The Magic of Manifesting Money (Without Hard Work)

Hi Scott,
 
You need to share this book with your audience. It’s called "The Magic of Manifesting Money: 15 Advanced Manifestation Techniques to Attract Wealth, Success, and Abundance Without Hard Work".

I read it last Sunday, and then strange things started to take place. My little business scored three new clients which will bring in $15,000, and my husband got a call from an organisation that had found an old long-forgotten insurance policy worth $3,000! Money is energy, and you just have to tune into its frequency.

Taylor
 
Hi Taylor
 
Whenever I read about these ‘magical’ money books I think about the favela (slum) I visited in Brazil a few years ago. It was built on the side of a mountain. Tens of thousands of families living in tiny tin sheds, ruled by violent gangs with bigger guns than the police. Surely all these wretchedly poor people needed to do was simply think the right thoughts and they’d magically grow rich?
 
Oh no, señor, it’s not that easy.
 
My worry is that if you buy into the belief that it’s the universe’s job to kiss your ring then you’ll be less likely to do the thing that really manifests success (and money): a well-thought out plan backed by hard work and a commitment to taking massive action.
 
At Barefoot, I’ve noticed a pattern: the most hardcore people who follow my book tend to sort themselves out inside of one year and, if they keep going, become successful (in their terms) in around six years.
 
The results people manifest frequently astonish me … but there’s nothing magical about it.

Scott.

My Ultimate Father’s Day Present

Scott,
 
Last year on Father’s Day you advised readers to sit down with their father and ask them five questions on video. My father was 75 and was over for dinner on Father’s Day so I did this and recorded his answers. Two months later he was diagnosed with stage four prostate cancer, and last week he passed away after a four-month battle. Tomorrow is his funeral and we will be playing this video. This footage is the last video of my father truly happy without the fear of a terminal cancer diagnosis. My family and I can not thank you enough for giving me the idea to ask my father these questions, and I strongly urge everyone to do the same as we truly cherish this video.

Nathan
 
Hi Nathan
 
I’m really sorry for your loss.
 
However, I’m thankful you’ve given me the opportunity to give people a nudge to do what I call the ‘ultimate Father’s day present’.
 
If you’re lucky enough to have your father (or mother!) still with you, whip out your phone, hit ‘record’, and ask them the following 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?

There are a few things in life that cost nothing but are truly priceless. You now have one of them.

Scott.

The ‘Die with Debt’ Strategy

Dear Scott,

I feel a bit disturbed when a different strategy recently came to my attention. If you don’t have any children (or don’t plan to, which is becoming more common) and are therefore not worried about what you might pass on to your children when you die, then you should borrow as much money as you can and pay back as little as possible. Get a mortgage to buy a beautiful house, get loans to go on holidays, buy things that bring you joy, live it up a little. Just enjoy your life to the fullest without worrying about working too much. Just pay back a little to keep the lender off your back but don’t worry about how much you are borrowing, or how much interest it would add up to over the years … because you get the money, spend it, enjoy it and then you die with no one left to pay the debt. Win! Or is it?
 
Debbie
 
Hi Debbie,
 
This is the sort of ‘strategy’ that people come up with at the pub … after six schooners.
 
It is true that, if you die without enough to repay your debts, they’ll generally be forgiven. (Though not if the debt is in joint names – the lender will chase the surviving person.)
 
Sounds simple, right?
 
It most certainly is not.
 
Can you imagine how stressful it would be to be old and financially stressed about keeping up your repayments? To be getting hassled by banks or debt collectors?
 
Besides, the vast majority of people want to leave a legacy, or at least square the ledger before they meet their maker.

Scott.

What you’re about to read is going to get me into trouble

What you’re about to read is going to get me into trouble.  
 
So I’m going to cut to the chase: to all the marketing managers of the products I’m about to mention, please email my assistant: idontcare@barefootinvestor.com 
 
When I was a kid, I used to try and hide my school report from my parents, hoping they’d simply forget (this was in the days before email, and helicopter parenting).
 
Yet my plan was always foiled by my older sister, who was the dux of her class, and waited in anticipation all year for her brief bath in the parental sunshine.
 
Mole.
 
Well, the Government just released a (long, confusing, boring) report card on your super fund card - it’s called the APRA External Report (www.apra.gov.au), and the worst super funds are hoping that you never read the report.
 
So let’s dig in.
 
