Which app is screwing you?

Imagine if the maps app on your phone was ‘dodgy’.
 
Without you knowing it, Google directed you to routes with toll roads … because they got a kickback from the toll road company.
 
Outrageous, right?!
 
Well, according to Small Business Ombudsman Bruce Billson, that’s what’s happening … with another app on your phone.
 
Can you guess which app is screwing you?
 
(Drum roll.)
 
That’s right, it’s your bank app. (It’s always the bloody banks.)
 
Here’s the sting:
 
Since we all became germophobes, tap-and-go payments have exploded. In fact we Aussies are now the biggest users of contactless payments in the world, according to banking research firm RFI Global.
 
Yet what most people don’t know is that, when they tap, their bank generally defaults that payment through Visa or MasterCard, who pays them a fee – instead of defaulting that payment through the much cheaper bank-owned EFTPOS.
 
Talk about a rort!
 
Getting slugged a surcharge of up to 2% on every transaction could be costing you upwards of two hundred clams a year (collectively a $1 billion-a-year rort, according to the Ombudsman).
 
So let me suggest two quick ways to make it much less likely you’ll be charged:
 
First, change your default payment on your phone.
 
On an iPhone, open ‘Settings’, go to ‘Wallet & Apple Pay’, then tap your debit card. Then look for ‘Payment Option’. It will generally have ‘MasterCard’ or ‘Visa’ preselected, but instead you should select ‘eftpos SAV’. (Not all cards allow you to do this, and if you’re on an android you’ll need to check with your bank, because it’s a bit tricker apparently.)
 
Second, pull out your physical card.
 
I know it’s annoying, but if you swipe and insert your card you can choose ‘cheque’ or ‘savings’ and it’ll go through the EFTPOS system, which at the bigger retailers means you’ll be less likely to be charged.
 
Here’s the problem though.
 
Let’s say you’re at my local fish’n’chip joint, which has a sign on the till that reads:
 
“Surcharge 1.5%.”
 
The 16-year-old goth with the nose ring and bad attitude doesn’t understand the intricacies of banking payment systems, nor the fact that you’ve chosen EFTPOS, which will result in her employer being charged less in fees. She’s going to hit you with the fee, because, well, just because.
 
So here’s what really needs to be done:
 
The Government needs to ban surcharges … the same way they have in the US and the UK.
 
That’s a rolled-gold vote winner a year out from an election, right?
 
(Hello, Minister for Financial Services Stephen Jones and Shadow Minister Luke Howarth!)
 
Tread Your Own Path!

Bob Brown Isn’t Dead!

Scott,
 
You think Bob Brown is dead? Shows how much you know about politics you flog!
 
Jim
 
Hey Jim,
 
I was joking … though hundreds of Greens supporters didn’t get it. Still, I think Old Bob is more alive than most of the current crop of Greens pollies. God bless his bamboo socks. 

Nervous Wife

Hi Scott,
 
My husband and I are both in our mid-forties and have a combined income of $210,000. We have paid off our mortgage, and we lease our cars through my husband’s work as part of a salary sacrifice program. We have no other debt and around $75,000 in savings. We have been paying extra into superannuation, and when he retires from his job as a firefighter he will retire with a lump sum payment that will be more than adequate.
 
But now my husband wants to invest in day trading, and has been doing a trading course to ‘educate’ himself. I’m not very investment savvy and would definitely be the more money cautious out of the two of us. This seems a bit risky to me, but when I say this he tells me that we need to make our money “work for us”. Do you think day trading is a smart way of making our money work, or can you suggest something else that we should consider?
 
Nervous Wife.

Dear Nervous Wife,
 
Ding! Ding! Ding!
 
I’m hearing a fire alarm, and your firefighting, risk-taking hubby is running towards the danger. The only problem is that if he begins day trading it’s your money that he’s going to set on fire.
 
Look, some of the savviest day traders I know have gone broke more than a few times. And these days it’s even harder because you’re trading against AI bots. It’s just not a game you can reliably win.
 
Allow me just one last analogy: you two have reached the top of the mountain. Yet, instead of sitting back and enjoying the view, your husband has pulled on a snowboard and is doing some tricks for some extra kicks. That’s crazy.
 
I’d gently remind him that your money is working for you, via your superannuation. I’d focus on how much you need to contribute to it to live comfortably. Once that is set up, I’d get him busy thinking about all the exciting things he could be doing with his time, rather than risking his money.
 
Enjoy the view, don’t let him screw it up!

Scott.

How your life changed in 2012

There were two weeks in July 2012 that completely changed your life forever.
 
However, at the time you were blissfully unaware of what was going on.
 
(We all were.)
 
What happened?
 
Well, it all began when Facebook listed on the Stock Exchange, which was a total and utter disaster. Within a few months its shares had crashed by more than 54%.
 
Why?
 
At the time of its IPO (initial public offering), Facebook stated it had “no material revenue from mobile”. (Yes, in 2012 we were all checking our Facebook friend requests on our web browsers.)
 
