Kohler Ad is a Scam (and so are you)

Hi Scott,

My wife and I have followed the Barefoot Investor program for years. It got us out of a pit of debt and we've been debt-free ever since. I'm now happily retired. The other day I saw a 'news' article on social media quoting both you and Alan Kohler endorsing a new AI platform. Is this something you're involved in?

Reg

G'day Reg,

It's a scam.

The other day I rang Bushy – a bloke I know who does stonework – about a job at my place.

"Am I talking to the real Scott Pape?" he asked.

Huh?

"Because you and Alan Kohler are on my Facebook feed promoting crypto scams," he laughed.

Bushy wasn't wrong.

Scammers use AI to create fake news stories featuring well-known Australians (like me and Alan) supposedly revealing a "secret investment platform". The ads often look like an ABC article, complete with the logo and a fake interview on 7.30.

Click the link and things move fast.

Another reader this week told me she clicked one of these ads. Within seconds the phone rang. A friendly voice congratulated her for "getting in early" and asked for just $400 to start.

Then came the hook: all they needed was the 16 digits on her bank card.

Thankfully her husband overheard the conversation and said the magic words:

"Hang on… is this a scam?"

She hung up. Good move. Because if you hand over those details, the scammers won't just take $400. They'll take everything they can.

For the record, I do not run secret crypto trading platforms. Neither does Alan Kohler.

And if you ever see an ad online claiming we do, there's only one thing you should do.

Don't click.

The Iran War is Killing My Retirement

Hi Scott,

I am very stressed about the Iran war, and the impact it will have on my superannuation. I am 61, still working, and looking to retire in the next four years. Therefore I check my Australiansuper balance if not daily, every second day! I spent the last 60 years not giving a cuckoo about the share market, and now it keeps me up at night. Experts are suggesting that this is the start of something much bigger. I am thinking of moving my super to cash until this blows over. It would help me sleep at night.

Yasmine

Hi Yasmine,

You wrote: "I spent the last 60 years not giving a cuckoo about the share market."

That might actually be the smartest investing strategy I've ever heard.

Because when retirement is four years away, every wobble in the market suddenly feels personal. It's like waking up an hour before your alarm. Every creak in the house suddenly sounds like a burglar.

On Monday, as I was sipping my coffee, I read this headline:

"More than $100 billion was wiped off the ASX in less than an hour in a horror morning for Australian investors."

I actually love these headlines, because they are just so… thirsty.

Let's decode it:

"$100 billion wiped off" (seems like a lot)

"in less than an hour" (seems quick)

So was it a horror morning for Australian investors?

Nah.

Another way of writing that headline is:

"Sharemarket down to levels not seen since… Christmas."

Even accounting for Iran and the $100 billion wipe out, over the last year  the sharemarket has delivered a 14% return, when you factor in dividends (which you should).

Ho! Ho! Ho!

So I have some advice for you to get more sleep.

First, stop checking your super balance every week. It's like planting an apple tree … and then checking on it each morning and wondering whether you should pull it out and replant it somewhere sunnier in your garden.

Second, build up a cash buffer within your super fund. Money you can live off when you retire. Book in to see a financial adviser at AustralianSuper. 

Something like three years of living expenses is a good number.

Sleep well.

I am in tears as I write this

Scott,

I am in tears as I write this. I'm 43 and a qualified nurse. My husband is a lawyer. We own our home and two investment properties. We are asset rich, cash poor, mortgaged to the hilt. I need dental treatment. Implants are just the start. It will cost upward of $30,000. I'm a nurse, and I fully understand the impact bad teeth have on your health. Not to mention embarrassing, and at times painful. I've put my kids first and my health last. So here I am. 

The investment properties cover their own costs, but that's it. Both have gone up significantly in value, but the bank won't let us refinance. We don't want to sell either. We'd lose half in capital gains. Our primary mortgage is $7,000 a month. Childcare $3,000. We don't have fancy cars. I shop at Kmart. There's nothing left. So do I dip into my super (I have $416K)? Fly to Thailand? What should I do? Don’t just say ‘nothing’.

Sue

Hey Sue,

Seems like you’ve spent your entire adult life dismissing yourself and your needs — so I sure as hell ain’t going to do that. You’re not talking about getting flashy veneers for Instagram, but treating a genuine health concern that will have real ramifications for you as you get older.

