The Barefoot Investor for Families Read online

  No funny stuff, just money stuff

  The Barefoot Investor holds an Australian Financial Services Licence (AFSL no. 302081). This book outlines general advice only. It should not replace individual, independent, personal financial advice.

  Neither Scott Pape, the Barefoot Investor nor anyone associated with the making of this book has received any kickbacks, commissions or fees—or even so much as an invite to a corporate box at the footy—for recommending or mentioning anything contained herein. We never have, and we never will.

  We are fiercely independent.

  The bottom line: you’re reading the same advice that I’d give to my mum, God love her.

  Disclaimer

  The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

  Dedication

  For every person who read my last book and said . . .

  ‘Why the hell wasn’t I taught this when I was a kid?’

  Epigraph

  ‘Just make sure you don’t become a wanker . . . look after the battlers, son.’

  —Don Pape

  The Barefoot Investor Pledge

  For every ten copies of this book sold, one copy is donated to a parent in financial hardship.

  Who is this book for?

  This book is written for parents (and grandparents, and anyone else who has kids in their lives).

  It’ll give you a proven plan to teach kids of all ages.

  By the time you read the last page you’ll know you have a plan that will work with your family.

  Whether your kid is currently listening to The Wiggles or Ed Sheeran, their life will never be the same.

  Let’s ROCK!

  Contents

  Dedication

  Epigraph

  The Barefoot Investor Pledge

  Who is this book for?

  Picture this . . .

  Growing up Barefoot

  The day my life changed forever

  Our game plan

  Weekly Barefoot Money Meals

  PART I: First Steps Three Jam Jars

  Three Jobs

  Three Minutes

  The Barefoot Money Meal

  PART II: The Barefoot Ten Chapter 1: How to Protect Your Kids from Bank Robbers

  Chapter 2: The Family Treasure Hunt

  Chapter 3: The Grandparents’ Dinner Party

  Chapter 4: Breaking the Brat

  Chapter 5: The Lazy $100 Challenge

  Chapter 6: Why Your Kids Need Plastic Surgery

  Chapter 7: The Magic of Flipping Burgers

  Chapter 8: Barefoot Betty

  Chapter 9: Uncle Scott’s $453 329 Gift

  Chapter 10: The Barefoot Ladder

  PART III: Off and Running The Victory Dinner

  Your Legacy

  The Final Goodbye

  Epilogue

  Will you help me?

  Index

  About the author

  Praise

  Also by Scott Pape

  Copyright

  Picture this . . .

  You’ve spent the entire weekend helping your 18-year-old pack up their bedroom and box up their belongings.

  Finally the moment has arrived to say goodbye.

  You walk them to the front door and give them a hug.

  You’ve known this was coming for weeks, but your stomach is still in knots.

  It’s a pivotal moment in your lives.

  They jump in their car, reverse out of the driveway, give you a toot, toot, a wave, and then they’re . . .

  Gone.

  You close the door, walk into your eerily quiet lounge room, sit down and think to yourself:

  ‘Did I do enough to prepare them?’

  Sweet Child O’ Mine

  Look, I don’t know you.

  And I don’t know how long it’ll be before you find yourself at your front door saying goodbye to your kids.

  But what I do know is that it’ll happen a lot quicker than you think.

  One moment you’re changing their nappies . . . the next they’re changing yours.

  So, the ultimate question is this:

  Will you do enough in the short time you have to prepare your kids?

  And will your kids leave with the financial confidence and the street smarts to seize the opportunities the world has to offer them?

  Well, the reality is that young people aged between 18 and 24 have the lowest levels of financial literacy of any age group, according to ASIC research.

  In other words—if your kid is normal, they are not prepared.

  Normal is $4200 in credit card debt.

  Normal is making only the minimum repayments, which will take them 42 years to pay off, with a whopping $21 080 in interest.

  Normal is accepting the bank’s offer for an increased credit card limit . . . Oh, okay, sure, and a loan for a new car.

  Normal is working a job they’ve outgrown so they can continue making repayments on stuff they regret buying.

  The bottom line is this: as a parent, the days are long, but the years are quick . . .

  And you only have a very short time to influence your kids.

  Because once they turn 18, you have to share that influence—with their friends, with their bank, with their Instagram account, with their boss.

  And most of these people don’t have your kids’ best interests at heart . . . but you do.

  What really makes the difference?

  Have you ever wondered what really makes the difference—why some kids fly and others seem to flail?

  Is it having wealthy, educated, upper-middle-class parents?

  Is it attending a $35 000-a-year private school you mortgaged your kidney to get them into?

  Is it receiving a big-arse cheque at their 21st for a deposit on their first home?