Zuckerberg could see the writing on the wall. They were dead meat unless they got on mobile. And so, as legend has it, he pivoted the entire company to building a killer app – fast. He famously refused to have a meeting with anyone until they had presented him with what he wanted.
 
And in those few weeks the smartest behavioural psychologists and programmers in Silicon Valley created the very first social media app, something so powerful that it changed the course of history.
 
Seriously.
 
Let’s flip forward.
 
This year alone we’ll all spend the equivalent of 500 million years scrolling on social media.
 
(Collectively, the world spends 720 billion minutes a day using social media platforms. Over a full year, that adds up to more than 260 trillion minutes, or 500 million years of collective human time, according to a report from GWI, a consumer research company.)
 
In short, you’re spending way too much time on your phone, right?
 
Everyone is.
 
The Digital Australia 2024 Report by consumer intelligence company Meltwater shows that the average time users spend on TikTok is 42 hours and 13 minutes per month. Second place is YouTube, with the average user spending 21 hours and 36 minutes per month. And Aussies are some of the biggest users of Snapchat, with 17 hours across 619 individual sessions (!) per month. Facebook users spend an average of 20 hours and 15 minutes per month, and for Instagram it’s 11 hours and 45 minutes per month (which I thought would be higher, to be honest).
 
Is this a good use of your most precious asset?
 
Well, if you ask Mark Zuckerberg the answer is “Hell, yeah!”. Facebook’s profits were $US32 million in 2012 … and last year they were $US39,000 million.
 
Yet what about for the rest of us?
 
Well, Facebook interviewed eMarketer’s Ezra Palmer about the dramatically increased use of mobile, which is up 627% in the last four years alone. She glowingly described it as our “connected consciousness” and brushed aside the naysayers:
 
“If it were not a valuable way of interacting and being, we wouldn’t be doing it. Mobile is an extension of us … it’s a fundamental shift in our psychology … it’s one thing to look at the [daily usage] numbers, it’s another to think about the amazing ramifications of that”, she gushed.
 
Uh-huh.
 
Just like all those people at the casino wouldn’t be there if it weren’t a valuable way of being.
 
And let’s look at those amazing ramifications.
 
The rise of social media has coincided with an accelerating decline in teen mental health, and hospitalisations for self-harm have exploded, especially for young girls.
 
Not only are today’s kids more anxious, depressed and suicidal than in previous generations, they’re also getting dumber. Australian students are among the world’s biggest users of digital devices at school, yet academic results released in December showed teens have fallen a full academic year behind those who went to school in 2000s, according to the Programme for International Students Assessment (PISA).
 
This all makes sense.
 
Social media (which has done another ‘pivot’, this time to 45-second viral videos) is the equivalent of junk food.  

You wouldn’t spend upwards of 10 hours a day continuously gorging on highly processed junk food and expect to be healthy.
 
It’s the same for our mental health. You are what you eat … and what you scroll (and Zuckerberg is your personal chef serving us up dopamine-soaked donuts all day long).
 
Yet waving our fists at the tech giants is about as useful as blaming Macca’s for your kid eating Big Macs for breakfast.
 
We’re the parents, and we’re in charge.
 
And many of us have trained our children to see that a phone is the most important thing on earth. I’m ashamed to admit that at every milestone of my kids’ life – the day they were born, the day they took their first steps, the day they pedalled their first bike, and every birthday – they looked up and didn’t see my eyes … they saw the back of my phone as I yelled “Smile!”.  
 
They also see Mum and Dad mindlessly scrolling on our phones while the world passes us by.
 
Again, what message do you think that sends them?
 
So I’ve come to a couple of conclusions.
 
First, if I want my kids to have a healthy relationship with technology, I need to model it myself. That means keeping my phone in a dish with my car keys and wallet at the front door – and leaving it there – so I can engage with my family without constant distraction.
 
Second, it’s my job to give our kids experiences they can’t get from screens.
 
Like what?
 
Like encouraging them to have friends over to hang out IRL (which is what kids actually want most). Or going on a family hike, to the beach, or to a sporting event. Or encouraging them to start their own little Barefoot Business (perhaps with a mate).
 
Now this sounds very aspirational, but how would you force yourself to actually do it?
 
Well, the fastest way would be to implement Screen Free Sundays. And that’s what my wife and I have decided to trial with our family – starting this week.
 
Yes, we’re trying to put the internet back in the box, and live like it’s 2012!
 
Tread Your Own Path!

This is the hardest thing I've ever written

What you’re about to read is very uncomfortable.
 
It’s possibly the hardest thing I’ve ever written, but it needs to be said, and you need to read it.
 
Wayne is a 50-something Barefoot Dad. His son Mackenzie (Mac) is 16 years old, and obsessed with footy, cricket and getting his L-plates. The trouble began when Mac befriended a girl on Snapchat who was friends with some of his friends.
 
“Hi Sweety, what do you do?” she wrote.
 
Mac told her that he was the captain of his footy team and that he liked to work out.
 
She told him he looked like he had great abs, and then sent him a photo of her breasts.
 
Mac responded by sending a nude photo … but without his head in the shot.
 
She returned the favour, sending him a nude photo … also without her head in the shot. And after a few more minutes of flirting, they both sent nude photos of themselves with their heads in shot.
 
Then Mac’s phone rang.
 
On the other end of the line was a middle-aged man:
 
“I’ve got your photo, and I’ve hacked your Snapchat. Mac, you are going to put $500 into this bank account in five minutes, or I will send it to all your contacts.
 
“I’m counting”, he barked, then hung up.
 
Mac immediately transferred $500 to the man’s bank account.
 
And then Mac’s phone rang again.
 
“Mac, I’ve got your $500. But now I want another $500. And if you don’t pay me another $500, you’re going to be embarrassed. Your parents will hate you, and you’ll want to kill yourself”, he snarled before hanging up.
 
And then Mac did what you would want every single kid to do in this situation:
 
He walked out of his room, found his old man, and tearfully said, “Dad I’ve made a big mistake”.
 
And Wayne did what every single parent should do in this situation:
 
He lovingly put his arms around his son and said “Mate, you’ve done nothing wrong. You are the victim here. Everything is going to be all right.”
 
And then Mac’s phone rang … again.
 
Wayne grabbed the phone and, quick as a flash, made something up:
 
“This is Senior Sergeant Holdsworth from the Mornington Police. STAY AWAY FROM MY BOY!”
 
The scammer listened, breathing down the line, and then coolly replied:
 
“I don’t care about you or your son. You can both die.”  
 
And to prove it, he sent the photos to all of Mac’s friends on Snapchat.
 
Now he was forced to live with the consequences of his actions … which began at footy training the next night. (Thankfully, his coach turned it into an educational session for the boys on the dangers of sending explicit photos.)
 
The next few months were understandably rough for Mac. 
 
Yet, at dinner one night, Mac was back to his old self, joking with his sister and laughing at Wayne’s dad-jokes. Things had turned the corner, Wayne thought. As Mac went off to bed that night he told his old man that he was excited to put on his L-plates in the morning.
 
And then Mac went to his room and killed himself.
 
The next morning, Wayne opened Mac’s door and found him dead. He sat there with his son, now cold and lifeless – and his entire world fell apart.
 
The next few weeks were a blur of heartache and uncontrollable, throbbing pain.
 
Mac’s funeral was huge – packed to the rafters. After a lifetime of community service and sport, people came from out of the woodwork to give Wayne and his family their heartfelt commiserations.
 
And then everyone else got back to living their lives, as they must do.
 
One afternoon Wayne found himself in Mac’s bedroom, gazing at his son’s prized trophy cabinet. He saw something out of the corner of his eye. It was a note. Wayne reached over, picked it up, and sat on his son’s bed and slowly unfolded it:
 
Dear Dad,
 
Things haven’t been the same for me since that photo. I’m really embarrassed. I’ve let you down.
 
I am so sorry.
 
Love, Mac

I’ll admit that I’ve shed more than a few tears this week talking to Wayne.
 
As the father of four kids, it all hit way too close to home for me. And, if you have a young person in your life, perhaps it does for you too.
 
So this week I spoke to Susan McLean, widely regarded as Australia’s first cyber-cop.
 
“Sextortion is huge, it’s a massive problem”, she told me.
 
“In my 30 years of policing, I’ve never seen a crime type that is tipping previously mentally well young people into a crisis as quickly as sextortion does”, she said.
 
Now, I’m a money expert with no cyber qualifications, yet there are a few things I got out of my chat with Susan, starting off with what does not work:
 
Most parents read the doom and gloom headlines about tech rotting their kids’ brains, causing them to overreact and go all Judge Judy on their kids. Not only does this not work, it makes their kids much less likely to come to them if something goes wrong.  
 
Try these three things instead:
 
Ask Your Kids to Create an Online Contract
 
Sit down with your kids and explain the concerns you have about the addictiveness of the apps, the mental health challenges they create, and the risks posed by the internet.
 
Now here’s the trick:
 
Have your kids create a contract on how they’ll manage their day-to-day online use.
 
You should give them some pointers of what a good contract should contain:

• Regular tech-free times

• Sharing passwords and logins to all accounts

• No phones in bedrooms and bathrooms

• What they should do if they feel unsafe or see something that makes them uncomfortable.

Then, have them pick their punishment for breaking the contract they’ve set. (When I get my kids to do this, it’s always harsher than what I’d come up with!)
 
This works because you’re treating your kids with respect … and that goes a long way.
 
No Social Media until 16
 
Have your kids read this article.
 
When they do, the first thing they’ll say is … “Yeah, but I’d never send a nude pic”.  
 
And the next thing you’ll say is, “You don’t have to. Scammers are now creating AI-generated fake nudes and using them to blackmail kids.”
 
Right now there’s a petition on Change.org to get the Government to raise the age limit of social media to 16 (I signed it this week).
 