Stop asking for permission. You’re a grown woman. There is no question you need to get this done — the only question is how to pay for it sensibly. And sensibly rules out super. Taking $30k today could easily be $200k at retirement.

So that’s a hard no.

What about flying to Thailand? 

If I were in your shoes I wouldn’t do it. Yes it may be cheaper, but if something fails, fixing it here could end up costing more than doing it locally.

Let me pick at something you wrote:

“I've put my kids first and my health last. So here I am.”

Here you are.

What lesson are you teaching your kids … that money is more important than your health?

Sue, it’s time for a little drilling: you’re a professional couple with over a million dollars in assets, but you can’t pay for your health?

If I were in your situation I’d sell one of your investment properties.

Pay the damn capital gains.

Pay for the dental work.

Maybe give yourself some breathing room so you don’t feel so stressed all the time.

Smile.

You deserve it.

Two padlocks

I've been thinking about putting a padlock on my diesel tank.

"Do it," urged Kathryn, my personal assistant. "Diesel's going to four dollars a litre."

She showed me texts from mates driving around Lancefield trying to stockpile diesel in 44-gallon drums.

 
Wait, why are people prepping?

Well, maybe because they listened to Energy Minister Chris Bowen, a man who believes in hot air and wind, who assured us this week:

"There is no need for panic buying."

Better make it two padlocks.

It's easy to write this off as the toilet paper panic of 2020, except this time the thing running out actually runs everything.

The Strait of Hormuz is a sliver of water between Iran and Oman, two places most Aussies would struggle to find on a map. Still, it carries 20 per cent of the world's oil. That makes it the jugular of the global economy, and right now someone has their hands around it.

Here's how it hits farmers like me:

When oil prices surge, the tanker that rolls up my driveway to fill my diesel tank costs more. So farmers swear a lot. The fertiliser to grow the food is already up 30 per cent. So farmers swear some more. The truckie who moves the harvest needs to charge more. By the time your food hits the shelf, every single hand that touched it paid more to do it. That's inflation.

Here's how it hits you:

Prices are already rising at 3.8 per cent — well above the RBA's 2 to 3 per cent target. Higher oil prices push that higher. Higher inflation means the Reserve Bank reaches for interest rates. So if you've got a mortgage, that distant rumble you can hear?

That's not thunder.

My wife, meanwhile, has moved on.

She test drove a new electric car this week. We've got solar on the roof, and a battery going in soon. We drove past a servo on the way home.

Diesel: $2.60 a litre.

She didn't even notice.

Felt good!

Tread Your Own Path!

Have You Checked Your Super Lately?

Hi Scott,

I read your column about Mary (“I’m Still Standing”), who lost the majority of her lifetime super savings through the First Guardian Master Fund collapse.

I’m the government-appointed CEO of the Compensation Scheme of Last Resort.

Around 12,000 people were impacted by Shield and First Guardian, but only 2,000 have lodged complaints with the Australian Financial Complaints Authority (AFCA). What happened to the other 10,000? 

If you received dodgy advice, you may be eligible for compensation. Lodge a complaint with AFCA. And encourage everyone to check their super balance now! Love your work. Keep giving the bad guys a hard time.

David Berry, CEO, Compensation Scheme of Last Resort

Hi David,

Your job is to compensate Aussies who have received dodgy financial advice?

Bloody hell, you’d be busier than TAL’s funeral insurance public relations team.

Here’s my best guess on where those 10,000 missing victims are:

They have no idea it happened.

The vast majority of people who got screwed innocently clicked on a Facebook ad offering a free super comparison or review. They were taken to a page that asked for their phone number. Then a smooth-talking spiv convinced them to move their super into a dog-turd super fund. 

Then their money went ‘poof’!

And here’s the thing about super: it’s the one account we never check. It just sits there while we get on with life. Which is exactly what these crooks were counting on.

So let’s give a brother a hand.

There are a couple of million Barefooters reading these words right now.

So I have a favour to ask of you.

If you, or someone you love, ever clicked on a social media ad and switched your super, or if a financial advisor has switched you into a super fund, go here right now to find out if you’re affected:

takeyoursuperback.com/ 

The Worst Car Loan Ever?

