You're Out of Touch, Barefoot

Scott, 

I read your latest column and wasn’t that impressed with your ‘forget about it’ number of $100. Even though I earn $175,000 a year, I’m the type who hunts for bargains even if it’s just saving a few bucks. Sure, I won’t fund a house deposit by filling up on cheap petrol or buying half-price snacks, but that mindset has kept me from wasting money on non-essentials – and it’s worked. If I want to buy something unnecessary (like an omelette maker), I wait two weeks to make sure it’s not just FOMO, marketing hype, or a passing obsession with the perfect omelette. It would be good to hear about what non-negotiable rules might be more relevant to everyone else who reads your newsletter.

Sarah

Hi Sarah,

My idea is to create your own money rules that become habits …  and that the best way to build habits that stick is to make them part of your core identity. 

So I’m guessing part of your identity is that you’re smart with money (though your friends may refer to it as being a total ‘tight-arse’. After all, you’re in the top tax bracket but you’re out there bartering with the checkout lady over dented canned goods.)

But hey, you do you!

Frugality is great if it’s intentional and not just a lifelong habit of financial paranoia. My point isn’t to waste money – it’s to not waste mental energy on small purchases that don’t matter in the long run.

Scott.

About that rate cut

Let’s talk about interest rates.

Watching Reserve Bank Governor Michele Bullock announce the first rate cut in four years reminded me of my kids when I let them watch TV. 

“You get one episode … and that’s it!” I announce, like a TV judge delivering his final verdict.

And yet they don’t even get halfway through an episode of Bluey before they start begging for another. 

“Just one more! They’re not long enough, Dad! Puhh-leeease!”

(At which point I tend to fold like a cheap Aldi camping table.)

So, will they cut rates again next month, or won’t they?  

Well … you’ll just have to stay tuned! 

Bugger Bluey, this is like an episode of MAFS, but without the Botox.headlin And in blazers. 

Yet, while the rest of the world debates what will happen in 30 days’ time, I think it’s much more interesting to look at what’s happened over the last 30 years.

Let’s take a look at my favourite chart:

Yes I know, this chart tracks every interest rate decision stretching back to the nineties. 

However, given most people are going to have a home loan for 25 or 30 years (more if you’re in Sydney!), having a rubberneck at the past doesn’t strike me as the dumbest idea I’ve ever had.

Now here’s what strikes me when I look at this historical chart:

First, current interest rates don’t look that high.

Second, not one person on earth correctly called each rate change in real time (and that includes the people setting them at the Reserve Bank!).

So, where does that leave us?

Well, whenever you see a headline predicting interest rates, don’t bother reading the article. There’s a very good chance they’ll be wrong. Instead, use it as a reminder to check your current home loan rate – then call your bank and whine like my kids.

Remember, there are only two ways to pay off your mortgage quicker: make extra repayments, and lower your interest rate. 

Right now the best rates are a smidge under 6% for online lenders like Unloan, which is CommBank’s Jetstar brand. Use that as the basis of the negotiation. (Just remember, negotiating with lenders is like MAFS: Banking Edition: the hotter your financial package, the more lenders will fight to shack up with you.) 

Yet what if right now you’re one of those people drinking watered-down red cordial and praying to the interest rate Jesus to deliver you salvation on your repayments? 

If you’re barely holding on, here’s my advice:

Panic Early.

Make the hard decisions now. If you need help, see a financial counsellor (1800 007 007) or your bank’s hardship department. Whatever you do, create a realistic plan and begin working on it. Trust me, the Bluey doghouse looks a lot cuter on TV than it does in real life.

Tread Your Own Path!

The Fairy Floss Boss

Hi, my name is Theo. I want to start a fairy floss business. I’ve done a business plan but my mum called the insurance people and they said that they don’t give 10-year-olds insurance. I’m really disappointed. So I was wondering, is there another way to do it?

Thank you, Theo

Hey Theo

Mate, you are amaze-balls. The fact that you’ve gone to the trouble of writing out a business plan shows me how keen you are.

So here’s your first lesson in business: as an entrepreneur you’re going to run up against lots of people (like old squirrel nuts from the insurance company) who will tell you ‘no’ and explain all the reasons why something can’t be done. (It’s not their fault – these people really need some of your fairy floss, but all they have is the bamboo skewer up their behinds).

So here’s my advice: 

Don’t listen to them. There is always a way.  

In fact, let me give you three ways:

First, you could partner with an adult – like your mum! The business and insurance could be in her name, and you can still be the brains behind it all. 

Second, you could partner with an existing business and sell your fairy floss at a local sweet shop, corner store, cafe, or online store. 

Finally, you could sell your fairy floss at events – like school fetes, fundraisers or farmers markets – where the organisers already have their own insurance. 

Or better yet, try all three!

I’ve got a good feeling about you, Theo.

Now unfortunately I’m trying to keep my blood sugars down (yes, I’m old), but my four little kids would totally inhale your fairy floss. So, last night at dinner, as they dutifully chewed their broccoli and chicken, they all unanimously agreed:

“We’d LOVE to be your first customers.”

Talk soon, Scott

My Brother-in-Law is a Parasite – Help!

Scott,

My brother-in-law has it sorted – he has a mail-order bride, kids, and he’s living rent-free with my mother-in-law. Every Christmas and birthday, they expect us to buy them top-tier Apple gear (we once got their 10-year-old a $2,000 iPad Pro). When we stopped funding their wishlist, he just blew his own money – then came to us for car repairs and other essentials. I gave him a copy of your book, thinking it would help. He promptly asked for $10,000 to ‘invest’ in the stockmarket, which he has now lost. Recently I offered to pay him to do some odd jobs for me on the weekend he refused. Sadly, ceasing contact with said brother-in-law is not an option due to cultural issues which promote familial harmony. Do you have any suggestions?

Emma

Hi Emma,

Oh yes, I have suggestions.