OnePath was like my Year 8 report card: a total and utter sh…earing show (as my father would say). OnePath was singled out by the regulator for having no less than 33 dud super funds.
 
Thirty-three!
 
OnePath was joined in veggie maths by BT Funds Management, Colonial First State, Auscol (Mine Super), Perpetual Super, MLC Super – whose report cards revealed “significantly poor performance”.

Some of the funds that were singled out for charging high admin fees include Verve Super (who market to women), Spaceship Super (who target millennials), Student Super (who need a detention), and the ironically named Cruelty Free Super (well, except for their barbaric admin fees).
 
And last but not least, Equity Trustees appear to be really struggling with their pencil grip, after being singled out by the regulator for both high fees and poor returns.
 
Am I being too harsh?
 
I don’t think so.
 
There is currently around $10 billion of our retirement savings sitting in underperforming funds. Many of them are not taking on new customers – because, well, who the hell would actively choose to join them?! However, they’re still more than happy to continue milking their existing customers with high fees and/or poor performance.
 
Why?
 
Because, unlike their customers, the people that run the funds are making seriously good profits!
 
Their only way of keeping this going is to hide their report card, and hope you forget to ask.

Don’t let them.
 
Tread Your Own Path!

So My Husband Has a Lady Friend …

Hi Scott,
 
My husband has met a new lady friend. We got through Covid without killing each other (or the kids), but this year has been horrible. I’m totally stressed out that in November our home loan repayments will jump $1,200 a month, and so I’ve been telling him we need to buckle down and stop spending. But he has no idea about money. In fact, just to tick me off, a few months ago he joined a very expensive gym which he flat-out refuses to drop. And today I’ve learned that he’s been messaging a woman there that he ‘trains’ with. I’m at boiling point, and I want him to leave. But what do I do then?
 
Hi Natalie,
 
I am not a relationship counsellor.
 
However, I’ve helped enough people in your situation to know one thing for sure:
 
After the initial shock wears off, you’ll know in your gut whether it’s going to work out … or not.
 
And if you decide it’s over, here is what you do next:
 
First, lock everything down.
 
Change all your passwords and PINs, and lock down your phone’s privacy and location tracking settings. Then find as much financial information as you can: you’re looking for copies of your marriage and birth certificates, and any information on shares, property or superannuation.
 
Second, call your bank’s hardship department.
 
Let them know what’s going on (and if there’s been any family violence tell them that too). Ask them to put a freeze on all joint accounts, including credit cards. And, if you have a redraw or a line of credit on your home loan, have them change it so you both have to sign before making transactions. Then, open a new bank account in just your name that he can’t access.
 
Third, see a family lawyer.
 
Actually, you should meet with a family lawyer even if you’re still sitting on the fence with the relationship. Reason being, the first meeting will be free, and you’ll be able to get answers to many of the questions that are swirling around in your head as you lie in bed at night.
 
Finally, whatever happens, make sure you reach out for support – it sounds like the next 12 months could be rough, and you don’t need to do it on your own.

Scott.

Leaving a Cult

Hi Scott,
 
I’ve known about the Barefoot Investor for years, but I couldn’t buy your book as I was being severely controlled physically and financially by my parents, who raised my siblings and me in a religious cult that considered living in poverty as absolute for being a devoted follower.
 
My parents literally took every cent I earned for over a decade and coerced us into paying off their five personal investment properties. Last year, after getting a good legal team and a Supreme Court hearing – and breaking free of the cult I was born into – I purchased your book as a birthday present to myself (celebrating birthdays was forbidden in the cult).
 
My husband and I are now working through the Barefoot Steps together and I have purchased your book for my siblings and their partners, as well as the few close friends who haven’t shunned me after I escaped the cult. I’m truly happy for the first time in my life and have control over my own finances. Thank you.
 
Rebecca

Hi Rebecca,
 
There are no winners in this situation … but a couple of sinners. 
 
Your parents applied a religious lens to justify their behaviour, but they were really motivated by greed, power and control. (Though you don’t need to be in a cult to practise monetary manipulation. I meet plenty of women in abusive relationships who have been forced to take out car loans … but don’t have a licence.) 
 
Standing on your own two feet financially will be part of your recovery, and it’ll help rebuild your self-confidence. Welcome to the … Barefoot ‘cult’!

Scott.

ING Totally Sucks!

