Barefoot Investor Scott Pape has issued an Aussie mum a stark piece of advice, after she revealed her underage son thinks she is “stupid” for not allowing him to invest in cryptocurrency.
The mum, Chloe, reached out to the personal finance guru for his take on the situation after her 17-year-old son claimed she was “holding him back” because she won’t let him invest $1000 into BloFin, which is a centralised cryptocurrency exchange.
In the query, titled “my teenage son thinks I am stupid”, Chloe revealed the $1000 would be coming from money that she had saved for him.
When asked where he got this investment idea, the son just responds “people”, without giving a straight answer.
“I’ve told him that if he’s that keen to invest then he can get a school holiday job and risk that money instead,” the woman said.
“That’s when I’m accused of being old-fashioned and not understanding investing.”
Chloe admitted that she doesn’t understand crypto-style platforms, but she does understand the importance of working and saving, rather than “gambling money at 17”.
In her query, she asked Mr Pape if she was being “overcautious”, or if she was right to be concerns about these kind of online trading platforms that her son wants to put his money into.
“How do you guide a teenage boy who thinks the internet knows more than his mum?” she asked.
Mr Pape is extremely outspoken about gambling and the negative impacts it has, not only on individuals, but their loved ones.
He often speaks about how prevalent gambling addiction is across Australia, particularly among young people.
Australians aged 18-34 are now the most at risk of gambling harm, according to the Australian Gambling Research Centre.
Which is why Mr Pape’s advice of letting her son lose the $1000 may have initially come as a shock to the mum – but the financial expert quickly explained his reasoning.
He noted that Chloe has the life experience to know that “losing money hurts a lot more when you’ve earned it” – something her son does not yet understand.
“He’s 17. He’s bulletproof. He could lose the entire $1000 and still not admit you were right. That comes with the ability to grow sideburns,” he said.
“Here’s my advice: let him lose it.”
The Barefoot Investor said he knows “that sounds crazy”, but explained that when he was a teenager his first investment was in something called a “special situations” managed fun.
It had extremely high past returns, which is why he chose to invest.
The situation quickly turned sour and Mr Pape ended up losing most of the money he put into it.
Despite this, he believes it was one of his “best” investments – not in terms of financial return – but because it taught him first-hand about risk and hype.
So, he advised the mum to let her son invest the $1000 through the crypto exchange, but only if he earns the money through a job.
“If he won’t work for it, he doesn’t get to risk it. Simple. If he earns it and loses it? That’s an expensive lesson,” he said.
“But it’s a cheap one compared to what he’ll lose later in life if he never learns it.
“The goal isn’t to protect your kids from making mistakes … it’s to make sure the mistakes happen while the stakes are still small!”