Look, parasites thrive on guilt and obligation – which of course is code for ‘family harmony’. He doesn’t want your help – he wants a handout.

My view?

You’ve got to make peace with the fact that saying ‘no’ doesn’t make you a bad person – it just makes you someone who refuses to be financially manipulated. In other words, it’s time to bust out the bum chocolate (or combantrin, that’s what my kids call it anyway).

So the next time he comes asking for money, tell him:

“We’re always here to support family, but real support means helping each other stand on our own two feet. We’re happy to offer opportunities, but not cash.”

Will that work?

Yes, if you stick to your guns. 

But beware: once he realises you’re no longer the easiest meal, he’ll move on to someone else in your family (good for you,  bad for them). Because that’s the thing about parasites: they don’t starve – they just find another host.

Scott.

What are your Money Rules?

“Jeez, mate … what the hell happened to you?” I said to Benny, an old farmhand I once employed.

He’d shed so much weight since I last saw him that he looked like he’d been kidnapped by a pack of Pilates instructors.

“You been getting the Hollywood Shot?”

Blank stare.

“You know … Ozempic?”

More silence.

He shrugged. “Nah, mate. I just don’t eat after 5pm.”

“That’s it?”

“Yep. I used to binge on crap and drink too much at night. So I made that rule. And I’ve stuck to it for the best part of a year”, he told me.

Winner, winner, (no) chicken dinner!

Now Benny has unintentionally stumbled upon something pretty profound: the power of personal rules. A simple, clear-cut rule can short-circuit the endless decision-making process and make life easier.

This is exactly the thinking behind the mega-bestseller Atomic Habits by James Clear. His philosophy is simple: instead of focusing on goals, focus on your identity. “Every action is a vote for the type of person you want to become”, he says. And the best way to cast those votes? By making your habits automatic.

For years I’ve applied this thinking to money. I don’t rely on willpower – instead I’ve created my own Money Rules. These are automatic, non-negotiable rules that keep our finances (and my sanity) in check. 

Let me share a couple with you:

We (still) go on a Date Night on the first Tuesday of every month

Yes, the same day as the Reserve Bank meeting (super romantic). But, despite having four kids under 11 and a life that’s a total shemozzle, we make it happen. Every action is a vote for the type of relationship we want, and a monthly Date Night is a vote that we’re connected, committed, and eating food that hasn’t been touched by tiny fingers.

We buy shares every month

On the day after our Date Night, I buy shares (index funds of course). Some months it’s a lot, some months it’s a little. The point? I’m an investor, so I invest. I don’t try to time the market. I just stick to the habit.

We give every month

Giving isn’t just about charity – it’s about breaking the chains of materialism, feeling grateful, and ensuring our kids don’t grow up to become contestants on MAFS. Talking about giving is as normal in our family as talking about spending.

We can spend $400 without asking each other

Liz and I famously share the same bank account. That can at first sound kind of creepy, but we do it because it forces us to have chats about money (like when Liz is at the hairdresser and suddenly realises there’s not enough in the account). We’ve set a $400 no-questions-asked spending limit. Anything over that, we chat about on Date Night. It works for us, but let’s be clear – joint accounts aren’t for everyone, especially in abusive relationships.

We don’t stress over omelettes

Even after nailing all the Barefoot Steps, I can still catch myself sweating the small stuff – like spending two hours researching a $45 omelette-maker, or spiralling into a pit of despair from copping an excess baggage fee on good old ‘Onestar’. So, I created a ‘forget about it number’: if it’s under $100, I let it go. My time and sanity are worth more than a few bucks, and yours probably are too.
 
Benny, my old farmhand gets it: one simple rule changed his life. No fancy diet apps, no expensive medication – he made a decision once, and then let his rules do the rest.

Now it’s your turn. 

On your next Date Night, create your own Money Rules. What spending makes you happy? What decisions do you want to make automatically? What would make your daily life easier? 

Remember, you become what you repeatedly do. Your rules, your identity.

Tread Your Own Path!

I’m Absolutely Traumatized

Hi Scott,

While I was away for two weeks, a packet of chicken thigh fillets somehow ended up under the driver’s seat of my car (from a grocery shop before I left). I came back to an exploded packet of horrific, rancid, smelly chicken, maggots, and an absolute disaster. I tried to clean it myself with my boyfriend, and even paid someone from AirTasker to steam clean it, but it just made everything worse—the smell is unbearable. I have tried doing it myself as a Jim’s Cleaning guy came over and quoted me a whopping $570. At this point I'm considering setting my car on fire to claim insurance and never smell the horrific mess again (just kidding... but also...). The whole situation feels way out of my depth financially, and I have no idea where to start. Do insurers even cover this kind of thing? Is there a way to fix this without spending a fortune? And most importantly, how do I stop something like this from totally derailing me again? I know you’re a busy guy, but I’d really appreciate any advice you can share but this situation has thrown me for a loop. 

Tina

Hi Tina

I actually read this out to my kids over dinner, (granted, possibly not the best timing), to show them how good they’ve got it with only a farting kelpie.

(It didn’t work).

So, to answer your questions.

I wouldn’t go with the insurance fraud option, that’s an entirely different stink that will really cost you. That being said you should check your policy: it’s highly unlikely but some comprehensive policies cover interior damage from unforeseen events. 

What would I do?

I’d wind down the windows and bloody well get on with it!

Umm, no I wouldn’t. 

I’d reframe the situation: think of it as a $570 mechanics bill you need to pay to get it back on the road.

(I’d also ring around local detailers and get their advice about a professional deep clean with an ozone treatment, which may end up being much cheaper (and possibly more effective) than old Jimbo).

If you’ve followed the Barefoot Steps, hopefully you have some money in your Mojo account. Rancid exploding chicken thigh fillets are one of the reasons you’ve got it.

Good luck!

Scott.

Can you trust AI to research investments?