Hi Scott,
 
Let me count the ways that ING sucks. Their customer service absolutely sucks. Their security sucks (a four-digit passcode, really?), and now they are dropping their international ATM rebate, which TOTALLY sucks because I’m heading overseas soon. Are you still in the ‘orange army’ or, like me, do you think it sucks too much?
 
Angela
 
Hi Angela,
 
So I had my own sucky experience with ING a while back.
 
They called my wife about suspicious transactions on our account.  
 
It turned out the suspicious transactions in question were actually payments we received.
 
Odd, right?
 
Yet it gets odder.
 
The dude from ING kept asking what the payments were related to, and my wife answered that she honestly had no idea. Then I remembered I’d sold some sheep troughs on eBay, and that was the transaction in question. It was all very … sheepy.
 
So what do I think of ING?
 
Well, these days ING is a lot like U2. The Joshua Tree was an awesome album, edgy and original … but now they’re just a little bit same, same, lame. There are better accounts on offer. 
 
Still, their online saver is currently paying 5.25%, and they don’t charge transaction fees. And as for them ditching the foreign ATMs, well, I’m as likely to use that as I am to listen to All That You Can’t Leave Behind.

Scott.

My Business Banking Set-up

I’ve spoken a lot about how I manage my money … you know, the Barefoot Buckets, the orange cards, and the super-cheap index funds.
 
However, I don’t think I’ve ever discussed my money set-up for how I run my business. And I don’t think I ever would have, except for the fact that I was roped into doing a talk for small businesses in my hometown this week.
 
Here’s what I told them:
 
Some people get excited about designing their logos, websites and socials. Yet when I started my business I looked at the most common ways small business owners go broke, and set out to avoid them.
 
I call them the ‘three Bs of business’ … bastards, bust-ups, and borrowing too much.

Firstly, the bastards (the Australian Taxation Office).
 
It’s true, the biggest killer of small businesses – at least early on – is none other than the ATO.
 
My golden rule:
 
Thirty-five percent of every dollar I earn gets transferred immediately into that online savings account, which I’ve nicknamed ‘tax man’. (Side note: When I was setting everything up, I went with a totally different bank for my business – actually a credit union – to keep things separate from my personal stuff. I have a basic business transaction account, and an online saver, which currently pays 4.6% p.a.)
 
Why 35%?
 
Well, it accounts for my company tax and my GST (which many small business people forget about).
 
It’s a conservative number – too conservative – because I always have extra money sitting in that account after paying my tax. And when I’ve paid my taxes I take that surplus and invest it into the business to make more money.
 
My accountant, ‘Old Stubby Fingers’, tells me I should be more ‘sophisticated’ and use the tax savings to manage my cashflow.
 
He’s right, of course.
 
But I don’t like doing budgets, much less trying to stick to them. And I hate having heart palpitations when my BAS is due. (So stick that in your spreadsheet and smoke it, Stubby Fingers!)
 
Secondly, bust-ups.
 
I can count on one hand the number of business partnerships that have lasted the distance. Most don’t, because relationships are tricky … especially when there’s no sex, and there’s money on the line.
 
So early on I decided to not take on any business partners. Never. Ever.
 
And, thirdly, borrowing too much.
 
This is why I run my business without debt.
 
The upside is I don’t have to hock my home for a business loan (the banks almost always want a personal guarantee).
 
The downside is that it’s my back up against the wall, and the buck stops with me.
 
And that’s why I have a fourth ‘B’ – burn money.
 
When I first met my wife, she was slightly petrified that I ran a small business. (Her parents were academics, so she had no concept of ‘you only get to eat what you kill’). So each month I work out my ‘monthly burn number’, which is all the fixed expenses of the business that I have to pay to keep things running, including paying myself a basic wage plus super.
 
My aim is to have three months of burn money sitting in my business transaction account, and I try not to let it dip below that amount on a month-to-month basis. Having an accurate burn number burned into my brain keeps me both hungry (at the start of the month) and humble (when I have a good month).
 
Then, anything left over and above my three-month burn figure goes into blasting through the Barefoot Steps … and these days into shares.
 
 Yes, it’s simple. But it needs to be, because being in business is bloody hard!
 
 Tread Your Own Path!

Barefoot OnlyFans?

Hi Scott,
 
I’d like to learn to do forex cash trading as a side hustle to supplement my income (so eventually I might be able to move to part-time work and have more time to spend with my daughter, who’s eight and was diagnosed with anxiety last year). Can you recommend any online trader training and trading access platforms? I’ve started searching for options but am bamboozled by the plethora of trader-training companies out there. And it bothers me that some of them take ongoing commissions and monthly fees as well as significant training charges ($5,000 to start with!), not to mention all the hard-sell emails and phone calls I’m now receiving! Any advice would be much appreciated.
 
Linda
 
Hi Linda,

You dabbling in forex is like me joining OnlyFans as a side hustle.
 
No one is going to pay to see me wobble my dad-bod around the farm. After all, I’m competing against very good-looking people (who also know how to milk a cow).
 
Just like you will be competing against billion-dollar hedge funds and the biggest financial institutions in the world, both of which not only employ the best traders but spend millions on their AI trading algorithms.
 
My thoughts?
 
You will lose, and with fast-trading forex the odds are that you’ll get wiped out quickly. Stay away from the gurus cold-calling you – they’re all bad news.

Scott.

Patronising, Condescending and Out of Touch

Scott,
 
Reading Jim Chalmers’ last week set my teeth grinding, but what really made my blood boil and shoot flames from my ears was his answer to Emma about rent rises.
 
Jim’s suggestion that she “report excessive increases to a relevant state body” shows just how safe he is in his house, and that he doesn’t have to worry about landlords. We all know that we can “report excessive rent rises” but we also know that landlords find loopholes to exploit (like “we’re doing maintenance on the property” or “we’re selling and you have to leave”) and then relist it at a much higher rent a short time later. Our landlord did this to us to the tune of $80 a week after we’d been living there for four years (making minimal maintenance requests and always being a month in advance with the rent).
 
Jimbo blithely says the “government is trying to bring in tax breaks to get more rental properties built”. That’s not helpful, Jim, that’s patronising and condescending and shows how elitist and out of touch you are. People need real help right now.
 
Dana
 
Hi Dana,

This week I got a window into what it’s like to be Jim Chalmers (or any politician for that sake) – and I did not like it one bit! My inbox exploded with angry readers … and it was the renters were really up in arms.

I agree with you: I don’t think Jim understands what it’s like to be a renter on a low income right now.
 
Then again, to be honest, neither do I.
 
The housing market is fundamentally broken in this country, and it has been for years. Jim is smart enough to know that there are no short-term magical fixes: any steps to ‘protect’ renters can either be sidestepped (as you point out) or can result in landlords jacking up their rents to compensate.

Scott

What Drugs Are They Smok’n?

Scott,

I struggle to relate to the questions you get. A couple earning $160,000 a year can’t save 20% for a deposit, or a single mum edging up to $100,000 a year is struggling financially. What kind of expensive neighbourhood and lifestyle are you readers living?
 
I’m lucky if I earn $50,000 a year, and we are a single-income family with five young children. Yet we have been able to save up a 20% deposit and have purchased a house, which we are currently renting out (yes we have a mortgage that will take years to pay off, we just didn’t over-capitalise).
 
We travel the country in a little pop-top caravan, homeschooling our kids while I work online. I don’t believe in sponging off the government either, so we don’t put our hand out for welfare payments.
 
You don’t need to be earning big bucks to have a valuable life in this country, and kids don’t need to go to some posh school or have after-school care to get educated or be successful. Being able to spend time with those you love is what makes you truly rich.
 
Darren
 
Hi Darren,
 
You’ve discovered what a lot of people eventually work out when it’s too late:
 
Debt enslaves you.
 
And that if you can avoid being in too much debt you’ll be happier.
 
Life is short, and the time you have with your kids is even shorter.
 
You Got This!

Scott.

Admit It: You Were WRONG, Barefoot

Scott,
 
Late 2020, hubby and I were renting a granny flat in Sydney for $520 a week. He saw on the news that house prices were set to rise as much as 30% and said we needed to buy our first home ASAP. The boom had started. We managed to scrape together a 5% deposit and bought our townhouse 15 minutes from the Wollongong CBD for $565,000. Our house is now worth about $750,000. There is NO WAY we would have been able to buy our house with a 20% deposit if we ‘waited’! And, because we bought at a time when rates were at a historic low, we got that benefit too, locking in 1.98% for three years. Again, if we had waited we could have ended up buying now, when rates have more than doubled. You are not always right, Scott. You KNOW there are scenarios where your rules do not always apply ... and this was one of them.
 
