Released back in 2004, Scott Pape’s The Barefoot Investor was aimed squarely at those people in their twenties and thirties interested in investing but afraid to ask how. As it turns out, there was a lot of them––the book quickly sold out and Scott became a regular across all forms of media.
Reprinted and updated in 2007, The Barefoot Investor pitches itself as a kind of Triple J for personal finance. Full of pop-culture references and witty one-liners, the humour may not appeal to everyone but the advice should. Going against the trend of books promising get-rich-quick schemes and magic bullet wealth creation, Scott’s proposition is not that he will make you rich fast, but rather that his advice will put you in a position to live life on your own terms.
The first step in the barefoot plan is to let go of the things you think you want, or think you need, in order to impress others. The luxury car, the expensive shoes, the fancy watch - Scott believes none of it is going to make you happy in the long run. This contrasts with those who argue that in order to be successful you need to fake it till you make it. But faking wealth often means loading up on debt, and the punishing repayments on your car or the credit card bill that just keeps growing are traps that inhibit your wealth.
Scott believes it is freedom that can give you happiness, and debt is essentially the opposite of freedom. With his young audience in mind, Scott explains inflation, interest rates, returns on investments, and what they all mean for your money. It’s relatively simple stuff, but it’s essential.
The barefoot plan is a simple one, and that’s the point. Scott is not interested in confusing us with jargon, nor trying to impress us with his own achievements. There’s no need to go into enormous detail, but the barefoot plan is basically this: identify your goals, get control of your finances, understand and repay your debts, save and invest what you can, and then protect your assets.
Along the way there are loads of tidbits, anecdotes, and bits of advice that clarify elements of Scott’s program and aid in understanding. The second edition also features useful chapters on buying property and starting your own business.
While The Barefoot Investor probably won’t appeal to the more materialistic among us, for the young person with an interest in their financial future it’s a great place to start.
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