by Scott Pape
If your teen has been following the Betty Behaviours—and they’ve developed a reputation as a hard worker—then they’ll have earned their glowing reference.
Yet that doesn’t mean they’ll automatically get it.
That’s because it’s usually just not on the boss’s radar (and I say this as a boss who has given dozens of references).
They need to ask for it.
(That’s the old Barefoot Rule 85: Don’t ask, don’t get.)
It can be as simple as knocking on their office door during lunch, or sending a polite email. The important thing is that they don’t just sit there and wait for their boss to walk up and hand them a reference letter and a box of chocolates.
Teach your teen that they need to kick butt, and take names.
Time to celebrate!
For this Money Meal, you’re going to celebrate the rite of passage of your teen’s first job. And if they have younger siblings this is especially strong, because you’re building up another family legend: ‘In our family, we celebrate getting a job.’
Point out to your teen that if they can just do the three Betty Behaviours they’ll instantly be ahead of nearly three-quarters of the population, who just phone it in and do the minimum to get by. And it’ll pay off for them a hundredfold in satisfaction, job security, income, and (eventually) achieving our Barefoot Ten for this chapter: ‘to earn at least one glowing reference from a boss’.
But above all, remember to have fun—this night is about celebrating their win.
Money Meal ‘shopping list’
•Get your teen to bring along all their work documentation (employment contract, super, payslip etc.) to talk about over dinner.
BAREFOOT MONEY MEAL
THE CELEBRATION!
Either go out to dinner, or bake a cake and put streamers up. You’re going out of your way to let your whole family know that this is a celebration—and set a precedent for any younger siblings.
ENTRÉE:
Explain to your teen what they’re at work for: the money, perks, friendships, sure. But the main reason is that it is the first step down a long path—and they want a glowing reference from their boss.
But this isn’t about brown-nosing. It’s about setting them up for a successful, profitable, enjoyable career.
All they need to do is internalise and follow the Betty Behaviours:
1.Be on time.
2.Roll up your sleeves and get the job done.
3.Say please and thank you, and smile while you do it.
MAIN COURSE:
Look over the work documentation . . .
•employment contract
•payslip
•any introductory documents they’ve got.
Run through each item and answer any questions they have about how it all works—hourly rate, tax, super, contracts.
DESSERT:
Instead of Family Legends, tonight is about your teen’s story.
Get them to talk about their new job. Funny stories from their first week. The jobs they’ll be doing. How much money they’ll earn. The people they’re working with. Whatever they want to talk about—make a big deal of it.
Then, do payday (three minutes is all it takes!).
Everyone pitches in and does the dishes (if you’re eating at home).
May the Force be with you!
Well done, Yoda—by teaching your kid the three Betty Behaviours in this chapter, you’ve done a great thing for them.
If they can internalise this lesson, you can be sure that they’ll never leave any job without a glowing recommendation to take into their next.
And they’ll enjoy their work a lot more, no matter what they do!
But most importantly, they’ll also remember they can always come to you for guidance. And isn’t that what parenting is all about?
Now we’re getting to the pointy end of the Barefoot Ten . . . so it’s time to kick it up a notch.
Seriously, crossing off this next item might be the single biggest thing you ever do for your child. And if you do it right, you’re going to pay off the cost of this book, oh, I don’t know . . . 20 000 times.
‘His boss says he has management potential—he forgets he’s only in Year 9!’
Gretel and Andy Sneath, Port MacDonnell, SA
My husband and I both work for ourselves. He’s a cray fisherman and I’m a freelance journalist, and we also have a small cattle farm.
That means our son, Jamison, has grown up seeing us work hard —and we’ve taught him you have to work for things you want and not rely on Lotto wins or inheritances.
He regularly helps us on the farm and we are very fair: if he works as hard as any other contractor we could employ, we pay him just as well. And he always does!
When he was 13, he used his pocket money to buy some bobby calves. Every day, for 12 weeks, he would set his alarm for 5.30 am and bottle-feed the calves before school. Doing that taught him the value of showing up on time: soon he’ll be able to sell them for $1000 each—that’s his car fund!
When it came time to get a ‘real’ job, one of the only positions available was a graveyard shift at the local crayfish factory. It was pretty challenging for him—he was the youngest worker there and sometimes shifts started at 1 am on a school night!
Yet he put his head down, worked hard, and was polite to everyone. He ended up winning the respect of his workmates—and even his boss at the crayfish factory says he works like a machine.
Not only has he learned the joy of hard work, but it’s clear following the ‘Betty Behaviours’ is going to take him far in his career. In fact, his boss has already told him he has management potential—I think he forgets Jamison’s only in Year 9!
Uncle Scott’s $453 329 Gift
Last week (well, last Barefoot Money Meal), you celebrated with your teen as they scored their first job.
