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.

The Betrayal

Hey Scott
 
We have – well had –  a much-loved receptionist. She was like a second mum to our child, even taking paid time off to go to the grandparent/important person day at her school. She was paid above award wages and has been looked after with bonuses and gifts for the last 17 years. Here is the kicker: I caught her stealing! Cash out of my wallet – on my birthday! The look on her face as I watched from the door was not one of guilt or fear of getting caught, but quiet intent, as if it was normal activity. I pretended not to notice, but I was shocked to my core. This was right before she went on holiday. While she was away, I called the local detectives and asked for advice. Here’s where I have a conflict: do we prosecute or not?
 
Sally

Hi Sally,
 
Should you prosecute?
 
HELL YES.
 
If I were in your shoes I’d want to see her face a (pre-morning coffee) Judge Judy.
 
And I’d also employ a forensic accountant to look over your accounts and see if she’s stolen money from the business, not just your wallet. If they find anything, you should hand that over to the cops and add it to the rap sheet.

I know the hurt and betrayal must be weighing on you, and the prospect of a drawn-out drama might fill you with dread, but I’d encourage you to see it through – not only as a sense of resolution for you but as a way of helping her next boss.

Scott.

How I invest my own money

On Sunday night, after the kids were fast asleep (for the third time), I lay in bed and opened my calendar to check what I had on for the week ahead. And up popped my favourite ‘event’:
 
“Check your dividends, Big Boy!”
 
"OH YEAH!" I exclaimed, loud enough to startle my sleeping wife.
 
She squinted at me: “what is it?!”
 
“It’s dividend week!” I told her wide eyed.
 
“You’re … a weirdo,” she sighed, and rolled back over to sleep.
 
One hundred percent, though she knew that when she married me. Yet, I thought you might find it interesting to hear how I invest my money.
 
Let’s get into it.
 
These days I have roughly 95% of my net worth in a handful of low-cost exchange traded funds (ETFs).
 
Which ones?
 
An Aussie shares index fund, and a couple of international shares index funds.
 
That’s it.
 
While I’m classified as a ‘sophisticated investor’ I believe in my bones that keeping things simple is the ultimate high net worth strategy – and one which will deliver higher returns than the vast majority of professional fund managers. Even better, it means I spend as little as four hours a year managing my investments.
 
How?
 
Well, to start off, I don’t have a trading app on my phone.
 
Why not?
 
For much the same reason that I don’t have social media apps on my phone: when I’m on the throne, the only thing I want to be scrolling is toilet paper, not TikTok.
 
I don’t want to check my share prices every day, or even every week. It’s a trap that leads to stress, and overtrading, and ultimately, to flushing your returns down the toilet.
 
Here’s what I do instead:
 
I have all my investments on autopilot, automatically buying a set dollar amount of the above funds each month. (It used to be expensive to do this, but today you can trade for a few bucks, or in some cases for free.) 
 
When you buy, you can google their historical payout dates and put them in your calendar, like I do. And that means I check my share prices just four times a year … like this week when my dividends come through. That way you can do something more productive with your time … even scrolling TikTok on the tot! 
 
Tread Your Own Path!

Au Pair? Au Contraire!

Hi Scott,
 
I’m 19, au pairing in the UK and preparing for a three-month backpacking trip around Europe. Living the dream, right! Except that by the time I get back to Australia I’ll have just about used up my savings. I have this little voice whispering in my ear that I should be working towards setting myself up for the future, and travelling definitely doesn’t feel like I’m doing that! I have an index fund and I save as much as possible, but I am having that classic existential crisis of what the bloody hell to do with my life now! And by ‘now’ I mean when I go back to Australia (and reality). So, what snippet of wisdom do you have for me, Scott?

Mindy
 
Hi Mindy
 
You know that little voice whispering in your ear?
 
It’s a very good thing. Most broke people don’t have that voice (instead they have advertisers and influencers whispering in their ears).
 
However, I don’t think you should listen to it for the next year or two. Fact is, you’re only 19 once, and this is your time to go out and experience all the amazing things this world has to offer.
 