Linda
 
Hi Linda,
 
So were you lucky, or smart?
 
The thing I’ve learned about people who make money through luck is they tend to believe they’re smart, and you can’t convince them otherwise.
 
Personally, I don’t think the value of your home matters that much (though prices in Wollongong have come back 14.5% in the last 12 months, according to realestate.com.au).
 
In other words, you’re talking paper profits – let’s instead talk bangers and mash:
 
You’ve said that you’re not a saver, so you don’t have much money behind you. In the next few months your repayments are going to skyrocket. Will you be able to make them?
 
The most important question you need to ask right now is “How long will my luck last?”

Scott.

Albo should have known better

WHACK!
 
Last week I got the Treasurer to answer readers’ questions, and the verdict was swift and brutal:
 
Old Jimbo may have been Barefoot for the day, but readers thought the bloke had bunions!
 
Yet for me it was his advice to a young first home buying couple – that they only needed to save up a 5% deposit (thanks to the Government’s First Home Loan Deposit Scheme) – that caused my left eye to twitch and made me sweat all the way down to my mangoes.
 
My view?
 
Look, it’s not going to win me any votes, but I believe that if you can save only a 5% deposit … then you really can’t afford a house.
 
Yet in 2021, then-Treasurer Josh Frydenberg basically said “hold my beer”.
 
He expanded the First Home Loan Deposit Scheme (FHLDS) to ‘help’ low-income single parents, and lowered the deposit required to just 2%!
 
Then came Labor.
 
Now Albo was famously raised by a single mum in public housing. So he must have known in his bones that this was a very dangerous policy. And that it would not just legitimise but actually incentivise vulnerable people to make a highly risky financial decision … at a time when interest rates were at record lows and house prices were at record highs. However, in the heat of the election he too joined the 2% down party with his shared equity ‘Help to Buy’ scheme.
 
What could possibly go wrong?
 
Well, let’s fast-forward a few years and hear from Jane, who wrote to me a few weeks ago.
 
“Scott, I went against what you recommended, but the government said they were helping me buy a unit with a 2% deposit for my child and me. I’m a low income earner and also an immigrant with a parent overseas who I’m providing for. I’ve made it work so far by taking on extra work on the weekends. But the fixed rate with my bank changes over (higher!) in a few months and I’m terrified. Do you think moving banks will help keep the variable rate manageable when it’s my turn at the cliff?
 
The fact is, Jane has about as much chance of moving banks as Peter Dutton has of being Prime Minister.
 
For the record, I called Jane and put her in contact with a financial counsellor in her area who will work with her – and her bank – to try and find a way forward.
 
But it won’t be easy.
 
She pretty much had zero equity in the joint to begin with, and it went down from there. So not only is she deeply in the red but, more importantly, her interest rate is about to triple, and her repayments could take food off her table.
 
I don’t blame her for wanting to buy her home, and provide financial security for her kids.  The problem is she trusted that the politicians were acting in her best interest … not theirs.
 
Now let me get off my soapbox and introduce you to someone who not only thinks I’m dead wrong … but can prove it.

Tread Your Own Path!

Jim Chalmers goes Barefoot for a day

Today I’m doing something that I’ve never done before in nearly 20 years of writing this column …
 
I’m letting someone else answer my readers’ questions:
 
And that someone else is Treasurer Jim Chalmers.
 
I caught up with the Treasurer this week ahead of his Grand Final (the federal budget) and added an even harder task to his plate: the job of being Barefoot for a week.
 
To ease him into the job, here’s the advice I gave him.
 
First, don’t be boring.
 
Second, really, please don’t be boring.
 
Finally, don’t give us the party line. Instead, give us the ‘Jim at a party, three bourbons down, telling it straight’.
 
Over to you, Jimbo.

Your Questions & Answers

• First Homebuyer Hell

• From a Sleep-deprived Mother of Two   

• The Pineapple Project
  

First Homebuyer Hell

Hi Barefoot (Jim)
 
My husband and I are in our late 20s and have been desperately saving for a first home. I’m a nurse and he’s a teacher, and we earn just under $160,000 a year combined. We’ve tried so hard to save up a 20% deposit but with house prices, and rents, going up so fast it feels impossible. We want to have kids soon and be close to our family (who all live in Sydney), but I can’t see that we’re ever going to make it. The system is just broken beyond repair. How can we plan our lives when we don’t even have the stability of the roof over our heads?
 
