Barefoot Investor: The best gift you could ever give your mum

Many people see Barefoot as being about money-grubbing finance, but at its core it’s about how to look after those we love. Here’s the best thing you could do for your mum.

Many years ago, I was invited to a very exclusive finance dinner.

As luck would have it, I found myself sitting next to a VIP … the chief of a large international bank.

He leant in, shook my hand, and began telling me all about his sprawling bank, which employed tens of thousands of staff and had millions of customers.

And then he said something that totally shocked me:

“We lend money only to women.”

“What?” I blurted out.

“My bank lends money to small businesses. And we’ve found that when we loan money to women they use it to improve their living situations and educate their children … whereas men often squander it.”

Bingo, bango!

The famous bank chief I was sitting next to was none other than Muhammad Yunus.

Back in the ’70s, Yunus did something that no one in his native Bangladesh had ever done before: he provided small business start-up loans to women – poor, uneducated women who lived in the backblocks.

People thought he was crazy.

See, at the time, 99 per cent of loans were to men. If a woman applied, she was often laughed at and dismissed: “Go get your husband to apply.”

Yet Yunus understood the power of the mothering instinct … these women wanted a better life for their children.

Yunus bet this would drive these mothers to work hard, to look after their kids … and to repay their loans in full.

And that’s exactly what they did.

The result was that millions of people were pulled out of grinding poverty, and Yunus was awarded a Nobel prize.

Of course it doesn’t matter if you’re in Bangladesh or Bendigo – women tend to be more focused on financial security.

And you don’t need a Nobel prize to work out why: they have to be.

That’s because women are, on average, poorer than men. They are more likely to do more unpaid work. They are also more likely to take time off their career to raise children. And they still get paid less than men, according to the Human Rights Council of Australia.

The result?

They have less money compounding over their working lives, so they retire with about half of what men have in super.

And so, on this Mother’s Day I’ve got a special request for you:

If you know a mum who’s struggling (whether yours or not) give her the gift of financial knowledge.

Offer to take her out on some Barefoot Date Nights. Help her work through the steps.

Odds are she’ll remember that more than the supermarket flowers she gets every year!

Tread Your Own Path!

Women tend to be more focused on financial security.

A Very Barefoot Will

Hi Scott,

My beautiful mum passed away recently. She was a big fan of yours. Each Sunday we’d catch up and she’d ask me what “Barefoot Scott” had written this week, often chuckling at your straight-talking responses. After she died, we found that she had left instructions (in her fireproof Bunnings safe) about a hidden “Mojo” envelope – to help us out until her will was resolved. We also found an ING account named “Holiday”, ready for her next big trip. As sad as I felt, I had to smile with pride. It wasn’t about the money, I was just in awe that Mum had done all this in her late seventies, and with very little, too. Kudos, Mum!

Jenny

Hi Jenny

Love it!

A lot of people think that Barefoot is about money-grubbing finance.

Yet, at its core, what we talk about here each week is how to look after the people we love.

And, in that sense, your mum was a true Barefooter.

Thank you for sharing your story.

Help!
My Mother-in-law Breeds Siamese fighting fish

Hi Scott,

I get along well with my mother-in-law – it’s her business ideas that drive me nuts. One day she discovered the marvellous world of pet breeding, specifically high-end ragdoll cats.

Quite good money for cute little kittens. She took a loan – from my wife – and off she went. But the kittens turned into old cats, with no buyers.

That was 10 years ago, and it almost bankrupted my wife. Lesson learnt? No! She switched to great blue mastiffs (very Instagram worthy), but still no buyers. Lesson learnt? No! Next came Siamese fighting fish!

And that brings us to today. She holds to the idea of entrepreneurship like a lottery ticket, thinking her luck will change overnight. We have shown her that if she had taken the dole and saved it, instead of buying animals, she would be in a better position. Even those poor creatures would be better off anywhere but where she has them. But she doesn’t want help. How do you make someone so delusional see the red numbers?

Craig

Hi Craig,

She sure sounds like she’s having lots of fun! You? Not so much.

To you, the answer to her problems is so simple it’s like shooting Siamese fighting fish in a barrel: “Stop doing this, you’re going broke!”

Yet she seems purr-fectly happy with her monetary menagerie, mate!

So let me give you the same advice I give any family member who writes to me:

Never, ever “lend” money to your family or friends.

Give it to them instead.

Mentally, get to a point where you’re giving away the money: surrender any thought of it ever being repaid. Which is a decent strategy if you know she’s using it to breed pets she’ll struggle to later give up.

So on this Mother’s Day I want you to stop off at the butcher and get as many bones and offcuts as you can carry.

Then tell her the debt is forgiven!

(And never lend her money for ragdoll cats again.)

Taking mum out on Barefoot date nights will create a more lasting impact than supermarket flowers.

Thanks, Mum

Hi Scott

I will be forever grateful to you for removing the noose around the neck of both me and my mum. A couple of years ago I read your book and was hooked – I set up my buckets and paid down my credit cards. Then I realised I could also help my mum. She had just hit 70, was desperate to stop working, had little super, had credit card debt, still had a mortgage, and was being crippled by strata and council rates. On New Year’s Day of 2018 I sat her down and suggested she read your book, which she did in a couple of hours. Before we knew it, her credit cards were gone and her dreaded bills were covered. Most amazingly, she sold her place, paid off the mortgage, and retired to the country. Honestly, the best gift you could give your mum is to rid her of money stress. (P.S. I’ve just purchased my own first home – something I thought would never happen.)

Thanks, Jess

Hi Jess,

What a fantastic story!

Let’s repeat that last line so everybody gets it: “The best gift you could give your mum is to rid her of money stress.”

Not flowers. Not chocolates. Not Apple gear.

You know who would love this idea? Anna Jarvis.

Anna is none other than the Mother of Mother’s Day.

She created the first Mother’s Day in 1908, to honour her late mother … and all mothers.

Yet, just like Coca-Cola hijacked Christmas (ever wondered why Santa’s dressed in Coke’s corporate colours?), it didn’t take long for corporations to cash in and commercialise Mother’s Day.

But she wasn’t one to stand down; instead she fought them every step of the way.

Newsweek reported that she once had as many as 33 simultaneous Mother’s Day lawsuits on the go!

She devoted the rest of her life – and every cent of her savings – to fighting to keep Mother’s Day pure.

In a day and age where you can buy anything for your mum and have it gift-wrapped and delivered, spending time with them, and maybe even helping them out, is what Anna Jarvis envisaged all those years ago.

You Got This!

Got a money question or story to share? Go to 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: The best gift you could ever give your mum