Barefoot Investor: Why spending time with your dad is a great investment

Father’s Day is an excellent reminder of the important things in life, and hard work and dedication give all dads the ultimate form of wealth: time to spend with their kids, writes Barefoot Investor.

I’ve got a friend who is super successful and very, very rich.

He sold his business for $300m, owns a resort and hangs out with dignitaries.

I was talking to him one day and he told me something that shocked me: “Looking back on it all, my most cherished memory has been reading Harry Potter to my kids each night.”

Not the mega deals. Not the mega mansions. Not the pointy end of the plane. Reading a $20 book to his kids.

And you know what I thought?

I wondered if he’d ever told his kids that.

See, dads don’t always open up. We’re all too often busy being the breadwinners, the hunters, the gatherers, the planners, the fixers.

Yet what we really want is to spend time with our kids, and let them know we care about them.

That’s all that really matters in the end.

So this Father’s Day I want you to give your dad the ultimate Father’s Day present: a chance to open up to you.

If you’re lucky enough to have your father still with you, whip out your phone, hit “record” and ask your dad the following questions: How did you meet Mum?

What advice can you share with me about money, life and happiness?

What does being a dad mean to you?

What are you most proud of?

How would you like to be remembered?

Each year people write to me telling me (often in tears) how it really was the ultimate Father’s Day present.

And then, throughout the year, people who have lost their father tell me they cherish the video they made.

So, as you thumb through Instagram or Twitter for the millionth time today, stop and do this.

One day, it’s all you’ll have left of him. And you’ll treasure it.

Happy Father’s Day!

Investing, like parenting, is the ultimate act of faith.

READERS WRITE

MY DOOM AND GLOOM DAD

JIM WRITES: My dad and I are classic doomers.

Dad would often speak around the dining table about the looming subprime mortgage crisis — among other things, like public debt, and the devil in credit cards — when I was a teen.

Now I am a Millennial who turned 30 this year.

I have a modest but secure (ish) job in the Queensland Public Service and was rattled to see my superannuation wiped by the coronavirus crash.

Naturally, I went to my father for advice.

He told me a huge crash was coming and to put my super into cash.

However, I have seen it recover very quickly. So is my dad an economic genius or is this all pure coincidence?

BAREFOOT REPLIES: How lucky are you to have had serious, meaty discussions over the family dinner table growing up! Now, no one can predict the future, yet you should internalise the real message your old man is giving you: “Life is risky, so be sensible with your money.”

But what about his suggestion to move to cash?

Well, I wouldn’t do it.

That’s because I worry that all this money printing will at some stage lead to inflation.

If inflation averages just 2.5 per cent, per year, then after 15 years a third of your purchasing power is gone.

After 30 years, more than half the real value is gone.

You need to outrun inflation and historically the best way to do that is by investing in the share market.

Know this: investing, like parenting, is the ultimate act of faith.

Things are never clear. There are no guarantees. You just put your best foot forward.

It sounds like you have an awesome dad. So learn from his wisdom, plan for the worst and hope for the best.

DEALING WITH A DIFFERENCE OVER WILLS

BELINDA WRITES: My lovely husband and I (both in our 40s) are doing our wills.

Unfortunately, this is a pressing matter as he has terminal cancer.

When it comes to dealing with his illness he is a legend but with finances he is a freaking nightmare.

Luckily, his life insurance will pay out $2m.

But this is where the problem lies — he wants to divide it equally between me and our three teenage kids, which they’ll each get when they’re 25.

This leaves me with just $500,000 to support myself and the kids until then.

My husband is the main breadwinner and my income does not even cover our rent.

What should I do?

BAREFOOT REPLIES: I’m so sorry for your situation; my heart goes out to your family.

The simplest option — and the way I have my own will set up with my wife — is to have everything go to the surviving spouse.

That allows them to make the decisions for the children going forward.

Yet it may not be the best option.

That would be the both of you sitting down and planning it out together, ahead of time.

And that’s exactly what you can do. You may not know this, but a terminal diagnosis should mean that your husband will have access to his payout 12 months before his death (or 24 months — check your insurance policy).

That should be enough time for you to work things out together.

Now this is his legacy that he’s writing and it’s understandable he wants to ensure that no one misses out.

So here’s how I’d frame the discussion with him:

If he were not sick and you won $2m in the lotto tomorrow, what would you do with the money as a family?

Here are some ideas that spring to my mind:

First, you would likely buy a nice, secure home for the family to live in.

No more renting and no mortgage either.

Second, you would make sure the entire family had reliable, safe cars (when the kids get their licences).

Third, with no mortgage, you’d probably reprioritise your work and spend more time with the kids.

Finally, you’d put some money aside for your kids’ education or to help them with a home deposit, or both.

Yet leaving kids with a large inheritance may not be the best way to achieve these things. It might be a better idea to match them dollar for dollar as they save for their first home.

That way you’re helping them but also encouraging them to work hard and save — qualities that will serve them well, long after you’re both gone.

Ultimately, my hope is that your husband finds some comfort watching his legacy take shape.

My thoughts are with your family.

All dads really want is to spend time with their children.

AN UNUSUAL REQUEST FOR MY HUBBY

SALLY WRITES: I have an unusual request.

Before reading your book, my husband Derek’s after-work hours were taken up largely by games on his phone and Netflix.

Now he reads investing books every evening. It has been amazing to see him transform!

We have paid off our house and are investing our savings, with our portfolio growing rapidly.

We have a one-year-old son who is the luckiest boy in the world to have my husband as his father.

So to my request: please tell my husband “well done!”

BAREFOOT REPLIES: It’s got nothing to do with me, and everything to do with becoming a father and realising what’s truly important.

Your hard work and dedication have given you the ultimate form of wealth: time to spend with your kids.

The only test you have is the urge to upsize your home.

Remember, though, that kids don’t care about the suburb you live in, the car you drive, or your title at the office — all they really care about is spending time with you.

Your husband has worked it out.

Happy Father’s Day, and good onya Derek!

MORE BAREFOOT INVESTOR

Got a money question? Visit barefootinvestor.com and #askbarefoot

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: Why spending time with your dad is a great investment