Help! Our Family is Breaking Apart

Hey Scott,

Six years ago my partner purchased his first home for $340,000, with his two brothers. He pitched in $26,000 along with his first homebuyer’s perks. His brothers put in $15,000 and $3,000. Since then, they have all paid the same amount each week to pay down the mortgage quicker. The house is now worth a (conservative) $800,000. The area where the house is located is on the rise, so my partner doesn’t want to sell anytime soon.

However, the brother who put in $3,000 is annoyed and wants to sell up, and thinks he is entitled to a third, despite it being obvious he isn’t. (At one stage he didn’t even make his share of the mortgage repayments for a whole year.) The whole situation is messy and stressful, and it may be what breaks the family apart. I think my partner should cut him loose and buy out his share, but what is he really entitled to?

Sharon

Hi Sharon,

What a mess!

You’ve just described the reason I strongly advise against going into debt with family members. Even though the investment has done great, everyone is miserable!

At the very least you need to have a written agreement right from the start.

For me, it’s ‘Bros over Ho(me)s’.

If I were in your shoes, I’d do the following:

First, I’d suggest that it’s time everyone went their separate ways with this investment.

Second, I’d commit to selling the property. I don’t care if you think it’s going higher, the fact is it’s got bad family ju-ju (a non-financial term), and if you keep it (and buy out the others) it’ll serve as a constant reminder to them of the deal. If it goes well and the property goes up, they’ll feel they’ve missed out. And even if it goes down, they’ll still hold a grudge.

Third, I’d appoint someone independent, perhaps your parent’s accountant or a conveyancer, to broker a deal (which would include dealing gently but firmly with the entitled brother).

Lastly, don’t take your eyes off the prize: the most important asset here that needs to be protected above all else is the family relationship, not the property.

Scott.

Don’t believe them

Did you know that Australians are officially the richest people on the planet?

It’s true, according to Credit Suisse’s latest annual global wealth report.

And yet it’s also true that Australians have some of the highest levels of household debt on the planet, according to the Bank of International Settlements (BIS).

In other words, we’re rich – on paper at least – because we have high house prices.

Yet that appears to be rapidly changing, with prices now falling at one of the fastest rates on record. Nationally they’re down 4.5%, with some analysts suggesting it’s only just beginning, with predictions of much larger falls of up to 25%.

I’ve consistently argued that I wouldn’t be surprised if house prices eventually gave up the 30% gains they made during the COVID period.

After all, what the Reserve Bank (RBA) giveth … by slashing interest rates to 0.1% and promising to hold them there during the pandemic … it can also abruptly taketh away. The 2.5% of hikes this year have added a massive $715 a month in extra repayments for the average borrower.

That’s huge.

It’s the sort of shock to the system that drives an economy into recession.

So where to from here?

Well, a lot will depend on how far the RBA hikes. Yet the problem is that the RBA has proven to be as accurate at calling interest rates – which they set! – as my youngest boy is at peeing standing up. Despite his best aim he invariably ends up spraying it all over the walls and floors.

“You promised me you got it in the bowl!” I yell.

“Oops. Sorry Dad” he says sheepishly.

My view?

We should enjoy our win – because much like my beloved Melbourne Demons – it ain’t going to last.

Tread Your Own Path!

You Have No Backbone, Barefoot

Hi Scott,

This is the third or fourth time I have written. I appreciate your principles are sound, however every column has a feel-good news story and none of them explain the backbone of how they made something happen. I have written to you on several occasions asking about this. If someone doesn't have a spare penny to feed their kids and is living hand to mouth.....how can they suddenly start "doing the barefoot" with different accounts? I am not thick, but I am struggling to find the obviously missing piece?

Linda

Hi Linda,

Ah, the missing piece of the puzzle.

Here’s a clue: in almost every single feel good news story they start off saying something like:

“I read your book, followed the Barefoot Steps, and then things slowly turned around for me”.

The starting point of the Barefoot Steps is to go on a date night, set up your buckets, and get $2,000 in a Mojo account as soon as possible, even if it means selling your kidneys on eBay.

Scott.

UPDATE: The $32,000 Couch

Hi Scott!

