The sun is shining, the birds are chirping … and they’re about to get paid!

  By the time you’ve finished your harvest, you’ll have crossed off the two biggest goals every Aussie has … but very few achieve.

  You’re going to get the banker off your back, once and for all.

  But, more importantly, you’re going to retire in absolute comfort.

  And I’m not talking about some young sapling with 35 seasons of compound interest left in him. I’m talking about a 65-year-old who’s terrified they’ve left it too late.

  You see, I’m going to show you what I call the Donald Bradman Retirement Strategy. It’ll strip away the fear you have about your retirement and reveal how you can retire in comfort regardless of how much money you have in super right now. I guarantee you’ve never read anything like it.

  In Harvest I’m also going to:

  show you how to save $77 641 on your mortgage and wipe out almost seven years of payments

  reveal the dirty secret that the mortgage industry doesn’t want you to know

  step out your ‘retirement number’ and show you how to nail it

  give you the phone numbers of independent financial experts who can help you … not sell you.

  Plus you’re going to go on a very special Barefoot Date Night.

  But now it’s time for some apple pie … it’s time to harvest!

  STEP 7

  Get the Bankar Off your Back

  When you get to this step, I want you to go all-out on your next Barefoot Date Night.

  Go somewhere really hoity-toity and — what the hell — arrive in one of those stretch limos that only old farts (with lots of money) and young kids (going to their end-of-year formal) bother hiring.

  In this step you’re going to save tens of thousands with just a few phone calls.

  There are only two ways to pay your mortgage off more quickly:

  Lower your interest rate.

  Make extra repayments.

  We’re going to do both.

  But first, let me tell you about a phenomenon I call ‘postcode povvos’.

  The curious case of the postcode povvos

  The word ‘mortgage’, as I’ve already said, means ‘an agreement till death’.

  And make no mistake, the entire universe is conspiring against you ever being mortgage-free.

  It happens when you watch shows like The Block.

  It happens when you type ‘How much can I borrow?’ into a bank’s website calculator.

  It happens when your friends buy a house in a nicer suburb than yours, and you get a jitter of jealousy.

  A side-effect of living through the biggest debt boom in history is that some people view a house like a chess piece: you hold onto it long enough for the equity to rise — and then you trade up to a newer, flashier suburb with newer, flashier neighbours.

  I’ve got a name for people who do this: I call them ‘postcode povvos’ — people who hock themselves to the hilt so they can live in a fancy suburb, but end up living lives of quiet desperation in the process.

  Postcode povvos

  Let me introduce you to one such couple … they’re friends of ours, although I’ve changed their details. Obviously.

  This couple has been married for about nine years. Two squids. They work in the same skyscraper in the city where they met. They earn decent — but not great — dough.

  When they first got married all they could afford to buy was a poky little joint in the meat-and-potatoes suburb of Reservoir, in Melbourne’s north.

  The day they bought it they didn’t celebrate. It was more like the underwhelm you felt as a teenager when you opened the Christmas present from that aunty and uncle you only see once a year: ‘You got me a … Garfield colouring book … gee … thanks’.

  No, Reservoir was just a layover on the road to someplace better … and that better place was pricey Port Melbourne.

  Over the next eight years they’d talk longingly and lovingly about Port Melbourne, where their other, richer friends lived. It was like everything that went wrong in their lives was caused by being ‘stuck’ in Reservoir.

  (We, on the other hand, lived in the country, in one of the poorer parts of greater Melbourne — far, far away from the pristine waters of Port Melbourne … ‘though we do have dams’, I’d jokingly tell them.)

  Everything would be perfect when they moved to Port Melbourne. Life would be like a choreographed Instagram feed:

  He’d have a ripped sixpack because every morning he’d get up and kayak along the bay, while she’d get into her Lorna Jane active wear and meditate as she looked out to the ocean. They’d spend their weekends frollicking with their kids on the beach, and at dusk they’d have a BBQ, drink chardonnay and toast the good life.

  Winner, winner, chicken dinner, right?

  Well, lo and behold, the little place in Reservoir shot up in price like a rocket. They sold for a record price, but again they didn’t celebrate. They still didn’t get enough to buy the place they really wanted (which of course had gone way up too).

  However, they were determined to live their Instagram fantasy, so they traded up and bought a poky little joint in Port Melbourne two streets back from the water — and in the process added more than $1 million to their mortgage.

  What do you think happened next?

  Like for most people who borrow too much for their dream home, the Windex had worn off and she was left stressed to the max, while he decided to ‘take control’ of their money and didn’t tell her much — which made her paranoid.

  ‘What are you going to do about it?’ I asked her one day when she was having a coffee.

  ‘I guess I’m just used to living this way,’ she sighed, slouching her shoulders, looking down at her latte.

  ‘So,’ I said, ‘you’re sitting here, as one of the richest people on the planet, and you’re telling me you’re okay spending the next 50 years worried about money?’

  ‘It’s not so bad. Everyone is in the same position … right?’ she said.

