The Barefoot Investor, page 21
How’s that for a legacy?
‘Why do you do it?’ I asked her.
‘Because it fills me with absolute joy.’
The digger giving back
Anthony, NSW
The legacy I’d like to leave is to provide financial support to wounded veterans.
I’m a ground defence officer in the Air Force.
I was living on base for three years, and in that time saved up $30 000. I was looking at how to invest my money when I found Scott and the Barefoot Blueprint. But before I could start investing I got tapped on the shoulder.
‘You’re going to Afghanistan.’
I saved $80 000 while I was on deployment, and I spent my downtime reading up on the Blueprint. When I came home I made my first share investment. I then diversified into other companies.
In four years, I turned $110 000 into $220 000.
I don’t have any drive to be rich; I only want to be financially secure. In the military we have this saying: ‘Don’t jack on your mates’, which basically means don’t be selfish. That’s been embedded in my personality.
When you go overseas on assignment it’s like the world is not so romantic anymore. You can go one of two ways — grow from the experience or go downhill. There are 11 people I know who’ve taken their own lives. My father was a train driver and he faced three suicides (people jumping in front of the train), and now has PTSD as a result.
So that’s my main driver for giving back — for trying to make a difference.
I thought, wouldn’t it be good if someone started a business that took something we do every day and made it meaningful.
So I started ‘Brother Shave’.
The idea was simple: the military requires people to shave daily. But razors are expensive and the money we spend on them is huge. So I created a company that provides high-quality razors for a cheaper price, delivered direct to the troops.
We donate $1 per pack to Soldier On, a charity that helps men and women who’ve been wounded either physically or mentally during service.
The business is going well — I’ve even been able to employ my dad, who hadn’t been able to work due to the PTSD. It gives him purpose and allows us to work together.
The biggest thing I got from Scott was understanding that small amounts of money, saved over a long period, can make a massive difference.
The legacy I’d like to leave is to provide financial support to wounded veterans. And over the long term, my hope is to employ veterans who otherwise can’t work due to their injuries (much like my father).
And, I’m proud to say, we’re on our way.
The comments from Anthony are his only and do not necessarily reflect the views of the Australian Defence Force.
Recap of Part 3: Harvest
Normal people walk around in a fog of financial fear and indecision.
They worry about losing their jobs, or paying off their debts, or how they’ll ever afford to retire.
Not you.
You’re no longer ‘normal’.
You now have clarity. You’re following a time-tested plan that is propelling you towards safety and security. And you’re one of the very few people in this country who’s getting fiercely independent advice.
You have:
called your bank, and you’re now on track to save $77 641 in interest and wipe almost seven years from your mortgage. Even better, you’ll soon have the banker off your back.
seen exactly what a comfortable retirement looks like … and you’ve worked out your individual retirement number, and now you’re armed with a bulletproof strategy on how to nail your number.
got the phone numbers of independent financial experts who can genuinely help you … rather than sell you some expensive product.
made a commitment to managing the most precious resource you have — your time — to create a legacy that will live long after you’re gone.
Right now you’re that girl hugging her father on the Tattslotto ad … wouldn’t it be nice?
You betcha.
You’ve achieved something that millions of people believe is impossible for them: you’ll never ever worry about money again. You’re in charge. You call the shots. You’re free. You’ve hit the jackpot!
Enjoy your long, golden harvest!
Prove them wrong
Barbara Hansen, VIC
As he left he said … ‘You will never survive financially without me’.
When my ex-husband left, he said, ‘You will never survive financially without me’.
And for a long time I did struggle.
I was a single parent trying to raise two kids. I had to take a hardship application out on my home loan, because they were pushing for me to do a voluntary default (I fought them off). I had no savings and my only income was from Centrelink.
When you’ve been in an emotionally abusive relationship, it takes a long time to get that person out of your head.
Then I met my new partner, Geoff, in 2014. Every Sunday he’d read the Barefoot Investor newspaper column, and it’s part of our Sunday breakfast ritual. Scott’s like a little voice on my shoulder — I’ve even begun to quote him!
I’ve become part of the ‘Barefoot family’ and use the strategies and advice to build my wealth. Before, I’d never even read my super statements; now I actively look at my returns.
Things I couldn’t do before, I can do now — I’ve got $70 000 in Mojo! I’ve even helped my daughter buy a car, and I’m helping my son start a business.
At last I feel free of the noose around my neck. I’ve stopped burying my head in the sand. Even at my age, you can make a difference to your future. You can’t let your past define your future. It’s not too late to build wealth.