Remember me? I wrote to you a while back and you shared my story "$32,000 couch." I wanted to update you. Not only did your advice see me lose ALL my debt but following your advice and doing the Barefoot Steps I am now getting closer and closer to buying my first house. As I write this with tears in my eyes, from the bottom of my heart I thank you! This single mum feels so capable and so excited about what more is to come. You are truly a star in my eyes.

Lisa

Hi Lisa

I remember you!

You took out a $4,000 living room package (couch, TV, coffee table) at hardly normal, via a GEM Visa card. And over the next decade it ended up costing you $32,000!

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

I told you that it was time to stand up to the bullies, and you sound like you have. Congratulations on following the Barefoot Steps, and proving them all wrong.

You Got This!

Scott

We are terrified

Scott,

My husband is retiring this week. We are not sure if we should withdraw his super or leave it in his fund. We would place it in a high interest account if that is the better choice. We are terrified the market is going to keep going down. What should we do?

Linda & Steve

Hi Guys,

It’s been a rough time. I can understand how stressful it must be for you.

First up, you should not panic and take your money out of super. When you are in the retirement pension phase, your income is tax free and protected in the case of bankruptcy. Besides, you can put some of your super into a high interest cash and fixed interest account within your super.

And that’s exactly what you should be considering doing. In my book I suggest people a few years out of retirement to start building up a cash buffer of a few years’ living expenses (minus any pension payments), so that you have enough money to ride out downturns like we’re experiencing.

Many people in your boat are taking on a lot of otherwise ‘hidden’ risk in their super funds because of large unlisted assets, and overly aggressive one-size-fits all portfolios. So you should definitely call your super fund and tell them you’re freaking out about the market, and sit down with one of their financial advisors.

Scott.

Please open this right now, it’s very important

Today I’m going to show you the exact steps that will stop scammers from running up credit in your name.

Best of all, it’s fast, easy, and free.

Yet before I do, I want to take a moment to reveal the name of a company that made MILLIONS from the Optus Hack.

That company’s name is Equifax and they’re a credit bureau.

This week, in a blind panic, Optus agreed to purchase 12-month subscriptions to Equifax’s ‘Credit Protect’ service for their most affected customers. This service sends an alert if your credit file is accessed (by a scammer applying for credit in your name using stolen docs), and it costs $14.95 a month per person.

That’s not just a huge amount of dough for Equifax, it’s insanely great advertising to boot!

So let me square the ledger …

Equifax is the financial equivalent of Mark Zuckerberg. They hoover up your personal private credit information and sell it off to any financial institution they damn well please. Yet unlike Zuck, if you want to monitor who they’re pimping your private data out to, well, you have to pay them $14.95 a month*!

*Except you don’t.

I’m afraid Optus has been scammed again.

They didn’t need to pay Equifax all that money. There’s a much better workaround, and it’s free.

I want you to pay close attention to this, even if you aren’t an Optus customer. After all, just this week Standard and Poor’s came out saying that Aussie banks are among the most vulnerable to a cyber attack in the region because of their work from home policies and all the stuff they’ve got in the cloud.

Bottomline?

This isn’t the first mass hack, and it won’t be the last.

Now, I don’t think simply having an alert on your credit file provides you enough protection.

Here’s the way I think about it:

An alert is like having a security camera on your front door.

You’ll get an alert that you’re getting robbed … but your TV still gets flogged!

If you are scammed – and one in four Aussies have been – it can take upwards of 30 hours to sort everything out, (most of which involves sitting in long telephone bank cues, listening to Daryl Braithwaite’s Horses.)

Instead, what you want is a big arse lock on your door that makes it impossible for the robber to get in your house.

Thankfully there is one app that will let you put a lock on your credit file.

That company’s name is CreditSavvy, and it’s a division of the Commonwealth Bank. (The fact that they’re owned by big yellow gives me a certain level of comfort … though I still wouldn’t trust them educating my kids).

Creditsavvy bills themselves like a fitness coach for debt, which in itself is kind of weird. Their schtick is that they calculate a personal ‘credit score’, which for me is about as useful as the score I give my four year old daughter’s nightly dance concerts:

“10 out of 10 Honey, BRAVO!”

In both cases we’re just needy adults desperately trying to keep your attention. (Credit Savvy makes its money by selling leads to finance companies to get you into debt).

