Sunday Herald Sun - - Finance - SCOTT PAPE

YEARS ago, when I was cram­ming for my fi­nal VCE ex­ams, I went to see my doc­tor. I con­fessed to the old quack that I was stressed — wound up like a lacker band — and was hav­ing trou­ble sleep­ing.

He just started chuck­ling, and then pulled out his pre­scrip­tion pad. “You need sleep­ing pills”, he said mat­terof-factly.

Now, in hind­sight, that was very bad ad­vice.

Those pills were like horse tran­quilis­ers — the first time I took one, I woke up 10 hours later with my face su­per­glued to my text­book by my own drool.

To coun­ter­act the fog­gi­ness I started scoff­ing No-Doz caf­feine tablets (one down from speed, one up from Red Bull) — se­ri­ously, my fi­nal year of school was like Char­lie Sheen’s fi­nal sea­son of Two and a Half Men.

Still, the good doc­tor gave me some wise ad­vice that I’ve never for­got­ten: “These high school ex­ams aren’t nearly as im­por­tant as you think. You’ll have much big­ger ones in the fu­ture”. The doc was dead right. It was only as I got older that I re­alised the re­ally im­por­tant ex­ams — the ones that will change your life for­ever — don’t have a date, a time, or a room num­ber.

(And be­cause of that, most peo­ple not only don’t study for them ... they snooze through them, again and again.)

And given stu­dents across the coun­try are sit­ting down to do their fi­nal ex­ams this week, I thought I’d take you through them.

The first life exam is find­ing a ca­reer you en­joy, the sec­ond is to choose to be­come fi­nan­cially se­cure, and the third is to in­vest in your fam­ily and friends.

You’ll sit these three ex­ams over the next decade (and be­yond) — here’s how to ace them.


The av­er­age Aussie teenager will have 17 dif­fer­ent jobs, and five ca­reers, in their life­time, ac­cord­ing to the Foun­da­tion for Young Aus­tralians. Fair dinkum! My first job out of uni was work­ing on build­ing sites with a joker called “Wolfy” ... who would (un­suc­cess­fully) wolfwhis­tle at women who walked by. (True story: the day the Aus­tralian Stock Ex­change called to tell me I’d se­cured a grad­u­ate po­si­tion, I thought it was old Wolfy play­ing a trick on me, so I told them to bug­ger off.)

Any­way, while it’s very im­por­tant to side­step the work­ing wolves, you don’t want to keep chang­ing ca­reer like Aus­tralia changes prime min­is­ters. Oth­er­wise, you’ll never make a dent in the uni­verse.

The smartest method I’ve found to think about such an over­whelm­ing topic (what do I want to be when I grow up?) is to set aside an af­ter­noon and do a think­ing ex­er­cise that author Arun Abey calls ‘the three cir­cles’:

“What am I deeply in­ter­ested in?”

“How can I work, over many years, to be­come truly great at it?”

“How can I make enough money from do­ing it?”

Your killer ca­reer is found at the in­ter­sec­tion of these three cir­cles.


There are tro­phy de­grees that will guar­an­tee you a good in­come: medicine, en­gi­neer­ing, fi­nance, law.

How­ever, there’s no guar­an­tee you’ll turn that good in­come into long-term wealth, and it’s cer­tainly no guar­an­tee that you won’t end up be­ing com­pletely dis­en­gaged with your job — as 70 per cent of Aus­tralians ap­par­ently are, ac­cord­ing to Gallup re­search.

Yet com­mit­ting to be­ing fi­nan­cially strong — no mat­ter what level your in­come — will change the course of your life.

You’ll sit some form of this exam many times over your life — it starts the mo­ment you get the let­ter from your bank say­ing “con­grat­u­la­tions, here’s your credit card!”, or when your em­ployer au­to­mat­i­cally en­rols you into their de­fault high-fee su­per fund.

The so­lu­tion is to tell the bank you don’t do credit cards and to tell your boss to put your su­per into a low-cost su­per fund you’ve cho­sen your­self — then tick the “high growth op­tion” and let com­pound in­ter­est work its magic.