Hi Scott,

My nephew borrowed $51,681 from ‘Infinity Finance’ for a car at 18.35% interest. After 12 months of paying $1,327 monthly (that’s nearly $16,000 paid), he came into some money and asked for an early payout figure. They said he owes $53,511 – that’s nearly $2,000 MORE than he originally borrowed. They’ve given him seven days to ‘take it or leave it’. Is there any world in which this is legal? What do we do?

Aunty Pat

Hi Aunty Pat,

Your nephew has just learned the most expensive lesson an 18-year-old can learn:

Don’t swim with sharks.

Let’s look at the maths:

He borrowed $51,681.

He’s already paid almost $16,000.

And after a full year of repayments … they say he still owes $53,511?

Bloody hell.

Now, how does that happen?

Simple. These lenders pile on things like early termination fees, establishment fees, monthly account fees, and interest that compounds faster than rabbits. It’s all buried in the fine print.

If he keeps the loan, he’ll end up paying close to $70,000 for a car that’s probably worth $35,000 today. Half his money. Incinerated.

So here’s what you should do:

Tell him to prepare himself for a bit of biffo.

He’s about to scrap with a company whose entire business model depends on 18-year-olds not reading the fine print. So he should call the National Debt Helpline on 1800 007 007 and get a free financial counsellor in his corner.

His first punch is to call Infinity Finance and tell them he’s disputing the loan on responsible lending grounds. An 18-year-old, fifty grand, 18 percent?! That’s got ‘Barefoot Investor national newspaper article’ written all over it.

Then throw a hook: while he’s got them on the phone, make them a ‘full and final’ settlement offer well below their payout figure. I’d open at $45,000.

However, I’m guessing these guys don’t mind a scrap and they love their money, so they may well say “bring it on”. If they do, it’s time to go for his knockout punch: lodge a complaint with AFCA (the Australian Financial Complaints Authority). The moment he does, Infinity Finance has to stop any debt collection action. They can’t chase him. They can’t threaten him. They just have to sit there and wait.

Oh, and tell your nephew one more thing from me:

When someone offers a teenager a $50,000 car loan at 18% interest, they’re not selling a car.

They’re selling a life lesson.

Unfortunately, this one costs about $35,000.

Jeffrey Epstein and Vanguard

Scott,

As a mid-life woman, I have been impacted by predatory behaviour in the workplace and I identify strongly with the women who were treated as prey in Epstein’s network. I am really disturbed to read about the links of this network to Vanguard. Are you able to recommend some alternative low-cost ETFs that are more ethical about how they do business, like Future Group, which holds Future Super?

Matilda

Hi Matilda,

Your question made me sweat like Bill Gates.

Jeffrey Epstein is linked to Vanguard?

I couldn’t believe it. This is one of the most boring companies in finance. Its founder, Jack Bogle, was so tight he kept a penny jar by the photocopier.

He must be rolling in his grave right now.

So I took a deep breath, held my nose and googled.

Nothing.

I asked ChatGPT.

Nothing.

So I called Vanguard and asked them point blank.

“Is it true you have links to Jeffrey Epstein?”

“I don’t think so”, came the confused response. “Have you heard otherwise?”

“Well, I got a tip-off from a reader who’d obviously done some serious research ... though it doesn’t appear to be on the internet, or in any newspapers, or anywhere else that I could find.”

And as I said that, I realised something.

Research isn’t really your thing, is it Matilda?

Because if it were, you would have also googled the ‘ethical’ alternative you recommended to me, Future Super. 

Here’s what I found when I did:

It seems Future Super has its own problems: greenwashing allegations, high fees – and ASIC fined them for misleading marketing in 2023. So your ‘ethical’ alternative has about as much credibility as Elon Musk’s email to Epstein on Christmas morning asking for an invite to one of his parties (google it).

Matilda, the whole Epstein tragedy is about innocent young women giving their trust to people who hadn’t earned it, and didn’t deserve it. Don’t make the same mistake with your money.

Ding Ding Ding

“The unfolding war in Iran took a deadly turn today …” squawked the radio in my ute.

I glanced at my son in the rear-view mirror, strapped into his booster seat, and switched it off.

We had business to attend to.

“Were here, mate,” I said, without needing to.

He was already wriggling out of his booster seat like a magician escaping a straitjacket.

For a brief moment we stood holding hands, watching a giant conveyor belt swallow empty bottles one by one.