Case in point: I often employ backpackers to work at my farm … they camp at the shearing shed, sleep in their vans, eat on camp stoves and have cold showers. Yet they look at me with my wife and four kids, and the basketball, ballet and cricket practice … and pity me!
 
When you’re travelling you’re growing as a person, both from gaining a more worldly perspective and from learning how to make your money stretch, which will pay dividends throughout your life.
 
My view?
 
Don’t bank dollars, bank experiences for the next few years. Australia will still be here when you get back!

Scott.

Lovestruck

Hi Scott,
 
Last year I got caught in a romance scam and lost $240k. I was just so stupid to send money to the stranger, but I thought there were lots of signs to believe him. I haven’t told any of my family about this. I’m 56 years old, a single mother and working full time as a nurse. I didn’t have $240k, so I sold my house (making $100k profit) and then took out three loans for the rest. I also moved into my adult daughter's house, so my current expense is the bare minimum and I am so grateful. I would appreciate it if you could give me any advice on how to pay this off quickly.
 
Kelly
 
Hey Kelly,
 
Each week my editor wades through hundreds of questions and gives me five (or so) to look at.
 
He wrote a note on yours that simply read “awful”.
 
Indeed.  You’re paying $140,000 off at high(er) interest rates, you’re living with your daughter, and you’re a dozen years from retirement.
 
Here’s what I’d suggest.
 
First, don’t let them rob you again: these scammers took you for $240,000 – but don’t let them take your self-respect. The fact is that romance scams are a multibillion-dollar a year business. You’re not the first, and (sadly) you won’t be the last.
 
Second, don’t suffer in silence. This is too big to shoulder on your own. You owe it to your daughter to explain what’s happened.
 
Finally, go and see a free financial counsellor (call 1800 007 007). The banks are running a mile from all this scam business, but there may be a 1% chance that they’ve lent irresponsibly, and if I were in your situation I’d be chasing down that 1%.
 
Thank you for sharing.
 
Scott

Are you smarter than a 10-year-old?

Last year, while I was fanging around France in an oversized motorhome with way too many kids, the Reserve Bank of Australia (RBA) ran its first ever large-scale survey to test the general public’s understanding of economics, by way of six multiple choice questions.
 
The results will SHOCK you.
 
The RBA found that “being male, older, of higher income, having a degree, having studied economics or finance, or being engaged with economic news are associated with higher scores”.
 
Well, slap me with a seasonally adjusted wet lettuce leaf, Guv’nor!
 
Then again, my 10-year-old son aced the first five questions. (Admittedly, he’s pretty smart – when I read him bedtime stories he often corrects my pronunciation.)
 
In fact, he did so well on the RBA quiz that I wondered whether he’d got some financial knowledge via osmosis from his old man.
 
“Well, the first five questions don’t require any real financial knowledge … it’s just logic”, he said matter-of-factly, “though the final question on the RBA needed technical knowledge that I don’t have.”
 
No pressure – but let’s see how you go.

Are You Smarter than a 10-Year-Old?

1. As far as you know, during a recession in an economy, there would normally be an increase in:
 
a) imports
b) unemployment
c) economic growth
d) business spending

2. Say wages in the economy increased by 5 per cent and prices increased by 7 per cent. As far as you know, in terms of the goods and services they can buy, a worker would be:
 
a) better off
b) worse off
c) neither better nor worse off

3. As far as you know, all else equal, which would usually increase total spending in the economy? An increase in:
 
a) tax rates
b) consumer caution
c) the savings rate
d) business investment

4. As far as you know, all else equal, a decrease in interest rates provides an incentive for people to:
 
a) save more and borrow more
b) save less and borrow less
c) save more and borrow less
d) save less and borrow more

5. As far as you know, which monetary policy would the RBA most likely adopt if the economy moved into recession during a period of low inflation?
 
a) increase income taxes
b) lower the cash rate
c) decrease purchases of government bonds
d) reduce spending on public infrastructure projects