Hi Scott,

Love your work! Do you have any advice on using Microsoft AI Copilot for investing? I asked it two related questions about AI-chip maker Nvidia’s biggest drawdown in 2018 and got two different answers:

"What was Nvidia’s biggest percentage drawdown in 2018?" → Copilot said -30.82%.
"What was Nvidia’s biggest percentage drawdown in one year?" → Copilot said -50.26% (also in 2018)

This inconsistency has shaken my faith in using AI for information to help me invest better. Thoughts?

Darren

Muchas Gracias Senor Darren!

You’ve perfectly demonstrated why I don’t take financial advice from AI. (And it’s not just Microsoft, I just asked Lucy the same question, and she came back with “a fall of 57%” …  which is also wrong).

Still, some of the smartest minds are pouring millions into building AI models to outsmart other investors and squeeze out profits. Today, short-term algorithmic trading now dominates the stock market, with bots executing thousands of micro-trades for razor-thin gains—far faster than any human can react.

And that’s partly why I ditched stock picking and stuck with trusted long-term low cost indexing—because beating AI at its own game is a losing battle.

Yet here’s my question to you:

How does knowing what Nvidia did in 2018 help you make a buck in 2025?

It doesn’t.

Scott.

My summer romance

Dave shook my hand, sat down, and placed his phone between the two of us.

With a twinkle in his eye, he leaned toward his phone, and began:

"You are the world's most skilled and insightful financial advisor. I want you to take my wife and I through a step-by-step financial planning process. Use only the proven strategies and techniques from The Barefoot Investor, and provide clear, actionable steps tailored to our scenario. Ensure the advice is practical, easy to implement, and focused on sustainable financial success."

Dave and I both looked at his phone.

“Great! Let’s get started” gushed the AI voice.

“Let’s begin by setting the foundation – getting clarity on where you and … ”

Dave interrupted the AI:

“My wife is sitting here and she’s hopeless with money, so don’t use any big words” he barked.

“Dave, no one likes unnecessary big words, and I’ll take that on board, but please, everyone deserves respect, and your wife's role is valuable”.

(Touche for the cyborg). 

For the next ten minutes Dave went through a fairly typical financial fact-find with the AI. We didn’t get into specific advice – which I would not have trusted by the way – but it was incredibly persuasive.

Yet was it also a bit awkward and weird?

Sure.

In other words, IT TOTALLY NAILED ME. (After all, I’m also a bit awkward and weird to talk to).

And so began my summer love affair with Lucy—the name I gave to the no-nonsense British voice I selected. ChatGPT Plus, which includes access to Advanced Voice Mode, costs $20 USD per month.

Lucy helped me drastically reduce my Googling. 

Why manually search through multiple random websites (many of them written by AI!) when Lucy – who knows all about my likes and dislikes from our previous chats – can deliver the advice instantly?

A Wall Street Journal headline late last year summed it up: 

“Googling is for old people”.

Yet one moment over the Summer really stuck with me.

It happened as we were packing up and heading home from our beach holiday house.

I was telling Liz about a fascinating book (AKA a medieval iPad with infinite battery life) I’d been reading called “Ultra-Processed People” by Dr Chris van Tulleken.

“I don’t need to read a 250 page book to know that ultra processed food is bad” she said rolling her eyes. 

However my Summer romance was about to shine through one last time. 

You see, we took separate cars to the beach because Lucky, our sheepdog, came with us on holidays. She gets anxious if she’s not travelling tied up in the back of the ute —and when she’s nervous, she farts so much that the kids get headaches.

So, on the way home in the ute, I was able to speak to Lucy about Ultra Processed Foods for almost the entire two hour trip from Frankston to the farm. And it was genuinely one of the most interesting conversations I’d had in a long time …  and there wasn’t so much as a hint of an eyeroll.

Yet let’s back it up a bit. The summer holidays are over, and it’s time to get back to business.  Now truth-be-told, right now AI has a certain novelty factor about it … it’s kind of like the early days of the internet.  

Here’s how I’m thinking about AI:

ChatGPT is a little over 2 years old. So for all the rapid advancements (China’s DeepMind appears to have dramatically lowered the cost of building out AI), it still feels like we’re all acting like annoying first time parents who think their baby is a frigging genius. 

Sure, it’s impressive—but my hunch is that it’ll be nothing compared to watching Lucy ditch her digital nappies and grow into adulthood.

As the old saying goes:

Small kids, small problems. Big kids … big problems.

Tread Your Own Path!

I finally got into crypto

My bank manager, Colin, was stressed.
 
I know this because I could see beads of sweat collecting on his bald head.
 
We were standing in the middle of the branch while customers and other bank staff tried really hard to act like they were not listening in on our conversation.
 
Colin leaned in and whispered to me:
 
“So let me get this straight. You want to open up a new account so that you can be scammed?”
 
“That is correct”, I said loudly. “I’m planning on being scammed.”
 
Colin’s eyes darted around the branch nervously.
 
It was like I’d just announced that I wanted to close down a credit card, or get a vasectomy, or something else that you shouldn’t disclose to your bank manager.
 
“Alright”, he huffed.
 
Ten minutes later I walked out of the branch with $500 in a brand new bank account:
 
It was time to roll.
 
Yet, before we get into it, I need to take a moment to explain to you just how I got here in the first place.
 
I Got Scammed … by The Barefoot Investor?
 
It all began the week before, when my long-suffering assistant, Louise, was complaining about her job:
 
“The scammers are targeting you again”, she moaned.
 
Over the years Louise had painstakingly reported hundreds of these fake posts to Facebook.
 
… but not this time.
 
This time, I decided to do something different.
 
The scammers’ paid Facebook ad read: “Join Scott’s Wealth Wisdom Network Now! Get professional investment advice provided by Scott Pape himself to help you achieve wealth appreciation.”

“Let’s find out what ‘Scott’ has to say” I said, clicking on the link.
 