I have survived financially and I will continue to grow financially because I’m not afraid anymore to take control. I have grabbed my finances by the horns and will never let them go.
Freedom starts today — you don’t have to wait …
You and I have come a long way.
Right now you might be feeling that you’ve got a long stretch ahead of you before you can achieve the same success that others who’ve followed the Barefoot Steps have achieved.
But the truth is, you’re closer than you think.
The truth is, your freedom starts today.
Don’t believe me?
Well, let’s look at what the hard research suggests: the nation’s longest running and most comprehensive survey on happiness, the Australian Unity Wellbeing Index. After 15 years of detailed research, the author of the survey, Deakin University Emeritus Professor Bob Cummins, says he’s finally cracked the code to wellbeing, which he has dubbed the ‘golden triangle of happiness’:
A sense of purpose
Strong personal relationship/s
Financial control.
Let’s take a look at each of these.
A sense of purpose
Yes, that sounds like something Malcolm Turnbull would say.
For most people their ‘purpose’ is pretty simple: to live a better life and to look after their family.
That explains why most people (often unconsciously, with the help of advertisers) strive towards outward symbols of success: owning an expensive home, in an expensive suburb, and driving an expensive car to drop the kids off at an expensive school.
Yet 15 years of detailed research proves — quite convincingly — that once you earn over $70 000 a year, money won’t make you much happier.
Here’s you: What a load of rubbish. I like buying stuff. I’ll take the short-term sugar hit!
Here’s me: It’s often what you have to give up to get the sugar hit that makes even high-earning people unhappy. You bite off more than you can chew. You work more. You stress more. You fight more. Ask yourself: is it really worth it?
Strong personal relationship/s
One of the building blocks of happiness is strong personal relationships … yet the number-one cause of relationship break-ups is fighting about money. It’s important to understand that Relationships Australia says this is universal, and not just confined to low-income couples who shop at The Reject Shop.
Yet I’m not Doctor Phil, so let’s look at something I do understand: money.
Financial security
Money may not make you happy, but the research shows that not being in control of your finances will make you very unhappy: in fact, as I said earlier, Professor Cummins and his research team found that financial insecurity produces similar feelings to those of physical torture.
His survey found that low-income earners who rated themselves at least an 8 out of 10 for being in control of their finances were far happier than those people who were earning substantially more but rated themselves as not as in control of their finances.
Years ago, a woman in her 40s approached me after I gave a seminar in Perth.
Her husband had walked out on her — and their two preschool kids — a few years before. He’d left her with massive debts that he was never going to repay. And she was … absolutely beaming with happiness.
A friend of hers had given her my book. After she read it, she didn’t have any doubts. It was clear to her that if she followed the simple, commonsense plan, she’d be okay. For her there was no doubt. No indecision. She had a roadmap that clearly pointed out her destination. That was enough for her to be able to confidently look herself in the mirror and say, ‘I’ve got this’.
There’s science to back this up.
Achieving a sense of financial control isn’t about your net worth — it’s about your self-worth.
You don’t have to wait until you’ve paid off all your credit cards.
You don’t have to wait until you’ve bought a home.
You don’t have to wait until you’ve paid off your home.
You don’t have to wait until you’ve saved enough for retirement.
You don’t have to wait for anything.
You achieve the freedom of control the very moment you make the decision to commit to following a commonsense plan. A plan that’s realistic and based on hard work, saving, paying down debt and investing. When you know in your bones it will work, your anxiety will vanish immediately. It then becomes a matter of time: so long as you keep following the plan, everything will be okay.
You can be in control of your money right now, regardless of your situation.
You now have a plan. It’s been tested on thousands of people over many years.
And it works.
So let’s look at it one last time.
We’ll meet again
You’ve probably had someone in your past who doubted you.
Someone who told you that you couldn’t do it, and that you ‘shouldn’t get ahead of yourself’.
It may have been your dad; it could have been a teacher, or an old boss; and it almost certainly came from your biggest critic: the person who stares back in the mirror at you each morning.
But you will win.
Like the rest of the Barefooters you’ve read about in this book, if you follow the Barefoot Steps that I’ve laid out for you, your success is guaranteed.
Here’s what’s going to happen. A year from now I’ll be sitting in the sunshine on the verandah at my farm, looking out over the green hills that were once black and burnt.
I’ll fire up my laptop, open my inbox and click on the email you’ve just sent me (scott@barefootinvestor.com).
