Barefoot Investor: Don’t let hidden fees ruin your breakfast

After Kenneth Hayne recommended that government and regulators act to stop the selling of junk insurance, consumers could be up for up to $1 billion in refunds. So if you’ve been sold junk add-on insurance, be sure to demand a refund and don’t let them ruin your day, write the Barefoot Investor.

Last weekend I ruined a man’s breakfast.

True dinks.

It all began when I answered a question from Louise in last week’s newspaper.

Here’s a recap:

Louise read my book, went on a Date Night (by herself!), and dutifully checked her bank statement.

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She found that she was being whacked $90 a month for credit card insurance.

She’d been told — when she applied for a credit card — that the only way the bank would give a single mum a card was if she got credit card insurance.

That was a lie.

For the uninitiated, credit card insurance is what Vanilla Ice is to hip hop: a total marketing con job concocted to fleece unsuspecting people of their money.

And that’s not just my view — the Financial services royal commission said credit card insurance was “junk” and called for it to be banned.

So, for the next month Louise tried to put her policy on ice, ice baby.

Yet that was easier said than done — her bank, St George, bounced her from one department to another, and all the while kept billing her.

Just before the school holidays the bank agreed to stop the payments.

A win!

And Louise could do with a win.

She’s a single mum.

She’d just been laid off from her full-time job.

And her little girl has a very serious illness.

But you know where this is going, don’t you?

Yes, during the school holidays, when money’s always tight, St George hit her account and swallowed up the little money she had.

That left her account overdrawn (then again, on the upside, more fees for St George!).

So in my reply last week I went straight to the top: I googled “who the hell is the CEO of St George Bank?” and up popped the smiling face of Ross Miller, the general manager. I gently suggested (to a few million readers) that he pull his finger out and do something.

I can only imagine poor old Roscoe choking on his morning cornflakes as he read the paper and saw his name in print!

In any event, he got straight on to it. And I mean straight on it — on a Sunday no less, when banks are all closed, and counting their billions.

The result?

Louise not only got her junk insurance cancelled, she got a full backdated refund, paid into her account first thing Monday morning.

All right, stop, collaborate and listen.

After Grand Master Hayne recommended that government and regulators act to stop the selling of junk insurance, consumers could be up for up to $1 billion in refunds.

So if you’ve been sold junk add-on insurance, go to demandarefund.com and get your money back.

Rock on, Roscoe!

Tread Your Own Path!

Q&As

Insiders like Bill Gates and Leonardo DiCaprio got into Beyond Beef at very, very low prices. Picture: AFP

WHAT’S YOUR BEEF?

BREE ASKS: I am a proud and very passionate vegan who normally couldn’t give a stuff about investing. (OK, so your book really helped me, but I have never got my head around investing in businesses that harm the planet for future generations).

However, some of my vegan friends have been telling me about an amazing company called Beyond Meat that has perfected plant-based meat, which some food critics weren’t able to tell wasn’t meat.

It’s backed by Bill Gates and a host of other smart people.

Should I follow their lead, and if so how do I invest?

BAREFOOT REPLIES: As a farmer, I’ve been watching Beyond Meat for a while.

And I’ve been saving up your question until they had their IPO (initial public offering), so I could tuck into it like a juicy Sunday roast.

Grab your fork, Bree. Let’s chew some investment jerky!

Beyond Meat’s signature product is the Beyond Burger patty, which has 20 grams of protein, and by all accounts smells, tastes and even bleeds like a real burger (because of beetroot juice … rather than blood).

It’s a plant-based product, not meat grown in a lab.

Coles actually stocks its products at selected supermarkets, and in the US the burgers are sold in thousands of supermarkets and restaurants, like TGI Fridays.

It’s a massive market.

Aussies are some of the biggest meat eaters in the world, consuming around 100kg per person per year!

(Think about your pipes, people!)

Globally, meat consumption has increased from 70 million tonnes in the 1960s to more than 330 million in 2017, according to the United Nations.