However, part of their app that I’m interested in allows you to lock your credit file with a swipe or click of a button.

So here’s what I want you to do, step-by-step to lock down your credit file so that scammers can’t rip you off.

Step 1: Download the Credit Savvy app (either in the Apple or Google app stores).

Step 2: Verify your details (I used my driver’s licence and Medicare card).

Step 3: Press “protect” from the bottom navigation.

Step 4: Press “Request a ban”. Credit Savvy will then let the other credit agencies know you’ve got a ban on your file within 2 business days.

Step 5: On the 16th day the Credit Savvy app will remind you that your pause is ending. When you get that alert – and this is important – click “ban my credit report for 12-months”.

And that’s it!

From then on if anyone tries to access your credit file, the Credit Savvy app will alert you.

Though it will also be locked so the bank or financial institution won’t be able to access your file. However, this will not count against you. To be clear, it will not harm your ability to take out credit.

Now if you are applying for credit (or say moving home and applying for utilities and the like), all you need to do is temporarily lift the ban on your credit file for a week or so. And then put that lock straight back on using the Credit Savvy app.

Tread Your Own Path!

A Follow Up to the Barefoot Investor Book?

Dear Barefoot,

I have read your original book four times, well, the audio book that is. It was excellent and I attribute it to my strong financial position today. But what now? We recently have moved into free housing provided by our work and are earning collectively $400,000 a year now - we have all our buckets set up, we have $80,000 in savings, $30,000 in index funds and our is super set up for success. We even called a financial advisor to get specific advice, but he was more about borrowing and he recommended we read the Barefoot Investor (I’m glad it was a free appointment!). So again I ask, what now? Is there a book 2.0 for those who followed your advice and are now reaping the rewards?

Clint

Hi Clint,

First up, well done for sitting through my audiobook four times: that thing goes for like 6 and a half hours!

You’ll be hearing my voice in your sleep!

It’s a timely question you ask, because I’ve just finished writing a companion to the Barefoot Investor. It’s called:

Beyond Barefoot: The Next Chapter.

I wrote it to mark the 10-year anniversary of sitting down with my wife at the Romsey Pub and sketching out the Barefoot buckets with Liz. It’s written especially for Barefooters, and there are three brand new Barefoot date nights, and a brand-new bucket as well.

However, I won’t be selling it in bookstores.

Instead, I plan to give it away as a free bonus for people who pre-order my new book. If you’re interested you should ensure you open the email I send you next week, because this is the only place it’ll be available, and only for that week!

Please forward this email to a few of your mates so they don’t miss out!

Scott.

Blood on the Floor

Scott,

Thank you for helping me over the last few years. I have managed to both save and pay some large life bills thanks to sticking to your simple plans. However, I just lost a big chunk of my investment money with the current market wobble. I’m optimistic it will be back on par with 3 years, based on what history has shown us, although a little nervous. My question now that push has come to shove, and blood is on the floor, do I keep buying my index funds, or pause?

Thanks,

Ollie

Hi Ollie,

This isn’t blood, it’s a paper cut!

Our market is down by roughly 10% in the past 12-months, which is totally and utterly normal.

The stock market is the only place where prices go on sale … and everyone runs out of the shop!

My suggestion?

The only thing you need to pause is looking at your share prices each day.

Scott.

Retire in Seven Years?

Dear Scott,

I just came across an article in Forbes describing how it would be possible to retire in seven years by investing half your income in closed-end funds (CEFs). What do you think of CEFs? Are they worth investing in?

Tammy

Hi Tammy,

I read the same article, right to the bottom.

Then I clicked on the following ad:

The #1 BEST new trick to rapidly burn belly fat & detox (start this tonight).

Apparently the best new trick is eating avocado, and buying a lot of their expensive pills.

You and I both read the same thing: clickbait.

It’s an American article, but a closed end fund is the equivalent of a Listed Investment Company (LIC), like the Australian Foundation Investment Company (AFIC), or Argo Investments (ARG). They’re perfectly decent investments (that I own!), though they have largely been superseded by simpler Exchange Traded Funds (ETF) index funds.

Retiring in 7 years, or getting a six pack doesn’t require gimmicks, just a lot of hard work.

Scott.