6. As far as you know, what is the Reserve Bank of Australia’s target range for inflation?
 
(a) 0–1 per cent
(b) 1–2 per cent
(c) 2–3 per cent
(d) 3–4 per cent
(e) 4–5 per cent
(f) 5–6 per cent
(g) 6–7 per cent
(h) 7–8 per cent
(i) 8–9 per cent
(j) 9–10 per cent
(k) don’t know / uncertain
 
Answers: 1 (b), 2 (b), 3 (d), 4 (d), 5 (b), 6 (c)
 
And here’s how you did compared to the great unwashed:

Now there was one thing that really caught my eye in the wash-up … while the RBA found that wealthy white dudes got the highest scores, it also revealed that “persons aged 18–24 years, unemployed persons and those without a degree had the lowest scores”.
 
Bingo.
 
Young people leave school without knowing this stuff … so they never learn it.
 
Given the RBA’s operating costs were $500 million last financial year, surely they could snaffle a few deniros to set up and run a program and teach all Aussie school kids basic financial life skills?
 
Tread Your Own Path!

HECS Freedom for First Home Buyers!

Scott,
 
You stuffed up last week in your column on higher education. The big headline from that report was that banks should NOT be allowed to take your HECS debt into account when you’re applying for a home loan. The report blasted this practice as unfair (as a young couple with HECS debt ourselves, I’d say greedy). You should have done so too!

Louise
 
Hi Louise,
 
Nah.
 
I read the recommendation and I thought it was … daft.
 
Look, I’m no friend of the banks, but I’m on their side on this one.  
 
After all, who are a bunch of academics to dictate a bank’s lending practices?
 
If the banks are looking at your expenses and drawing a red line around your HECS debt, it’s because they know it’s a factor in you being able to repay them … and that it’s a non-negotiable expense that scales up the more you earn.  

Scott.

Let’s Talk about Bill Gates

Hey Scott,
 
I love your column and read it every time! I do have a question though: you’re extremely quiet on the global situation that’s been happening since the plandemic. WHO, WEF, global elitist groups calling the shots over health, food, money, energy, climate scams, digital currency, cashless societies, global vaccine passports. You get my drift, I’m sure. I would LOVE to hear your opinion! Is that why you took your family around Oz and overseas?
 
Mandy
 
Hi Mandy
 
You are right, I am extremely quiet about these things … and there’s a very good reason for it. Look, I know a guy, who knows a guy, who used to work for a guy, who swears what I’m about to tell you is true:
 
One of the richest men on the planet has created a social media website that is fed by an artificial intelligence algorithm that targets unsuspecting anxious-prone people and feeds them with a never-ending supply of wild conspiracy theories and outright lies. Some say that his evil aim is to keep these people chained to his website day in and day out so he can make a fortune from advertising.  
 
So that’s why I stay off social media and instead read books. The one I’d suggest you read is Factfulness: Ten Reasons We’re Wrong About the World – and Why Things Are Better Than You Think, by Hans Rosling. 
 
Trust me, you’ll love it. After all, it’s one of Bill Gates’ favourite books.

Scott.

Teacher Gets Schooled

Hi Scott,
 
I love teaching. I love the sparkle in a student’s eye when they ‘get it’. I love being a stable and consistent cheerleader in their lives. Yet things have changed in the past five years – the challenges that come with students who didn’t receive the support they needed during lockdown, and the challenges of the ‘screen kids’ – a generation with too much time on TikTok and not enough time socialising, imagining, reading or being outside. The role of teachers has never been more important, never harder and never less respected.
 
I am at the top of the classroom teacher pay scale ($120,000) after 10 years (I’m 37), with no possibility of progression unless I want to take on a Head Teacher, Deputy or Principal role – and I don’t. We can’t ask for a payrise annually like your book suggests. We have a teacher shortage and an impending education crisis, with three out of four teachers having considered a career change in the past five years. So my question is: how does a highly qualified and experienced teacher transition into another career without taking a huge pay cut?
 
Jim
 
Hi Jim,
 
So what you’re telling me is that the grass is much greener on the other side of the oval.
 
