Barefoot Investor: Time to empty your give jar for those in need
Right now the bushfires that have been blazing along the east coast are the biggest story in the country. There are plenty of amazing organisations with their sleeves rolled up helping people who need it most but it’s time for all of us to pitch in, too, writes the Barefoot Investor.
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Here’s what no one tells you about living through a bushfire.
First, nobody thinks it’s going to happen to them.
On the day the fires hit my area, I sat at the kitchen table of my farm thinking everything was fine. (I was a member of the local CFA, and my pager hadn’t gone off — yet.)
What I didn’t know was that the areas surrounding me were already being evacuated.
As I jumped in my ute, the ABC radio announcer said of my area: “It’s too late to leave. You must take shelter now to protect yourself.” And in that instant, my entire world turned upside down.
The second thing nobody tells you is that the road back from losing everything in a bushfire is a long one.
The harsh reality is it takes years for people to get back on their feet, and for communities to rebuild.
As I write this, I’m looking out to the paddocks on my farm and I can still see blackened trees staring back at me.
Which brings me to the third thing nobody tells you:
Everybody moves on, quicker than you think … and the survivors are left trying to put the pieces back together.
Yet right now people haven’t moved on. It’s still the biggest story in the country, and we need to harness that.
There are plenty of amazing organisations with their sleeves rolled up helping people who need it most, like the Australian Red Cross, who are supporting communities affected by fires in NSW, QLD and SA.
Empty out the Give Jar.
Tread Your Own Path!
Q&As
BUY NOW, PAY FOREVER
LISA WRITES: Ten years ago I got a “buy now, pay later” $4000 “living room package” at a retailer (couch, TV, coffee table).
Actually, the deal was that they gave me a GEM Visa with a $6000 limit … so another $2000 credit, which I stupidly spent. Fast forward 10 years and I am still struggling to pay it back.
I am a single mother with a chronic illness, and while I really want to work I just haven’t been able to. Yet so far I have paid back $32,000.
Last year, while I was in hospital, my debt was sold to another group, Lion Finance. They arranged a $10-a-week payment plan, but my debt has increased by $1000 in the past year. I need your help!
BAREFOOT REPLIES: Your email makes me sad, and incredibly mad. (So today I’m going to be a little bad.)
What a bunch of … bankers. The business model of these institutions is basically to take advantage of people like you who don’t understand the complex contracts they’ve signed up to. Yet you have acted honourably: you made a 15-minute mistake and have steadfastly paid a huge price for 10 years because of it. Now you’re probably thinking to yourself, “Well, I’m just a single mum on a disability benefit, there’s nothing I can do … these finance guys have the upper hand”. No, they don’t. You have the upper hand.
Together, we’re going to get this debt wiped — to zero. Don’t get me wrong. Generally, I’m in favour of people paying back their debts, but you’re in a special situation: First, you’ve repaid the principal plus more than your fair share of interest over the past decade.
Second, the Lion Finance deal is disgusting: you’re repaying $520 a year, yet your debt rises by $1000! On a Centrelink income, you’ll never, ever, clear it. They’ve effectively trapped you for the rest of your life. And, finally, what are they going to do if you stop paying?
Well, they’ll probably huff, and puff and threaten to blow your house down. But the truth is they can’t do anything: you don’t have any capacity to repay the debt, and you have no assets.
So this week I want you to call the National Debt Helpline on 1800 007 007 and ask to speak to a financial counsellor. Tell them your story, email them the paperwork, and request a debt waiver. Time to stand up to the bullies.
SCAMMING HAS A HAPPY ENDING
GINA WRITES: Last week my husband and I were hit by scammers, who “ported” (transferred) all our business mobiles from Telstra.
We contacted Telstra, who assured us that our mobiles could be recovered, and that they would report the matter to their fraud department. Little did we know what was to happen next … The scammers found our details on social media, and once they knew our dates of birth and address they hit all our bank accounts.
Thankfully, ANZ and CBA blocked them first go. Yet ING gave them access to all our accounts! With ING, all the scammers needed was to recover the customer number: there were no security questions asked — maiden name, school I attended, favourite pet, nothing!
All our savings, including our redraw facility, were drained within three days: a total of $15,000.
ING does have an “online security guarantee” but they are not honouring it because we did not notify them on the day our mobile was scammed!
I know you are one of their biggest supporters, but after banking with ING for 15 years (and I must admit it’s the best little savings account I’ve ever had) I’ve now lost all respect for them.
Please help me to get ING to upgrade their security. After all, what are the security questions for if you don’t need to use them?
BAREFOOT REPLIES: What a horrible situation! Now let’s get a couple of things clear:
First, I have zero association with ING, other than being a fellow customer. Second, what you’re talking about is identity fraud, which affects thousands of people (and every major bank). Still, I called ING and asked them, “Why doesn’t ING ask security questions like the other banks do?”
They told me that they have disabled their online retrieval function, which means that they now force customers to call the contact centre, where they are faced with additional security questions.
They also assured me they had a dedicated team that constantly monitored and updated their security. Finally, it is totally outrageous that they declined to refund you … so I asked them about that too. Thankfully, they have now agreed to fully reimburse you for your losses. As they bloody well should.
SLEEPLESS BAREFOOTERS & A GOOD BEDTIME STORY
STEVE WRITES: My wife Anna and I recently welcomed our first child, a boy. While at the hospital, I noticed your book was in the hospital library with the caption “Great Books to Read Aloud to Babies”.
We have a copy at home that I have tried reading to our son, but he does not seem too interested right now! Anyway, I wanted to ask for your advice on what type of bank account I should set up for him.
BAREFOOT REPLIES: Congratulations! But I don’t think babies need bank accounts. If you’re just going to use it for some grandparents’ birthday gifts and a few bucks here and there, you’d be better off creating an additional online saver in the lower-income-earning spouse’s name, and then nicknaming that account after your child.
(That’s important — names have power — if you don’t, you’ll probably forget after a while and end up spending the money.) However, if you’re thinking about saving long-term for his future (10 years plus), you definitely don’t want to have that money in a bank account: better to invest it in the share market.
I write about that in my book too. Feel free to read all about it in your rocking chair.
However, I’d suggest you stick with Where’s The Green Sheep? and save my book for a few months’ time when you and your wife can tackle it together on a date night at a restaurant!
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: Time to empty your give jar for those in need