Barefoot Investor: Huge inspiration for pulling your weight
The process of taking control of your finances can build up continual small wins, which can help to build confidence little by little. Barefoot reader, Claire, has not only changed her life, she has saved her life, writes the Barefoot Investor.
Move over, Michelle Bridges — I’ve decided to make a move into a new industry: health and fitness.
I’ve even come up with a catchy name for my program: The Barefoot Bikini Challenge.
Why am I so excited?
Well, I just read the following email from Claire, who has given me one of my most inspirational book testimonials yet.
CLAIRE WRITES:
My fiance and I started “going Barefoot” in November 2017. At the time, we were living pay cheque to pay cheque at my in-laws’ house. I was also battling some demons in regard to my physical health, being obese at 170kg.
Fast forward to now — 18 months later — and we have achieved the following:
PAID for gastric sleeve surgery out of our own pocket ($5000);
GONE to America for three weeks;
PAID off one of our credit card debts ($3000);
MOVED into our own property and bought brand-new furniture and appliances;
PAID for multiple things for our wedding using savings and not credit;
AND … still managed to save $15,000.
What’s more, I have lost 96kg, which has eradicated my physical health problems. I have included photos from before and after starting Barefoot, because without your advice I don’t think I would have been able to have this surgery and achieve so much in such a short period of time!
Holy guacamole!
Ninety-six kilos? So, how did Claire nail the two biggest goals most people have (fitness and finances) in one hit, and so quickly?
Well, it had nothing to do with fad diets or get-rich-quick schemes … which never work out in the long run.
And she certainly wasn’t spurred into action by continually beating herself up about her situation.
This reminds me of a book that legendary financial columnist John Beveridge wrote called Invest or Die.
Full. On.
Truth be told, my book has roughly the same stuff in it (just with less death threats and more date nights).
And the Barefoot approach worked for Claire.
She created rituals, like going to the pub for Barefoot date night. And while she was there she automated her finances so she didn’t have to rely on her willpower or even think about her finances after it was set up.
And the process of continual wins built up her confidence, little by little.
The outcome is that she’s not only changed her life, she’s saved her life.
Tread Your Own Path!
Q&As
DON’T SEND THE KIDS TO THE COAL MINE, BAREFOOT
CHERYL ASKS: I just wanted to comment on your response last week to the letter from Alice, the 15-year-old asking if she should get a part-time job. Could you please recommend that high school students work no more than 12 hours per week, unless they are happy to take a nosedive in their education! Up to 12 hours per week can help them with time management and all your other points. But not more. And I know what I’m talking about: I am a teacher who sees the results of overworked students!
BAREFOOT REPLIES:
I agree with you — a few shifts at the weekend is more than enough. Really, you just want to get kids off their phones and working for a boss who will knock the “special snowflake” out of them.
And here’s a tip for all those tired parents, which I call the “taxi rank”: shortlist the youth-friendly employers that are close to your home or the school.
Think shopping malls, supermarkets, fast food joints and small businesses that you’re happy to taxi them to and from. Because you will!
HOW A FINANCIAL ADVISER CAN MAKE A MILLIONAIRE
MARIA ASKS: My daughter is a hardworking 22-year-old who lives in a share house. She is struggling with her living expenses.
I pay for her weekly grocery shop, and she feels bad about it. She earns $3068.32 after tax each month.
Here are her monthly expenses: rent $760, financial adviser $190, savings $400, share portfolio $250, insurance $58, super $100.
She feels grateful that her financial adviser has enabled her to do all this. Is there anything she could be doing differently?
BAREFOOT REPLIES:
The monthly expenses you’ve listed come to $1758, which means your daughter has $327 a week to spend on food, booze, bills and transport.
That’s doable. (I lived on less when I was 22, though admittedly I drank a lot of home-brew, ate spag bol most nights, and drove a 1966 XP Falcon that mostly ran on potato skins.)
Having said that, she needs to eat without resorting to dumpster diving.
I’d suggest she looks at scaling back her saving for the moment rather than relying on you (of course a “care package” from Mum now and then never hurt anyone).
Other than that, your daughter is an absolute bloody legend.
Let me paint you a picture:
Let’s say she invests that $250 a month into the share market, from age 20 to 30 (starting from zero and assuming an 8 per cent return) could grow to $43,460.
Then, at age 30, she stops saving, leaves the investments to grow, and never puts in another dollar.
By the time she’s 65, that $43,460 will have grown to $642,571.
Noice … but let’s not stop there — let’s make her a millionaire!
I’d suggest your daughter meets with her financial adviser, who has done a terrific job setting her up, and get her to have an awkward conversation with the adviser.
Play him Bette Midler if you want, and assure him “you’ll always be the wind beneath my wings … but I ain’t paying you a monthly retainer anymore”. Then, she adds the $190 a month she’s paying to the adviser to her low-cost index fund.
If she does, her end balance will be boosted to $1,001,130.
I AM NOT AN ALCOHOLIC BUT I NEED A NEW BUZZ
JANE ASKS: I currently spend about $100 a week on alcohol — it is pure habit and l love the taste, too.
I am not an alcoholic, but I do need some incentive to drop the habit, like a financial goal!
What else could I be doing with that $100 that will give me the kick l need to replace booze with something more intoxicating?
BAREFOOT REPLIES: I’m good, but I’m not that good.
There is nothing I can do with my trusty old Casio calculator that will beat the buzz you’re currently getting from boozing it up.
Case in point: on the form you submitted to ask your question on the Barefoot Investor website, there’s a box that says “Summarise your financial situation in one word”. You answered: “Tipsy”.
At Barefoot, we talk a lot about having an Alpaca Attitude.
It’s named after my two headstrong alpacas — Pedro and Alberto — who will spit, kick and stomp on anyone who tries to mess with their flock. In that regard, getting on top of your money isn’t that dissimilar to losing weight (see, I’m still hanging onto the Barefoot Bikini Challenge):
We all know what to do, but you need to come up with the why for you.
If you have a burning money question, go to barefootinvestor.com and #askbarefoot
The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need (HarperCollins)RRP $29.99
The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice.
Originally published as Barefoot Investor: Huge inspiration for pulling your weight
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