Do I think it will actually do anything?
 
Shrugs.
 
Zuckerberg (and the other tech bros) will likely get around anything imposed on them.
 
They’re way ahead – investing tens of billions a year into AI algorithms that promise to change the way humans interact, with the sole aim of making as much money as humanly possible.
 
So anything we can do to make these pricks’ lives harder is good by me.
 
The bottom line?
 
Don’t wait for the Government to protect your kids. That’s not their job. It’s your job. Keep your kids off social media as long as possible. Nothing good is happening there.
 
Don’t Be a Hypocrite
 
Imagine if you told your kids not to drink … while they watch you down a beer at breakfast.  The truth is your kids may not listen to you, but they never fail to model you.  
 
So, how often are you at the kitchen table blankly scrolling through Instagram in front of them?
 
Know this: to make lasting change, you need to have a good hard look at your technology habits.
 
And so, here’s one final cock-a-doodle-doo:  
 
Sign the same contract your kids came up with. I guarantee you’ll be much happier for it.
 
Tread Your Own Path!

(If this story has triggered anything for you please call: Lifeline 13 11 14, Kids Helpline 1800 55 1800 or Beyond Blue 1300 224 636)

Thanks for reading,

Scott

P.S. I’ll leave the last word to Wayne, who is a man on a mission to end the tragedy of suicide. He has created a 40-minute session that’ll teach you how to really listen, so you can change the course of a person’s life. Organisations can book a live session at smacktalk.com.au. 
 
This isn’t about money (he’s doing it free of charge).  
 
This is about making a difference and leaving a legacy.
 
And you know what?
 
I think Mac would be incredibly proud of his dad and the work he’s doing.  

The Anti-Budget Date Night

Hi Scott,

The first time my partner and I sat down to do a budget, we both felt so overwhelmed. Tonight we are reflecting on how much easier these conversations have become since I bought your book back in 2018. Thank you again!
 
Louise
 
Hey Louise,
 
Well done for looking at my ugly mug rather than Jimbo’s (to be fair I actually think we’re a tie).  
 
Politicians spout a lot of bulldust about what they can do for you (especially as we get closer to an election). However, the things you do over a nice meal and glass of wine will have a real, positive and lasting impact on your life – and that’s an outcome that no politician can guarantee.

Will the Budget Push Interest Rates Up?

Hi Scott,
 
I know you boycotted the Budget, but, being a ‘postcode povvo’ who is barely hanging on (after the rate rises, roughly 65% of our income goes to our mortgage!), I have to ask: do you think all the Budget spending will increase interest rates? We’re banking on them coming down!
 
Sim
 
Hi Sim,
 
I had low expectations for the Budget, and Jimbo did the limbo and went lower still! (Though I’m sure James Packer is very happy he’s getting $300 off his power bill, struggling as he is.)

So to your question – will this Budget push up interest rates?
 
No, it won’t.
 
Well, that’s according to the Federal Treasury, which employs hundreds of the smartest economic boffins in the land.
 
The Treasury has 123 years of experience (since 1901) working with the Government analysing the impact of their policies – and they are officially forecasting that inflation will continue to fall.
 
The problem is that their track record of economic predictions is worse than my boys’ aim at the toilet.
 
“YOU NEED TO STAND CLOSER TO THE TOILET, BOYS. THIS IS DISGUSTING!”
 
Look, to be fair, my boys do try – they just don’t have their aim in yet.
 
However, the boffins at Treasury are fully grown adults who’ve been spraying their predictions around the bathroom for over a century. There is no hope for them. Their economic forecasts are consistently and laughably wrong.
 
So what does that mean for you?
 
Absolutely nothing. With over two-thirds of your income going to your mortgage, you are weeing into the wind, Sim.
 
My advice to you?
 
Panic.
 
The key is to panic early: ask yourself what would happen if you lost your job, or you got sick, or interest rates went up. In other words, you need to do something that Jimbo hasn’t been able to do: make some hard decisions, right now.

My Best Friend Thinks I’m Scum

Dear Scott,
 
I am so privileged. Thanks to following Barefoot from age 17, I bought my own home in Brisbane on a modest salary when I was 24, which I am now renting out while I live interstate. At 27, I am with the man I plan to marry and we are looking to the future. Yet I feel guilty about having multiple investment properties during a cost-of-living crisis. My best friend says “all landlords and shareholders are scum”. I want to build wealth for my family and future children, but I feel bad about getting ahead when others are being left behind. Can I please get some advice?
 
Lina
 
Hi Lina
 
Congrats on your success, I’m so proud of you!
 
Now, what I tell my five-year-old daughter is that whenever someone tries to hurt you with their words it says much more about them than it does about you. They’re the ones who are in pain.
 
Your friend sounds like she’s frustrated that she hasn’t been able to achieve financial security.
 
I get it. You get it. Fact is, we may all live in the wealthiest country on earth, but there’s a growing divide between the haves (home owners) and the have-nots (renters) that is driving deep-seated resentment.
 