Every time it swallowed one:

‘Ding.’

Ten cents.

‘Ding. Ding. Ding.’

Forty cents flashed on the analogue scoreboard.

Something stirred inside me that I genuinely cannot explain. I am a grown man. I have written books about money. But standing there at that collection depot with my five-year-old son, I felt five years old myself.

My mind started racing. We should go to Bunnings and get one of those Gorilla trailers. We could raid Romsey for every yellow bin in sight and make out like bandits.

DING!

My son felt it too. He squeezed my hand and then began shovelling bottles like he was feeding one of his hungry orphan pet lambs.

I told one of my newspaper editors about it. She went to the tip recently herself, fresh off a camping trip that was apparently very well hydrated. She fed the machine for twenty minutes and walked away with twelve bucks.

“All that work,” she said. “For twelve dollars.”

Same machine. Same ding. Completely different reaction.

We heard treasure. She heard an hourly rate.

And that's the shift: at some point money stops feeling like treasure and starts feeling like homework. The numbers get bigger. The feeling gets smaller.

The first dollar you ever earned felt like all the money on earth. You remember it. Today your mortgage repayment does not feel like anything, even if it’s the smartest financial move you’ve ever made.

I’m not saying go fossick for bottles. I’m saying if the only time your kids ever see you with money is when you’re paying bills and sighing, that’s the story they’ll grow up believing.

They’re watching how you feel about it.

My son collected forty-three bottles. He made $4.30.

“This was the best day,” he said on the drive home.

The radio stayed off.

Tread Your Own Path!

I’m Disappointed in You, Barefoot

Scott,

I was disappointed with your response to the teacher last week. Why not provide a real solution when you are asked? The ASX School trading game is a lot of fun and can be done in a safe way to encourage kids to get a taste of investing. I would have thought you would jump at sharing a low cost, safe way to learn how to invest.

Denise

Hi Denise,

The ASX school trading game is, in my view, redic-or-us.

Students get a virtual $50,000 and have 10 weeks to trade stocks throughout the school day.

What does that teach kids?

That investing is basically gambling. Just without the sports.

That is monumentally wrong. It’s dangerous. It’s poisonous. After all, if investing were a 10-week sprint, Warren Buffett would’ve retired at 14.

The ASX should shut it down and leave the gambling grooming to Sportsbet.

The best way to learn to invest is to actually do it. Take some pocket money — as little as $25 — and put it into a low-cost index fund. Google “kids investing app” and you’ll find plenty of options.

At the same time, plant an apple tree in the backyard.

Watch both grow.

That’s investing.

I’m Still Standing

Dear Scott,

I’m writing to you because I need a little hope.

I’m 56 years old, single, and the sole supporter of myself. I have worked two to three jobs at a time all of my adult life, always believing that if I worked hard and did the right thing then my superannuation would be there to support me in later years.

Unfortunately, due to the failure of the First Guardian Master Fund, I have lost the majority of my lifetime superannuation savings. I now have approximately $13,000 remaining in super, and I am extremely concerned about my financial wellbeing as I approach retirement age with no partner, no safety net, and no ability to rely on anyone else.

I am not looking for sympathy, I’m looking for practical, realistic advice. I want to know what is still possible at my age. Whether rebuilding some level of super is achievable, what the smartest use of my limited income might be, and how to protect myself from making any further mistakes.

I have always been responsible, hardworking, and willing to do what it takes. I just feel overwhelmed and unsure where to start now, particularly after such a devastating loss late in life. Your work has helped so many Australians feel less ashamed and more empowered about money, and that is why I felt brave enough to reach out. Even a small amount of guidance or direction would mean more than I can properly express.

Mary

Mary,

You are a rolled-gold winner.

You have every reason to play the victim. Your retirement savings are gone. Yet you’re writing to me about hope?

That tells me everything I need to know about you.

However, hope isn’t a strategy.

We attack.

First: I’m putting you in touch with a lawyer already across this issue. If there’s money to be clawed back, we claw it back.

Second: you’ve got roughly ten working years left.

Here’s the rebuild:

Move your super to a low-cost industry fund or Vanguard super index fund. Salary sacrifice like your retirement depends on it. Take advantage of the ‘free money’ co-contribution scheme. Keep fees tiny.