Why?

Because the world population is growing, and this is the wealthiest time in human history … and wealthier people eat more meat.

However, there are environmental effects — depending on who you believe, producing 1kg of beef requires somewhere between 550 litres of water (beef lobby group) or 100,000 litres (Greens party).

And then there’s the growing backlash from animal welfare and vegan groups.

So it’s not surprising that food conglomerates have been shovelling millions of dollars into producing a low-cost alternative.

Beyond Meat debuted on the NASDAQ this week, and its share price rocketed 163 per cent on the day.

In 2017, insiders were buying in at a reported valuation of $US250 million.

Today, investors are buying in at a valuation of $US3.6 billion!

Key point: insiders like Bill Gates and Leonardo DiCaprio got into Beyond Beef at very, very low prices.

Now they’re selling their shares to the public (via the share market) at very, very high prices.

They’re all eating rib eye … but are investors getting the “mystery sausage”?

After all, Beyond Beef is still very much in start-up phase and is yet to turn a profit (in fact, last year the company lost $US30 million).

So what’s my advice?

Call me old-fashioned, but I personally don’t invest in companies that don’t make money, regardless of how attractive the future looks (and the more attractive the future, the more competitors a company will have).

However, if I were in your shoes, I’d probably have a crack: it’s something you’re passionate about, and if you believe in the company and the change it makes, put your money where your tofu is.

You can buy shares through your bank’s online international share broker. The ticker is BYND.

The Barefoot Investor is a committed Christian.

DOES JESUS DESPISE BAREFOOT INVESTOR?

DANIEL ASKS: I’m a committed Christian, and I’m also a committed Barefooter, which is why I felt a bit conflicted recently when I saw a blog post by a pastor on the Gospel Coalition website entitled: “Does Jesus despise the Barefoot Investor?”

He writes that your book should be setting off alarm bells for Christians because it encourages people to look to money for their safety rather than the Lord.

Have you read the article, and, if so, what are your thoughts?

BAREFOOT REPLIES: No, Daniel, I had not.

I’m used to hearing from disgruntled AMP financial planners … but now God’s trolling me?

Good Lord!

So, what do I think?

Not much, to be honest. He says my book “should be setting off alarm bells for Christians”, and he thinks that the Mojo account is sacrilege, calling it “a modern day idol”.

I figured he was using my name for clickbait (OK, so we’re both sinners in that regard).

Yet, just to be sure I wouldn’t be turned away at the Pearly Gates, I forwarded the article to my mother, a deeply religious woman who not only goes to church on Sundays but backs up on Tuesday nights too.

Here’s what she said:

“You don’t make a god out of money! And you help a lot of people that no one even knows about.”

God bless.

A mum and her son had an amazing holiday on a limit of $250 from her Smile account.

FILTHY FROM HEAD TO TOE

MARIE ASKS: Thanks so much for your last column.

My son and I went on our first camping trip these holidays and it was honestly the best holiday ever.

I set a limit of $250 from my Smile account, which paid for food, petrol and admission to the Buchan Caves in Victoria.

He spent the whole time exploring, throwing the biggest stones he could find to make the biggest splash he could, and rolling down dirt piles.

He was filthy from head to toe, asleep before his head hit the pillow every night, and already planning our next trip before we left the campground.

It was amazing, and what’s more, we were out of range so I had to turn my phone off — and did not feel a twinge of guilt.

Thank you, Marie (mum to a little boy who got to be dirty for a few days and had a ball!)

BAREFOOT REPLIES: 250 bucks! That’s one night at the suburban Mantra, with food poisoning at the all-you-can-eat buffet.

Give me damper on a stick and boiling billy any day. (And a few frothies around the campfire when the kids have gone to bed.)

Good on you, Marie.

If you have a burning money question, go to barefootinvestor.com and #askbarefoot.

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice.

The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need (Harper Collins) RRP $29.95

Originally published as Barefoot Investor: Don’t let hidden fees ruin your breakfast