Barefoot Investor: Don’t get high on the short-term sugar hit

Despite the COVID crisis, money questions have been flooding in from readers about how to buy and trade stocks, or even gold. Maybe it’s down to raiding super, or the government stimulus, but the key to financial control is first to get out of debt, writes the Barefoot Investor.

Scott Pape. Picture: Foxtel

Working from home is great.

Until you want to get any work done. Then it’s the worst.

My almost-three-year-old daughter has taken on the role of my annoying interrupting coworker — so much so that we had to put a kiddie rail at the bottom of the stairs to stop her coming up to my office.

But that just made it more fun.

This morning she MacGyver’d over the rail, raced up the stairs, burst through the door, and — now completely out of puff — blurted out: “Are you like chickens?”

Huh? As in for dinner tonight? Or in general? Or wait … are you trying to psyche me out?

She didn’t say, and began rolling around on the floor, staring up at the ceiling.

Good chat.

This, however, was far from the only nonsensical thing that happened this week … let me tell you about a few.

Let’s start off with my Barefoot inbox. Questions flood in from people all over the country, giving me a good insight into what the man on the street in a mask is thinking.

You’d think that people would be asking about COVID-19 , JobKeeper or JobSeeker.

You’d be wrong. For the past few months the questions have been dominated by how to buy and trade stocks. And, with gold hitting fresh highs, people are now asking me about how to buy that too.

Next, there’s my day job. As a volunteer financial counsellor, you’d think I’d be run off my feet, with so many people out of work.

You’d be wrong. Last year our agency would get a dozen calls a day from people in financial crisis … yet at the moment the phone barely rings. There’s a certain financial pain-point people need to get to seek out our services. The government stimulus has largely — though temporarily — taken that away.

The final nonsensical thing I came across this week was when I went to pick up some photos of Mini-MacGyver from the local camera shop.

The owner confessed that last year he’d been thinking about shutting up shop. Things were that tough. And then came the lockdown. You’d think he’d be struggling to stay afloat.

And again … you’d be wrong. Instead, something weird happened.

“I’ll be blowed”, said the owner, “but since we came out of the first lockdown the shop has been going absolutely mental … our sales are through the roof! In fact, I don’t think we’ll qualify for JobKeeper this time around because our figures are too good.”

“People are buying cameras in Sicktoria?” I inquired. “To shoot what? The inside of their homes?”

He shrugged his shoulders.

“So I’m thinking I’ll spend a bit on doing the shop up … I reckon things have turned the corner”, he said, smiling.

Maybe … or perhaps the $42bn raid on super, combined with the government stimulus, has served as a short-term sugar hit.

We may not have found a vaccine, but plenty right now are double-dosing on retail therapy.

Tread Your Own Path!

Financial counsellors are more qualified than family to deal with a dire financial situation.

READERS WRITE

IT’S A FAMILY AFFAIR

LEXIE WRITES: We have had a bit of a shocker the past few days. My mother-in-law, who was visiting us from Norway, was arrested for shoplifting.

We thought it was all a misunderstanding over a jar of manuka honey but, shockingly, she later admitted it was deliberate as she “didn’t feel like she’s worth much”. She also shared that she had incurred a huge debt (AU $1.7m) on a bad business deal.

She is 54 and is super-fit and organised, but she has not worked full time in a while and her main source of income is renting out rooms in her home, plus government handouts.

With my daughter-in-law hat on, I tried to encourage my husband to get her to see a counsellor.

And, with my Barefoot hat on, I suggested she could sell an apartment she has that is worth $1m. (She refuses to downsize from her main home as she is very attached to it.)

Most importantly, I suggested she should get a job — any job! — because, aside from the financial upside, it would give her some purpose and a social life. But my husband tells me “she won’t get her government handouts” if she does. ARGH! What would be your 2 cents’ worth on all this?

BAREFOOT REPLIES: Oh, I would be staying the hell away from this.

It sounds like your mother-in-law needs to sit down with a counsellor to help with her mental health.

If I were in your shoes, I’d encourage her to make an appointment with her GP, or call Beyond Blue (1300 224 636).

They’re qualified to deal with her situation, and they can refer her to a free financial counsellor.

Just understand that if she doesn’t want to get help then there’s nothing you can do.

So, after encouraging her to see a professional, that’s exactly what I’d do: stay out of it, not lend her any money, and support your husband. That’s my 2 cents!

IS THIS LIFE-CHANGING MONEY?

TERRY WRITES: I am currently listening to a crowd who are selling a trading program to get into “call” and “put” options.

I do not understand a thing about the stock market, and do not have a lot of time to sit in front of my screen watching the stock market to earn “life-changing money”.

But in this tragic time, where people are dying worldwide, is options trading something I should look into?

BAREFOOT REPLIES: No, it’s not.

If you believe your life and financial situation won’t get better, it won’t, so find a new story.

I’M AN ACCOUNTANT— I SHOULD KNOW BETTER

JANE WRITES: I am a single parent of two kids and, financially, I am haemorrhaging.

I have been trying to domino my debts for three years, often paying off too much and leaving myself struggling (then ending up in more debt).

I have multiple family debts and multiple payday loans that end up costing me a fortune to repay.

I have accessed my super twice in the last five years, and have only $9000 left in super. But here’s the kicker: I am a qualified CPA accountant — I should know better.

BAREFOOT REPLIES: That must have felt good to get off your chest, right?

Well, I’ll let you in on a dirty little secret: I know a couple of financial pros who are broke. I also know a doctor who smokes, and a manic-depressive motivational speaker.

Look, let’s be honest, going to school and learning how to read a balance sheet doesn’t stop you from ordering $50 worth of UberEats instead of cooking a $5 spag bol.

Managing your money is about your behaviour and the story you tell about yourself. Which for you currently is, “I’m a fraud, and I’m ashamed of myself, and things won’t get better.”

It sounds like your life is out of control.

And you know what?

As long as you believe it, you’re right. Your life will continue to spin out of control, and you’ll end up bankrupt.

So you need to find a new story. For example, you could say to yourself, “I’m an educated single mum raising two beautiful kids. I’ll do anything for them. No one messes with my family.”

You Got This.

MORE BAREFOOT INVESTOR

Got a money question? barefootinvestor.com and #askbarefoot

Scott Pape is an independent, community-based financial counsellor. 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: Don’t get high on the short-term sugar hit