Nice one!
Can you remember your first job?
Don’t you wish someone had sat down and explained how that pesky line item on your payslip called ‘superannuation’ worked? (And if they did, don’t you wish you’d actually listened to them?!)
Well, this Money Meal could be the most important financial conversation you ever have with your kids.
Granted, the chapter title has stolen a bit of my thunder, but in this Money Meal I’m going to step out how I gave my own twin nephews a $453 329 gift. And how your teen can get the same.
Even better, I’m going to explain exactly how you can communicate this to your teen so they not only understand it but act on it.
How can I be so sure?
Because I’ve stepped it all out for them, and for you. It couldn’t be easier.
Oh, you want it even easier?
Okay, so how about if I share with you the specific high-growth, ultra-low-cost super funds that old Uncle Scott has found . . . which will potentially boost their nest egg by hundreds of thousands of dollars over their working lives.
Sound good?
Look, most things you read don’t matter (especially if you’re reading them on Facebook or Instagram). Yet the next few pages matter a whole lot. And if you take the advice I’m about to give you, your teen, unlike the majority of people, won’t have regrets. Because of you, they WILL get it right the first time.
What you’re about to do will keep them safe and secure long after you’re gone.
Young talent time
As a parent reading this, you’ve been great and all . . .
. . . but for this chapter, I’m going to write to your teen.
I’ve helped out my 15-year-old nephews; now I’m going to help yours.
Here’s the thing:
if you’ve been playing along at home and checking off some of the Barefoot Ten, your teen will easily have built up the confidence to totally smash this chapter, and ‘open up an ultra-low-cost, high-growth super fund’.
However, I know that every teen is different. Maybe there’s no way they’d be caught dead re
ading a book their lame-o parents recommended. And if that’s the case, feel free to just read this yourself—and talk to them about it. I give you permission to steal my best lines.
Otherwise, please pass the phone (well, book). Your teen and I are about to have a very important discussion.
GIVE THIS PART TO YOUR KIDS
* * *
Prove them wrong: Why you will become a millionaire
Hey,
My name is Scott Pape, and I am the Barefoot Investor.
My one (and only) claim to fame is that I am very, very good at helping people with their money.
And today I’m going to help you.
There will be no spreadsheets, no calculators, and no plastic piggy banks.
There will, however, be quite a bit of talk about cars, and partying, and New York City.
First, though, I need to clear up something that could get me in trouble with your teachers . . . and there’s a good chance it’ll piss off your parents too.
The entire education system is designed around what I call the ‘three steps to success’:
Step 1: Study hard to get into a good university, so you can. . .
Step 2: Get a good paying job, so you’ll . . .
Step 3: Be set for life!
And it’s . . . bulldust.
(Actually, it works for parents and teachers, because it means you’ll keep your head down and study, rather than making trouble for them.)
I’m here to tell you that the ‘three steps to success’ almost never work out the way they say.
My job involves helping a lot of broke and desperately unhappy ‘three steps graduates’ dig themselves out of a hole. These people studied hard, got good marks, got a decent job . . . and many of them are miserable financial trainwrecks.
Yes, almost everything you’ve been told about how to become wealthy is a lie.
And I’m here to tell you the truth, so here’s my story.
I didn’t come from a wealthy family.
I didn’t get great marks at school (I was far from a straight-A student).
I wasn’t in the cool crowd, or good at sport, or particularly talented at anything.
In fact, I spent my school years surrounded by people who were smarter and more confident than me.
Yet there was one little thing I learned about that guaranteed I would become a millionaire, that most of my mates didn’t have a clue about . . . and probably still don’t know to this day.
The miracle of compound interest
The one thing I had in my favour was that I knew how compound interest works.
In fact, I didn’t just know it—I lived it.
And you can too.
With enough time, you can’t help but build enormous wealth. Your greatest investment weapon isn’t a high IQ, a knack for numbers, or fancy letters after your name: it’s time.
As a young person, that’s something you have plenty of. And the sooner you start, the better.
Before I do the big reveal, though, I first need you to do me a favour:
Picture a kid at school who’s been really mean to you.
Go on, do it.
You know, the person who thinks their selfies don’t stink . . . who makes you feel like crap.
I’m going to show you how you’re going to beat the pants off them, and have a much more successful life . . .
Got a picture of that bully?
Great.
How to beat the bully
You’ve probably noticed that your parents have been going a bit crazy lately with Money Meals and the Barefoot Ten. Well, let’s say you’ve already checked off #7 of the Barefoot Ten, which was getting yourself a part-time job.
And let’s say you work incredibly hard, scrape together $5000 a year in savings and at age 15 start putting each year’s savings into a managed share fund, which invests in the stock market. Along the way you earn a nominal 10 per cent return per year (the average return for the Aussie stock market, before inflation).