Where Are They Now?

Hi Scott

I sent you an email over 5 years ago; after my husband left me pregnant with our 3rd child. I was a terrified mess. I'm writing to give you an update and to say thank you.

My children are now 10, 7 and about to turn 5. We are still in our family home and my name is the only one on our mortgage. I have paid off my credit card and cut it up, I have renovated our bathroom with cash, and we are about to go on an overseas holiday. Best of all, I’ve got $30,000 in the bank, offsetting my mortgage. Your book has changed mine and my children’s lives. I’m teaching them everything I know and they're going to have the best start to life financially once they start working.

Tara

Hi Tara

I love a happily ever after – thanks for the update! Now let me break this to you: the book I’ve just written is even better than The Barefoot Investor, and it’s written directly for kids like yours. It’s out in a few weeks, and if your kids are anything like you, they’re going to absolutely love it.

Scott.

Barefoot Calls a Single Mother in the Middle of the Night

Hi Scott

I’m a 57-year-old single mum. I bought a property 3 years ago and work, as a nurse, almost every day to make ends meet. I get anxious when I think about the age I will be when I finally pay off my house, age 71! Will I even be able to work at that age? Then I start thinking of how to make money quickly. The lotto obviously is not going my way, so I looked into the stock markets and opened an account with CoinDaq. They are very helpful, but I do feel uneasy. I invested $2,500 and they supported me, so I added $2,500. I made 23% profit, about $1176.17. Which I’m excited about but somehow it seems too good to be true? Now they try to convince me to take $50,000 from my super and then I will make up to $9,000 a month with a ‘bonus’ of about $230,000 every 3 years. What is your opinion about this?

Kind regards

Linda

Linda,

As I’m reading this, it’s currently 4:35 am, (see above).

I’m debating whether I call you right now and completely FREAK YOU OUT.

It would go something like this:

“Good morning, it’s the Barefoot Investor. You are being robbed RIGHT NOW!”

(I’d scream ‘RIGHT NOW’ down the line, for dramatic effect).

Then you’d bolt upright in bed, and listen nervously for the burglars rifling through your stuff.

However, they didn’t climb through a window, and nab your telly Linda. They came in via your computer, and they convinced you to willingly hand over your cash.

Linda, they are scammers.

Literally the very first website that comes up when you Google ‘CoinDaq’ says:

“Coindaq is a scam site”.

The robbers have already stuffed $5,000 of your money into their duffle bag. Yet they haven’t left. They’re now searching around for the big pay day: your superannuation.

Again, to be clear:

YOU ARE BEING ROBBED RIGHT NOW!

No matter what they tell you, never ever speak to them again.

Scott.

If You Move I’ll Kill You

“If you make so much as a sound … I swear I’ll kill you”, she hisses.

It’s 4.30am, my morning alarm has just gone off, and Liz has been up all night with our 18-month-old.

So I creep down the hall in the pitch black – past our sleeping toddler – praying that I don’t hit a landmine piece of Lego.

Why do I get up so early?

Well, with four kids, a book that’s about to be launched, and a full-time farm, life is busy … so I follow the army motto: get up before the enemy.

And it seems, post the pandemic, that we’ve all won the battle of being able to work from home … yet we’re losing the war. A new study from La Trobe University has found that working from home increases the likelihood of weight gain, exhaustion and burnout.

The main reason cited in the study is a lack of routine. So, as someone who’s been working from home for the past 20 years, I thought I’d share with you my routine.

You need to get up at 4.30am and START BLOODY WORKING!

Just kidding.

It’s not just the start of the day that matters … its also how you end your day. So let me tell you about a simple little ritual I follow at the end of each day that has radically reduced my stress and overwhelm.

First, I set an alarm on my phone for the end of my work day. When the alarm goes off, I grab a nice knock-off drink and close every single one of the tabs in my browser(s).

Then – and this is important – I shut down my computer.

Watching the computer screen go blank is my visual cue that the work day is over. And then I go full 1980s and leave my computer in the office.

My final step is to go for a walk outside without my phone. Sometimes it’s only 10 minutes. It’s just a way to get my body moving, and it helps me mentally transition from work-Scott to taxi-dad.

Soldier on!

Tread Your Own Path!

