Professional Documents
Culture Documents
The Common-sense
Path to Financial Freedom
The Barefoot
Investor rocks!
Sir Richard Branson
CONTENTS
Dear Barefoot.................................................... 15
Dear Barefoot...................................................... 7
Dear Barefoot.................................................... 11
Page 2
Page 3
Hey, in reading back over this interview, I sound like Im a bit of a wanker (as my old
man would say). So let me tell you about a time when I fired myself from a job...
Page 4
INVESTING
Page 5
Explain, step-by-step, a
strategy for getting in front
of key decision makers
Page 6
Dear Barefoot
How much do I need to retire?
Roger asks: Hi Scott, Im a dedicated reader
of the Barefoot Blueprint. What you write makes
sense to me like nothing Ive ever read before. Ive
had years of financial planners dazzling me with stats
and jargon, and where has it got me? You just state it
like it is, in terms we can all understand. So could you
help me with my problem?
Page 7
Either way, to have a decent retirement when you get really old, youre going to have to keep working and
topping up your savings but thats not a bad thing. Its often said that the two most dangerous years of your
life are the year youre born and the year you retire.
Why not work at Bunnings and teach young flatheads like me what a Phillips head is?
S
G
IN
SAV
Mojo
Blueprint
Businesses
Investment
Opportunities
Managed
Property
Trusts
Blow
Grow
Page 8
Page 9
How?
Well, some companies make the reinvestment of
dividends really easy. They offer shareholders the
option to sign up to a Dividend Reinvestment Plan
(DRP). Not every company does this, but many do.
When a dividend payment falls due, their DRP will
issue you with extra shares rather than cash. This
not only saves on brokerage fees for you, but as an
added benefit theyll usually offer the new shares at
a slight discount to the share market price. Double
bonus.
So, using Siegels figures, these dividends add
another 5.5 per cent to the returns, making a total
of around 7 per cent per year (and this is being
conservative). With these returns your investment
now doubles in 10 years, not 46.
Page 10
Dear Barefoot
Page 11
The $390-billion-dollar
gravy train
Page 12
Page 13
There are a number of public offer funds that you can join that allow members to invest their super balance
directly into shares just like a traditional SMSF, but without all the hassles.
And best of all, theyre around 34% cheaper than running a traditional SMSF. And you know what that means?
More money for you, and less money for old stubby fingers the accountant.
SMSF
SMSF Lite
$200,000
$200,000
Set-up fee
$2,000
1.76%*
0.1%**
$5,000
$5,000
$853,139***
$1,141,370***
Starting capital
$288,000 EXTRA
* Source: A statistical summary of SMSFs 10 December 2009, Australian Government Review into the Governance, Efficiency, Structure
and Operation of Australias Superannuation System
** $180 plus brokerage costs assumed to be 4 trades of $20,000 share parcel ($160 brokerage) for a total of $340 per year on average
balance of $350,000.
*** Based on an 8% return per annum.
--Disclaimer: This article is an excerpt from a longer article in the Barefoot Blueprint. There I go into detail
about what SMSF Lite funds are available and the tips and tricks to watch out for.
Page 14
Dear Barefoot
Page 15
One of the nicest things I ever heard said about my grandfather was that he always paid his bills on
time. For him it was an integrity issue: you were either a man of your word, or you were a crook. Going
bankrupt was not an option.
They didnt have a choice. Credit cards were yet to be invented, and bankers back then behaved like
responsible corporate citizens. More than that, people had an aversion to debt, caused by the borrowing
binge that preceded the (not so) Great Depression, which was still fresh in their minds.
The hard times left them with a healthy respect for risk, and this stayed with them and ultimately
served them even after the economy picked up post World War Two. Saving wasnt a diversification
strategy it was a survival strategy. These were the days before mass-market consumer credit, so most
people simply couldnt live beyond their means.
Things were fixed, not thrown away. Both my grandfathers had sheds where they could get away from
the missus, have a crafty beer or a fag, listen to the footy, and tinker. Things were handed down from
eldest to youngest. (Maybe they were the first greenies? Sure, lets go with that.) Shoes were re-soled,
socks were darned, dresses were hemmed.
Page 16
10
With five mouths to feed, there was no time to find themselves (let alone protest at the inequities of the
world). For both my grandfathers this consisted of manual labour, and while both parents worked long
and hard, there was only one income. Second and even third jobs were common.
The dole was something to be ashamed of, or at least it was for my grandparents. You worked hard,
paid your taxes and paid your way. Listening to them, it seems like there wasnt the entitlement attitude
that pervades our politics today. Case in point: remember the outcry over families earning $150,000
having their (middle-class welfare) government benefits cut?