  Actually, no …

  The millionaire next door

  One of the best books on the postcode povvo phenomenon is The Millionaire Next Door.

  The authors, Thomas J Stanley and William D Danko, set out to study the buying habits of the very wealthy. They began by interviewing people they perceived as rich: those in wealthy suburbs with big homes, expensive cars and all the other trappings of success.

  Yet their findings were puzzling. The people they interviewed had high incomes, but they were asset poor. Worse, they were drowning in debt. In other words, they were ‘all show and no dough’.

  So the authors changed tack and began searching for people who were genuinely wealthy. And what they found ran contrary to what society says a successful millionaire looks like.

  Real millionaires, they found, create their fortunes by following the time-tested rules of wealth (which, incidentally, mirror the Barefoot Steps). They are long-term investors — a whopping 95 per cent own shares. They avoid credit cards. They save. They don’t have boats, lap pools or Porsches. And they drive second-hand family cars, the equivalent of a Falcon or Commodore.

  And now the clincher: the wealthy people they interviewed were living in modest homes, in modest middle-class suburbs — hence the title of the book, The Millionaire Next Door.

  Don’t do it for the kids

  So what’s become of our postcode povvo pals?

  Well, ‘one point four’ didn’t buy them a really nice home in Port Melbourne … so they’re already talking and dreaming about trading up to something a bit … bigger.

  I’ve seen how this plays out. It never ends.

  There’s always someone with a bigger house than yours (unless you’re the Queen, and she’s got her own problems — look at her family!).

  So let’s turn it on its head:

  They’re paying tens of thousands of dollars in interest to the bank.

  They could instead spend that money on an unforgettable overseas family holiday each year: take the kids out of school, hire a campervan and drive across America for six weeks.

  Or, if they didn’t have their mortgage migraine, they could afford to take their foot off the accelerator — slow the hell down — and free up some time to coach their kids’ footy team.

  And that’s the rub: if you ask this couple why they’ve got themselves into home loan hell, they’ll say it’s for their kids.

  But their kids don’t give two hoots about their fancy home in their fancy suburb.

  All they want is to spend time with their parents.

  All they want is their parents to stop fighting about money all the time.

  I grew up in the Mallee town of Ouyen — smack bang in the middle of nowhere — in a little home my parents built themselves (out of what in retrospect looked suspiciously like asbestos sheeting), and I had the time of my life, because my parents were always around.

  Don’t get me wrong: I’m not against trading up, but I am here to tell you that signing up to a mega-mortgage for the next three decades just so I can live in a ‘rich’ suburb is not a trade-off I’m willing to make.

  There’s not a home in the world that will make you as happy as being in control of your time. That’s true freedom. And the sooner you can wipe your mortgage, the sooner you can live life on your terms.

  How to save $77 641 and wipe almost seven years off your mortgage

  If your home loan is with a big bank, there’s a good chance you’re getting screwed. Generally speaking, the banks don’t do the best deals on home loans because … they don’t need to. So let’s talk about what you really need from your home loan.

  Rule 1: Don’t get the bells and whistles

  A home loan is a pretty simple proposition: you borrow money from the bank to buy a home, and then pay it back with interest over 25 to 30 years.

  Most of the bells and whistles the banks market as ‘special features’ are rubbish — their main purpose is to bamboozle you into paying more for things you rarely use. So stay away from repayment holidays, fixing a portion of your loan and anything else dreamed up by a marketing dude with a ponytail. This is where the banks make their margins.

  Rule 2: Don’t fix your rate

  Repeat after me: ‘I promise to stick with the lowest variable rate I can find, regardless of what my brother-in-law Eric recommends at Christmas lunch’.

  Here’s what Eric will say: Man, I got a great deal on a fixed rate — and it’s locked in for five years.

  Here’s your reply: Yes, Eric, the banks are offering fantastic fixed-rate deals, many lower than the standard variable — and there’s a reason. It’s not because they want to help you pay off your loan quicker. Rather, since the government banned exit fees, the banks have had to find another way to stop their customers switching to a better deal. Fixed-rate loans give them that power. And, Eric, if interest rates drop lower than your fixed rates and you want to switch banks, your bank will slug you with a ‘break fee’, representing the difference between the two rates, multiplied by the length of time left on your fixed contract — which can add up to thousands of dollars.

  So much for Eric.

  The only reason you’d fix your rate is if you’re really struggling (like Eric) and you want the security of fixed repayments, but for everyone else it’s too much of a gamble.

  Rule 3: Get the cheapest rate possible

  Truth is, just as with many relationships, it’s easier to bitch to your current bank than it is to go through the hassle of switching to another one.

  Which brings me to your first phone call for this monthly Barefoot Date Night …

  The $22 064 phone call

  Here’s the deal: it costs your bank about $1000 in marketing costs to replace you (and about six times that amount if you come via a mortgage broker they pay kickbacks to).

  That’s your negotiating power right there.

  Here’s how to use it.

  First, I want you to google ‘UBank Home Loan Rate’.

