Analysing PF Blogs: Bad Money Advice & The Barefoot Investor

SMG is going to be analysing and dissecting the other PF Blogs in the blogosphere. Other websites have started writing series so I thought I'd start a series too. It's going to be a series on 'Analysing PF Blogs'. Every week, I will try to dissect through websites and blog sites to evaluate the merits of the advice given and the background of the writer/s.

Bad Money Advice

If you've never heard of Bad Money Advice, written by a cranky dude going by the moniker of Frank Curmudgeon(who used to be a previously unemployed hedge fund manager), you should visit that site and read- I really recommend. He's recently gotten a job so fortunately for him and unfortunately for me, the delectably witty, insightful and sarcastic articles that he churns out has decreased significantly.

Bad Money Advice differed from mainstream sites because it doesn't exist to publish gardening and food drivel like SMG (had to confess that), it exists to solely point out the wrong financial advice given out in the blogosphere and on money management websites. I thought that would be an interesting slant for SMG readers to read about. SMG has dissected its first blog in the post, Australian Personal Finance Blogs where the blogger MJTED started her own SMSF fund with only $32k which is financially illogical(unless proven otherwise).

The Barefoot Investor



The Barefoot Investor, also known as Scott published a popular money management book a few years ago and have since then, gained a rather large number of followers in the Australian market. Over 18,000 people have 'liked' his Facebook page if that signifies anything. The screenshot above is a snippet of the interesting income, expenses and investments of the typical 'average couple' that Scott likes to write about.

He writes in a very casual manner. He likes to mix alcohol and trivial stories into his articles and he steers away from overly complex financial geek speak. His style is very casual. His target group would be beginners, intermediates and pretty much the average population in Oz.

While I don't agree with everything he's written, most of it is wise, good old fashioned advice. The only thing I'd like to caution readers who visit his blog is to be wary of the commenters. Quite a few of the comments are misleading and bad money advice. But that begs the question, do readers really take notice and take advice from commenters?

Australian Personal Finance(PF) Blogs

I found some Aussie PF Blogs. I was beginning to think that Aussies abhor discussing their personal finances and only the British, Americans and Canadians enjoy dissecting their finances to pieces, obsessing over couponing, managing rentals and all that other Jazz.

PTMoney published a Personal Finance Bloggers Map which enables readers to locate a personal finance blogger situated near their city so that they can have 'local' blogs to follow. I thought that might interest you as a reader of this blog. Some of the personal finance blogs that I subscribe to and skim through often can be found in my old post 'PF Blogs I Often Read: Some Blog Lovin'.

If you're looking for Australian PF bloggers, look no further:

1. Kylie Ofiu : @ Aspiring Millionaire. Her blog is interesting. Advice appears sound however she's confessed that she has no official financial qualifications whatsoever so read with an open, inquisitive mind and do your due diligence.

2. My Journey To Eliminate Debt : Mainly for those in debt if you're looking for motivation. MJTED is a blog about a couple in their early 40s and their efforts in paying down their mortgage.

There are a few issues that I'd like to raise regarding that blog though- the author has an SMSF with just $32k? I wonder what fees she pays on running her SMSF? According to the Cooper Review below, SMSF with asset values below $50k pay an average operating expense ratio of 5%. MJTED has only $32k and with an average operating expense of 5%, she'd need to get an investment return of at least 8.5% to keep pace with inflation and a return greater than 8.5% to even be growing her retirement funds. Is she doing more harm to her retirement funds than good by opening up an SMSF with only $32k?

Fees on retail super funds are usually under 2% but again, the fees vary depending on how active the super fund is in 'managing' your funds. Maybe her 'professional' retail retirement fund crashed up to 40% or something drastic during the peak of the GFC, spurring her to open up her own SMSF despite not having a large fund value to work with?

If you'd like to understand the link between SMSF fund values and calculating the operating expense ratio, read the extract below: