The Barefoot Investor

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Some stuff is good others is unique to personal situations.

He lives int he country and doesn't have the burden of a huge mortgage. Thats fine if you want to live in the country and find work there.

I dont agree with the extra super sacrifice either.
 
10571z said:
Some stuff is good others is unique to personal situations.

He lives int he country and doesn't have the burden of a huge mortgage. Thats fine if you want to live in the country and find work there.

I dont agree with the extra super sacrifice either.
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He isn't going to be worried about a mortgage mate.

His subscription newsletter is $400 p.a. and has significantly more than 10,000 members, I say > 10,000 because the members Facebook group cracked 10,000, and they'd be lucky if 30% joined the facebook group. Numbers surged on the back of his best selling book -- which also would have made him tonnes of cash.
 
superfraser said:
He isn't going to be worried about a mortgage mate.

His subscription newsletter is $400 p.a. and has significantly more than 10,000 members, I say > 10,000 because the members Facebook group cracked 10,000, and they'd be lucky if 30% joined the facebook group. Numbers surged on the back of his best selling book -- which also would have made him tonnes of cash.
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My point is he talks Like that being a viable option when it isn't for most.
 

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10571z said:
Some stuff is good others is unique to personal situations.

He lives int he country and doesn't have the burden of a huge mortgage. Thats fine if you want to live in the country and find work there.

I dont agree with the extra super sacrifice either.
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Why don't you agree with the extra super contribution?

My accountant said the same thing and for me to use that money to pay down my morage.

But it seems to make sense to me to chuck another 5.5% if my wage into super and get it taxed at 15% vs your normal higher rate 30-45%

I've got 28 years left on the mortgage, would I be better off paying it off as fast as possible with every spare dollar, or would it be better to max out super at 25k per year and throw every spare dollar into an index fund? After doing the sums the latter seems like the better option in 28 years time.
 
ato.png

That's taken straight off the ATO website regarding salary sacrifice.
Zoe is saving 15.93% on her tax ($1950) compared to Sally.
Assuming both women retire in 40 years and Zoe gets 6% pa return on her super she nets an additional $339,950.13 at retirement.
 
ash_1050 said:
View attachment 448697

That's taken straight off the ATO website regarding salary sacrifice.
Zoe is saving 15.93% on her tax ($1950) compared to Sally.
Assuming both women retire in 40 years and Zoe gets 6% pa return on her super she nets an additional $339,950.13 at retirement.
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she's also had less money in her pocket up to that point and that is assuming the government don't change super laws again and that she couldn't have made better investments outside of super etc
 
Gralin said:
she's also had less money in her pocket up to that point and that is assuming the government don't change super laws again and that she couldn't have made better investments outside of super etc
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Please tell what Sally's investing in that's earning more than 15.93% pa post CGT? Sure Zoe has got less spending money now but she's also much better off later on whereas Sally may not be.
 
ash_1050 said:
Please tell what Sally's investing in that's earning more than 15.93% pa post CGT? Sure Zoe has got less spending money now but she's also much better off later on whereas Sally may not be.
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she saved 15% on her tax bill by putting money into super where it cannot be used to pay off her mortgage for example. It gets taxed on the way in, it gets taxed in there and it gets taxed on the way out
depending on how much is in there it gets taxed a lot more on the way out
never mind that she can't access it for 40 years, assuming that the government doesn't change the retirement age, access to super age, tax laws etc at the end
Super is one way to invest for retirement, it is not the only way and it is not always the best way, it's also assuming that Zoe can afford to be almost $700 a month worse off and that Sally just pisses that $700 away

what if the return on super is lower than the interest rate on Zoe and Sally's mortgages and Sally is putting that extra $700 against her mortgage every month, sure Zoe saved $2k in tax but Sally paid an extra $8k off her mortgage
 
rdhopkins2 said:
Has anyone had much experience with The Barefoot Investor. I read his column in the paper and find he is pretty down to earth and sensible from those readings. Is anyone planning on buying his book or has read his old book or subscribed to his services?

Interested in your thoughts. Cheers in advance.
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I think he's positive and has some good advice, my age bracket has put me outside of some of his planning I 've actually set in place some ideas he talks about before hand , not to his degree of course , he knows a lot more than me believe me, I had set up different accounts etc.

But I believe he is sound and the book is good , its simple , and all you need is some discipline to follow through'
he has a bit of fun on the way, and he is not endorsed by any people he recommends .
I think he's genuine.
Have a read!
 