Boring and relentless is where the magic happens.

And understand this: retirement isn’t a cliff. It’s a gradual slope. Part-time work. Flexible income. Super plus the Age Pension. That combination works.

You are not starting from zero.

You are starting with grit, discipline and ten more years of earning power.

That’s enough.

Now go build it.

I Thought I Was Really Clever … Now My Wife is FURIOUS

Hi Scott,

I thought I was really clever when I started buying silver and gold about nine months ago. I bought the silver outright and the gold through a saver account with a reputable dealer. I’ve ferreted away a few grand and put $13,000 against our home loan – which had zero owing before I did this. I’ve put in $17,000, and our silver and gold is now worth about $30,000. I told my wife earlier this week and showed her the physical gold and silver. She was ropeable.

Before you say I should have included her: I’ve tried Barefoot Date Nights but she’s never shown any interest, too busy with kids, etc. Everything gets paid and she has enough money for groceries, nights out with the girls, and whatever she wants. But she’s furious. I thought she’d be rapt that I did something smart. 

Now she doesn’t want to hear about it. I want to double down and buy more, but she won’t even comment. We have a $200,000 investment loan for ETFs which has done nothing for two years – only up about $8,000. What should I do? Sell enough to clear the $13,000? Hold the silver? Sell the ETF and buy heaps more silver? Change my super to an SMSF and buy gold?

Ben

Dude,

Dude.

Duuuuude.

Your wife isn’t furious about the shiny metals.

She’s furious because you went behind her back and pulled $13,000 from the family home loan without telling her. Then you unveiled it like a kid at show-and-tell who’d found $10 in a carpark.

You didn’t include her – but you expected applause?

Truthfully?

You got lucky. Gold has had an incredible run. And now you’re asking whether to double down, drain the ETFs and restructure your super … while your wife won’t talk to you.

That’s your answer right there.

The investment question is easy. The marriage question is the one you’re ignoring. So, book the Barefoot Date Night. Not to explain silver … to actually listen to her.

Because right now you’ve got $30,000 in precious metals and a wife who doesn’t trust you.

I know which one I’d rather have.

My view?

Sell the metals. Clear the home loan. Then have the conversation you should have had nine months ago.

Canberra called (I said NO)

"You've been invited to Canberra this week to attend a Senate inquiry," announced my PA, Kathryn.

"Let me think about that," I replied.

Pause.

"Actually ... I'd rather buy funeral insurance."

This inquiry would be like a tacky theatre restaurant, except the waiters are on $180,000 and the ending has already been rehearsed.

The topic?

Reducing the Capital Gains Tax discount for property investors.

So here's what I'd say if I went, which is precisely why I won't:

"I strongly encourage you to pass laws that will make the value of my house go down."

Can you imagine the headlines?

"BAREFOOT INVESTOR PLEADS: 'MAKE ME POOR!'"

And I mean it.

Right now I get a 50 percent discount on the tax I pay when I sell an investment property. Meanwhile, Kathryn pays full freight on every dollar she earns answering my emails.

She's 32. Still living with her mum. Jokes about putting a tiny house on my back paddock.

She's not joking.

Two-thirds of voters own homes. Politicians know the maths. So they won't say this out loud: the tax system props up the housing market. It rewards people who already got in.

Cut the discount and politicians get to look brave. They get to say they've "taken on investors." And Canberra pockets more tax. 

Beautiful.

But don't let them keep it. Instead, use it to lower income taxes. Stop taxing effort harder than a property gain.

Cut the discount.

My property drops in value? I'll cope.

Kathryn gets a shot at a roof over her head, and keeps more of her pay?

Worth it.

Tread Your Own Path!

Funeral Insurer TAL Kills Off Husband

Hi Scott,

Thank you for taking on Bill and Wendy’s funeral insurance nightmare last week. My mum died last year. That’s when I discovered she’d been paying funeral insurance for decades – I think she paid for her funeral twenty times over. She wanted “a very simple affair”. Instead, the insurance company got rich. How many other families are discovering this after their parents die?

Tash

Hi Tash,

I’m sorry for the loss of your mum, and your mum’s loss.

How many elderly people are stuck in this trap?

The insurers won’t tell us, but I suspect it’s in the (many) thousands.

This week Wendy called me in a bit of a flap.