How much green are you chasing, Jim?
 
Let’s say you could earn an extra $60,000 a year. That’d give you an extra $3,000 a month after tax, which, if you invested it, would make a huge difference at your age.
 
However, it would also mean giving up your calling in life, something that clearly gives you a deep sense of meaning and purpose. You need to put a value on that – and I think it’s worth a lot more than $3,000 a month.
 
If I were in your shoes I’d look at your costs, and perhaps entertain the idea of moving to a regional area where you can live cheaper. I’d also think about how you could boost your income from tutoring. Remember, the grass isn’t always greener. Sometimes it’s just astroturf.

Scott.

Barefoot … You’re a Vulgar, Right-Wing, Nutjob

Hi Scott
 
You are a piece of work. The problems in the private health insurance industry have been ongoing for years, and Labor has been in power since the middle of 2022. That didn’t bother you! Instead you chose a cheap political hit-job on a very hardworking minister (Mark Butler). For all your spin, the facts are the facts: the more people we have in private health insurance, the less strain on the public system. In the future, keep your vulgar right-wing comments to yourself.
 
Linda
 
Hi Linda,
 
Given we’re talking about healthcare, I suggest you check your blood pressure (it might be a smidge high). A few weeks ago I was accused of being a Greens Party shill – this week you’re saying I’m to the right of John Howard. So I must be doing something right.
 
Now the hardworking minister got caught in my squirrel grip because he’s the guy in charge who can make changes. Fact is, the Government whacks people with a stick to buy private health insurance, but does nothing to rein in the deliberately confusing way it’s sold to us.
 
That’s not just my opinion: this week I was inundated with readers’ responses (many from workers in the industry!) telling me how unaffordable it is, how confusing it is, the gaps and the gotchas, and generally how terrible the industry is.
 
And to your point, a research paper by Melbourne University set out to answer whether private health insurance cuts public hospital waiting lists. They found it barely made a dent. Right, left or Green, the message is clear: the industry needs a bloody shake-up.

Scott.

My (brief) time in jail

The prisoner walked into the jail meeting room, sat down in front of me, and stared into my soul.
 
“Hello”, I said nervously.
 
Silence.
 
At the back of the meeting room there was a big clock on the wall that ticked loudly every second … perhaps a passive aggressive reminder that the prisoners were ‘doing time’.
 
A full 60 ticks later she opened her mouth.
 
“When I came in here …”, she whispered, softly enough that I had to lean forward (even though I knew I should not have been leaning forward), “I brought only the clothes on my back … and your book.”
 
“Okay”, I said, even more nervously.
 
“Okay”, she repeated without blinking.
 
I was in a women’s prison completing the mandatory workplace experience component of my Diploma of Financial Counseling … and what an experience it was!

Now, there are still people who see TAFE Vocational Educational Training (VET), compared to a university degree, as the educational equivalent of Aldi. But I strongly disagree … and I have both qualifications.
 
It’s said that uni is for learning and VET is for earning: VET/TAFE qualifications are more practical, shorter, and are generally much cheaper.
 
And I think it’s a very rational choice for a lot of teenagers who have no idea what they’re going to be when they grow up.
 
After all, not only does the research say that the average person will have five careers over their lifetime,  the World Economic Forum says that two-fifths of workers will be disrupted by technological change (read: AI) within the next three years.
 
And that’s why I was surprised this week that the Government released the Australian Universities Accord Report, which set out an ambitious goal of doubling the number of university placements over the next 25 years.
 
Does it really make sense to spend $40,000 on a degree you may never use?
 
(Today many people are finding their HECS-HELP debts are rising faster than they can pay them off. Last year the debt was increased by 7.1%; this year it will jump by another 5%.)
 
Don’t get me wrong. I don’t want my doctor to have a ‘Diploma in Appendix Removal’ from Broadmeadows TAFE. There is absolutely a need for quality tertiary education.
 