  Is it scoring top marks at school and getting into a trophy degree?

  I’m here to tell you that it’s none of these things.

  Besides, you and I both know people who’ve had all these blessings in life but have still turned out like Paris Hilton.

  So, what does make the difference?

  You do.

  My promise to you

  Being a parent is a tough and sometimes thankless job.

  It often feels like you’re making it up as you go along. Like you should be doing more.

  Well, here’s my promise to you:

  By the end of this book you’ll have a simple, no fuss plan that will guarantee that your kids will be confident and smart with money . . . in as little as three minutes a week.

  Someday—many years from now, long after you’ve forgotten this book—my hope is your kids will come to you.

  Maybe they’ll have kids of their own.

  Maybe they’ll finally understand some of what you’re going through now.

  Yet no matter where they are, or what life’s thrown at them, ultimately they’ll be doing okay.

  And they’ll thank you for what you did for them today.

  Just like I did with my dad.

  It wasn’t big or flashy.

  There was no background music playing, no tears welling up.

  I simply sat down, looked
him in the eye, and said:

  ‘Thanks mate.’

  Growing up Barefoot

  My father quit school when he was 16 and began working at a service station in Ouyen, a tiny wheat-belt town in the Mallee. (Claim to fame? It’s the hottest place in Victoria. And it has the best vanilla slices. Think about that combo.)

  One fateful day the bell on the servo door chimed, and in walked the most beautiful girl Dad had ever seen.

  Her name was Joan.

  The way my father tells the story, he instantly knew she was ‘the one’.

  My mother, the more conservative of the two, was more circumspect, and with good reason. Looking back at the polaroids of my parents when they were dating, I see a young man with mutton-chop sideburns, flares and a look in his eyes that I know only too well. It said: ‘I’m batting above my weight with this girl, so I need to give this everything I’ve got.’

  And for the next 40 years, he did (and continues to).

  He worked day and night at that servo. In fact, he was there so much that he lived in the caravan out the back for a while, saving his shekels. And it worked. Years later he bought that servo.

  When my parents got hitched they built our family home, a functional fibro joint located at the top of what the locals called ‘Tickle Belly Hill’. True dinks, we’d actually have mail addressed and delivered to ‘Tickle Belly Hill’.

  I came into the world at Ouyen Hospital, but, unfortunately for my mother, I was born dangerously close to the VFL Grand Final. So after she checked herself out of hospital(!), she arrived home and was greeted by Dad and his mates—including the doctor who’d delivered me—downing frothies in the living room, watching the footy.

  Yes, I grew up in another era. An era before helicopter parenting, tiger mumming and free-range fathering. Flipping through our family photo albums one day, I found this gem:

  Is this a potential petrohazard . . . or a photo opportunity?

  The author, aged 18 months, in Ouyen

  Yes, I’m in a (red) jumpsuit.

  Yes, my itsy-bitsy fingers are poking around a live, hot, rusty old petrol pump.

  Yes, the barrels of petrol—stacked three high—appear to be held only by a single plank of wood.

  ‘Say cheese, Scotty!’

  (Contrast this to my kids, who aren’t allowed outside unless they’re wearing a wide-brimmed hat, a long-sleeve shirt, protective sunglasses and SPF-100 lathered head to toe. Because the sun is DANGEROUS.)

  That’s basically the story of my childhood.

  When I was in primary school, Dad and I loved doing jobs in his old ute. Every now and again, when we were up a bush road, he’d pull over and let me sit on his lap and steer, while he simultaneously controlled the pedals, changed the three-on-the-tree gears and smoked a ciggie.

  ‘Just don’t tell your mother.’

  (About the driving, not the smoking in a confined space with his young son.)

  My parents haven’t changed.

  My old man affectionately teases my sons, calling them ‘fatty’ and ribbing them about liking the colour pink, which is ‘for girls’.

  This is quite confronting for my wife, who grew up in hipsterville North Fitzroy with academic parents and who spends her spare time reading books on positive childhood psychology and gender-neutral parenting.

  Still, I turned out alright . . . right?

  See, for all the things my parents may have got wrong . . . they got some big ones right, too.

  The day my life changed forever

  I was 10 years old.

  It was the school holidays and, unlike my mates, who were probably kicking a footy or playing on the Atari 2600, I was working with my dad.

  At the end of the day he sat me down on his knee and made an announcement:

  Dad: ‘Instead of giving you pocket money today, I’ve decided I’m going to give you one of my shares in BHP.’

  Me: Blink. Blink.

  Dad: ‘That means you’re now a part-owner of one of the biggest companies in the world . . . and they’ll share their profits with you.’

  I didn’t have a clue what he was on about.