However, calling people names is a five-year-old’s way of looking at the world, and it’s going to lead her to becoming a bitter and twisted Greens voter.
 
If this was a playground tiff, I’d tell you to not take it personally and to try and be kind to your friend as she goes through a rough patch. However, if she continues to use you like a cat uses a scratching post, I’d argue it’s time to branch out and find some new kittens to play with.
 
Onward and upward, Lina.

My favourite podcasts (inside)

My 10-year-old son is thinking about launching his own podcast.
 
“Is there any money in podcasting, Dad?” he asked.
 
“Well, if you did one with me … I’d say yes”, I said, smiling smugly.
 
“Umm, this would be a kids’ podcast – no adults allowed!” he shot back, shutting me down.
 
Okay, so when my 10-year-old is thinking about doing a podcast, it tells me two things:  
 
First, the barrier to entry is extremely low (which explains why there are 17,000 new podcasts being created each month).
 
Second, podcasting has now gone mainstream. (Aussies downloaded one billion podcasts last year, and we are proportionately the biggest podcast listeners on the planet.)
 
So, to answer my son’s question, I decided to talk to a guy I know called Mike Fitzpatrick, who has been at the top of the broadcasting tree in Australia for near on 20 years.
 
“The biggest podcasters in Australia are earning over $1 million a year from advertisers”, said Fitzy.
 
“However … your favourite local podcast with, say, 50,000 listeners and 100,000 downloads a week, could be making around $500 a month from advertising … and of course the vast majority of podcasts don’t earn anything”, he added.
 
Interesting.
 
I explained to my son that podcasting is a lot like writing a book. Most authors spend hundreds of hours toiling away … and barely cover their costs. However, as with most rewarding things in life, money isn’t their main driver. They do it because they have a passion for the subject at hand, and they want to connect with and help people.
 
So”, I told number one son, “creating your own podcast is an awesome idea, mate.”
 
“But you’ve sold a lot of books, Dad … so maybe you could be my co-host?” he said, rethinking the idea.
 
Gotcha!
 
Speaking of which, here are my (latest) favourite podcast episodes:
 
1. Your Undivided Attention, with Jonathan Haidt
 
Every parent, school principal and politician should listen to this episode by psychiatrist Jonathan Haidt, author of The Anxious Generation. It made me deeply anxious about the horrible impact social media and AI algorithms are having on our kids. However, Haidt also gives us clear, concrete steps we can take to protect them – if we’re willing to stand up and act. (The episode is called ‘Jonathan Haidt on how to solve the teen mental health crisis’).
 
2.  The Political Fallout of Housing, with David McWilliams 
 
 You could be forgiven for thinking that the housing crisis is unique to Australia – yet the truth is that it’s a global phenomenon. This episode looks at the policy failures of older, out-of-touch politicians (who are generally landlords themselves!). If history is a guide, young, angry renters will soon ‘evict’ them from public office. Be forewarned: a political hurricane is heading our way.
 
3. The Stupidest Thing You Can Do With Your Money, with Freakonomics (Stephen J. Dubner)
 
This episode is labelled “Wall Street’s worst nightmare”, and it tells the story of the index fund revolution. Once you listen to it you’ll never go near a ‘wealth platform’ again. It will also leave you questioning why most not-for-profit industry super funds don’t invest this way. Maybe they’re too busy building their own empires with their members’ money?
 
Tread Your Own Path!

I’m All Alone

Scott,
 
I am a 22-year-old single mother with a six-year-old child. I recently escaped significant domestic sexual abuse and violence. My abuser is currently on trial for attempted murder. In order to keep myself and my son safe, I had to leave behind my support network. I received some compensation for the abuse, and I have saved most of this money. However, I am unsure what to do with it. I am considering investing it for my son’s future or maybe a home eventually, as I am afraid of having nothing to pass on to him or fall back on. I would appreciate any advice on how to invest this money, as I do not have parents to guide me. Thank you for taking the time to read this. I admire your work, it is truly inspiring.
 
Belinda
 
Hi Belinda,
 
I’m so sorry for what you’ve been through. You’re not like other 22-year-olds. You’ve seen life. You’ve been through a lot. And that makes you stronger than the average woman your age.
 
My advice?
 
Don’t stress about giving your son money in 20 years’ time – instead, focus on the here and now.
 
The best return you’ll get on your money is not having to worry about it. So I’d suggest you open up an online savings account and deposit three months of living expenses (we Barefooters call it Mojo).
 
After that?
 
Spend money on getting a secure and safe rental in a good neighbourhood.
 
I’d also open another online saver, nickname it ‘House Deposit’, and put some money in it. I don’t know how much you’ll be able to put in there, but it doesn’t really matter. What does matter is that you’ll see it each time you open your banking app and know you’ll eventually buy a home for you and your son with that money. It’s begun. You’re going places. It’s only a matter of time.
 
And after that?
 
