Barefoot Investor Scott Pape’s advice to crypto buyers

There are 7773 cryptocurrencies in the world and Barefoot Investor Scott Pape says the vast majority will end up being worth digital diddly squat.

It was a privilege just to be there.

We were deep in the outback on a guided tour run by First Nations people. Our host, a traditional elder, showed us incredible ancient rock art, pointed out animal tracks, and told us dreamtime stories.

It really was a spiritual experience.

At the end of the tour, our host came up to me and asked:

“What do you like?”

“Oh, all of it”, I gushed.

He looked a little perplexed as he pulled out his phone.

“Here’s what I like,” he said, gesturing for me to take a look at his phone.

What was on his phone?

His crypto portfolio.

Wow.

Here I was, in the middle of the Never-Never, with the oldest living culture on earth, and we were discussing … Dogecoin?

That was the first time I fully grasped that crypto really has gone mainstream in Australia.

Earlier this month Commbank announced they’ll soon give their 6.5 million customers the option to trade crypto smack bang on it’s banking app. My bet is the other banks won’t be far behind them. (After all, the Big Four are about as relevant as incontinence pads to Millennials, so they’re desperate to show the kids they’ve finally unchained their ballpoint pens from their desks.)

Bitcoin is one of a staggering 7773 cryptocurrencies in the world.

For the record, I think what’s going on in the crypto space is absolutely fascinating. We’re in the early stages of a revolution, watching the financial industry be both disrupted and democratised. Clearly, this is the future.

Yet history also teaches us that in every gold rush there are scams, cons and bubbles just waiting to be popped.

This time is no different. If anything it’s worse — today a majority of Gen Z investors in the US think crypto will make them millionaires, according to a new survey by data analytics firm Engine Insights.

It won’t happen.

There are now a staggering 7773 cryptocurrencies, according to Coinmarketcap (compared to 180 traditional currencies across the world!).

Let me be clear: I am sure that a handful of these will be genuinely transformational (don’t ask me which ones). And I’m also just as sure that the vast majority of these coins will end up being worth digital diddly squat.

Still, now that crypto has gone mainstream, it’s me who needs the reality check. Statistically, there’s a good chance you own crypto … or at least you’re thinking about it. And if that’s you … all I can say is best of luck!

Tread Your Own Path!

Have I Been Gone Too Long?

Scott,

I know you’ve written about it in the past but for the life of me I can’t find it. What is the product sold at Bunnings for removal of scale from toilets?

Thank you! Drinda

(A note to the reader: I swear on my Bunnings sausage this is a real question I received this week. Still, I can’t work out whether I’ve been gone too long and she’s forgotten who I am … or if I really am in the toilet?)

Hey Drinda,

Holy crap!

Now I’m not licensed to give toilet cleaning advice, but, since you asked, I’ve had good results using Hillmark Scalex Descaler. It costs around $12 a tube, and it’ll do a good job providing you use it with warm water.*

* Disclaimer: past performance is not a reliable indicator of future performance.

Here’s Something SHOCKING

Scott,

My mother has been diagnosed with dementia and will be going into 24-hour care. She has a caravan-park-living boyfriend who is a raging alcoholic and has increasingly isolated her from everyone and everything. Mum was never a drinker, but he has religiously fed her alcohol every morning from 9am onward! On the very first night I met him 10 years ago, virtually the first thing he said to me was, “You don’t have to worry about your inheritance — I don’t want anything from your mother”.

I found this strange at the time, and with recent developments I believe he’s been playing the ‘long game’ from day one.

Barefoot Investor Scott Pape.

You see, Mum owns her own house, solely purchased by her. But (according to her friends) he has been trying to gain access to her bank account and trying to get her to sell her house. He’s also taken her to her lawyer to ‘update’ her paperwork.

He has told everyone that Mum and I (and my siblings) are estranged, but he won’t allow me to visit, he sorts her mail, he screens her calls, and he hangs up on me when I call. I am financially sound and have never wanted or expected anything from Mum. As far as I’m concerned, her house is hers, and it’s her equity to support her for whatever time she has left. Is there a way to make sure the boyfriend doesn’t take everything, leaving her high and dry?

Nella

Hi Nella,

Congratulations, I believe you’ve just asked the longest question I’ve ever published.

The first thing I’d do is ask your mother if she has signed an enduring power of attorney (POA).

Explain to her that whoever is named on the POA can make financial decisions on her behalf, like accessing her bank account or selling off her property. Obviously, while she’s of sound mind the person holding her POA should only act as directed by her. Yet when and if your mother loses her mental facilities the POA continues on …

So what can you do if he’s already stitched up the POA?

Well, I spoke to my lawyer (Dr Brett Davies) and he said you could go to court and apply for an overriding ‘administration order’, which in most cases overrides and replaces the POA.

The court will hear the stories from both sides and decide who is best to control your mother’s assets while she lacks the mental capacity to do so. Even better? The administration order has the ability to outline who your mum can associate with.

Boom!

Escaping in the Middle of the Night

Dear Scott,

When I read your book three years ago I knew what I had to do. My husband had always had a temper, and in the back of my mind I knew I had to leave him.

With each Covid lockdown he got more depressed and more abusive towards me and my two girls. Last month we fled with just our overnight bags. It was all a blur.

This has been the toughest year of my life, but because of you I had a secret Mojo account that has allowed me to rent a tiny apartment and buy the essentials. We have financial security and personal safety. Thank you from the three of us.

Lisa

Hi Lisa

I’m so sorry for what your family has gone through.

Now we Barefooters are a big community, and I want to speak directly to the thousands of women who are reading these words and are currently living in a dangerous situation: you don’t have to wait to save up the money to cover the bare necessities, but you do need to have a support team around you before you go.

Speak to a financial counsellor (1800 007 007) about getting the basics in place. In many cases the counsellor can organise things quickly, including crisis payments, temporary accommodation, basic necessities, and dealing with your bank (they don’t advertise it, but I’ve found the banks do a bloody good job supporting women).

Family violence affects one in six women — of every age, in every wealth bracket, and in every suburb. Each year it feels like the rates of reported family violence get worse, but thankfully the help available gets better too.

Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.

The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need

(HarperCollins) RRP $29.99

If you have a money question, email [e-mail].

Originally published as Barefoot Investor Scott Pape’s advice to crypto buyers