After having it recommended to me a million times, I finally listened to the audio version of Scott Pape’s “The Barefoot Investor”. Scott’s a long time financial adviser who regularly appears on Australian television and writes a weekly article that’s published in most of Australia’s major newspapers.
His book styles itself as the only finance book you’ll ever need.
Yeah okay mate (I thought). I WAS SO WRONG. It’s genuinely really, really good.
There’s obviously no shortage of personal finance books out there, most of them called things like, “Never Drink a Coffee Ever Again in Your Whole Life and Never Eat Avocados Again, (You Sinful Millennial), Also Live in a Horrible Leaky Garage for Seventeen Years and Then You Can Have a House Deposit”
It’s rare that one inspires me enough to read it.
One of the great things about this book for me is that it’s Australian, making it heaps more applicable for Kiwis than most financial advice books out there. So good not to have to read endless chapters about 401k’s and Roth IRA’s (um, what).
Without further ado, here’s some great stuff I found in The Barefoot Investor.
It’s stuff that you can easily apply to your everyday life to get smarter about personal finance.
He doesn’t believe in strict budgeting
One idea that’s never sat well with me is the idea that you should strictly budget out what you spend, and track your expenses to the last tiny little cent.
If someone tells you to do this, they clearly don’t understand how real life works.
I find strict budgeting to be the financial equivalent of following an intense diet and counting every calorie – it would work if you were some kind of superhumanly controlled person, but for most of us – that ain’t gonna happen.
This was a common theme throughout the book: better a good solution that you’ll actually do than a perfect solution that you won’t.
Cut up your credit cards
Scott believes credit cards are the actual and literal devil.
There’s perhaps no other item with as much potential to completely mess up your finances for years, sometimes even decades.
If used correctly, credit cards can be great (interest-free period and reward points), but the downside of huge interest rates and fees makes never using one a fine decision for most people.
Pay off your debt and pat yourself on the back
He spoke about how Australians have a ridiculous amount of consumer debt (Kiwis do too).
When you’re looking at paying off debt, people will either advise you go for highest interest debt first or go for the smallest value debts first to get the snowball effect.
While paying off the highest interest debt first might be mathematically the smartest thing to do, we’re not soulless debt paying robots.
Achieving little things makes you feel good and gives you more confidence to keep going.
How to sweet talk your bank
This was something I thought was particularly cool because it’s something a lot of people find really difficult.
The book provides scripts you can use to ring your bank and get a lower interest rate on your credit card. Being provided with a bit of a guideline can really improve confidence – especially once you have success with it.
Here’s a previous article I’ve written about avoiding bank and credit card fees.
Money date nights
If you happen to have a significant other of some sort who you share your life and finances with, Scott highly recommends the concept of a money date night.
It’s true that finances are one of the biggest causes of stress in a relationship, and being really open and communicative about it is really helpful to try and avoid this.
My girlfriend and I are pretty savvy when it comes to our finances (she pretty much doesn’t have a choice, dating a money nerd like me) but we still regularly set aside time to discuss money and plan for the future.
Have a bottle of wine, break out the calculator and get down to some hot and heavy money chat.
Reading about Scott’s story and all the people he’s helped take control of their finances has definitely inspired me and made me think about what I can do with Money for Young Kiwis.
Here’s a link to the physical book on Book Depository. I got my audio copy via Audible.
I don’t recommend too many books as a lot of them aren’t really worthwhile. This one, I recommend so hard. You can check it out at the library, but I feel like this is the kind of book you want to keep around.
It’s not how much money you have that counts, it’s the piece of mind and security that comes from knowing you can deal with any financial problem that comes your way.
Have you read this book? Let me know what you liked about it.
Hit me up by email if you have any book recommendations of your own!