You’ll tell me about the steps you’ve taken, about your Barefoot Date Nights, and about your planting, growing and harvesting … and how deeply proud you are of yourself.
And I’ll call Liz over and read lines from your email to her, and we’ll marvel at just how far you’ve come in such a short time.
Till then …
From this point on, no matter what you face in the future, you can now look yourself in the eye and confidently say to yourself …
I’ve got this
A final word
Most days I help someone, somewhere, who’s fighting their own financial fire.
It could be a young father who has terminal cancer. A teenager with out-of-control credit card debts. An elderly pensioner who can’t afford to turn on the heater. A widow with young kids. A family who are about to have their home repossessed.
Everyone needs a helping hand occasionally.
After the fire, I needed help myself.
And in the fog of those first few days my most cherished memory is of Liz coming back from the post office with one of their postal trolleys loaded to the brim with gifts and letters from people all over the country. We received thousands of letters and emails. Our son was sent more toys than Richie Rich.
This book is my way of paying it forward.
It’s everything I’ve learned from the decade or so that I’ve been helping people with their money.
It’s everything I’ve learned from losing the lot and having to start from scratch.
And it’s everything you need to be prepared for when you face your financial fire.
Now, I have a favour to ask of you.
If you got anything out of this book — if you highlighted or circled anything — please pay it forward and give this book to someone else. Ask them to read it. They need your help to get prepared for their financial fire.
Spread the word.
Index
3 months’ buffer in Mojo account 189
15 per cent target for superannuation 138–182
Abey, Arun, How Much is Enough 53
accountants, hiring 234–235
AdAge, on marketing expenditure 52
Affluenza 52
Afterpay 88–89
aged care, advice on 233
age pension, maximum rate of 219–220
AMP, superannuation fees paid to 26
‘Anthony’ (digger) 247
apartments, oversupply of 128
ASIC — MoneySmart Managed Fund Fees Calculator 27
— MoneySmart Mortgage Calculator 210
— MoneySmart Retirement Calculator 227
— on numeracy levels 173
auctions for property 132
Australia — affluence in 52–54
— home ownership rates 124–126
— retirees in poverty 154
Australia Institute, on bank fees 15
Australian Financial Review, on cost of schooling 174
Australian Foundation Investment Company 148, 169-170
Australian Scholarships Group 177–178
Australian Stock Exchange 110
Australian Unity Wellbeing Index 251-253
autopilot, investment on 153
average wage in Australia 54
Back to the Future 49
‘balanced’ superannuation funds 28
balance transfer deals 97–98
bankruptcy 91
banks — Barefoot banking 13
— getting them off your back 196–211
— negotiating mortgage with 204–205
— pre-approvals for loans 132
— setting up accounts 13–22
Barefoot Benchmark 66–67, 71, 74
Barefoot Date Nights — menu for 21
— monthly 102
— recommendations 11
— scheduling 4–10
Barefoot Investor — Barefoot Steps on one page 1, 254
— Facebook page 84, 96
— gifts and letters from subscribers 259
— starting up 110
Baumeister, Roy, on willpower 65
Big Four banks 15
BlackRock investment chart 144–145
Blow bucket 63–65
boosting Mojo 184–191
boss, relationship with 114–115
Boxing Day sales 146–147
Branson, Richard, on author’s show 117
‘Brother Shave’ razors 247
Brown, Helen, starts HUG 245–246
buckets, setting up 58–75
Buffett, Warren — on avoiding debt 169
— on investments 147
bushfire losses, insurance for 47–48
business ownership through shares 147–149
BWP Trust 171–172
calculating your debts 96–97
capital gains on investment property 171–172
Career Compounding 113–115
car purchases 56–57, 90
cash-back mortgage brokers 206
celebrate eliminating debts 100
Centrelink, financial advice from 232–233
children see also family and friends — helping to prepare for your death 238–247
— investing for 173–183
— making financially fit 174
— ‘unearned income’ for 175
ChoicePlus superannuation fund 150
Citibank 97–98
co-contribution to superannuation 161–162
comfortable retirement funding 218
commitments, making 114
Commonwealth Bank — on breadwinner disability 38
— influence in schools 79–81
community newspapers, advertising in 131
compound interest 168, 180–182
conscious spending 54
co-workers, dealing with 113
credit cards — eliminating 98, 101
— paying off debts from 103
— problems with 81–85
— reward programs 85–86
credit rating, maintaining 86, 91
Credit Suisse, on Australian affluence 53
Cummins, Bob — on financial stress 69
— on happiness 251–253