One of my mates grandfathers once told me, I remember growing up with dirt floors it was like
Christmas when we got carpet imagine that, being happy with carpet! They bought what they could
afford, then they slowly added mod cons like carpet and curtains.
I learned this when my grandmother said (out of the blue) that we skinned rabbits in the old days
whatever it took to make ends meet (wait KFC was around even back then?). Still, I understood what
she was getting at. There was large-scale unemployment and married women werent accepted in the
workforce. They simply did what they had to do.
While Gen Y are the most connected generation in history, its commonly cited that theyre also
the loneliest. Things seemed to be simpler back then maybe because there wasnt a TV piping
pipedreams into their homes each night making them feel unworthy. Instead, they lived with dignity, they
saved money, and they competed but on their integrity and their family rather than the stuff they had.
But its impossible to be fully insulated from risk. And even if you could be, you wouldnt want to. A bit of pain
is lifes way of telling you to stop doing dumb stuff and its essential in sharpening your long-term decisionmaking skills.
So despite all the doom and gloom in the newspapers and the bleating we hear from Tony et al, we need
to remember that right now at the very least things are pretty bloody good. After all, weve got low
unemployment, first-class (and basically free) healthcare and subsidised education.
Or, as an old bloke once said to me: Life isnt fair, and if you expect it to be, well, what you need to do is get a
bucket, a spade and some concrete and harden up, cupcake.
Page 17
Speeding Things Up
Im a proud wealth-accumulator. Dont misunderstand
me. I dont wear designer labels, I drive a very
unfashionable ute, and my most expensive accessory
is my dog Buffett. Whats important to me is financial
security, building up a sufficient level of wealth so I
can do what I want, when I want. Money wont make
you happy, but it does give you choices about how
(and with whom) you spend that non-renewable asset
your time.
Now my parents gave me a wonderful education
and the best upbringing in the world, but when you
dig down to it, Im just a kid from the country. But I
learned a few things.
The way I sped up my wealth accumulation was to
focus on earning more money. But it wasnt easy, and
to some degree it was risky I missed out on a lot of
social events, and worked harder than my mates.
I chose to invest in my career, first by undergoing
a massive amount of training and education, and
by spending a huge amount of time developing a
network of contacts that I helped and who eventually
helped me. The increase in earnings took me from
$31,000 a year to well over $200,000 a year.
You may not agree with the way Ive done things.
The bloke I met who said that what I do is common
sense was an accountant, and he argued that
with my income I should be borrowing to invest.
Technically he may have been right. But the fact of
the matter is that he was much, much older than
me, and after I spoke to him for a few more minutes I
realised I was much, much wealthier than him.
Page 18
I offer special bonus reports throughout the year the best home loans on the market,
savings accounts, tax strategies and insurance all provided by me and my group of
experts, 100 per cent fiercely independent.
Each week I answer the Blueprint communitys money questions, and am on hand to
inspire, motivate and keep you moving towards your wealth goals. All for less than a few
hundred bucks a year.
So, if this is the year youll take the next step, click here.
Page 19
LEGAL STUFF
Members of the Blueprint team own shares in Berkshire Hathaway, Thorn Group, Metcash, Collins Foods, Woolworths, AFIC and
BWP.
Please remember that investments can go up and down. Past performance is not necessarily indicative of future returns.
IMPORTANT: This Barefoot Blueprint Newsletter provides general financial product advice only, not personal financial product advice.
It has been prepared without taking into account your objectives, financial situation or needs.
Before acting on our recommendations, you should consider their appropriateness to your specific investment objectives, financial
situation and needs. If you are uncertain as to what your objectives and needs are, you should contact a financial adviser who is
licensed to provide you with personal financial product advice.
Please refer to our Financial Services Guide for more information at www.barefootblueprint.com/fsg or email us at blueprint@
barefootinvestor.com to request a copy.
The Barefoot Blueprint bases recommendations and forecasts on techniques and sources believed to be reliable in the past but
cannot guarantee future accuracy and results. The Barefoot Investor will not be liable for any loss or damages arising from the use of
this information.
The Barefoot Blueprint is published by Barefoot Investor Pty. Ltd. Registered Address: PO Box 16215, Collins St West, Melbourne
VIC 8007 (ACN: 112 545 169 ABN: 80 112 545 169) Australian Financial Services License: 302081.
Copyright 2013 Barefoot Investor Pty. Ltd. All rights reserved.
Page 20