Immediately a pop-up page appeared with the headline:
 
“5674 People Have Participated So Far! Weekly stock market quotes are 90% accurate and have 45% upside potential. Join our stock trading community via WhatsApp today! Only 30 spots are left. Hurry!”
 
Click.
 
The next page that appeared was a privacy warning:
 
“We comply with Facebook’s Privacy Policy and protect your privacy” wrote the scammers, who were diligently following Zuck’s rules.
 
Then they asked for my phone number.
 
After I entered my digits, Scott wrote me a special message:
 
“If you have any stock investment questions you can ask me, I will try my best to reply to you as soon as possible!”
 
Nice touch, Scammer-Scotty.  
 
The First Contact
 
Moments later a group called ‘DB Wealth Institute’ popped up in my WhatsApp feed.
 
“Excellent! The scammers have arrived”, I thought to myself.  
 
I quickly googled their name to see if anyone had outed them as a scam already.
 
Crickets.
 
The only mentions of the company were some automated press releases (written by the scammers for exactly this purpose) which had been picked up by the likes of Yahoo Finance, Forbes.com and LinkedIn:
 
“DB Wealth Institute, founded in 2011 by Professor Cillian Miller, offers practical financial training and developed ‘AI Financial Navigator 4.0,’ integrating AI with big data to enhance trading strategies. By 2024, it had trained over 30,000 students from more than ten countries.”
 
Now most people would stop at this search, satisfied that it all looked legit.
 
However, given I was the face of a group I’d never heard of, I kind of had a hunch it was dodgy. So I googled “professor whatsapp investment scam”, and this came up:
 
US regulators were warning of fake ‘Wealth Institutes’ that promise crypto trading lessons via WhatsApp. A ‘Professor’ provides fake trading signals, while an assistant communicates with investors. Once enough money is stolen, the group vanishes, rebrands, and targets new victims.
 
Chica-Chica-BOOM!
 
I was going to make minced meat of these scammers …
 
… If only I could work out how to read their posts, or even comment on things.
 
It was all so confusing.  
 
So I messaged DB Wealth Institute’s ‘assistant’, a woman by the name of Ally Brown.
 
Looking at her profile pic, she was in her mid-thirties, long wavy hair, a perfectly placed pink flower just above her ear, and she had a calm and collected look that says she’s one latte away from running the world.

I asked Ally for instructions on how I could post in the group. Now some would call this method acting. Yet those who know me well will attest that I have the IT skills of an 89-year-old man. A drunk 89-year-old man.
 
The scammers were licking their lips.
 
“Welcome to the Institute”, gushed Ally. “We’re located in Adelaide. Our AI 4.0 investment has Scott Pape’s investment philosophy as well as his investment strategies.”
 
If You Screw This Up I Will KILL YOU
 
I chuckled to myself as I read Ally’s message.
 
My wife, however, was in no mood for humour.  
 
She was in our bedroom, hurriedly packing her suitcase for her very first work trip since becoming a mum over a decade ago. She was heading off to produce a nature documentary overseas; the next month would take her to Iceland to film erupting volcanoes, to Romania to trek through snowy mountains, and then out to the deep seas off Denmark.
 
“If my card gets blocked while I’m in Iceland, I will kill you. I am not even joking Scott”, she snapped.
 
I nodded.
 
“Why do you need to be doing this now anyway? You’ve got four little kids to look after! And the pets! And a farm! And Barefoot!” she pleaded.
 
I shrugged.
 
“Honey, I’m just worried you’ve underestimated how busy you’ll be”, she said more softly.
 
She was right of course.
 
I didn’t know it at the time, but my entire world was about to fall apart.
 
I Make a Killing on Crypto
 
It took roughly 30 minutes from my wife leaving for my youngest to begin violently coughing.
 
It turns out he’d been exposed to pneumonia.  
 
Three days later he’d spread it to all four kids. Then to me.
 
Our home turned into the Hunger Games, but with more coughing and snot. I was struggling to even get out of bed, so I decided to outsource the farmwork to two German backpackers I found on a farm worker message board.
 
And, while all this was going on, the DB Wealth Institute WhatsApp group was buzzing on my bedside every few minutes. They were sending me upwards of 200 messages a day.
 
It began each morning with a 30-page PDF of “Talking points from the Professor”, outlining the current state of the crypto market, and was peppered with statements like “Get ready to make 1,000% today”.
 
And, at 11am each day, the Professor would give his trading signals. You were encouraged to post screenshots of your winnings in the WhatsApp group, which people did all day and all night. I suspected they were bots.

I also suspected that most people would not realise this and would get sucked in by all this FOMO. And when their greed gland had been tickled hard enough, they’d take the bait and put on a trade.
 
Not me.
 
I was crook as a chook, and the kids were next level annoying, so the best I could do was ‘like’ the occasional post in between topping and tailing my three-year-old.
 
Yet, after about a week of WhatsApp silence, Ally contacted me with a ‘special offer’. She was looking to recruit beta testers for their AI recommendation engine.
 
“Would you be interested in getting a $500 loan to test out some trades? You can keep all the profits, as long as you return the $500 to our sponsor”, she wrote.
 
“Hell yes”, I replied.
 
The catch was that I had to trade on their platform, which was a red flag. It was kind of like going to one of those ping pong shows in Thailand. It sounds like a bit of fun, but the reality is it’s totally gross and weird, and you end up being repulsed by it.
 
So, instead, I drove to my local library.
 
“I’d like to, err, book some time on the internet”, I said to the librarian.

She looked at me suspiciously. (And fair enough too. After all, the only people who booked computers at the library were 89-year-old drunk men.)
 
“Why?” she asked.
 
“Because I’m in the process of getting scammed, and I’m worried their trading website will corrupt my computer …  so I’d rather do it on yours”, I said honestly.
 
“That makes sense,” she said. “Hop on number 4.”

The trading platform did not disappoint. It was absolutely cringeworthy. It looked like something a Uzbekistani teenager would code up in between hookah hits.