Bec and Steve
 
The Treasurer responds:
 
Thanks for the work you do teaching and nursing.  I get it – when you’re under the pump it’s hard to save for a house.  We’ve got two ways to help – one that’s up and running and one that’s on the way, but both of them are about helping you buy a house without needing the full 20 per cent.  
 
One’s called the First Home Guarantee (up and running) which can help you buy a home with as little as a five per cent deposit; the other’s called the Help to Buy scheme (coming). In the rental market there are tax breaks coming this Budget to encourage people to build more rental properties as well.  Big challenge, not uncommon, doing what we can.
 
 
From a Sleep-deprived Mother of Two   
 
Hi Scott (Jim),
 
I'm a single mum with two kids (and two cats and a dog), and I’m really struggling. My landlord just let me know he’ll be increasing the rent by $150 a week, due to the “changes in the housing market”. How will I survive? I’ve just moved into a permanent job, but my increase from four to five days means I will lose my Family Tax Benefit. I’ll probably also have to pay more after-school-care fees because I’ll soon be earning $100,000 a year. But it’s just ME on my single income paying for everything. What should I do?
 
Emma
 
The Treasurer responds:
 
Thanks for this and congrats on the new job. $150 a week is ridiculous. It’s worth talking to your local tenants union to find out what your options are. The options will differ depending on what state you’re in but could include reporting excessive increases to a relevant state body. Apart from that, we recognise rent’s a big part of the pressure people are feeling right now.  We are trying to get the parliament to agree to building more properties, we’ve got some tax breaks coming so that investors build more as well, and besides that we are making your after school care cheaper from 1 July, by increasing the subsidy – hope that helps you make ends meet.
 

The Pineapple Project
 
G’day Jim,

I thought I’d add in a question of my own …
 
If the RBA gets its way, in the next few years there will be plenty of businesses that go bust, and lots of people who will lose their jobs. That is, after all, how to slow the economy.
 
Now here’s the jam, Jim: there is really only one place that Aussies who get the wrong end of the economic pineapple can turn to for free, unbiased, confidential financial help: a community-based financial counsellor.
 
There are 750 financial counsellors across Australia. Yet they are already overrun. People are being turned away. However, if your government put up the dough to double the number of financial counsellors, it would mean an additional 50,000 families would get the help they need to get back on their feet this year. Will you commit to that funding?
 
Scott Pape
 
The Treasurer responds:
 
There’s no doubt financial counsellors do a fantastic job. They help people who are in real financial strife to make the case to get a debt waived or get a better rate and that makes a massive difference in people’s lives. As a Government, we recognised how critical these services are, particularly during natural disasters and we’ve delivered extra funding over the last year to employ more financial counsellors in flood-impacted communities. We’ve also been working with industry on a way to make funding of these services sustainable over time which is something that my colleague Amanda Rishworth has been leading.

The Wrap-up
 
It’s a bit of a cliche to say “thanks for taking time out of your busy week” … but the dude’s got his first federal budget to deliver next week! So, Jim, thank you for taking the time to answer people’s questions.

However, I don’t agree with encouraging people to put down a 5% deposit (I’ll have more to say on that next week). And as far as your answer to my question … that was one hell of a word salad, mate. Should I just take that as a ‘no’?
 
Good luck with the budget and, as my old man says, “Just look after the battlers, son”.

Thanks for reading.

Scott

Have You Changed Your Mind on HECS?

Hi Barefoot,
 
My hubby has $85,000 in HECS debt, and I’m wondering what your thoughts are on the HECS-HELP debt saga. The Greens are trying to freeze the indexing to inflation. You have always suggested that we don’t rush to pay off our HECS-HELP debt because it’s an ‘interest-free loan’, but I am wondering if you still think the same way now.
 
Tania
 
Hi Tania
 
Look, I hate inflation like the Greens hate fossil fuels (and Barnaby Joyce).
 
Both the Labor government and the coalition Barnabeyed the Greens proposal to freeze indexing student debt inflation. Now the whole concept of inflation can be a really hard one to get your head around … but HECS debt lays it bare in all its brutality:
 
For many years the indexing has been bugger all (in 2021 it was 0.6%) – yet this year it’s a whopping 7.1%. So your husband’s debt will be indexed up by $6,035.
 
So, have I changed my mind: should you make extra repayments?
 