The Scumbag Landlord

G’day Barefoot,
 
My wife and I are very lucky. We own two investment properties that basically pay for themselves. Trouble is, we live in another state and rent ourselves. If we sold our two rentals we could afford to buy a family home for cash — but we feel obligated to our tenants. Both rentals have long-term tenants and we charge about $50 a week less than market to help them out. If we sold, they’d be out on their own and unlikely to be able to afford to rent anywhere nearby, and their kids would have to change schools and I’d feel like a scumbag capitalist. What should we do to not make two families homeless but get ourselves into our own home?

Brendan
 
Hi Brendan,
 
You sound like the sort of bloke I’d like to have a non-alcoholic beer with.  
 
As a renter yourself you understand just how absolutely bonkers things are right now:
 
The national rental vacancy rate sits at just 0.9%, according to SQM Research. Meanwhile, rents have rocketed up 20.1% in the last 12 months alone!
 
I have never seen anything like it.
 
It’s a terrible situation, and one that I’m glad I don’t have to grapple with … as a renter, or a landlord.
 
After all, my share portfolio doesn’t have feelings (nor does it suffer burst water pipes at 3am), and my dividends just magically appear in my bank account a couple of times a year.  
 
That said, if I were in your shoes I’d sell the properties and buy your own family a home. That’s not because I’m a scumbag capitalist, but because your first responsibility is to your family.
 
Besides, there are other ways to help struggling people in your community than renting out a few joints slightly below the market rate. You could volunteer at a local food bank, or you could donate money to the Financial Counselling Foundation, who help and fight for some of the most vulnerable people in our community.

Scott.
 

You’re a Puppet, Barefoot

Scott,

I read last week’s column. You’re pushing Vanguard?! Oh you really are an elitist WEF puppet.

Eva

Hello Eva (name unchanged),

Thank you for your comment. I always enjoy the nasty ones that get me Google-ing.

Turns out, ‘WEF’ stands for the World Economic Forum, and the conspiracy theory you seem to be alluding to is known as the ‘Great Reset’, which suggests that a secret group of capitalists and politicians are trying to control the economy.

Now, Eva, I really don’t know if that’s much of a secret — isn’t that just what sociopath billionaires and power-hungry politicians kind of, well, do?

Yet I have to pull you up for putting Vanguard in the same pot. If anything, it’s the exact opposite. Jack Bogle set up Vanguard in the 1970s to stick it to the Wall Street capitalists. He could have become a billionaire but instead chose to put investors first, so he set it up as a not-for-profit. Vanguard created the first index fund and has driven fees down for all investors the world over ever since.

Scott.

Mexican Wins the Lottery … Twice!

Scott,

I know you may get millions of emails every day, but I hope your team can forward this one to you. I’m Mexican and I came to Australia in 2018 and became a permanent resident. I came here carrying a 10-year debt from back home. But then I stumbled upon your book, and with the advice you gave I finally paid off my debt and no longer owe a single dollar (or Mexican peso). Thank you! You taught me something that I will carry for the rest of my life, and I cannot wait to start building a better future.

Gerardo

Hi Gerardo,

What I love about your story is that you won the lottery by making it to Australia … and best of all you know it. That’s given you a perspective that a lot of people born here simply don’t have. This country truly is the land of opportunity, and now that you’ve got your money sorted there’s no telling how far you’ll go. You Got This!

Scott.

My Thoughts on the Kim Kardashian Fund

I am fascinated by Kim Kardashian.

Did you know she started out as a wardrobe stylist for Paris Hilton?

It’s true.

Yet what’s even more impressive is that she basically stole Paris’s playbook:

She was in a porno, got famous … and then parlayed her fame into a business empire.

The success of her clothing business, Skims, and her cosmetics line, KKW Beauty, have turned Kim into a self-made billionaire, worth a staggering $2.6 billion, according to Forbes.

And now Kim is launching … an investment fund.

I feel like a 16-year-old fanboi scrolling on Insta:

OMG! OMG! OMG!

Yet, instead of buying stocks on the share market, Kim’s firm plans to buy private businesses.

These are called ‘private equity’ funds (as opposed to buying shares on the stock exchange).