“Scott, I just received an email from TAL telling me how sad they are that Bill died.”

Bill has not one but two terminal diagnoses.

Now imagine your wife of 60 years opening that email.

Getting paid out the benefit automatically triggered a “we care deeply” templated email from TAL – the same company that’s been bleeding them dry for years with a funeral insurance policy they should never have sold in the first place.

Still, when big companies are this stupid, you have to laugh.

“Wendy, please go give Bill a prod for me … make sure the old bugger is still with us”, I joked.

She put down the phone for a moment.

“Yes, he’s watching a movie. Very much alive”, she laughed.

Big companies do dumb things. Their systems and processes – and profit targets – blind them from behaving like decent humans. They forget that those profits come from someone’s scared grandparent. 

TAL don’t need their money.They just want it.

I changed my nightie for this?

The other day I was manning the sausage sizzle at my kids’ school with another dad, who’s a vegan.

“Don't worry”, I told him, “there’s no meat in these snags.”

He looked confused.

“Look at the label. The main ingredient is ‘meat product’. Could be anything. Eyeballs. Toenails. Band-aids that fall on the floor at the abattoir.”

True story: I worked at a butcher in high school. I haven’t touched a snag since. You don’t want to know what goes in them. 

It’s the same with Canberra.

This week the International Monetary Fund (IMF) warned that Labor’s 5% deposit scheme will push up house prices.

The Government’s response?

“But our modelling shows only a 0.6% price impact over six years.”

Six years.

Documents released under Freedom of Information (FOI) reveal that the Treasury didn’t model the short-term impact at all. Instead, they looked six years out and skipped what happens now.

Huh?

It’s like my kids telling me they’ve cleaned their room.

“But Daaaad, it’s spotless.”

From the doorway, sure.

Just don’t open the cupboards where everything’s been jammed in and the door won’t shut.

And we’re already seeing the cupboards bulge.

The price of properties under the scheme’s price cap are accelerating faster than the broader market.

Then there’s the risk.

Treasury has set aside $35.7 million to cover defaults under the scheme, but this week they admitted they may need to tip a few more wheelbarrows on the pile as interest rates climb.

So young Aussies are being sold a policy that’s 95% debt, 5% equity, and 100% vulnerable to rate rises.

When rates climb, these buyers get put through the meat grinder.

The IMF sees it. Treasury sees it.

Yet there’s Albo at the sausage sizzle, waving around his tongs: “You want a snag, kid? Get them while they’re hot. They’re just offcuts, eyeballs, and taxpayer guarantees!”

You’re better off renting than swallowing this.

Tread Your Own Path!

My Teenage Son Thinks I’m Stupid

Hi Scott,

My 17-year-old son says I’m holding him back because I won’t let him access $1,000 of the money we have saved for him, to invest on something called BloFin. When I ask where he got this idea, he says “people”. I ask who – real people? – but I never get a straight answer. I’ve told him that if he’s that keen to invest then he can get a school holiday job and risk that money instead. That’s when I’m accused of being old-fashioned and not understanding investing. He might be right, I don’t understand crypto-style platforms. But I do understand working, saving, and not gambling money at 17. The digital world moves fast, and I know I’m behind. I don’t even trust what I read online anymore. Am I being overcautious? Or are these online trading platforms something parents should be deeply wary of? How do you guide a teenage boy who thinks the internet knows more than his mum?

Chloe

Hi Chloe,

Your son is right about one thing: you don’t understand investing.

What you do understand is that losing money hurts a lot more when you’ve earned it.

He’s 17. He’s bulletproof. He could lose the entire $1,000 and still not admit you were right.

That comes with the ability to grow sideburns.

Here’s my advice: let him lose it.

I know that sounds crazy. Hear me out.

When I was younger than your son, my first investment was something called a “special situations” managed fund. I’m fairly sure “special situations” was code for “whatever the fund felt  like betting on”.

The fund had ridiculously high past returns.

Which of course was exactly why I invested in it.

Guess what happened?

The special situations became extenuating situations. Then terrible situations. Then “where did all my money go?” situations. (I think they were big into emus at one stage.)

I lost most of my money, and it turned out to be one of my best investments. It taught me more about risk, hype and human nature than any book, podcast or online ‘expert’ ever could.