However, it’s also true that many universities have become highly profitable diploma mills: rapidly ratcheting up their fees, jamming in full-fee-paying Chinese students, and all too often delivering a Zoom-like learning experience. Which may explain why the number of students studying for a degree has fallen by more than 13% since 2016.
 
TAFE courses, meanwhile, are widely available and increasingly well funded. In fact, the prisoner I was speaking to was getting her life back on track from behind bars by doing … a VET course.
 
Tread Your Own Path!

Wine-O Needs Help

Hi Scott,
 
I have a dream. I want to start my own vineyard. I love wine! We live on 20 acres in Gippsland (Victoria) and I want to add 4 hectares of vines. I always thought it was a pipe dream but last year I got an inheritance of $250,000 from my grandmother. I want to use that money to create something. I want to bottle my own wine, it’s very profitable. My wife is not so sure, and wants to pay it off the mortgage. Is this a good idea?

Craig
 
Hi Craig,
 
I know nothing about wine, so I asked the best winemaker I know, Ben Ranken.
 
Ben won the ‘Young Gun of Wine’ award from his industry peers, so he knows what he’s talking about.
 
Over to Ben:
 
“I see a lot of doctors and lawyers and wealthy people who fall in love with the idea of owning a vineyard, but they never think about who they’re going to sell their wine to.
 
“So my advice to Craig is to work backwards: have a wine with a local winery and ask them about their experience, how much they’re selling their wine for, and to who, and how much money they’re making.
 
Because it can be a tough slog. A vineyard costs between $30,000 and $50,000 a hectare (irrigation, posts, vines) to set up, and then you’ve got three years before you have a crop.
 
So you’re basically working for free, and you’ve got all the risk. As you know all too well, Scott, there are bushfires, floods, kangaroos, rabbits, hailstorms …”
 
Thanks Ben, I’d go with paying down the mortgage Craig (and buying a case of your favourite plonk).
 
Speaking of which, I famously don’t drink anymore, but back when I did it was Ben’s wine that was my rolled-gold favourite. In fact I used to give away his plonk to hoity-toity wine snobs, and they’d often tell me it ‘tasted like $200 wine’ (check out Ben’s wines out at www.wilimeewines.com.au). I don’t get paid anything to say that … other than to see my readers get to drink amazing good wine.
 
Tell him Barefoot sent you!

Scott.

The man with no balls

Federal Health Minister Mark Butler wants you to know that he has balls of steel.
 
You see, each year private health insurers must go cap in hand to him to increase their prices. And this year they wanted to deliver their biggest premium hike in six years – but he rejected it.
 
Bam!
 
Instead he’ll soon announce that he’s allowing a much smaller increase in your annual private health insurance premium.
 
Pow!
 
The truth?
 
The truth is the Minister doesn’t have the balls to tell you it’s a total farce.
 
But I do. So let me tell you how the game is really played … and how you are getting robbed:
 
While it’s technically true that private health insurers can only increase their prices once a year, and that old Steely Balls has to sign off on it, it’s also true that health insurers can close down existing policies and simultaneously release new, much more expensive policies at any time.
 
Let me give you a very personal example:
 
My family has gold-level, hospital-only cover with insurer Health Partners. (I don’t pay for extras or combined cover, because it’s generally a rip-off for most people.)
 
Ten years ago, this was one of the best-value products on the market. Actually it was too good – Health Partners have now closed this product to new customers.
 
And here’s the rub: today, if a new customer wants the same cover as me it would cost them $2,360 more than I’m currently paying per year.
 
And it’s not just Health Partners that are engaging in this shifty practice. CHOICE recently found that insurers have increased their gold hospital cover by about 31.5% in the past three years, much more than the Government-mandated increases.
 
Look, private health insurance is intentionally confusing.
 
There are 26,000 different policies, and so many exclusions and out-of-pocket gotchas that it makes it almost impossible to work out how to get a good deal … which is exactly how the health funds like it.
 
This explains how they were able to lift their profits by more than 110% in the last financial year (to $2.2 billion) while their customers lived through a cost of living crisis!
 
So what can you do?
 