I’d spend money on making positive memories with your son. Holidays with the two of you in a caravan park. Cricket pads. Scout camps.
 
Finally, spend $5 on a notepad from Officeworks. Write your story down as it unfolds. Then give him that to him at age 22 and it’ll inspire him to go out and make his mark, just like his mum did.    
 
Happy Mother’s Day!

Look Me in the Eye

Hi Scott,
 
We’ve just returned from a meeting with our financial adviser. It was the first time I’d met him face to face. He never really acknowledged my presence and spoke directly to my husband throughout the meeting, which made me feel uncomfortable – because it’s my money too! The statement of advice (SOA) has us in 16 different products. When I asked him why we needed 16 different products, he turned to my husband (not me!) and explained that this was normal and that each fund had been specifically selected to maximise our returns. My husband (a landscape gardener!) dismissed me and said “You just don’t understand investing”. I read you every week, so I thought this might be a good question to get your thoughts on.
 
Dina
 
Hey Dina,
 
Your experience reminds me of a meeting my wife and I had with an accountant many years ago. He turned to her and quipped, “Liz, I think there is plenty of money for shoes!” That meeting ended then and there, and we never saw him again.
 
You asked a very intelligent question, which unfortunately your husband clearly didn’t know the answer to … but I do. The reason the adviser has selected 16 different funds is that he wants to make your portfolio so complex that you’ll be forced to stick around and pay his fees each year. (There’s an old saying in the finance world: “Complexity is job security”). You do not need 16 different funds to maximise your returns. I have four diversified index funds.
 
Your husband is incredibly lucky to have such an insightful person by his side.

My Mother Lives in a Chicken Coop

Hi Scott,
 
I’m in the US but feel like your column and book apply to us over here too, and it’s my favourite tool! The problem is my mom is a serial multi-level marketer. She has lost a lot of money over the last couple decades but keeps truckin’ on, mainly due to social security checks that come from her having been married to my dad for 20 years (they have now been divorced for almost 30). She’s in her 70s and we live in the mountains. She literally lives in a converted chicken coop – she has no running water but does have a composting toilet (and at least the coop has electricity). It’s cold and snowy here. She’s broke and freezing most of the time, kept warm by whiskey and pickleball. Do I give up or build her a house and risk my family’s money? When do you stop trying to help your mother?!
 
Rachel
 
Hi Rachel
 
Happy Mom’s Day!
 
Thank you for being so American. (The average chicken coop in Sydney rents out for $1,800 a week.)
 
Seriously, though, your mum is now 70 years old and is unlikely to change. That chicken has flown the coop. Just make sure she doesn’t get any of your eggs.  

The anti-budget

Today, for the first time in over 20 years … I’m breaking with tradition.
 
I’ve decided I’m not going to next Tuesday’s Budget lockup in Canberra.
 
(My editor is not amused.)
 
Tuesday is Daddy-day with my three-year-old, and we have a very busy day planned on the tractor, digging random holes around the farm that I will invariably forget about and end up driving my ute into.
 
Besides, the Budget has always been poor man’s prime-time political theatre.
 
The Government’s spin doctors spend months in focus groups conjuring up a catchy name for their signature splurge – which they hope will get them re-elected.
 
(This year it’s ‘Made in Australia’, apparently.)
 
Then they get turfed out, and the next mob dismantles it.
 
 Plus, all the rosy economic forecasts they make in the Budget can’t hide the fact that many people feel like they’re living in a recession right now.
 
Bottom line?
 
Don’t look to Canberra for help – they’ve got enough problems of their own.
 
Instead, focus on what you can directly control, and I guarantee you’ll move mountains. That’s why this year I want to start a brand new Budget tradition. On Tuesday night I want you to dust off an old copy of my book and have a Barefoot Budget Date Night.
 
Yes, I know it’s probably been a while since you’ve looked at Betty the sheepdog and me, but there’s a special type of compound interest that comes from getting together to plot, plan and dream … as a team (and if you’re single, bring along a friend).
 
Specifically, on Tuesday night I want you to write down which Barefoot Step you’re currently on, and then pick just one thing you can do in 30 minutes or less that will help you move to the next step.
 
It could be sacking your scheissenhausen super fund, dominoing your debts, getting a cheaper deal on your insurance (they can do better, trust me) or, most importantly, rebalancing your bucket percentages after all the rate rises and rental increases.
 
Best of all, you can do it with a nice bottle of wine or a fancy meal (or both), with no Elbow or Mr Potato Head in sight. Now I haven’t passed this by a focus group, but I’m calling it … the Barefoot anti-Budget.
 
Tread Your Own Path!
 
P.S. Send a Barefoot Budget Date Night selfie to scott@barefootinvestor.com!

Should I Pay $2000 for Two Zoom Meetings?

Hi Scott,

My husband and I were referred to a financial advisor by a friend. The first Zoom meeting was a free introductory session – the next covered how they wanted to invest our money and what their fees were. We decided their fees were too high ($27,000 per annum!) so emailed to say “thanks but no thanks”. Now they have now sent us a bill for $2000, which we don’t want to pay. We haven’t signed anything, so I’m just wondering if this is normal for a financial advisor to charge.

