Pape - The barefoot investor for families: the only kids money guide youll ever need

No funny stuff, just money stuff

The Barefoot Investor holds an Australian Financial Services Licence (AFSL no. 302081). This book outlines general advice only. It should not replace individual, independent, personal financial advice.

Neither Scott Pape, the Barefoot Investor nor anyone associated with the making of this book has received any kickbacks, commissions or feesor even so much as an invite to a corporate box at the footyfor recommending or mentioning anything contained herein. We never have, and we never will.

We are fiercely independent.

The bottom line: youre reading the same advice that Id give to my mum, God love her.

Disclaimer

The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based on the information in this publication.

For every person who read my last book and said...

Why the hell wasnt I taught this when I was a kid?

Just make sure you dont become a wanker... look after the battlers, son.

Don Pape

The Barefoot Investor Pledge

For every ten copies of this book sold, one copy is donated to a parent in financial hardship.

This book is written for parents (and grandparents, and anyone else who has kids in their lives).

Itll give you a proven plan to teach kids of all ages.

By the time you read the last page youll know you have a plan that will work with your family.

Whether your kid is currently listening to The Wiggles or Ed Sheeran, their life will never be the same.

Lets ROCK!

Contents

Youve spent the entire weekend helping your 18-year-old pack up their bedroom and box up their belongings.

Finally the moment has arrived to say goodbye.

You walk them to the front door and give them a hug.

Youve known this was coming for weeks, but your stomach is still in knots.

Its a pivotal moment in your lives.

They jump in their car, reverse out of the driveway, give you a toot, toot, a wave, and then theyre...

Gone.

You close the door, walk into your eerily quiet lounge room, sit down and think to yourself:

Did I do enough to prepare them?

Sweet Child O Mine

Look, I dont know you.

And I dont know how long itll be before you find yourself at your front door saying goodbye to your kids.

But what I do know is that itll happen a lot quicker than you think.

One moment youre changing their nappies... the next theyre changing yours.

So, the ultimate question is this:

Will you do enough in the short time you have to prepare your kids?

And will your kids leave with the financial confidence and the street smarts to seize the opportunities the world has to offer them?

Well, the reality is that young people aged between 18 and 24 have the lowest levels of financial literacy of any age group, according to ASIC research.

In other wordsif your kid is normal, they are not prepared.

Normal is $4200 in credit card debt.

Normal is making only the minimum repayments, which will take them 42 years to pay off, with a whopping $21080 in interest.

Normal is accepting the banks offer for an increased credit card limit... Oh, okay, sure, and a loan for a new car.

Normal is working a job theyve outgrown so they can continue making repayments on stuff they regret buying.

The bottom line is this: as a parent, the days are long, but the years are quick...

And you only have a very short time to influence your kids.

Because once they turn 18, you have to share that influencewith their friends, with their bank, with their Instagram account, with their boss.

And most of these people dont have your kids best interests at heart... but you do.

What really makes the difference?

Have you ever wondered what really makes the differencewhy some kids fly and others seem to flail?

Is it having wealthy, educated, upper-middle-class parents?

Is it attending a $35000-a-year private school you mortgaged your kidney to get them into?

Is it receiving a big-arse cheque at their 21st for a deposit on their first home?

Is it scoring top marks at school and getting into a trophy degree?

Im here to tell you that its none of these things.

Besides, you and I both know people whove had all these blessings in life but have still turned out like Paris Hilton.

So, what does make the difference?

You do.

My promise to you

Being a parent is a tough and sometimes thankless job.

It often feels like youre making it up as you go along. Like you should be doing more.

Well, heres my promise to you:

By the end of this book youll have a simple, no fuss plan that will guarantee that your kids will be confident and smart with money... in as little as three minutes a week.

Somedaymany years from now, long after youve forgotten this bookmy hope is your kids will come to you.

Maybe theyll have kids of their own.

Maybe theyll finally understand some of what youre going through now.

Yet no matter where they are, or what lifes thrown at them, ultimately theyll be doing okay.

And theyll thank you for what you did for them today.

Just like I did with my dad.

It wasnt big or flashy.

There was no background music playing, no tears welling up.

I simply sat down, looked him in the eye, and said:

Thanks mate.

My father quit school when he was 16 and began working at a service station in Ouyen, a tiny wheat-belt town in the Mallee. (Claim to fame? Its the hottest place in Victoria. And it has the best vanilla slices. Think about that combo.)

One fateful day the bell on the servo door chimed, and in walked the most beautiful girl Dad had ever seen.

Her name was Joan.

The way my father tells the story, he instantly knew she was the one.

My mother, the more conservative of the two, was more circumspect, and with good reason. Looking back at the polaroids of my parents when they were dating, I see a young man with mutton-chop sideburns, flares and a look in his eyes that I know only too well. It said: Im batting above my weight with this girl, so I need to give this everything Ive got.

And for the next 40 years, he did (and continues to).

He worked day and night at that servo. In fact, he was there so much that he lived in the caravan out the back for a while, saving his shekels. And it worked. Years later he bought that servo.

When my parents got hitched they built our family home, a functional fibro joint located at the top of what the locals called Tickle Belly Hill. True dinks, wed actually have mail addressed and delivered to Tickle Belly Hill.

I came into the world at Ouyen Hospital, but, unfortunately for my mother, I was born dangerously close to the VFL Grand Final. So after she checked herself out of hospital(!), she arrived home and was greeted by Dad and his matesincluding the doctor whod delivered medowning frothies in the living room, watching the footy.