Here’s the investment pitch:

A promising fashion label gets an offer from Kim to buy their business. Then Kim wears their clothes and posts the pics to her 328 million Instagram followers, creating an instant hit. And a few years after that she’ll flick the company off for a huge profit.

SHUT UP AND TAKE MY MONEY, KIM!

Hang on. In reality, that bounty will go to Kim’s booty, and not the investors in her fund.

If history is a guide, her investors will likely earn below average returns because of the high fees funds like hers charge. And it makes sense: there is only one Kim Kardashian, and she doesn’t need your money.

So let’s talk about people who do need your money.

Your super is much more likely run by a bunch of middle-aged men … with 74 people following their LinkedIn profile. Just like Kim, they’re hunting for private deals, though unlike Kim it’s arguable whether they can add any value to their investments. Yet they sure have fun doing it. And they pay themselves really well. But their results are often like Kim’s 2012 song ‘Jam (Turn It Up)’, which is a truly awful piece of autotune.

Case in point, one of the world’s biggest super funds, CALPERS (the California Public Employees’ Retirement System) just took a multibillion-dollar bath on their private equity investments … which proves that even the biggest boys in the finance sandpit don’t always get it right.

And that is why I don’t invest in industry super funds that have private unlisted investments. After all, many have tried and failed to keep up with the Kardashians.

Tread Your Own Path!

A Sticky Issue

Hi Scott,

My kids are beyond excited about your next book (you’re a big deal in our household). I asked my local bookstore but they didn’t know anything about it. Will it be released this year?

Lauren

Hi Lauren,

So my new book went to the presses this week (an Aussie printer, not in China!). However, the printers are in hell right now. Reason being, I insisted my new book have stickers as a reward system.

They turn the book into an adventure and make it more like a kit than a book.

It totally rocks … and it’s something I’ve always wanted to do, but I couldn’t find a publisher crazy enough to spend that much money on a wild idea. So, let’s all have a moment’s silence for the printer who has to add pages of stickers to the back of each and every copy of lots of books.

The official launch date is early November but I’ll be letting you Barefooters know ahead of time so your kids don’t miss out!

Scott.

We're overdue for a stock market crash ...

Hi Scott,

We are well overdue for a stock market crash.

They happen, after all, on average every 10 years, and the last one (discounting the Covid-induced flash-crash) was 14 years ago.

And I still have PTSD from the GFC. People on the verge of retirement wrote to me in tears as they watched the value of their super dissolve in front of their eyes. They had no idea how much risk their super fund was taking … until the market crashed.

So now is a very good time to talk about what’s going on with your super fund. And a word of warning: it’s not good news if you’re in one of the large, top-performing funds …

New research from SuperRatings has found there is a “high risk at retirement” for many of the current top-returning super funds.

Huh?!

Aren’t we supposed to pick a super fund with high returns?

So what makes these funds so risky for older workers?

Well, it’s generally because they are invested more aggressively than the funds they’re competing against. That is, after all, how they get to the top of the performance tables: by taking more risks. There is no free lunch in finance, so tattoo this on your arm: “The higher the returns, the higher the risks!” Of course, taking on more risk is fine for a 17-year-old apprentice … but it’s not so sweet for a 64-year-old chef.

Still, that’s how most of our biggest super funds roll: they throw everyone – young and old – into a one-size-fits-all investment pot.

However, there is another type of super fund. It’s called a ‘target date super fund’.

These super funds invest based on your age. In simple terms, they automatically reduce the amount of riskier assets, like shares, in your portfolio as you get older and closer to retirement.

It works like this: our 17-year-old apprentice would start out aggressively invested in shares to build her nest egg, and then throughout her working life the fund would gradually – and automatically – become more conservative to protect her nest egg by beefing up her defensive assets like cash and fixed interest as she nears retirement.

It’s a simple, elegant and almost set-and-forget solution.

I say ‘almost’ because most of the current funds have their target date set at age 65, when you retire. (If I was a cynic I’d say it’s set at that age so you go see a financial planner.)

Enter Vanguard Investments.

Last month they received regulatory approval to launch a super fund. They're still fine tuning things, but later in the year they expect to launch a target date index super fund that will automatically adjust your portfolio all the way through to your 85th birthday.

The older I get, the more I value simplicity in my life – especially when it comes to investing.