Collingwoodity said:
I didn’t find it particularly useful as a money maker being an ever so slightly seasoned investor. However his story is interesting and he sends the right message to those who might not be money savvy. And yes...credit cards are bad. You are using money that you don’t have on disposable items. It is unlike a mortgage or business loan which is either deductible or provides a roof over your head.


Sent from my iPhone using Tapatalk
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Correct! Great for people who are not too up with finances, or people who have gotten themselves into the deep water and can't swim!
 
rdhopkins2 said:
It's interesting to see how many companies are offering investment seminars. Many of them are free to attend initially. I've attended two so far.

One was very high pressures sales. Some of what they said sounded good but much of it was scaremongering.

The other was much better and made sense without being so much of a hard sell.

See the propert investment seminar thread on here which I will try and update on the weekend.

I love BFI's work. No bullshit finance. You don't have to agree with everything he says but the majority is good sensible advice for the average person who can't afford to burn money.
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Investment seminars do seem to be, like, they think you are a bit dumb.

BFI doesn't do that, he sort of says we are all a bit uninformed on things , not dumb at all.
Just pull it together and find out things , learn , he shows the way , keep on track and get comfortable.

He's not really saying every one will be millionaire property owner or investment millionaire.
 
Kruzering said:
Why don't you agree with the extra super contribution?

My accountant said the same thing and for me to use that money to pay down my morage.

But it seems to make sense to me to chuck another 5.5% if my wage into super and get it taxed at 15% vs your normal higher rate 30-45%

I've got 28 years left on the mortgage, would I be better off paying it off as fast as possible with every spare dollar, or would it be better to max out super at 25k per year and throw every spare dollar into an index fund? After doing the sums the latter seems like the better option in 28 years time.
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I don't agree with it due to the fact that tieing up any of your wage in an account you can't touch for 35+years seems stupid for someone saving for a house. It might not be a lot but in my situation I want all the Savings now ( yes I'm aware there is a new scheme where you can pull extra contributions out for house deposits)

Also if you are inline for an inheritance (most families are smaller now 2/3 kids ) from parents unless they live to 120 that money will generally be accessible when you are 65 or even 75.
 

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10571z said:
I don't agree with it due to the fact that tieing up any of your wage in an account you can't touch for 35+years seems stupid for someone saving for a house. It might not be a lot but in my situation I want all the Savings now ( yes I'm aware there is a new scheme where you can pull extra contributions out for house deposits)

Also if you are inline for an inheritance (most families are smaller now 2/3 kids ) from parents unless they live to 120 that money will generally be accessible when you are 65 or even 75.
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You hope?
 
10571z said:
I don't agree with it due to the fact that tieing up any of your wage in an account you can't touch for 35+years seems stupid for someone saving for a house. It might not be a lot but in my situation I want all the Savings now ( yes I'm aware there is a new scheme where you can pull extra contributions out for house deposits)

Also if you are inline for an inheritance (most families are smaller now 2/3 kids ) from parents unless they live to 120 that money will generally be accessible when you are 65 or even 75.
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It's fair if you haven't got a house and are saving for one I'd agree.

But as a stupid person, my best investment would be an index fund, I can just gear my super to that, and I may aswell only get taxed 15% up to 25k instead of just buying index funds outside of super after higher tax.

It's free money!!
 
Gralin said:
what if the return on super is lower than the interest rate on Zoe and Sally's mortgages and Sally is putting that extra $700 against her mortgage every month, sure Zoe saved $2k in tax but Sally paid an extra $8k off her mortgage
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Either refinance the home loan or roll over to a better performing superfund. The top 30 super funds over last 5 yrs (balanced option) averaged over 10% return. How long ago were fixed home loan rates even close to this? Admittedly, things can change quickly and Super isn't necessarily the best investing option. 7% growth since inception, add the tax benefit, it isn't too bad though.
 