Well, that’s obviously totally up to you. However, I’d flip the Greens’ advice and pay back any bank debt (that attracts an interest rate) first before you repay any HECS debt.
 
What I think the Greens are picking up on is how the current economic climate is screwing people on low incomes (which includes students). Rents have increased at the fastest pace since 2010, and the cost of most things is skyrocketing.
 
But despite all that, given that HECS is an income-contingent loan (i.e. you only start repaying it once you earn $48,361), I’d be more inclined to put your money in Mojo as a buffer, than make a voluntary extra repayment to the government.

Chop Wood, Carry Water

Dear Scott,
 
We confiscated our 14-year-old son’s phone over a year ago because he was misusing it. It’s been a long year of self-harm and reminding him he is supported and loved. It’s now time for him to get one again, primarily to check in with us when he’s away. So here’s the argument I’m having with my hubby: I want him to earn the phone – we have five acres of bush and I have the idea that he only needs to sell one bag of firewood a month to pay for a phone. My hubby says it isn’t worth the cost of petrol, chainsaw, and delivering the wood to customers. He just flat out says “no, it’s spending money to make money”.  He won’t be reasoned with at all. Help!

Linda

Hi Linda,
 
Your husband may not show it, but I’m sure he’s been worried sick about your son self-harming.
 
Any parent would.
 
So here’s how I’d approach it with your husband:
 
Ask him to think about how he’d feel as he watched your son start his own little firewood business.
 
Paint him a picture:
 
He’d be off the screens and out into the fresh air, doing some physically demanding work. He’d be smiling and interacting politely with his customers. And, most importantly, his confidence would soar as he earnt his own dough.
 
Personally, I think this could work out to be the best money you and your husband ever spent. However, if it makes him feel better, you could write an agreement with your son that he has to pay you a certain percentage of each sale to cover the costs.
 
I think if your husband could see your son making a go of it he’d beam with pride.
 
Any parent would.

Scott.

Watch Your Back, Barefoot

Scott,

I like you. And I like your advice. Which makes me want to give you some of my advice. Watch your step. You’re a finance guy, right? Let me run some numbers by you: you said the three credit bureaus in Australia made $521 million collectively. You are challenging their entire business model. Do you see where I am going with this? You are a pretty bright fellow, and I respect your advice (and BIG BALLS!). Just remember, an American president got murdered in broad daylight.
 
Tony
 
Hi Tony
 
Thanks for your concern, but I don’t think the credit bureaus take me very seriously. After all, they have highly paid lobbyists who have better access to politicians than I’ll ever have.
 
Still, I think locking your credit file is one of the best ways to safeguard your identity, and to stop scammers who’ve accessed your personal details via a hack from applying for credit in your name.
 
The most logical solution would be to put a ‘lock and alert’ system on all credit reports. That is, give people the ability to lock their credit file so no one can see it (without the customer’s consent) and send an immediate two-factor-authenticated alert to the customer if someone tries to access it.
 
 In America, the government forces credit bureaus to offer exactly this service. I’ve asked federal Finance Minister Stephen Jones why he doesn’t follow their lead. He told me he’d look into it, but I haven’t heard anything for months. Bang!

I’ve never seen anything like it

In almost 20 years of writing this column, I’ve never seen anything like it.
 
Just this year, I’ve had the following people email me:
 
A veteran policeman who was scammed out of his life savings.
 
An experienced tech journalist who was swindled for ten grand.
 
And literally hundreds of readers who’ve lost amounts ranging from $1,000 to $1 million.
 
What the hell is going on?
 
Scams are red hot right now … in fact, they’ve increased a staggering 80% in the last year alone.
 
Most of it, to be honest, is the run-of-the-mill scammy stuff that you and I try our best to avoid, like taking dodgy calls from dodgy people in dodgy overseas call centres, or romance scams, or clicking on fake links and text messages.
 
Yet don’t get too comfy – an army of robots is coming for your money.
 
A new artificial intelligence app called VoiceLab can recreate your voice with just a three-second clip which it can gain from a spam call (you answer: “Hello, who is this?”) or, more likely, from one of your TikTok posts.
 
Scammers have even been using voice-cloning tech to trick parents into believing their kids are calling them in a panic and needing money fast! (Which is horrifying, but also makes me want to try it out on my mum, who complains I never call her anymore.)
 