  Yet this was my dad, and he was my hero, so if he was excited I figured I should be too.

  I’m guessing my old man didn’t have a grand plan when he gave me that share. In fact, it may well have been something he did on the spur of the moment because he didn’t have any shrapnel in his pocket.

  But it doesn’t matter how it came about; what matters is that in one moment my life was changed.

  That day kicked off what has become a lifelong interest in money . . . and here I am today, writing this book.

  That’s the power we have as parents.

  ‘If I only knew then what I know now . . .’

  How often do you hear people say:

  ‘If I only knew then what I know now . . . my life would be so different today.’

  That’s probably true for you.

  And if you don’t have a plan, it’ll end up being true for your kids too.

  See, as you read this, Grade 3 children across Australia are being taught about credit cards by the Commonwealth Bank. Facebook is studying your kids’ every like, share and photo, and selling to advertisers who, in turn, sell them to someone else. Google is covertly building up a highly detailed profile of what your kids are searching for, to use later.

  These companies have a plan for your kids.

  It’s time you do too.

  You need to fight for their future.

  And yet when I say this to parents, they often reply with things like:

  ‘But I can’t teach my kids about money—I don’t know anything about it myself!’

  Look, you don’t need any special financial knowledge to raise financially fit kids; that’s what I’m here for.

  Besides, my parents didn’t have any knowledge.

  My father quit school when he was 16.

  However, for the first decade of my life I sat around the family dinner table each night and listened to Mum and Dad talk about their ‘dream home’ . . . a brick veneer four-bedder in Bendigo.

  For years my sister and I watched them scrimp and save and strategise. And when we finally moved into that home (with sheets for curtains), to us it may as well have been the Taj Mahal!

  My parents showed us what patience, persistence and acting like grown-ups looked like.

  Hopefully you’ve been helped along by my last book, but maybe not.

  Regardless, this book has been written with the assumption that you have zero financial knowledge.

  ‘But I’m a single parent.’

  I’ve written this book with single parents in mind.

  My sister is a single parent, and I know how many balls you have in the air. In fact, I’ve not only had single parents review the book, they’ve helped me develop the plan (hence being able to do it in just three minutes a week!).

  I’m going to show you how powerful you really are.

  ‘But I’m a grandparent. Can I use this book to help influence my grandkids?’

  Yes, you can.

  I actually see it all the time: a wise grandparent takes on the duty of teaching their grandkids the value of a buck.

  It’s a very special role . . . a bond . . . something that connects them at a deeper level to their grandkids. And it often becomes the grandparents’ legacy, the thing the kids remember well into adulthood.

  If that sounds like you, well, think of this as your road map to teaching your grandkids the old-fashioned values of hard work, and saving.

  ‘But I don’t want my kids to become obsessed with money.’

  Having a plan for teaching your kids about money isn’t about corrupting them, or making them obsessed with money, or turning them into snooty, spoilt money-grubbers.

  It’s the opposite.

  For me, money is about values:

  It taught me about working hard and doing a good job.

  It taught me about setting a goal, saving for it,
and spending wisely.

  It taught me about the life-changing power of giving . . . the amazing buzz I get from helping people.

  And it’ll do the same for your kids, too.

  ‘But I’ve left it too late.’

  No you haven’t.

  And I’m not just saying that as an eager author at the start of a book; it’s backed up by hard scientific data.

  Later we’ll meet Professor Tim Kasser, a psychologist from Illinois who conducted a fascinating study called the ‘Materialism Intervention’. The study took a bunch of upper-middle-class materialistic brats and, using similar techniques to those I’m going to teach you, created compelling, long-lasting change in their lives.

  It’s never too late.

  Look, the entire thesis of this book can be boiled down to one line:

  ‘As parents it’s okay if we get most things wrong . . . as long as we get a few big things right.’

  And in this book, I’m going to show you exactly what you need to get right.

  Together, we’re going to put in place a plan that makes sure your kids don’t have any financial regrets.

  I’m going to lay out an incredibly simple plan that will allow your kids to thrive . . .

  Regardless of their current age.

  Regardless of your current income.

  And regardless of your current knowledge of money.

  If you’ve always wanted to prepare your child for whatever life throws at them—crazy high house prices, an increasingly automated workforce, or any other financial landmine that might be lying in wait for them—then this book is for you.

  No overwhelm, no guilt and no homework

  And this is where we do a u-bolt from every other finance or parenting book you’ve ever read.

  I’m going to make a promise to you right now: in the pages that follow, there will be no overwhelm, no guilt and definitely no homework.

  As a parent myself, I know that each of us (to varying degrees) lives with the guilt that we’re not doing enough to prepare our kids—and I sure as hell am not going to add to it.