So here’s what I’d do:

Tell him he can invest the $1,000 in BloFin – but I agree with you, only if he earns it first with a school holiday job. If he won’t work for it, he doesn’t get to risk it. Simple.

If he earns it and loses it? That’s an expensive lesson.

But it’s a cheap one compared to what he’ll lose later in life if he never learns it.

The goal isn’t to protect your kids from making mistakes … it’s to make sure the mistakes happen while the stakes are still small!

I Changed Out of My Nightie for This?!

Hi Scott,

I’m a 55-year-old disabled pensioner who hadn’t been clubbing in decades … but a few weeks ago I did. Guess where all the ‘cool kids’ hang out now? The pokies room. Not the dance floor or the bar — the poker machines! Rows of very, very young people feeding note after note into flashing machines. They weren’t drinking or talking, just glued to the screens. At closing time I heard teenagers told to come back tomorrow to collect winnings because the tills were closed. One said if she came back she’d “just feed it straight back in”.  When did clubbing turn into silent gambling sessions? What is the so-called Community Gambling Fund actually doing? Do parents realise this is where their kids’ pay packets are going? Who regulates this, and who fixes it? This was Hervey Bay. Have you been clubbing lately?

Jil

Hi Jil,

Jackpot!

If I asked people to pick who was the pokie player – you or the young girl saying she’d feed her winnings straight back in – most would pick you.

They’d be wrong.

If you think pokies are an old person’s vice, think again. Young people aged 18–34 are now the demographic most at risk of gambling harm in Australia.

 According to the Australian Gambling Research Centre, among young men who gamble 71% show signs of harm. For young women, it’s 55%. When it comes to poker machines, nearly nine in ten young pokie players are classified as at risk.

Nine in ten.

That’s why I have a saying with my kids every time a gambling ad comes on:

“Gambling is for losers.”

Then I make them repeat it back.

“Gambling is for losers.”

Look, Australia has the highest gambling losses per capita in the world.

We didn’t get here by accident.

We willingly addict our kids while pokies companies and sports betting lobbyists grease the palms of politicians who kill any reform that might threaten the cash flow.

You know what really gets me?

Most Aussies want it reined in. Poll after poll shows it.

Yet the truth is that politicians are the biggest winners from this misery.

And until that changes, nothing changes.

Schooling the Teacher

Dear Scott,

I am a secondary school teacher, and I have two questions:

Would you come and speak to Year 10, 11 and 12 students about the problems of gambling and how to save using your methods?

Do you have any recommendations about where I can learn to trade? I’ve looked at a few but they seem to want to sell, sell, sell once you pay the initial $7,000.

Haley

Hi Haley,

Thanks for your questions, but I think you’ve got them back to front.

If you sign up for a $7,000 program and begin trading, you will learn all you need to know to teach your young students about the problems of gambling.

Barefoot Finally Gets into Crypto

Hi Scott,

Brynvest is an automated trading platform that uses price arbitrage between Bitcoin platforms to make investors thousands of dollars a month with as little as $350. And they are quoting you as part of the bait on the hook. Should I put my $350 down now?

Terry

Hi Terry,

It’s a scam.

The headshot they’re using of me is from 2006 (I wish I still looked like that), and the AI-generated quote they’ve attributed to me is complete nonsense.

It sounds harmless. And that’s the point.

“Throw in $350 and give it a go”, right?

That’s the bait.

Just this week a lady wrote to me who put in $350 “just for fun”.

Once she was on the hook, they kept reeling her in – “top up to unlock withdrawals”, “borrow to scale up”, “you’re so close”.

Today she’s down an astonishing $2.1 million.

I had to tell her the truth.

The money is gone.

Help! My In-laws Are Conspiracy Theory Cookers

Dear Scott,

My conspiracy theorist parents-in-laws are offering my husband and me $3,000 – but only if we invest it in silver. We live week to week, so this is serious money. They even sat us down to set up an ABC Bullion account. Silver will make us and them rich, apparently (they’re almost 70 and have never been smart with money). If we do what they say, they’ve also promised to enrol our two-year-old son in a prestigious Sydney boarding school where three generations of the family have gone.

The problem is I don’t want cooker investments. And I don’t want my son shipped off to boarding school four hours away! He’s TWO! We can’t afford decades of debt. And our three daughters get nothing because they’re not boys. Both sets of parents bankrupted themselves on school fees and had nothing for retirement. I won’t repeat that. But my husband won’t cross his parents. How do I make him see this is madness?