I don’t like my returns being eroded by high fees, so I invest my super solely in low-cost index funds.

And I really like the idea of not having to meddle with my super as I get older.

So let’s hope the top-performing funds – who collectively invest for millions of Aussies both young and old – take heed of this new type of offering and build something even better for their members.

Tread Your Own Path!

Disclosure: I invest in some Vanguard index funds but not their super fund (because it doesn’t exist yet!).

Happy Father’s Day

One of my earliest memories was tagging along with Dad as he volunteered for Meals on Wheels.
 
“Perhaps that’s where I got my social conscience from”, I wondered.
 
“Ha!” he laughed.
 
“Huh?” I said.
 
“Well, I hate to break it to you, but you never went to Meals on Wheels with me”, he replied.
 
“I did, however, occasionally help out the local mortician. I’d basically just comb the stiff’s hair and spruce them up a bit before they got put in the casket. That’s what you probably remember. They weren’t old mate – they were DEAD!” he roared.
 
That story explains a lot about my childhood … and the man who raised me!
 
Now, we have a Father’s Day tradition here at Barefoot that’s been going for almost a decade. It’s called the Ultimate Father’s Day Present: a chance to open up to you. So, if you’re lucky enough to have your father still with you, whip out your phone, hit ‘record’, and ask your dad the following five questions:

• How did you meet Mum?

• What advice can you share with me about money, life and happiness?

• What does being a dad mean to you?

• What are you most proud of?

• How would you like to be remembered?

Chances are this video will one day be much more valuable to you than anything you’ve purchased from a store. I know that because throughout the year people send me emails like this one from Jude:
 
“Hi Scott, I just lost my dad and I’m devastated. Although he lived to the ripe old age of 94 it is still an enormous void that has been created in my life as we were very close. Years ago you suggested we interview our dads and record it. I actually did it. I just watched the video and although I bawled my eyes out, it will be one of the most beautiful memories I will have of my dad”.
 
Happy Father’s Day!
 
Tread Your Own Path!

The Cocaine Mumma

Hi Scott

I’m a happily married mother in my mid-thirties, with two kids under four. We’ve been Barefooting for seven years, and I went to a financial advisor to sort all my insurances out so my family is financially safe in the event of something bad happening to me. However, I made a terrible error of judgment. When I first filled out my "health" summary I did not even think to mention ad hoc trying of some recreational drugs in my early 20s. Yet during the 1.5 hour interview Zurich asked some specific questions and I answered honestly (as I was told I must by law!), and now I've just received an email saying my insurance request has been declined and that no one is likely to insure me given my past recreational drug use!

Given the statistical facts in Australia around "have you ever tried a recreational drug" it must mean people DEFINITELY lie when answering those questions, and so now I just feel really really STUPID for being honest. If no one will insure me, how do I protect my family in the event of my TPD or death? I'm so scared. I won't sleep knowing they will suffer from their stupid mum and her stupid youth, and my poor husband if he's left with the mortgage. And the final insult: the financial planner has hit me with a bill for $750!

Natalie

Hi Natalie,

I doubt you got knocked back for smoking a doobie.

(Sorry for my bluntness, that’s just how I … roll).

Fact is, most insurers are going to ask you about your drug use – because most people downplay it – even Presidents: Bill Clinton once said ‘I smoked weed but didn’t inhale’.

Uh-huh. Sure Bill.

What most insurance underwriters are looking for is evidence of using hard drugs (heroin, speed, cocaine, and meth), which correlates to a higher chance of risky behaviour, self-harm, permanent injury and death (and therefore a higher chance of them having to pay out).

So if I were in your shoes, I’d be mad as hell at your financial advisor.

They should have alerted you to the fact that this question would be asked, and pre-prepared back-up documentation to give to the insurer, which explains it happened over ten years ago, that you’ve been drug free since then (if you have!), and that you are now a responsible mother with no intention of dropping an ecstasy tablet and dancing to the Wiggles on a Thursday afternoon playdate.

However, now that you’ve been rejected by an insurer it will make it very difficult for you to get insurance anywhere. So I’d make sure you have basic default insurance cover via your super fund, and tell your financial advisor to stick their $750 fee in a pipe and smoke it.

Scott.