And then you STOP—by age 25—and never invest another cent.
That’s you . . . now let’s look at the bully.
She doesn’t start as early as you.
She waits until she gets a real job—at age 25—before she starts investing.
Like you, she puts in $5000 a year.
Unlike you, she doesn’t stop. She continues, making her last investment after she turns 60.
All up, you put in $50 000 (i.e. $5000 for 10 years).
She puts in $180 000 ($5000 for 36 years).
Naturally, you’d think she’d have more than you, right?
Wrong.
Even though you’ve only put in less than one-third the amount she did, you end up with over 50 per cent more!
(You get $2.7 million—she gets $1.6 million.)
That’s the power of compound interest. That’s the power of time.
I’ve laid it out for you in a chart on page.
This works every single time, and it’s the safest and surest way to become incredibly wealthy.
So why don’t more people do it?
Well, because it’s kinda . . . boring. And in the first few years you hardly notice any improvement.
Hardly anyone makes it to the seventh year, which is when the compounding snowball really starts.
Take a squiz at the numbers in the chart . . . and follow them down the page from age 23.
You’ll see that it jumps $13 000 in just one year, then it’s up and up from there.
Remember, you’re done saving. That money is growing without you lifting a finger.
While you’re in NYC partying. Or painting. Or backpacking through Europe.
And if you can stick with it even further, that’s when your life changes. The money starts pouring in, in gushes.
That’s when you can truly ‘tread your own path’.
Meanwhile, your bully is busting her butt off . . . and she’ll never, ever catch up with you.
She’s still hundreds of thousands of dollars behind you.
Bullies be gone!
‘But I don’t have any money to invest?!’
Here’s you: Great story, bro . . . but I don’t have any money to invest!
Here’s me: Yes you do—or you soon will—now you’re working. It’s called superannuation, or super for short.
(Technically if you’re under 18 and work more than 30 hours a week, and earn more than $450 per month, your employer must pay you super. However, super is often paid regardless of these conditions.)
Then your employer will begin taking 9.5 per cent out of every pay and putting it towards your super—basically a retirement fund for you. And the super fund will invest your money for you.
This is money that’s already sitting there, compounding away for you.
So you’re rich, right?
Not yet.
Truth be told, the super fund you’re in now—that is, the company managing the money—is probably is a little . . . Jean-Claude Van Damme (google him), rather than The Rock.
See, when you joined your job you probably got enrolled in a ‘default’ fund.
There are two issues with that.
The first is the fees are probably too high—which will burn you big time.
The second is that your fund has probably placed you smack-bang into its ‘balanced’ investment option.
That means the fund will invest your money exactly the same as for every other employee at your workplace—including that old guy Warren (age 59), who plans on retiring in a few years’ time.
But for a young person like you, a default fund makes as much sense as sharing your wardrobe with your parents. (Sure, it sounds fun, until you see your mum trying to squeeze into your boob tube.)
Default funds are designed for people of every age. They have around 75 per cent in shares (to grow your money) and around 25 per cent in cash and fixed investments (which is a ‘safety net’ for the likes of Warren, because shares can be volatile in the short term).
You don’t need what Warren does—after all, you have the best safety net of all: time.
My advice?
You should be investing every last dollar of your super—100 per cent—into the greatest wealth-building machine ever created: the share market.
Look, the Barefoot Ten has been about lifting your financial confidence.
You’re now financially smarter than half the adults you see walking about (including some of your teachers). I’m being deadly serious here: studies show that more than half the adult population don’t have the numeracy skills to function on a day-to-day level.
You’re so far ahead of most people (even adults) you’re ready for the ‘title fight of finance’ . . .
How to earn $453 329 in 15 minutes
Right now I’m going to show you how you can boost your super by $453 329 over your lifetime.
And no, I’m not playing with you—this is going to be the most profitable 15 minutes of your life.
And yes, you are totally up to the challenge:
You’re on Snap, aren’t you?
For the life of me I can’t work it out. ‘How do I know who is following me?’ I asked my kids’ 15-year-old babysitter. ‘Don’t worry,’ she said. ‘I don’t know any old people who use Snapchat anyway.’
Ouch!
Seriously, this is going to be a Snap.
The real three steps to success
Alright, so let Uncle Scott give you the real three steps to success.
And unlike a high school guidance counsellor, I’m not going to give you any fluffy stuff—this is strictly money stuff.
Now, if you’re stressed that you may not be up to the challenge, relax.
Over the years I’ve shown literally hundreds of thousands of people how to get a better deal with their super.
Some of them would struggle to lick a postage stamp.
You, on the other hand, regularly arrange covert missions where your dad thinks you’re at hockey practice, your mum thinks you’re doing homework at your friends’ house . . . and you’re actually out with your boyfriend.