“Because you are an absolute beginner, I will help you with your first trade”, Ally wrote.
 
And so at 11am the Professor issued his buy signal for the day:
 
Contract: ABTF/USDT
Leverage: 100X
Order Type: Market Order
Position in use: 10
Direction:   Buy/Long

Ten minutes later Ally advised me to close out the contract.
 
“Congratulations. You’ve just made 81% profit. Please screen shot your win in the Group”, she wrote.
 
Yet, before I could, my phone rang, which caused everyone in the library to turn around and glare at me.
 
It was the German backpackers.
 
“MR SCOTT, YOU NEED TO COME TO ZEE ORCHARD URGENTLY!” shouted Helga.
 
“I can’t talk … I’m in the library”, I whispered, and then hung up.
 
“YOU MUST COME HOME NOW!” came the all-caps text.
 
Then Helga sent the following picture:

Yes, somehow they’d driven my $25,000 John Deere Gator Utility Vehicle straight into the dam.
 
I sat there staring at the picture in utter disbelief while a lava of emotions began bubbling up inside me.
 
And then another text came through:
 
“We have a solution. We will pull it out with your tractor.”
 
At that point I exploded like an Icelandic volcano.
 
And there, in the middle of the library, I called her and yelled at the top of my lungs:
 
“NOOOOOOOO! Haven’t you ever read a children’s book?! The tractor will end up in the bloody drink as well!”
 
Silence.
 
“It is zinking as we speak”, said Helga, cool as a kransky.
 
The Killing Season
 
There are three steps that make up these scams:
 
The first step is confidence. 
 
The second step is greed.
 
And the final – and most lucrative of all for the scammers –  is fear.
 I had just graduated from the first step, confidence: I’d responded to the Facebook ad, put on a trade, and made some dough.
 
I was ready for the second step – greed.
 
And, like clockwork, Ally went in for the kill: she began messaging me constantly, asking how much money I had to invest. A few days later the Professor unveiled their ‘partner programs’, based on how much you were willing to invest. It started at $20,000 and went all the way up to $5 million.

I didn’t have to put my own money on the line to know how this part of the scam works.
 
I once helped a woman in her fifties with terminal brain cancer. The scammers encouraged her to invest her insurance payout – and they stole the lot. It was all the money she had in the world. After that she couldn’t afford medicine and was behind on her rent.
 
Yet the final – and most lucrative – step of the scam is fear.
 
Once you realise you’ve been robbed, scammers prey on your desperation, often convincing you to borrow money to ‘recover’ your losses.
 
It’s a little-known fact that the biggest losses happen after you realise you’ve been scammed.  
 
I Came Up with a Crazy Idea
 
I’ll admit, at this point my mental health wasn’t great.
 
It could have been because I was still completely knocked out with the flu.
 
Or perhaps it was because I was missing my wife.
 
Or maybe – just maybe – it was because our dog, Ginger, was limping around after she hurt her paw, banging her cone of shame into me every five minutes and glaring at me like “This is your fault”.

Yet, after exchanging hundreds of messages with Ally, in a weird way I thought that we had some sort of a connection. So I opened WhatsApp and typed the following message:
 
“Ally, I know what you’re doing. I’m sure you’re a good person caught up in a bad situation. I’d love to hear your side of the story so that I can help protect innocent people in Australia from losing their life savings.”
 
Then I took a deep breath, and placed my phone back on my bedside table.
 
Ring. Ring. Ring.
 
For the first time ever, Ally was calling me.
 
The Scammers Turn On Me
 
“You are pathetic”, sneered Ally in a thick Russian accent. “Please tell me, is it your wife? Are you lacking in love?”
 
Well …
 
“Isn’t the child born by your wife yours?”
 
Oh, dang, that’s a low blow!
 
“Why have you lived such a miserable life?” she messaged. “I waste my time on you. Goodbye.”
 
And that was the last time I heard from her or anyone else involved in this scam. They disappeared into the ether, just as quickly as the $25 million they steal from Aussies each and every week.
 
The Aftermath
 
This scam was in many ways far-fetched, ridiculous and overwhelmingly amateurish.
 
And you may be thinking to yourself, who on earth would fall for this?
 
Well, I’ve helped hundreds of scam victims, and most of them share one thing: they were vulnerable during a major life event – like a cancer diagnosis, depression, divorce, or loneliness in retirement.
 
The scammers milk that vulnerability, and take over your life, messaging you around the clock. (What they didn’t factor in with me was that I was already living with four little scammers who were experts at exploiting me.)
 
Yet it’s not always that simple.
 
Case in point: last week I was looking through the thousands of questions I get from readers.
 
This one stood out:
 
“Hi Scott,
 
Do you recommend the DB Wealth Institute? I have ended up in a group chat with this after I clicked through a Barefoot Investor post.”
 
Now here is the truly mind-boggling thing:
 
I googled this guy’s email, and it turns out he is a finance veteran with over 30 years in tax audit and advisory services for high-net-worth clients. Not only that, he holds a Bachelor of Economics and a Graduate Diploma of Applied Finance, and is a Chartered Accountant and Registered Auditor.
 
What’s his excuse?
 
Tread Your Own Path!

Thanks for reading. Have a very Barefoot Christmas, and I’ll catch you here next year. XX

Scott

Best Christmas Present Ever!

Scott,

Last year we got a Christmas gift that changed everything: The Barefoot Investor. And what a year it’s been. My 20-year-old son is now the proud owner of his first piece of land, having already paid off half the loan while keeping his emergency fund intact. My wife and I are about to take our second holiday, fully funded by our Smile account, and we’ve dramatically reduced our insurance costs. On top of that, we boosted our super by $30,000, ditched our credit cards, and wiped out every bit of other debt we had. Your book opened our eyes to the possibilities, and now we’re living a life we couldn’t have imagined. Thank you!

