You’re not alone: Scott Pape shares a terrifying story

Barefoot Investor Scott Pape rolled up his sleeves to help an Aussie mum struggling with a life-threatening shock.

“There’s an email that’s just come in … you need to read it”, said Wally, my long-suffering editor.

Wally has been working with me for nearly 20 years, so I knew it was important … and possibly grim.

The subject line was: “Terrified.”

It was written by Kate, a 31-year-old mum of two kids (4, 2), with another on the way.

She’s a teacher, her husband is a chippy, and they work remotely in Western Australia with BHP. Because there are no birthing facilities in their mining town, they’d travelled 1400km to have their bub in Bunbury.

However, while she was being admitted, the doctors noticed a lump on her breast. After the tests came back, the doctors delivered Kate the heartbreaking news: she had a very aggressive form of breast cancer … which would be very difficult to treat.

And, while she was processing this, she was told she had to have the baby the very next day so she could begin treatment immediately.

Kate’s head was spinning. Her husband, the main breadwinner, would soon have two toddlers to look after, plus a newborn, plus a wife with cancer!

So, from her hospital bed late that night she emailed me.

After reading her email, I did what anyone would do: I picked up the phone and called her.

She burst into tears.

Kate told me that she didn’t have her wider family around her, and that she was totally overwhelmed at what lay ahead of her.

What could I possibly say?

When a health scare or other crisis surfaces, remember you’re not alone, says Scott Pape.

Well, I’ve helped a lot of people in these situations, and the one thing I’ve learned is this: when you’re going through a tough time and you think you’re all alone – you’re not. The world is full of kind and generous people. And so I told Kate I’d spend the next few days connecting her with them.

My first call was to the global head of media at BHP, and I explained to her what was going on.

What could BHP do?

A lot, it turns out.

The benefit of being with a huge company is that it’s well resourced to help, in the form of counselling, carer’s leave, and flexible work arrangements.

Next up, I spoke to her private health fund. I asked them to give Kate and her husband a forecast of her out-of-pocket expenses for the next 12 months, so they could manage their outgoings.

Finally, I called a number of lawyers (who owed me favours) and asked them to help Kate look into any total and permanent disability (TPD) payment she may be able to claim via her superannuation.

It was a busy and emotionally draining day – but the best was yet to come. At dinner time on the farm, we all share our ‘high, low, and Buffalo’ of the day. I said my ‘low’ was learning about Kate’s situation. The kids listened, got out their Give jars, and collectively donated $12.80 to their GoFundMe page.

Every bit of kindness helps.

Tread Your Own Path!

P.S. A message from Kate:

“I’m a fit 31-year-old mum of three beautiful children. There is no history of breast cancer in my family. I didn’t expect this to happen to me, and I don’t want it to happen to you. So, please, check your boobs.”

How to Get a 30-Year Home Loan Fixed at 2%

Hi Scott,

I’m an Australian expat living in the United States. In the US the vast majority of people have either 15-year or 30-year fixed-interest-rate mortgages, with most of these loans having very few restrictions or prepayment penalties. Prior to the recent Federal Reserve interest rate rises, you could lock in a mortgage for 2 per cent to 3 per cent per annum for the entire loan term (and if rates dropped, you could also refinance and get a lower rate!). It isn’t clear to me why the Australian banks can’t offer these products. Maybe all this is not the fault of the RBA (they’re just trying to do their job of managing inflation) but of the Australian banks!

Matt

US and Australian home loan products are very different.

Hi Matt

Yes, our banks could offer 30-year fixed-rate home loans if they really wanted to … just like I could choose to mow my paddocks with a Victa push mower if I really wanted to.

In reality, what works for the banks is selling simple variable rates that track the RBA cash rate. And that explains why the majority of borrowers choose a variable rate: it’s generally the cheapest deal on offer.

Conversely, the banks make the act of fixing your rate much more complicated and expensive. In most cases, the longer you fix your rate for, the higher the rate you pay. And you can only fix for a relatively short time (less than five years), and then you’re dumped back onto a variable rate.

Now the reason the Yanks can offer 30-year fixed rates, with no penalties, is that the US Government basically set it up that way by guaranteeing the loans, which the Australian Government hasn’t done.

Having our Government create something similar would lessen the impact of these bulldozer rate rises from the RBA and give borrowers more flexibility and security. However, it would be a huge undertaking.

So the real question is whether any of our politicians could be bothered bending over, cranking the Victa, and pushing things forward.

Small House, No Worries

Hi Scott,

Coming on the back of the abusive emails you’ve been copping lately, I just wanted to say thanks! Following your advice led us to save for over 10 years for a deposit to purchase our modest two-bedroom house, in which our family of four lives, sleeps, studies and works. Since purchasing it five years ago we have been paying it off at a rate of 8 per cent regardless of interest rates (currently the majority of our loan is locked in at 1.99 per cent). This has set us up to either pay it off early or have a nice buffer in times of uncertainty, like now.

One day we dream of putting in a new kitchen to replace the $100 Gumtree kitchen we installed ourselves. However, what our daughters need more than extra space is certainty, security and chilled parents who don’t have to pay off a massive mortgage. So for now we are happy to wait and make do while we enjoy our children and our little home. Thank you!

Sarah

Hi Sarah

Amen to that, Sarah.

And let me confess: you guys are smarter than me.

When we rebuilt our home after the fires, we built it too big.

A family does not need a large home to be happy.

If I had my time over, I’d have preferred to build a smaller home. And not just because it would have been cheaper to build. A smaller house requires less stuff to fill it, and saves time, money and stress in terms of cleaning, maintenance, heating and cooling. And, importantly, there are fewer rooms for our kids to hide away from us in!

Television shows like The Block (and all the home builder ads that run through it) have convinced us that even first homes need a media room, an alfresco dining area and a butler’s pantry.

That stuff doesn’t make you happy.

However, that being said, when your daughters get to ‘slamming door’ age, they’ll probably want their own space, so a renovation will be needed. Yet something tells me you’ll do it with cash, and a lot less stress than they do on The Block.

You Got This!

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

Barefoot Kids: Your Epic Money Adventure! (HarperCollinsPublishers) RRP $32.99

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