Denise

Hi Denise,

Tell them to stick their bill up their Zoom.

You didn’t agree to it, and you haven’t signed a contract.

Fuggedaboutit.

And thanks to everyone for reading. Let me know your thoughts.

Till next week!

Scott.

I Turned $15,000 into $8 Million

Hi Scott,

I don’t have a money question to shock you, but more a story you’ll probably shake your head at. Many years ago, I turned $15,000 into $3.2 million in crypto. It took just over two years, and when I got there I was clueless as to what to do with that much money. I had every opportunity to turn it into real goods and services here in country Victoria. But, because it was the start of a bull run and YouTubers were saying it was going to go way higher, I held on to make more money. In fact, I locked the funds away in a smart contract where I could not access them.

Then the ride really began. The feeling was incomprehensible when it hit $8 million … saddening back at $6 million … sickening at $4 million … total denial at $1 million … and I stopped looking below $500,000. I felt embarrassed. Ashamed. I went on an emotional rollercoaster I never knew existed.

Over time I forgave myself for not being content with $3.2 million and for getting caught up in FOMO. Today, I rarely recommend crypto to people I know. I feel like my experience is similar to the time I got pummelled by the ocean thinking I was better in the surf than I actually was.

John

Hey John,

As they say in therapy, thank you for sharing.

It shows real insight and wisdom that you were able to forgive yourself.

So here’s another way to think about it: if you wrote to me saying you’d turned $15,000 into $200,000 (or however much the crypto is worth now), I’d say you were the luckiest man around.

And I’d focus on the big jackpot you’ve got sitting in your lap right now … in 25 years’ time, you’d give up all your money to wake up and be the age you are right now.

It’s time to create your own luck.

Scott.

A Helping Hand

Hey Scott,

My name is Hepa. I’m just responding to that question last week from Sarah the freelance graphic designer. If it’s all right with you, could you please pass on my contact info to her. I’m also a freelance graphic designer and I make between $100,000 and $130,000 a year. I am happy to help her by showing her how I find clients and how to charge more for her projects, and maybe even get her to help me if I ever get more work than I can handle. Sad to hear how much she’s struggling. I grew up with a single mum in the same situation so if there’s anything I can do to help, I’d love to.

Hepa

Hi Hepa

You’re awesome.

In fact, the entire community of Barefooters is amazing. This week I was flooded with emails from readers wanting to help Sarah (who is paying 85 per cent of her income in rent!).

What I love about your offer is that it’s a hand-up rather than a hand-out. Everyone needs a mentor. Everyone needs someone who believes in them. I’ll put you guys in contact.

Thank you so much.

Scott.

Port Arthur

I’ll get to the millionaire in a moment, but right now I want to talk about something important …

The Port Arthur massacre, in 1996, shocked our country.
 
A crazed gunman killed 35 people and wounded 23 others.

In the days following the tragedy, we were collectively shocked, devastated and outraged.

And our politicians heard us: in less than two weeks they unveiled a policy so big and bold – banning semiautomatic weapons and locking down guns – that countries the world over still point to it today.

The level of emotion over the last few weeks about family violence has been Port Arthur-like.

And this isn’t a one-off event: a woman is killed by an intimate partner every four days.

I look at the photos of these women and imagine the horror of their last minutes on earth. I think about how I’d feel if it were my sister. Or someone I work with. But most of all I think of the scared and scarred little children who have lost their beautiful mum.

Police are currently being called out to a domestic violence event every two minutes. One in three women has experienced physical violence since the age of 15.

We said ‘enough’.

A roundtable summit was called.

Now was the time for the Government to lead and be bold.

And Albo strode out of the summit with … a reheated Scomo policy?

Morrison had the Escaping Violence Payment, which offered up to $5000 for women, and Albanese has the Leaving Violence Payment, which does the same thing.
Now it’s better than nothing.

Yet it doesn’t come close to tackling the big issue: our housing market is a complete dumpster fire.

Many years ago politicians decided it was a better vote-grabber to give tax breaks to investors to provide private rentals, rather than build more public housing.

It’s time to admit that it hasn’t worked.

There are way too many women living with violent jerks because they can’t afford to move.

Last month Anglicare found that, even for educated women earning a higher salary (think teachers or nurses), just three per cent of the rental properties are affordable.
And those cheap rentals have eager-beaver applicants lined up around the corner.

“We’re giving out blankets to women to sleep in their cars”, Anglicare told me this week.

And Homelessness Australia found that just 3.7 per cent of women who flee domestic violence are able to secure long-term housing.

We’re better than that.

So, how could the Government really address it?

Well, let me suggest three ways.

First, by temporarily limiting immigration while the rental market is in crisis.
Second, by cutting negative gearing and the 50 per cent reduction on capital gains tax (CGT) for investors.