  Second, call your bank, ask for the ‘customer retention department’ and use this script:

  You: Hello, my account number is ________. I’ve been with you for _____ years, but I’ve applied to refinance with UBank. Their rate is ______ per cent, which is a full ____ per cent cheaper than you’re charging me. Given our longstanding relationship, I’d like you to match the offer — or send me the forms I need to switch to UBank.

  Bank rep: One moment, please.

  (You’re bluffing, of course. However, the bank’s sales team have strict targets, backed by incentives, that they have to meet — one of which is giving profitable customers discounts to stop them leaving.)

  Bank rep: We can’t match the rate you have quoted. However, we understand you are a valuable customer, so we would like to offer you a 0.15 per cent discount.

  You: That’s not good enough. I’ve already got conditional approval … so in order to stay I need at least a 0.5 per cent discount. Could you please speak to your supervisor? I’m happy to wait.

  Bank rep (a full six minutes later): On reviewing your case, we can offer you that 0.5 per cent discount on your current rate.

  You: Brilliant! Please send me an email confirming the new rate and confirming that it will be applied as of start of business tomorrow.

  This phone call works

  This phone call can save you $22 064 in interest (based on a $400 000 mortgage over 18 years at 4 per cent). Over the years I’ve had plenty of readers do this exact negotiation on the phone (even on their way home from work) and in most cases they’ve reported back that they’ve saved themselves a huge amount of money.

  But what if your bank says no?

  Easy. Ring them again.

  What if they say no again?

  Don’t bitch, switch. (As long as you have more than 20 per cent equity in your home. If you don’t, you’ll get hit with another round of LMI, which will eat up any savings you can negotiate.)

  Now, here’s how to hunt for the best mortgage.

  Straight up, if you’re going for your first home, check out the online players like UBank and ING, which generally have the cheapest rates (although you’ll need to have a 20 per cent deposit and a solid savings history).

  But what if you’ve got a more complicated set-up — like being self-employed, or having multiple loans? In that case you need a mortgage broker — but not just any mortgage broker …

  Revealed: the mortgage industry’s dirty little secret

  When you get a loan through a mortgage broker, they don’t charge you anything.

  But make no mistake, they still get paid — and in two ways: the bank they recommend pays them an upfront commission (around $3000 on an average loan), and then they get a ‘trailing commission’ (read: kickback) for the life of your loan (up to $1000 a year, every year).

  The solution is to get a broker who’ll charge you an upfront fee (which is a fair cop for their expertise) but will refund the trailing commission off your mortgage.

  They’re called ‘cash-back mortgage brokers’. I used them when I bought my farm, and, when the cash-back was kicked-back to my loan each month, I got the same buzz I assume a pokie-punter gets when they score ‘five free spins’ on the pokies.

  (Most mortgage brokers hate me for highlighting their kickback structure — some have threatened me with physical violence.)

  Why on earth would some mortgage brokers offer such a good deal? Well, very few do, but there’s a select few (see page 232 for a list of independent financial professionals you can hook up with … just like on Tinder) who see it as an ethical differentiation from their kickback-collecting counterparts.

  Point the Fire Extinguisher at your home loan

  So we’ve got you the cheapest variable rate on the market. Now it’s time for part two: making extra repayments.

  Where are you going to find the money to make the extra repayments?

  Well, let’s have a quick recap of the Barefoot Steps.

  In Step 2, you arranged to have 20 per cent of your take-home pay put into your Fire Extinguisher account, to be used for putting out ‘financial fires’.

  In Step 3, you pointed that Fire Extinguisher at your debts.

  In Step 4, you pointed that Fire Extinguisher at a deposit to save up and buy your home.

  In Step 6, you pointed that Fire Extinguisher at your Mojo Bucket and topped it up to three months of living expenses.

  We’re now at Step 7 and you’re going to point that Fire Extinguisher at your mortgage repayments, so you can ‘hose them down’ once and for all.

  If you pay just $1000 extra (on top of your minimum repayment) a month off your home loan, along with getting a cheaper rate, you’ll save $77 641 in interest and wipe almost seven years off your mortgage (based on a $400 000 mortgage over 18 years). To work out exactly how much you can save, head over to ASIC’s MoneySmart Mortgage Calculator and do the sums with your own mortgage.

  The proudest day of my financial life

  I used to describe my mortgage as ‘like wearing a pair of really nice but really tight shoes’. Sure, they looked good, but they made every step painful, and I couldn’t wait to get home, kick off my shoes and tread my own path.

  Let me tell you about the day I got the banker off my back.

  Now, I could have made the final transfer via internet banking, but I didn’t.

  Bugger that.

  I had visions of entering into my local branch — strutting in like a peacock — and my bank manager would greet me at the door with a little sponge cake she’d bought from Woolies on her way to work that morning, to mark this momentous day. And behind her the entire branch would gather in a circle and start clapping, and then balloons would fall from the ceiling and they’d yell, ‘Speech! Speech’, and I’d act all surprised and gracious … while I was secretly loving every minute of it.