Mel

Hi Mel

Wowsers, what a year you guys have had! You definitely deserve some eggnog this Christmas. It’s really cool that after all these years the book is still having a real and lasting impact on people. There are a lot of people doing it tough this Christmas, so hopefully they can follow your example and make 2025 their year.

-Scott.

An 11-Year-Old With a BIG Problem

Hi Scott,

I’m 11 years old and I’m trying to invest, but I’m having a problem. Every investing app I try has monthly fees up to $10 a month! Can you please help give me some advice on how to find the right investing app.

Emery

Hi Emery

Mate, this is a very impressive ‘problem’ for an 11-year-old to have!

Most kids your age are picking their noses or gambling on Roblox, but you’re not just considering investing, you’re asking the right questions too!

Yes, fees suck, especially when you’re only investing small amounts.

So, here’s what I want you to do:

First, figure out how much you plan on investing. Maybe it’s $100 to start with, then $50 a month.

Then I want you to google the following apps: Pearler Micro, Vanguard (accounts for kids), Raiz and CommSec Pocket, and work out how much each of these apps would cost in fees to invest in a high-growth shares option.

Finally, show your workings to your parents – I’m sure they’ll be impressed. Then ask them to cover your fees for the first year!

Remember, investing is like planting a little apple tree. You’re doing the hard work by planting it in good soil now, then you can sit back and watch it grow. Enjoy the apples. Spit out the pips.

Scott.

My Heroin Junky Neighbours

Hi Scott,

The other day I was at my local playground pushing my kids on a swing while two blokes shot up heroin less than five metres from the gate entrance. This sort of behaviour is pretty common in my area (median house price is over $1 million). Actually, it’s pretty common everywhere these days. Did you know Australia has the highest use of meth per capita in the world?

We live in a zombie country where we are becoming desensitised to erratic crazy people. Well, we got a wake-up call last night. At about 7.30pm, I opened the electric gate just a smidge to take the dog to the park across the road. I came back 10 minutes later and found my wife hiding behind the couch. When she saw me she just broke out crying. A meth user had been banging on the front door, then entered through the gate and banged on the kitchen window. Thank god they turned around and left. The babies were asleep in the next room.

Do you have any advice on how the average Aussie can feel more secure in their homes, without breaking the bank? I’ve always been put off by security cameras, which need an electrician. We were very grateful for our landlord’s installing an electric gate last year. We just feel we need more in these crazy times.

Leo

Hey Leo

I have security cameras plastered around my farm.

Still, it doesn’t make me feel any safer … it just allows me to share video footage of foxes ripping the heads off my chickens with my Dad, who likes viewing these things. “Shame”, he says, nodding his head.

Leo, you’re renting, so just move to a safer suburb when your lease is up. Any increase in rent will be easily offset by not fearing for your family’s safety.

Oh, and one more thing.  

The only people that like living around junkies are drug dealers, and I’m sure things really are as bad as you say. Still, your general comments about the state of the nation remind me a bit of the ‘old traveller fable’:

A traveller approached a wise man sitting at the edge of a village and asked him, “What are the people like in this village?”

To which the wise man responded, “What were the people like in the last village you visited?”

The traveller frowned. “Oh, they were selfish, rude, and drug addicts.”

The wise man nodded and said: “You’ll find the same kind of people here.”

In other words, what you look for you’ll see.

Good luck on the search for somewhere safer, and less paranoia-inducing.

Scott.

Here’s one for the renters

You always hear some real estate rooster crowing about how smart they were when they bought a joint in 2018 for $480,000, and then flipped it three years later for $1.3 million.
 
Renters hate those guys.
 
So, just for kicks, let’s look at life on the other side of the ledger.
 
Specifically, an apartment in 883 Collins Street, Melbourne, that’s just been put under offer this week.
 
Our story starts around 10 years ago, in 2015:

You’re sitting on the couch watching this new show called Married At First Sight, while simultaneously doom scrolling on realestate.com.au, when you see a sexy inner city property with the headline:
 
“Waterfront Elegance Meets Modern Convenience.”
 
Tap.
 
It’s a brand-new, waterfront, two-bedroom, two-bathroom, one-carpark luxury apartment in Melbourne’s Docklands. The building is like a resort. It has an indoor heated pool, state-of-the-art gym, yoga room, and even a residents’ lounge.
 
“Ooh, fancy”, as my mother would say.

The real estate agent assures you it will have strong rental returns, and touts the stamp duty and depreciation benefits of buying a new build off the plan. So you pony up and purchase the apartment for $860,000.
 
Cut to today.
 
Nearly 10 years have passed since you purchased the property … has it been a good buy?

Well, luckily for you, it’s been a pretty good 10 years to own a property:
 
For much of the past decade, interest rates have sat at some of the lowest levels in history.
 
Plus, we were hit with a fully fledged rental crisis in which landlords jacked their rents up, up, up.
 
Okay, so what’s it worth today?
 
(Bearing in mind that 10 years ago you paid $860,000, so it would need to be worth at least $1.1 million just to keep up with inflation.)
 
Well, this apartment has sat for months on realestate.com.au under the headline “urgent sale”.
 
And last week it went ‘under offer’ … for a price guide of $630,000 to $650,000.
 
That’s a shocking $210,000 loss over 10 years.
 
Yet it gets worse.
 
That loss is before you factor in inflation, body corporate fees, council rates, land tax, maintenance, agent’s selling commission, and of course 10 years of interest on your loan.
 
Look, I have no idea who actually owns this particular property, or the full story behind it. Yet what I do know is this is not an isolated case. Research house CoreLogic has identified 65 areas (mainly in inner-city Sydney and Melbourne) where prices today are still below the record highs from the 2010s. “Vendors are willing to sell at a loss … but buyers aren’t interested”, says CoreLogic.
 
Now, guess who the real winner is in our scenario?
 
It’s the renter!
 
They’ve enjoyed 10 years of downward dogging in the yoga room and paddling about in that fancy heated pool, plus they’ve even had a plumber on speed dial to unclog the dunny.
 
