Barefoot Investor: High time we kicked tricky banking swine out of our schools

It’s time for us to kick off a financial revolution in this country, and it needs to start with our children, writes the Barefoot Investor.

The other day my son came home and announced he’d received a “present” from a stranger at the local park.

“A pig gave me a fridge magnet!” he squealed (as only a 5-year-old can).

His younger brother picked up on the excitement and lunged for the prize. And then it was on for young and … slightly younger. All over a freaking fridge magnet. (Then again, that’s all part of the bro code.)

MORE BAREFOOT INVESTOR

As I separated the two hay-balers, I saw that this was no ordinary fridge magnet.

The pig was actually … a local bank employee dressed up in a costume.

Which bank?

No, not that one.

This swine came from Bendigo Bank, and he was apparently the star attraction at the local community event … getting selfies with the kids.

Now I’m sure there were some parents who were taking photos with the pig and having a lovely family time. But, as my kids would soon understand, I’m not like other parents. I get a little intense when it comes to school banking.

For me it was like my son coming home with a packet of Marlboros: “The cool cowboy gave it to me, Daddy … and a lighter!”

And wouldn’t you know it, the Bendigo Bank boar turned up at my son’s school with bank-branded bags, colouring books and pencils.

At this point I’m breathing into a paper bag: if I see that corporate clown around town, I’ll put a skewer up his clacker and an apple in his mouth! Okay, so I’m joking … but the fridge magnet went in the bin, thus reuniting the boys against a new enemy — their old man: “So unfair, Dad!”

Here’s the deal: for the past 15 years, I’ve just been carrying on like a pork chop about this issue.

And, thankfully, other people are finally starting to get their snouts out of shape about it.

Earlier this year the Australian Education Union (AEU) wrote a letter to the federal Education Minister, Dan Tehan, demanding that banks be banned from classrooms. As AEU president Correna Haythorpe put it: “There’s no place for private corporations to go into schools and try and trap children into banking with them for the long-term future.”

You know what?

We need a financial revolution in this country, and it needs to start with our kids.

Oink! Oink!

Tread Your Own Path!

 

Barefoot Investor says he’s not like other parents. He get a little intense when it comes to school banking.

Q&As

JESUS WOULD APPROVE OF YOUR ATTITUDE

REV. STEPHEN BLOOR ASKS:

I’m just following up on your question last week, “Does Jesus despise the Barefoot Investor?”

As an Anglican priest I love your books — they are against debt, they are about living within your means, and they are about being generous. Yes, perhaps I would add a few Bible quotes to back up your principles, but it has been a book I’m happy to recommend.

And, yes, there is a danger in making an idol out of money, but in this age our culture makes a bigger idol out of keeping up Instagram photos of so-called success.

Blessings, Rev. Stephen Bloor

BAREFOOT REPLIES: Thank you, Reverend. I’ve actually had a lot of Christians write to me echoing your sentiments this week.

(Okay, and the odd religious nut who said I was going to hell. Seriously they did, claiming I run a cult!)

Thanks for recommending my book, I love hearing from people who’ve used it to get themselves out of debt and back on their feet.

BANKRUPT BUT THEY’RE STILL CHASING ME!

LISA ASKS: I am a 36-year-old single woman, earning $65,000 as an admin officer, and I have recently declared bankruptcy.

However, one loan could not be erased, as it is a secured loan, and my car (a Mitsubishi ASX worth $8000) is attached to it.

It is a loan for $17,000 at a high interest rate (29% p.a.), and I still have about six years to pay it off (at $350 a fortnight). I have started using the Barefoot tools from your book (Smile, Splurge and so on), but what can I do with this loan?

BAREFOOT REPLIES: What a car crash!

You got really bad advice. If you sat down with me at the time you were going bankrupt, I’d have told you to surrender the car to the finance company and then add the shortfall (after they sold the car) onto your bankruptcy.

Then I’d have advised you to save up and buy a similar car for cash.

Instead, your repayments are $8400 a year … on an $8000 car!

Look, anyone who charges a 29% interest rate on a car loan is a shark — they deserve to be battered and dropped in hot oil, and eaten by a tubby bloke at the footy.

So, if I were in your shoes, I’d ring up AFSA (the Australian Financial Security Authority) and explain there was a mistake on your bankruptcy — you should have surrendered the car.

Then explain that you’d like to do it now, and ask how you go about it.

Buckle up!

When you inherit a significant sum, it’s important to understand that more money won’t make you any happier from this point on.

WHAT SHALL WE DO WITH MORE THAN ENOUGH?

TIM AND SARAH ASK: My husband (30) and I (24) have inherited an eye-watering $6.5 million!

We have paid off our mortgage, bought an investment property and cleared our debts, yet we have no idea what to do with the rest of it. (We have locked it up in our high-interest account while we decide what next.)

Now that we have the financial freedom to enjoy our weekly wages freely, we want to be wise with our next move. What do you suggest?

BAREFOOT REPLIES: You have reached your “enough” figure at a time when most couples are still trying to scrape up a house deposit.

That’s the first bit of advice: understand that you have “enough”. More money won’t make you any happier from this point on. In fact, as you’ve probably worked out, having lots of zeros in your bank account is actually bloody stressful, right?

Well, here’s how I’d think about it if I were in your shoes.

Let’s say you have $5 million, which you decide to invest in a low-cost index fund (via a family trust for asset protection).

I want you to think of that investment the same way I think about my family farm (stay with me here!).

Twice a year your “farm” will deliver you a golden harvest, in the form of dividends, and it will grow each and every year.

In my case, the land value of my farm goes up, down and sideways (just like share prices), but I don’t care, because I’ll never ever sell my family farm. Besides, it’s the harvest that puts food on the table.

In your case, your “farm” should deliver you around $275,000 pre-tax a year.

Yes, there will be the occasional “drought”, and lean times — but as long as you own the farm, you collect the harvest.

And that’s the lesson: you plant once, and then you can harvest forever.

And that is why you have more than enough.

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