Yet what the scammers are really after is voice authentication. The Australian Tax Office, Centrelink and many banks give customers the option of using their voice as a way to confirm their ID when they call or want to make a transaction. Bingo!
 
And if that doesn’t freak you out, how about the fact that criminals are using machine learning AI to hack your passwords (yes, the same password you’ve used for every single login since 2015).
 
So, what’s the answer?
 
I don’t think the government can do much: the tech and the scammers are moving too damned fast.
 
And Aussie banks are lobbying furiously behind the scenes to avoid being on the hook for their customers’ losses (as UK banks will soon be forced to be). In truth, the banks are as good as useless. Last year the Big Four managed to stop just 13% of scam payments. Worse, the banks only compensated their customers for around 2% to 5% of what they lost, according to ASIC.
 
So, given the leaves are falling and the nights are getting cooler, one way to warm your cockles is to grab a bottle of wine, take a moment, and make sure you have two-factor authentication set up on all your accounts. And, if you’re really concerned, lock down your credit file (though, according to the first question below, telling you this could get me killed).
 
Tread Your Own Path!

I Am Shocked, Devastated, Heartbroken, Numb

Scott,
 
After becoming Barefoot about five years ago now, my husband and I got our finances in order, saved a nice little nest egg, and decided it was time to upsize our modest little home. We bought a block of land pre-COVID to build our ‘Forever Home’, with a group called Porter Davis. Now I am one of the more than 1,500 families that were building when Porter Davis went bust. I am shocked, devastated, heartbroken, numb. We are currently waiting to hear further from the liquidators and have filed an insurance claim. But I am so anxious about where this leaves us and what to expect next. Please help.
 
Colleen
 
Hi Colleen,
 
I’m so sorry.
 
You have every right to feel totally betrayed: you gave your life savings to a builder who promised they’d create your forever home, and they dudded you.
 
So what you deserve now is honesty.
 
You want to know what to expect?
 
Expect it to suck for a good year, and possibly longer.
 
You’ll be hit with increased rent, increased debt repayments, and increased costs to complete your home. And it’s going to take way too much time: it’ll take a few months to process your insurance warranty claim, but the real time-killer will be finding another builder to take over your project.
 
All of this is outside of your control.
 
So, focus on the things you can control: your income, your expenses, and the most important thing of all – your relationship – in what is going to be a very tough year for the both of you.
 
Sadly, you’re not alone.
 
I read an article this week which shocked me:
 
Hutchinson is Australia’s largest private builder and the country’s third-largest residential builder. The group’s chairman, Scott Hutchinson, candidly told News Corp:
 
“Current conditions are terrible. It’s ridiculous. I have never seen it like this. There will be more builders going broke. There’s nothing governments can do. People simply should not build … I don’t think there should be any private building.”
 
That’s a bloody big call!
 
Buyer (and builder) beware!

Scott.

My Real Estate Agent is a Rogue

Hi Scott,
 
We had a terrible 2022, starting with listing our apartment for sale in May – right at the time interest rates went up in record succession. It ultimately resulted in our agent pulling all sorts of manoeuvres to get us to drop our price. We didn’t take the bait, and he delisted our property, meaning we lost the upfront marketing costs of $7,000. Two complaints to Consumer Affairs to no avail, so we lost that money. I’ve taken it really badly – it’s been a big confidence hit, not to mention the daily guilt I feel for putting my family in this situation. What can I do to get some of this money back? How are consumers able to hold businesses accountable when there are no consequences for unethical behaviour?
 
Linda
 
Hi Linda,
 
It’s a hard one.
 
So perhaps the agent got you on the books by touting an unrealistically high price … and then began knocking you down to reality. It happens a lot, especially with numbskull agents.
 
Or maybe it was the fact that you listed your house at the tail end of the Covid property boom and got caught out. From May to January, house prices in capital cities pulled back 8.6%.
 
I know I sound unsympathetic, but you can’t blame your real estate agent for that. His one and only job is to go out and find the highest price the market is prepared to pay.
 
It’s your job to decide whether you’ll accept it. And if you’ve anchored your price 10% higher than the market is prepared to pay, that’s not his fault. I think it would be a hard ask to get a refund on the dough his agency has spent marketing your property to the property portals.
 
Please don’t beat yourself up. This is all part of the emotionally and financially taxing process of selling a property. From here on out, focus on the reason you decided to sell in the first place … and what your next steps are.

Scott.