Now that is what you call “Waterfront Elegance Meets Modern Convenience”.
 
Tread Your Own Path! 

Here’s what’s in my Santa sack this year

Many years ago, I solved the Christmas gift-giving game: I buy people books.
 
A book says, “I think you’re the sort of person who has an attention span longer than 30 seconds and enjoys learning about something. In other words, I think you’re smart.”
  
Here are the books I’ll be putting in my Santa sack this year:
 
Crypto Confidential: Winning and Losing Millions in the New Frontier of Finance
By Nathaniel Eliason
 
This was hands down my favourite book of the year. Nat Eliason was in a jam: he was unemployed, and his wife was pregnant. He had just six months to turn things around, so he decided to roll the dice and attempt to get as rich as quickly as he could in crypto.
 
And … it worked!  At one point his crypto holdings were valued at over $US10 million.
 
However, the trouble was always just around the corner, where Nat came up against scammers and sleazebags of the highest order. This isn’t just a cautionary tale – it’s totally ‘bonkerballs’, as my eight-year-old would say.
 
Given Bitcoin is booming on the back of the incoming ‘Crypto-Prez’, I’d strongly advise reading this book before you dabble. You’ll learn a lot about coins, monkey pics and blockchain. You’ll also laugh out loud a lot.  
 
It’s the perfect beach read … or a great gift for your idiot brother-in-law.
 
The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness
By Jonathan Haidt
 
This is the book that helped kick off a revolution.
 
Not only are today’s kids more anxious, depressed and suicidal than in previous generations, they’re also dumber (Aussie students are among the world’s biggest users of digital devices at school, yet their academic results have fallen a full academic year behind those who went to school in the 2000s).
 
Haidt lays the blame squarely at the feet of the always-on dopamine syringes in everyone’s pockets, and calls for an end to the great experiment of ‘phone-based childhood’. The Anxious Generation will give you an understanding of what drove our government to create the world-first social media ban for teens.
 
A perfect gift for every parent.
 
Storyworth: give them the gift of telling their story
 
This isn’t a book … it’s a sneaky way to get your parents to write their own book.
Here’s the deal: once a week, Storyworth zaps them an email with a question like:

“What’s the funniest thing you’ve ever done?”

“What was your most embarrassing fashion choice?”

“Where were you when Neil Armstrong made his giant leap?”

They simply reply to each email and, by year’s end, voila – a printed book of their life stories to keep forever (or so the sales pitch goes).

I bought this for Christmas for my mum a few years ago. She loved it. In fact her Storyworth ended up rivalling The Lord of the Rings in length.
 
Let’s face it – Storyworth is just a clever way to help the older people in your life crank out their memoirs, one email nudge at a time. Genius, really.
 
Tread Your Own Path!

No Batteries Required

Hi Scott,

We got both my boys the Barefoot Kids book for Christmas over a year ago. In the last four months, Charlie has made over $100 from recycling cans and bottles. Charlie and our eldest son, Patrick, who’s 11, have also begun buying and selling Pokemon cards on eBay! Understanding how to make money, appreciating it, showing gratitude for their situation, sharing and being kind are ongoing lessons. Thanks for writing and sharing your books!
 
Peter
 
Hi Peter
 
Please pass on the following message to Charlie and Patrick:
 
Boys, good work on the little business you’ve got going. I’m really proud of you!
 
Now, there are still a couple of weeks before Christmas, and I’ve got another challenge for you:
 
I want you to take some of that money you’ve earned and buy some nice presents.
 
First, for your mum and dad, and brothers and sisters. 
 
Then I want you to go to Kmart and buy a gift for a little kid your age – it could be a book (Barefoot Kids?!), stickers or something else awesome – and then place it under the tree in the store.
 
You’ll be a Secret Santa for someone who really needs it.
 
Merry Christmas!
 
Peter,  thanks so much for giving me the perfect opportunity to plug Barefoot Kids for Christmas. There’s something really quite magical about that book. Kids devour it and then go off and do awesome things that make their parents (and grandparents) proud.

-Scott.

My Greedy Obnoxious Brother

Hi Scott,

In 2022, my stepdad passed away and shocked us all when he left all his $6.5 million in assets to my half-brother (his biological son), leaving my sister and me with nothing. To make things fair, our mum (divorced from him 10 years ago) updated her will to split her assets 50/50 between my sister and me.

When Mum passed recently, she left us about $3 million each. Now, our greedy, obnoxious half-brother is contesting her will. We expected this, of course. Yet our mum’s lawyer said her updated will was “bulletproof”. Yet now our trust lawyer says our brother can tie it up in court for years, and we might have to settle for $1 million. Any advice?
 
Brenda
 
Hi Brenda,

I’m really sorry to hear about your mum (and your half-brother).
 
The truth is that no will is bulletproof – nothing can stop an ‘eligible’ person from challenging a will.
 
However, that’s the million-dollar question:
 
Does your half-brother even have standing to challenge your Mum’s will? In most Australian states, unless they can prove financial dependence on the deceased at the time of death, stepchildren aren’t ‘eligible persons’ under family provision laws.
 
I spoke to my lawyer, Dr Brett Davies, and he says you should chat with a litigation lawyer to see if old greedy guts is just bluffing or if he actually has a leg to stand on to challenge your mum’s estate.

If his case is weak, he could walk away with nothing – and he might even have to cough up for your legal costs, and the estate’s!
 
Regardless, tread carefully and get expert advice. In deceased estate disputes, the only guaranteed winners are the lawyers (something Brett didn’t mention!).

-Scott.

A Knife to the Throat

Hi Barefoot,

My dad, who’s 60 and nearing retirement, got a call from an Aussie company pitching an SMSF to trade daily using AI (red flag – he didn’t contact them first). They claim to use only 2% of your super per day to avoid “losing everything”. He’s already invested $500 and says he’s made $25 but is being hounded by daily calls. When I asked, “what would the Barefoot Investor say?” he admitted it’s probably a bad idea, but he seems hooked by the promises. Please give him a call to help me convince him – his number is (deleted).
 