Linda

Hey Linda, 

They may be crazy, but they’re also cunning.

In fact, I think your in-laws are about to make the trade of a lifetime: 

But it ain’t silver ... that three grand they’re ‘giving’ you will buy them a say over your kids. And if you take it, you’ve agreed (silently) that they get a say: 

In your investments.

In your two-year-old son’s schooling. 

In the messages you send to your girls about their self-worth. 

And they’re getting all that for, what, three grand? 

In the wise words of the Brown Wiggle, “Bugger that”.

Look, if I were you, I wouldn’t waste energy trying to convert the in-laws. You won’t. People who mistake their silverware for a portfolio rarely change their minds over pavlova. 

This conversation belongs with your husband. 

But a word of warning: if you go after his parents you’ll push him straight into their corner.

So instead simply ask him: 

“Both our parents bankrupted themselves on school fees and dud investments. Are we going to continue that tradition, or are we doing something different?” 

Forget silver. It’s time for him to show some steel.

Barefoot finally gets into crypto

“You got balls”, said my editor, shaking their head.

I’d just told them about a conversation I’d had with Australia’s biggest life insurer, TAL.

Last week I answered a question from Bill and Wendy. Bill is 88, on life support, dying. Wendy is 79. They’re on the aged pension, renting, and handing over $304 a fortnight for a funeral insurance policy they took out in 2010.

Let me explain funeral insurance:

It’s the ‘Ab-Zapper 3000’ of the finance industry.

“Simply clamp these jumper cables to your muffin top and taser yourself into a six-pack! All for four easy payments … but wait, there’s more!”

Financial advisors wouldn’t give it a second look for their clients. So, instead, insurance companies go direct to Aussie lounge rooms, flogging it in ads to lure unsuspecting oldies watching Larry Emdur interview a psychic dog.

The people who buy it are battlers … kind-hearted, loving ones. They don’t own a house. They don’t have super to cover funeral costs. They sign up because they don’t want to burden their kids.

That’s their motivation. 

Yet the BMW-driving finance bro who dreamed this up? 

His motivation was earning a big, fat bonus.

Here’s the design: premiums start low. Then they ‘step up’ every year as you get sicker and broker. In other words, customers pay the most when they can afford the least.

And here’s the trap: cancel at any point – even after years of paying – and you lose everything.

My view?

Funeral insurance was created by rich people to exploit poor people.

Well, this week I officially became Bill and Wendy’s financial counsellor.

And I fight for my clients. 

Hard.

And that’s how I ended up in a ‘ballsy’ conversation with a TAL representative this week.

“Scott, you’ve already made up your mind. You’re saying our product is predatory and unconscionable”, argued the TAL representative.

“Bloody oath”, I said.

When Bill and Wendy signed up in 2010, it cost $41 a fortnight. In March, it rises to $304.

They’ve already paid in almost as much as the funeral payout.

If Wendy cancels now, she gets nothing back. So she keeps paying.

Which means she has a choice:

She can turn on the air-con for her dying husband.

Or she can keep the insurance.

Not both.

That ain’t bad luck ... that’s exactly the way the product was designed.

“And that is the trap your company built”, I said to the TAL rep.

“Well, you’re hardly independent”, she fired back.

“Look, I’m the only one who’s truly independent here: you’re banking their cash, Wendy and Bill are paying it … I’m doing this for free.”

“So what do you want?” the TAL rep snapped.

“I want all their premiums repaid”, I said calmly.

“All of them?” she scoffed.

“With interest.”

Tread Your Own Path!

P.S. A statement From TAL: 

“We are deeply saddened to hear of Wendy and Bill’s situation and do not want to add to their worry at what must be an incredibly difficult time. We have worked with Wendy and Bill and agreed an outcome that we hope provides them with the support they need.”

(And I can confirm that Wendy and Bill are delighted with the offer they were given.) 

TAL also stated: “We ceased selling stepped premium funeral insurance products in 2013.”

Nice.

Yet what they didn’t state was they’re still collecting the air-conditioning money from all the Wendys and Bills who signed up years ago. If you’re stuck in one of these policies, speak to a financial counsellor at the National Debt Helpline on 1800 007 007.