Well, think about whether you actually need private health insurance, for one.
 
That being said, the Government has a gun to our head and effectively forces 11 million of us to take it out, or smashes us with an extra tax. (And if we wait too long to sign up, we’re slugged with a further penalty based on our age.)
 
So your only option to save a buck is to consider downgrading your cover. CHOICE did the numbers and found that you could save up to $1,870 by switching your hospital insurance to a cheaper gold, silver or bronze policy – which admittedly limits or totally excludes coverage for childbirth (snip, snip!), knee or hip replacements (no limbo dancing!) or mental illness (stay happy!), among other things.
 
And when you’re comparing, avoid the churn-and-burn bucket shops like Comparethemarket and iSelect, which only show you policies they get a kickback from. Instead, head to the Government’s search engine Privatehealth.gov.au, which lets you compare every policy on the market.
 
If Mark Butler really had balls of steel, he’d stop playing political theatre with the health funds and do some serious surgery on the entire industry, because it’s an absolute disgrace.
 
Tread Your Own Path!

You’re a Dick, Barefoot

Scott,
 
I'm a hairdresser, and I didn’t appreciate you starting your column last week with the idea that your wife was embarrassed about you being mistaken for a hairdresser. It just made you sound like a dick. Don't alienate the people you are trying to help. Do better.
 
Michael
 
Hi Michael,
 
I actually got a LOT of emails this week from angry hairdressers saying the same thing. For the record my wife is embarrassed by me – not the idea of hairdressing. Mainly though, she gets annoyed that I wear free T-shirts instead of the nice ones she buys me. Apologies to all the hardworking hairdressers.

Scott.

The Greens Party Listens

Hi Scott,
 
You seem to be singing from the Greens playbook. This week they are shrewdly threatening to not pass the government’s Help to Buy scheme unless they agree to stop negative gearing and freeze rents. Plus, their stunt on calling out the number of pollies that own investment properties (most of them) was also very Barefoot. So, are you a member of the Greens party?
 
Sarah
 
Hi Sarah
 
I’m a V8-ute driving, gun-owning, farmer, who has proudly never eaten tofu. So no, I’m not a member of the Greens party (or any other political party for that matter). However, that allows me to sit on the (barbed wire) fence when it comes to politics. So, I think the Greens should be congratulated for not supporting the Help to Buy scheme because it’s a dud policy that will incentivise broke people to buy homes they can’t afford.
 
However, their policy proposal of freezing rents is Barnaby Joyce-like embarrassing.
Think of it from the landlord’s perspective: if the government limits what rent they can charge, what incentive do they have to spend more money maintaining the property? And what’s stopping them from bypassing these laws and getting a higher rent from Airbnb?
 
Look, there are no easy answers to our housing crisis – and it’s something that’s happening the world over. Yet if I was a politician for a day, I’d wave my magic wand and scrap all the first homeowners grants and policies like Help to Buy that simply serve to push prices higher, and instead spend the billions on rebuilding public housing so vulnerable kids (and their parents) have a secure roof over their heads.

Help! My Hubby Won’t Retire

Hey Scott,
 
My husband of 43 years has his own small business and it’s his identity, but I would like him to retire. Thanks to modest living, saving, superannuation and an inheritance, we have $2 million under our belt. We own our own home and have zero debt. He’s never taken long service leave, only three or four weeks off every year, so I reckon it’s our turn to spend some time together and enjoy life more. But he won’t (can’t) bring himself to stop working. Please tell him he’s a nong.
 
Lonely wife.
 
Hello Lonely Wife!
 
Your husband sounds like a typical nong-y small business owner.  
 
And we all have the same disease: it’s our baby that never really grows up, and will always need us.
 
So let me offer a suggestion:
 
Your husband needs to find someone young, and full of energy to shack up with*.
 
*In a business sense.
 
Selling a small business lock stock and barrel can actually be quite difficult, especially if the business owner is central to that business. And another big problem is that banks generally don’t lend people dough to buy a small business, unless it’s against an asset like a house, which limits the pool of buyers.
 