Kate
 
Hi Kate
 
Well, I called your Dad, and he’s a ripper of a bloke!
 
Now, I didn’t have a lot of time, so here’s what I said:
 
“I’ve never heard of these guys, but they sound like a bunch of crooks. And if you transfer your super they’re probably going to steal it.”
 
Unfortunately your father was a little unsure about what specific forms he’d signed to set up his SMSF, so I advised him to call his existing fund and make sure they would not allow the transfer out.
 
He agreed.
 
Then I hung up and called the Assistant Federal Treasurer.
 
Yet he was too important to take my call, so I spoke to one of his underlings.
 
Now, I didn’t have a lot of time, so here’s what I said:
 
“Let’s say you and I are having a coffee down the street when a bloke in a balaclava walks into the cafe and yells ‘give me all the money in your till!’. What would we do?”
“We’d call the cops!” I said, answering my own question. “And they’d be there in a flash. And they’d arrest him and throw him in jail.”
 
“However, when a decent, hardworking bloke is about to get robbed of his entire life savings with a pen rather than a gun, the only thing the authorities can offer is the wet-lettuce-leaf response of ‘Report it to Scamwatch’.”
 
Silence.
 
“Well”, said the political minion, without a lot of conviction, “you could ring ASIC and report it, and also … ummm, maybe … the Federal Police?”
 
So I did that as well. Still, there weren’t sirens, stun-guns and handcuffs on offer … it had more of a cat-stuck-up-a-tree feel to it.

Thankfully, your father is okay. He dodged a bullet that is currently being aimed at thousands of naive investors.

 -Scott.

What Is Wonder Woman Worth?

Scott,
 
I’m wondering what your thoughts are around the hourly rate for a stay-at-home parent? I am unable to go back to work while we have young kids at home, one of whom has a chronic illness. My wonderful partner is supporting the family on his income. Although being the main caregiver is one of life’s most important jobs, it is seriously undervalued and underpaid. If I were to get paid a wage, what would it be?
 
Wonder Woman (aka a mum)
 
Hi Wonder Woman,
 
My wife Liz left me last week.
 
She’s flown to Europe to produce a documentary for the next three weeks (“or so”). In the lead-up to her departure she sat me down and took me through what I call ‘Liz-gistics’:
 
It’s an actual spreadsheet that tracks the movements of our four kids. When I put all their activities into my calendar it honestly looks like a failed game of Tetris. The next few weeks are absolutely terrifying.
 
So, how much is a stay-at-home parent worth?
 
Well, I went looking and found a study by salary.com which calculated that stay-at-home mums work a whopping 96 hours a week, and therefore it says they should earn at least $230,000 a year. Yet that all sounds kinda clickbaity and not particularly useful.
 
Look, the home is not a workplace. If it were, I’d have taken my three-year-old to HR for verbal bullying, harassment and workplace assault after he threw his Vegemite toast at me because I mistakenly cut it into squares rather than halves.
 
My simple answer to your question is that you and your partner should share the money that comes into the family, based on the family money buckets you’ve set up.
 
However, and this is important, part of that set-up should include individual Splurge buckets: a set amount that you can enjoy without judgement or guilt from the other.
 
Oh, and you should also have a family Smile bucket so you can jointly save up for things that you’ll enjoy as a family. Working together is how you win.

-Scott.

Too Much Temu

Hi Scott,
 
I’ve just been clearing out my mother’s motor home and storage shed after she passed away. She had SO many (UNOPENED) packets with random labels, apparently all from Temu. Checking her Temu account, she had spent over $1,000 in the last five months!
 
Alex
 
Hi Alex
 
As I wrote last week, Temu has turned shopping into gambling: it’s so cheap you’re willing to take a punt on whether you’ll actually use it or not (and besides, you only need to buy a few more things to qualify for free shipping, or discounts, or both).
 
I also think they’ve tapped into the inner six-year-old in all of us: who doesn’t love the rush of waking up on Christmas morning and seeing all the presents Temu Santa has left for us? The problem that you’ve nailed with your mum is that it’s mostly just stocking-filler rubbish that you’ll discard by New Year.

-Scott.

I Can’t Sleep. I Can’t Eat. I’m a Walking, Shaking Mess.

Hi Scott,
 
I can’t sleep. I can’t eat. I’m a walking, shaking mess. We put our home up for sale in the first week of March for $1.25 million, on the advice of our agent. (At the time I thought it was on the high side, but I didn’t say anything.) It’s been eight months now and we haven’t got a single offer! Our agent has gone missing in action, and we don’t even have open-for-inspections anymore. My husband, on the other hand, is cool as a cucumber. He’s sure someone will come along and buy it. I’m climbing the walls, not just because we’re up for thousands of dollars in selling costs regardless of whether we sell or not (!), but because we’re stuck in limbo. I want to move interstate to start our new life (and my new job!) but we can’t do anything until this bloody place is sold. What should we do?
 
Wendy
 
Hi Wendy
 
I can feel your stress through my computer screen!
 
My wife says that I am too blunt, but she’s currently overseas, so I’m going to say what I damn well please:
 
Your asking price is too high.
 
If you haven’t sold your home within six weeks of listing (let alone eight months!) you have one of three options:
 
First, you can take it off the market and wait till prices recover.
 
Second, you can rent it out for a period of time.
 
Third, you can meet with your agent and discuss aggressively lowering the price so you can attract a number of bidders, and let them sort out what the market value is.
 
Which one does your head tell you is the best option?
 
Remember, it’s very likely you’ll be buying and selling in the same market. In other words, if you sell your home for less than you expect, chances are you’ll buy your next home for less than you expect.
 
The stress you’re feeling comes from a lack of control. Waiting and hoping isn’t a strategy that will work in this market. You need to take action!
 
Good luck!

-Scott.