Barefoot Investor: Lockdown offers us the gift of time
Being stuck at home during stage four coronavirus restrictions has given us one thing — time. Start by getting a better deal on your home loan, turn your trash into cash, or get your kids to do it, and find the best ways to brighten your financial future, writes the Barefoot Investor.
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Last week’s column on gold generated a lot of, well, gold in my inbox.
Like passive-aggressive Paul: “Hey mate, you ramble on with such garbage. Who has time to read your anecdotes?”
Obviously not you, Paul!
However, by far the shiniest nugget came from a woman who threatened to dob me in to the feds …
YOU’RE A MISANDRIST, BAREFOOT
KAREN WRITES You really do have a way with you to regularly throw backhander insults at mainly ageing, bald white males.
Last week you wrote: “Secondly, you’re 71, mate — where are you getting your income to pay for things from?”
Really! Be careful, young Scott — although not so young anymore — for one day you too will be 71 and some cocky young person will make a mockery of you and the money you have made. Please stop being ageist and misandrist in your writing or you may find yourself in court charged with an offence under 18C(1)(a).
Your otherwise useful Barefoot Investor book, which I have bought for my teenage grandchildren, is littered with similar offensive, misandrist, ageist statements.
They need to be removed.
BAREFOOT REPLIES: Hi Karen (well, that’s the name I’m giving you), Thank you for writing, and for teaching me a new word/insult: ‘Misandrist’.
At first I thought you were calling me a citrus fruit, but then I looked it up in the dictionary and found that it means “a person who dislikes, despises, or is strongly prejudiced against men”.
Boom!
I’ve been called many things, but never a misandrist!
It was news to my wife, who in the past has complained that I “spend far too much time in the shearing shed”.
(Click go the shears! The truth is that white, wealthy, middle-aged men — of which I’m one — screw most things up when it comes to finance. Really, how often do you hear about conwomen?)
Anyway, thankfully my counselling studies (and now practice) have helped me understand, appreciate and connect with people from different backgrounds at a much deeper level.
Even you, Karen.
You’re totally entitled to feel offended, to insult me, to even threaten me with the Racial Discrimination Act.
Heck, I’m publishing your complaint about me to millions of my readers!
However, I stand by the quote you pulled out:
The fact is that a 71-year-old (Jimmy, who described himself as an ‘old, and not a very bright bugger’) was considering investing in gold, which pays no income.
So I asked a very simple question: “Where are you getting your income to pay for things from?”
Questions like this are universal, and it’s my job to ask them.
Tread Your Own Path!
Q&As
I TURNED $30,000 INTO $900,000 – NOW WHAT?
DENNIS WRITES: Many years ago when I was single I invested $30,000 into Apple shares, and this has grown to more than $900,000.
I have a young family, and a mortgage, and due to COVID my work has dried up.
My big worry is that holding so much of Apple means all my eggs are in one basket.
I have a ‘glove puppet’ argument in my head, with one puppet (Warren Buffett) telling me Apple is a great business and to never sell, and the other puppet panicking about the need to diversify.
It does not help that Apple shares are rocketing! Should I take my profits and diversify, or am I suffering from FOMO?
BAREFOOT REPLIES: You think you have FOMO? I bought my first iPhone way back in 1997. If I’d spent the money on Apple shares instead, I’d have $20,000 today.
Here’s a way to think about your question: if I gave you $900,000 right now, would you invest the lot into Apple? Only you can answer that, but I’m guessing your answer might be “probably not”. Yes, Warren Buffett is a big fan of Apple, saying “it’s probably the best business in the world”.
His company, Berkshire Hathaway, owns 245 million shares in Apple, which makes up a staggering 43 per cent of the Berkshire portfolio. (Fun fact: his Apple shareholding has increased in value by $40 billion since March. Funner fact: Buffett traded his old-school flip phone for an iPhone … last year.)
However, despite Buffett’s love for Apple, there’s a reason he’s decided to put his wife’s entire estate into a simple index fund — to stop what you’re going through. Life’s too short for imaginary arguments with glove puppets!
MORTGAGE WARS
SARAH WRITES: After reading ‘Mortgage Month’ in Step 3 of your book, I apprehensively (as I avoid confrontation) called the bank and stuck to your script.
Our rate was dropped from 4.03 per cent to 2.74 per cent, no questions asked.
I shared this idea with my sister (single mum with mortgage, whose employer just announced her contract will not be renewed).
Her rate dropped from 4.1 per cent to 2.94 per cent. A teary (because those bastards charged us so much for so long) and heartfelt thanks from both of us!
BAREFOOT REPLIES: Sweet as! If there’s one thing you can do when you’re stuck at home, it’s to get a better deal on your home loan.
The big four banks have all been reducing their basic variable offerings to around 2.7 per cent.
They’re really slugging it out on fixed rates -- though I’d stick with a variable rate.
I had a window-shop this week and saw three small lenders were offering deals below 2%. I have never, ever seen rates this low. Time to get the banker off your back!
ADVICE SOUGHT ON BITCOIN
GILL ASKS: I have always liked David Koch … and now he appears to be advertising Bitcoin trading. The ad promises, like other get-rich-quick schemes, instant wealth. My question is, though Bitcoin has recently crashed, is it OK now as the ad is saying? Could you advise me on a $500 investment with Bitcoin in this lousy viral climate?
BAREFOOT REPLIES: Two things: firstly, it’s David Koch … and, secondly, the ad you’ve seen is a scam.
Kochie hasn’t approved it and so it has nothing to do with Kochie, or Bitcoin for that matter. I know this because scammers have used my name and image in the past. And right now they’re using Dick Smith in their ads quite a bit too.
They can afford to plaster these ads right across the internet because (a) they’re obviously not paying talent fees and (b) they’re making out like bandits — literally! — making millions of dollars ripping people off.
Stick to the Sunrise Cash Cow.
THE BIG PURCHASE
GAIL WRITES: My little boy’s ‘Save’ jar just got emptied for this little beauty! He paid for it with six months of chores plus selling some old toys on Gumtree — a ‘Money Challenge’ that was in your book The Barefoot Investor for Families.
He managed to save $143 in small change, which he counted out to a very patient store manager.
It took a whole day for him and his dad to build, and it sleeps next to his bed with its own special blanket.
(We are now slightly worried that he is calculating the cost of other household items to sell for LEGO.) He has blown us away with his tenacity to work for the three jam jars. Thanks, Scott.
BAREFOOT REPLIES: Look at how proud this little guy is! Can you imagine the swagger of having $143 in his pocket? He’ll never feel that rich again, right? Awesome!
While we’re all stuck at home (particularly here in locked-down Victoria), there’s only one thing better than going ‘Marie Kondo’ and turning trash into cash … getting your kids to do it.
Got a money question? Go to barefootinvestor.com #askbarefoot
Scott Pape is an independent, community-based financial counsellor. 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
Originally published as Barefoot Investor: Lockdown offers us the gift of time