And finally, by funnelling those tax savings into building public housing that looks after the most vulnerable people in our society – women and their kids who are fleeing family violence.

That sounds pretty bold to me, Albo.

Tread Your Own Path!

What To Do If You Know You Want To Leave

A woman came to me this week telling me she was contemplating leaving her partner after years of abuse that had, in her words, “totally shattered my self-confidence”.

Here are the exact steps I gave her.

First, safety is your priority
If you’re living with a controlling bully, they may suspect you’re thinking about leaving. That’s when the threat of violence can really ramp up. You need to protect yourself.

So, reach out to the wonderful people at 1800RESPECT line on 1800 737 732 and let them know your situation. They’ll give you advice on entitlements and may be able to find temporary accommodation in the event you’re forced to flee.

Second, put a lock on everything
Change all your passwords and PINs (especially on your email), and, importantly, lock down your phone’s privacy and location-tracking settings. Women are being tracked by their partners like never before. Don’t assume it’s not happening to you.

Third, call your bank’s hardship department
Explain to them what’s going on. They’ll open a bank account in just your name that he can’t access. And the best banks will even provide some ‘getaway money’. I know I’m tough on the banks, but they really do want to help.

Fourth, get digging
Go through any files (either paper or on the computer) and find as much financial information as you can. You’re looking for copies of your marriage and birth certificates, your mortgage or rental details, and any information on shares, property or superannuation.

Finally, go and see a family lawyer
The first meeting will be free, and they’ll explain that you’re entitled to a share of the assets. Many controlling men threaten that they have the financial power in a separation. Your lawyer will call their bluff.

The Golden Child

Hi Scott,
 
My parents ended up losing their jobs last year, and still had debts amounting up to a total of $80,000 (a mixture of credit cards and fixed-term loans). I have been making repayments for these and, by my calculations, I should be able to finish paying them off by October this year. I’m trying to figure out the best way to help them after this. They’re both receiving Centrelink retirement payments each month, which are minimal. I would like to supplement their income, though I am worried about how they’d be spending it. Is it advisable to open up a joint bank account with my parents?
 
Annie
 
Hi Annie
 
Let’s stop for a second and acknowledge your sacrifice:
 
You are an amazing daughter!
 
I’m sure your parents really appreciate what you’re doing (and if they don’t – remind them).

If I were in your shoes, when October rolls around I’d establish some boundaries … and cut off the money. Still, that’s easy for me to type and incredibly hard for you to do. 
 
To soften the blow, I’d encourage them to have a meeting with a Financial Information Service Officer (FISO) at Centrelink, and have them do a Statement of Financial Position and a budget that shows them how they can live off their pension.
 
I don’t know if you can afford to keep funding your parents’ lifestyle, and what ultimate long-term effect will be on your retirement. Yet I’d encourage you to think about this deeply. As they say on the aeroplane safety message, you need to fit your own mask first. 

Scott.

Barefoot-Approved Home Loans?

Hi Scott
 
I was scrolling Instagram the other day and I came across a group called Unbiased Mortgage Brokers who have “Recommended by the Barefoot Investor” at the top of their page. Before I book an appointment, I just thought I’d check that you do actually recommend this home loan provider.
 
Jerry
 
Hey Jerry
 
Thanks for checking!
 
I’ve never heard of them. However, I am very happy to give you a recommendation: stay away from Unbiased Mortgage Brokers, and anyone else (other than financial counsellors from the National Debt Helpline) claiming that I recommend them.

Scott.

The End of Cash

Hi Scott,
 
I’ve heard some talk lately (a lot more than the normal conspiracy theories) around the removal of coins and then notes from the Australian monetary system – moving Australia to a completely cashless society. The discussion between Linfox, the Government and the banks all revolves around how expensive it is to ‘move’ coins around the country for regional post offices, banks, corner shops, etc. The proposal is that the $1 and $2 coins will become notes again to reduce weight, and that later notes themselves will go. This whole concept is so very scary. It would mean a lot more traceability of payments and business transactions – and the ATO would see everything!
 
Lyn

Hi Lyn
 
It’s always puzzled me why paying for something with cash doesn’t carry a surcharge like cards do.
 
After all, there’s a huge cost to taking cash: think of the shopkeepers who have to walk to a bank holding more money than a homie in a rap video. Or Armaguard, who have two pistol-packing blokes driving around in an armoured tank.
 
Now the truth is that we basically already live in a cashless society: according to the Australian Banking Association, cash is being used for less than 13% of payments, and it’s sure to continue dropping in the future.
 
So we’ll get rid of cash?
 
I don’t think so, as much as the ATO would love it.
 
A good case study is Norway, which is the world’s most cashless country, with only 2% of payments being made with cash. Yet Norway is currently legislating the right for its citizens to continue paying with cash to ensure that they are “prepared for emergencies” (like when the artificial intelligence robots shut down our digital payment systems and have us dance like monkeys for their entertainment).
 
While I don’t see an end for cash, I do see a future where there is a surcharge on paying with cash.

Scott.