That’s why one idea I suggest to the business owners is to sell the business to one of their workers, or to find someone who is willing to take over the business, and structure it as a multi-year earn out, where the worker earns a small wage, while paying off the agreed price for the business over say three to five years.
 
Why would they do that?
 
Because it works for everyone.
 
The young worker learns how to run the business while the owner is there.
 
The owner gets to start to wind down … and not annoy his wife (you).
 
And he also not only gets to mentor someone, he knows that his baby is hopefully in very good hands.

The 23 year old window washer … making $165k a year

Today I want to talk to you about what I genuinely believe is the opportunity of a lifetime.
 
No, it’s not becoming an AI expert.
 
The cyborgs are getting exponentially smarter and will soon view us as golden retrievers (and leave us to sniff each other’s butts while they do the heavy analytical and computational work. Good boy!).
 
Nor is it earning your living as a YouTuber, or, god forbid, as an influencer. No matter how much you hustle, for most people being an influencer is a low-paid sales grind flogging teeth-whitening paste and vibrators.
 
Instead, the opportunity of a lifetime that I’m talking about is a lot more practical … and profitable.
 
Like what?
 
Like window washing.
 
Seriously, here’s a question I got this week:
 
Mr Pape,
 
I am 23 years old. Three years ago I started a very unsexy business: cleaning windows. Last year I netted $160k working, on average, 35–40 hours a week. I went into business as I didn’t want to be a slave, and I like the freedom that comes with money. I currently have $300k invested in the stock market and $90k in cash. My question is, what else should I do with it?
 
Sam
 
Sam is my new hero.
 
He’s not repaying HECS. He’s earning great coin. And he’s not only working far less than most of us, you can bet when he knocks off he might stare out a window, but he certainly ain’t thinking about them. That’s because Sam has what he calls an ‘unsexy business’.
 
Speaking of unsexy stuff, let’s talk about Baby Boomers – and the opportunity of a lifetime:
 
There are 2.6 million small businesses in Australia.
 
And almost half of the owners of these businesses are run by people over the age of 50. (In contrast, only 8% of small business owners are aged under 30 …   down more than 50% since the 1970s).
 
In other words, they’re all getting older, and they’ll increasingly be looking to retire.
 
Who is going to buy them?
 
Young(er) people of course.

And here’s the kicker: many of these businesses are being sold for a song, or even closed when the owner retires. And these are the types of businesses that you want to buy. After all, they’re established, having made it through the ‘kill zone’ of the first five years. They have regular clients, reliable streams of revenue, and trained staff and systems in place.
 
So what’s not to like?
 
Well, how about not having enough money to take advantage of this ‘opportunity of a lifetime’?
 
Fair point.
 
Which brings me to my first question …
 
Tread Your Own Path!

You Have 60 Seconds to Do This NOW

Hi Scott,
 
My good friend wants to invest $100,000 into a crypto-style investment strategy called GsPro. They say in 18 months you will 10 x your investment. What advice do you have for her as she feels she needs to take a risk to make some money. She is feeling behind where she should be and doesn’t trust the regular banks and mainstream investment options. Would she be better off with ETFs as they’re a relatively simple, set-and-forget strategy?

Heidi
 
Hola Heidi,
 
I have no advice for her, only for you.
 
Are you ready?
 
I want you to grab your car keys and get in your car. While you’re driving, ring your friend and tell her you have something life-changingly important that you need to speak to her about, immediately, in person.
 
When you get to her house, give her a hug. As you’re doing this, reach around and take off her belt. As in slip it out of her pants. Use her belt to strap her to her dining chair. Then take out your phone and turn the flashlight on and shine it in her eyes, while repeatedly yelling at her:
 
“DO YOU WANT TO LOSE $100,000? THIS IS A SCAM. THE BAREFOOT INVESTOR TOLD ME SO!”
 
You are only allowed to unshackle her when she promises you that she won’t give her hard-earned money to strangers on the interwebs.
 
Hurry up, Heidi. Your time starts now. Your friend needs you.
 
Give it a belt.