I like to think of com­pound in­ter­est like I do surf­ing — you put in a bit of ef­fort pad­dling at the start, but when you catch a gi­ant wave it car­ries you along with­out any ef­fort, which means that, in­stead of muck­ing around in the slushy waves later on in life, you get to lean back en­joy the ride.


I’m to­tally un­qual­i­fied to of­fer this ad­vice, but I’ll give it any­way.

When you’re a teenager you think your friends will be around for­ever, be­cause they al­ways have been.

How­ever, un­less you make a point of in­vest­ing time in your friends, they’ll slowly drop away.

What does this have to do with money? Noth­ing. But it has ev­ery­thing to do with your long-term hap­pi­ness.

Well­be­ing stud­ies show that the hap­pi­est peo­ple are those with strong so­cial bonds, so in­vest­ing in your re­la­tion­ships, (espe­cially your fam­ily) has the big­gest pay-off of all.

So there you have it. Sit these three ex­ams and you may not re­ceive a cer­tifi­cate in the mail or at­tend a fancy cer­e­mony when you “pass” them, but the pay-off is real, be­cause you won’t be one of those peo­ple who aces their ATAR exam and then snoozes through the ex­ams that re­ally mat­ter — and wake up 30 years from now and re­alise they’ve re­ceived an F.

Tread Your Own Path!


BEC ASKS: We are what many would con­sider “high in­come earners”, earn­ing $255,000 a year — and yet we are com­pletely out of con­trol.

Our five years of DINK (Dou­ble In­come No Kids) life­style came to a halt when we had three kids in two years, and we are now floun­der­ing month to month.

I am strug­gling to change my shop­ping habits

(ex­pen­sive ev­ery­thing), and we have a large dream house we started build­ing be­fore our un­planned chil­dren ar­rived.

What can we do?

BARE­FOOT REPLIES: I was read­ing a mag­a­zine pro­file the other day on Johnny Depp.

In­stead of buy­ing his smokes him­self, he has his as­sis­tant do it and gets them to scrib­ble out the health warn­ings and hor­rific pic­tures of black­ened lungs with a biro, so he doesn’t have to think about the health con­se­quences — so far it’s work­ing out well for him. If you’re on a high enough in­come, you can ap­ply Johnny’s smoke ex­per­i­ment to your money. You’d be sur­prised how many cou­ples I meet who are in your sit­u­a­tion and do just that. As long as the money keeps flow­ing, you’ll be able to smoke through your prime earn­ing years, but it will catch up with you even­tu­ally — it al­ways does — the dam­age you’re do­ing to your fi­nances isn’t hit or miss. The black shad­ows, the wor­ries that wake you up in the mid­dle of the night — and cause you to tap out a con­fes­sional email to me — won’t go away. Even­tu­ally they’ll con­sume you. My in­box is full of peo­ple who are 20 years down the road you’re on. They’re in their 50s and have sud­denly been ric­o­cheted into re­al­ity by a di­vorce, dis­ease or re­trench­ment.

They’re left bit­ter and twisted, and scared that they now can’t live any other way.

So right now you’ve got a choice — it’s not too late.

What you’re do­ing isn’t work­ing, you’ve ad­mit­ted that your­self.

For the sake of your fam­ily — and to be good role mod­els for your kids — it’s time to start do­ing some­thing that will work.

This week I want you to have your first Date Night and set up your buck­ets, then start mov­ing through the Bare­foot steps to­gether.

They’ll work for you, just as they’ve worked for thou­sands of cou­ples (many on far less in­come than you).

The steps work every sin­gle time — not be­cause there’s any magic, but be­cause they’re based on good old-fash­ioned com­mon sense.

Email me next week af­ter your Date Night and let me know how you go.

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

BARE­FOOT’S NEW BOOK The Bare­foot In­vestor for Fam­i­lies: The Only Kids’ Money Guide You’ll Ever Need (HarperCollins) RRP $29.99 Avail­able now in all good book­stores and on­line

While fac­ing the stress of VCE ex­ams, remember the re­ally im­por­tant “ex­ams’’ of life don’t have dates and times but are your ca­reer, fi­nan­cial se­cu­rity and fam­ily and friends.

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