ‘the good life’?

According to a News.com.au article, it’s $326,900 per year.

That’s five times the average Aussie wage.

Worse, one in four respondents said they’d need five hundred grand a year to stop feeling povo.

That’s totally out of whack.

My view is that life is infinitely better when you tune out of toxic social media. The only influencer opportunity I’m focused on right now is being a good dad to my kids.

Tread Your Own Path!

The Seven-Year-Old Financial Advisor

Dear Scott,

I am a seven-year-old who lives in Tasmania. I have read all your books and shared them with my mum. This is helping her pay her debts, and I will make sure she gets a super account. I own a small business (for pocket money) but I don’t know the business laws and I would like it if you wrote a book on what you can and can’t do in business.

Michael

Hi Michael,

Thank you for sharing my books with your mum, and for nagging her to set up a low-cost super fund.

You’re a good son!

In terms of writing a business book for kids, well, I’ll let you in on a little secret:

I’m writing one.

Late last year, my son, who’s roughly the same age as you (you two would get along so well), started asking me lots of questions about setting up his own business.

We had so much fun discussing it, I decided to write a book about it.

Watch this space.

Scott.