Gralin said:
she saved 15% on her tax bill by putting money into super where it cannot be used to pay off her mortgage for example. It gets taxed on the way in, it gets taxed in there and it gets taxed on the way out
depending on how much is in there it gets taxed a lot more on the way out
never mind that she can't access it for 40 years, assuming that the government doesn't change the retirement age, access to super age, tax laws etc at the end
Super is one way to invest for retirement, it is not the only way and it is not always the best way, it's also assuming that Zoe can afford to be almost $700 a month worse off and that Sally just pisses that $700 away

what if the return on super is lower than the interest rate on Zoe and Sally's mortgages and Sally is putting that extra $700 against her mortgage every month, sure Zoe saved $2k in tax but Sally paid an extra $8k off her mortgage
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Tax on the way out is only if you get early access? Typically most avoid this by taking it out after retirement, once they reach what is called their preservation age. Also any income outside of super gets taxed normally at a higher rate than super.
Yes their is legislative risk, but this can work the other way. They could restrict inflows even more, so the money you got in now, is even more valuable.

The only reason the government are limiting funds in super and contributions rates is because they can tax the you at a higher rate outside of super.
 
kickazz said:
A lot of his basic money advice is that - very basic. But that is what so many Australians need, and his book puts together all those building blocks to get people out of financial ignorance.

He does a bit of cherry picking with some stats but overall is good. He recommends people completely get rid of credit cards, which I do not agree with if you truly manage them well (ie never pay any interest).

(I think) he also recommends paying down smallest debts first, instead of the ones incurring the highest rate of interest. (To be fair, these can often be one and the same for people). Whilst from a numbers point of view this is not the best approach, he does approach money management from that emotional angle; getting a win on the board early will be encouraging for you. The concept of the 'Mojo' account similarly addresses the emotional relationship we have with finances.

I got a copy of his book and flicked through it. Most of it I already 'do', but I'm sure I'll find a couple of good tips. More than anything else, I bought it to share with friends and family who might not have those fundamentals bedded down yet.

Would make a good present for 16-30 year olds I recon.
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Even though I am just about to retire @ 57yo bought the book to have a bit of a read.

Already implemented a lot of what he said - never paid interest on a credit card, salary sacrificed into super for 20+ years, don't have a McMansion just a modest home near the beach in Adelaide - and now I am even counselling a couple of millenials on getting the foundations right (have been free spenders up till now). I'll retire on a higher income than I currently have and won't have to sacrifice anything going forward (will still get to travel overseas once/twice a year like I have done for past 15 years).

Just on salary sacrificing, my simple philosophy, you don't miss what you don't have. Just do it.

Will give the book to those millenials to reinforce the basic but necessary steps. None of it is rocket science tho.

And just on the matter of inheritances which one poster said earlier, don't always assume you will get one.
 
kirky said:
Just on salary sacrificing, my simple philosophy, you don't miss what you don't have. Just do it.
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I have friends that are perpetually in debt for the simple reason they don't save. It's amazing how much difference paying yourself first with the 'just do it' mindset has to your approach on money and your ability to be debt free.
 
10571z said:
I don't agree with it due to the fact that tieing up any of your wage in an account you can't touch for 35+years seems stupid for someone saving for a house. It might not be a lot but in my situation I want all the Savings now ( yes I'm aware there is a new scheme where you can pull extra contributions out for house deposits)

Also if you are inline for an inheritance (most families are smaller now 2/3 kids ) from parents unless they live to 120 that money will generally be accessible when you are 65 or even 75.
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unless like my fafter, who decided only 10 years ago to break up with my mother and cut both me and my brother out of the will .

ps my father was 74 and mother was 70 at the time.
 
kirky said:
Even though I am just about to retire @ 57yo bought the book to have a bit of a read.

Already implemented a lot of what he said - never paid interest on a credit card, salary sacrificed into super for 20+ years, don't have a McMansion just a modest home near the beach in Adelaide - and now I am even counselling a couple of millenials on getting the foundations right (have been free spenders up till now). I'll retire on a higher income than I currently have and won't have to sacrifice anything going forward (will still get to travel overseas once/twice a year like I have done for past 15 years).

Just on salary sacrificing, my simple philosophy, you don't miss what you don't have. Just do it.

Will give the book to those millenials to reinforce the basic but necessary steps. None of it is rocket science tho.

And just on the matter of inheritances which one poster said earlier, don't always assume you will get one.
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yes don't assume, as both my brother and i got cut of my fathers will.
 
sammm said:
yes don't assume, as both my brother and i got cut of my fathers will.
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You def can't count on inheritance.

My mates Grandma left everything to the church while her three kids thought they'd be dividing up the 2mil amount...ouch, basically adding 10 years onto kids working life.



I think it's fair to expect the family home to be divided evenly between the siblings. That's what I will likely get and what I will leave.
 
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