What to do when you're suddenly rich. Scott Pape advises church victim.

PUTTING a payout into a term deposit and then taking time to decide what to do with it is the way to go, writes Barefoot Investor.

Managing a payout has given a woman valuable time to recover and rest.

PUTTING a payout into a term deposit and then taking time to decide what to do with it is the way to go, writes Barefoot Investor.

REBECCA WRITES: You won’t remember this because you speak to so many people each week, but I wrote to you in late November last year about being overwhelmed by receiving a payout from the Church for $175,000, and you were kind enough to give me a call. The advice you gave me was incredibly helpful. You told me to put most of it away in a term deposit until I’d decided on things, so I could get rid of all the crazy ideas floating around my head. Doing that was an amazing first step. Then I got a copy of your book and have been following the “Barefoot Steps”. I am still going through some yucky procedures, trying to get some proper justice, and have had to take time off work to cope. But when I have bad days, I take out my drawing of the buckets and it reminds me that I am going to be safe, no matter what. The money has ended up buying me some valuable time to recover and rest, which is changing my life, one day at a time. I write with no expectation of reply, just wanted to say a sincere thank you.

BAREFOOT REPLIES: The Barefoot Steps are focused on keeping you financially safe and secure. And after what you’ve been through, that’s exactly what you need. Thanks for writing, and keeping us updated on your journey. You’re on the right path.

NO FREE LUNCH HERE

LUKE ASKS: ING Direct came to the market a few years back with great product called Living Super (you call this type of fund “SMSF Lite” as it allows you to buy shares within super). If memory serves, it was the first super provider to offer a zero-fee balanced option and it really shook up the market. I was attracted by the ability to access low-cost index ETFs and construct a low-fee share portfolio within my super. Fast forward a few years and everything has changed. There are now fees on the balanced fund option, and the annual trading fee is 0.50 per cent. It works out as a $700+ increase, negating the very reason for buying the ETFs over a standard fund. I rang ING and was told the reason was that they have been absorbing costs for a number of years — sounds like a loss leader to me to capture market share. Is this legal? Further, the Morningstar report they commissioned to justify their changes is laughable. I am very angry, because moving super is a pain and you are exposed while you are out of the market! I know AustralianSuper has a similar product. Do you recommend it, and are you aware of any others? Also, I want you to share this with all your readers so they are aware of these very significant changes to the ING Living Super product.

BAREFOOT REPLIES: When ING launched the zero-fee super option, I called them up and asked them, “what’s the catch?”. After about 20 minutes of bulldust bingo, I basically worked it out: technically the product was “free” … well, as long as you parked a certain amount of your super in a cash account that paid below the market interest rate. Uh-huh. That sort of marketing is too tricky for my liking — and it seems also for ASIC, which made ING Direct compensate 24,500 of their customers $5.38 million for the “potentially misleading” fee-free statements they made about their Living Super product. That’s why I’ve never recommended ING’s Living Super product. There’s no such thing as a free lunch! So, what should you do? First, you need to look at the costs of switching: you’ll have existing insurance cover in place, and you’ll also have tax implications. However, if you do a bit of research you’ll find there are a range of low-cost industry funds that have dirt cheap “SMSF-Lite”, otherwise known as direct share investing options.

SEXIST? NOT ME

TIM WRITES: I am usually a fan but I was rather disappointed by the way you described picking up your son from kindy in a recent column. To me your language came across as sexist, and I think we can all (especially someone in a position such as yours) be more careful in the way we phrase things. I have always recommended you to people (including my girlfriend just recently), but if your advice is going to come with a side of gender stereotyping, then that will come to an end.

BAREFOOT REPLIES: First, let me put down the vacuum cleaner so I can type with both hands. OK, ready. Tim, I’m guessing you’re upset about a column I wrote recently where I recounted a conversation I had with a mother at my kid’s kinder class: “Are you in between jobs?” she innocently asked me. When I told her that I wasn’t, she replied, “Oh, it’s just that not many fathers pick up their sons … in the middle of the day.” I’d say that’s a classic case of gender stereotyping right there … but I actually found it funny. Though I admit if I was actually out of work, it might have knocked my confidence a bit. Anyway, the guts of the column was about Australia’s biggest bank using its marketing muscle to send in cartoon credit card mascots to primary school assemblies. And that’s definitely something we should all be deeply offended and outraged about.

Read more Barefoot:

Financial education too important to leave to banks

You’re not a loser if you rent

Financial advice for when your spouse is terminally ill

The heartache of being a small business owner

Why gifting first-home buyers cash is bad

barefootinvestor.com

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice

Originally published as What to do when you're suddenly rich. Scott Pape advises church victim.