Barefoot Investor: How to invest in a share market hotter than TikTok

Young gurus giving trading tips to inexperienced millenials on social media isn’t a great financial plan. Here’s how to invest to set up your future.

Scott Pape shares how to invest in a stock market hotter than TikTok.

I’m back! Let’s kick off the New Year with the #1 question people have been asking me over the past few weeks:

“Barefoot, where the bloody hell are you?”

Answer: I took the school holidays off.

My thinking? Well, I only have 18 summers with my kids, and I want to make each and every one count.

Yet with COVID, our options were a little … limited.

So I came up with the ultimate trip: camping at a remote national park, some 500km away.

“Are you crazy?” asked my wife (who wisely stayed home, having just given birth to our fourth child).

“No doubt”, I said, as I bundled my two eldest boys into the ute and set off on our grand adventure.

My thinking was this: last year taught them to wash their hands for 20 seconds, to sneeze into their elbows, and to socially distance. So this year I wanted to give the boys the gift of good old-fashioned grubbiness.

And grubby we got!

We didn’t shower for a week. We did our business in the bushes. We ate off a rusty communal campfire hotplate that hadn’t been sterilised with antiseptic wipes. We slept shoulder-to-shoulder in a tent.

At the crack of dawn our flimsy tent would start getting lighter, hotter, and smellier … nature’s signal it was time to get up and spend the day together, swimming, bushwalking, and playing board games by the fire at night.

Rinse (in the ocean), and repeat.

Sounds delightful, right?

Okay, so let’s take off the rose-tinted glasses: It was a rewarding holiday, but it sure wasn’t relaxing.

The trip took us eight hours (that’s 56 hours in preschooler time).

Seriously, 20 minutes in, I heard from the back: “Daaad, how much longer?”

And when we got there, we had to set up camp, and sleep three-deep in a stinking hot tent.

And, unlike a resort or a beach house, there was nowhere to hide away from each other.

And no mobile reception, so nowhere for us to hide away from each other mentally either.

And no restaurant cooking us a hot meal … instead we lugged food and drinking water hundreds of kilometres into the bush (and Dad’s cooking skills are already a little, shall we say, agricultural).

Still, it didn’t matter.

See, I’m in the memory-making business, and that holiday is one that none of us will ever forget.

After the year we’ve had, we all need to be reminded of how little it costs to make memories.

After all, think back to your most precious memories: I’ll bet they didn’t cost you a cent.

Tread Your Own Path!

Investing in stocks can be daunting.

MAKING BABIES ON THE STOCK MARKET

Hey Barefoot …

New Year’s resolution number one for 2021 — invest in shares.

HELP!

There are so many options and so much conflicting information out there. Superhero, CommSec, Vanguard … EFT, index fund, AFIC, Raiz … It is doing my head in. I have read the ins and outs on most websites but still have no idea where to start or what features I really need.

Superhero offers $5 trades, and it seems to be marketed directly to me — a millennial starting out in the share game — but is it too good to be true?

I just want to pay low or no fees (I do listen to you sometimes!) and be able to sit back and watch my money make babies.

I would LOVE a simple, no-fuss, Barefoot-style guide to getting into shares before I’m an old lady regretting not following through on my 30-year-old New Year’s resolution.

Thanks for helping me kill the finance game thus far. In the last five years I have bought a house and paid off a pesky credit card … now I am ready to take the next step!

Nat

Hi Nat,

The share market is so hot right now. It’s like TikTok.

In fact, there are a lot of young gurus giving trading tips to Millennials on social media.

I may be getting old in the toe, but there’s a lot of stupid stuff happening in the market right now, and a lot of it is being targeted at young, inexperienced traders.

Mark my words: this will not end well.

Yet you are killing it.

You say you want a Barefoot-style guide to investing before you end up a regretful old lady?

Well, here it is:

You’re already through the fourth Barefoot Step (Buy Your Home), and now you’re onto Step 5 (Increase Your Super to 15%).

That is your next step. Do it, and you’ll be investing in the share market, compounding your returns over the (very) long term, and getting a tax deduction to boot.

Tik. Tok.

“I DON’T NEED YOUR HELP BUT WISH TO CRITICISE YOU …”

I don’t need your help but wish to criticise your answer to “Should I Pay My HELP Debt?” Your first response should have been “of course”, but you treated the subject as most recipients do, with a dismissive attitude on how to avoid it. As an older Australian, I need to tell you: it’s a loan and recipients have a responsibility to pay it back. Emphasising that it dies with you also indicates your attitude. Poor form for a self-proclaimed responsible purveyor of advice.

Gordon

Hi Gordon,

Thank you for your criticism.

So your basic premise is this: ‘If you owe a debt, it’s your duty to pay it off as soon as possible.’

However, that is not the premise of the Government.

They have set HECS-HELP up without a commercial interest rate, and with repayments based on your income. And they’ve discontinued the discount for repaying early.

It’s almost as if they don’t want you to repay early!

These bloody kids get a good deal, right?

Maybe. But, Gordon, remember that as an older Australian you had free university. And you also had affordable housing.

Young people today have neither.

BREAK NECK BAREFOOT

Hi Scott,

Just over three years ago I read your book, and took action. As my husband runs his own company, the first thing we did (after setting up our buckets) was to put aside three months of Mojo. To celebrate our daughter turning four we visited a water park, but it ended in tragedy with my husband breaking his neck. This resulted in a week in the spinal unit and three months in a neck brace, unable to work. The only thing that got us through was having our Mojo to fall back on. Since then he has also been attacked by a dog at work and suffered from a case of the shingles, and each time our Mojo got us through. Who would have known that a $25 book would have helped and saved us so much!

Yours in health, Wendy

Hey Wendy,

Fair dinkum, I thought I’d had it rough in 2020, but your husband wins the COVID cup!

What I took out of last year was an appreciation of just how risky the world really is.

My advice?

Keep your Mojo close (and don’t pat a growling dog).

DISCLAIMER: 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.

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.

If you have a 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