The Barefoot Investor book is a life changing read for any financial beginner. In 9 easy steps, it provides a simple framework to follow and succeed that is not overwhelming. From date nights, bank accounts, superannuation and beyond. If you only read one book to begin your financial education, this must be it. Learn why you must own this book in this barefoot investor review along with the Moneyman Top 5 insights.
Overall Summary
The barefoot investor book is a must read for financial beginners. It takes the everyday concept of money, simplifies it and makes the goal of financial independence attainable for anyone. Regardless of age or current financial circumstances, the barefoot investor book provides the blueprint for financial success with 9 easy steps. It’s simple, easy to read and follow, and easy to understand. It’s a fantastic way to start or restart your financial education.
Should You Buy This Book?
Heck Yes! This is a must buy for any financial beginner and it’s a great introduction to financial independence.
Who Is the Barefoot Investor?
Scott Pape is the the Barefoot Investor. His resume includes television presenter, radio commentator, newspaper columnist and author of the bestselling book “The Barefoot Investor”. First printed in 2017, the Barefoot Investor has sold more than 2 million copies and started a financial movement for everyday Australians. Teaching financial independence through financial education. Known for being “fiercely independent”, Scott Pape has changed the lives of thousands of Australians and he now works as a financial counselor in the bush. And he’s an all-round nice guy.
Why is the Barefoot Investor Book a Must Read?
The genius of the book is it’s so easy to read. With big pages and big text, it’s presented like a sequence of blog posts. It’s loaded with jokes and Scott Pape’s down to earth, “barefoot” style makes the book informative and enjoyable. Scott Pape is in every aspect of the book, as he details his own financial journey, his family and how he manages his finances. He also details how he lost everything in a fire and then started from scratch. That personal touch adds depth and creates a sense of trust. You feel like you know Scott Pape because his writing is so personal. Essentially, the experience is like having a casual beer and chat with a friend, as he’s telling you about his family and finances.
The book has a very non-finance approach to finance. Scott Pape takes you on a journey, peppered with calling banks and pillow recommendations, all small steps that accompany the 9 barefoot steps. It makes managing your finances seem so simple. In 9 steps you can take control of your finances. It truly is “The only money guide you’ll ever need” if you want foundational knowledge to help build wealth for the rest of your life.
What Are The Barefoot Investor Steps?
There are 9 Barefoot Steps as outlined by the Barefoot Investor Book.
- Schedule a monthly barefoot date night
- Set up your buckets
- Domino your debts
- Buy your home
- Supercharge your wealth
- Boost your Mojo to three months
- Get the banker off your back
- Nail your retirement number
- Leave a legacy
Why the Barefoot Investor Steps Work
The Barefoot Investor book provides a framework with 9 simple steps. Simply read through the book and follow the steps in order. It’s a recipe for financial success that begins with discussing your money, setting simple budgets, paying down debt and investing for the future.
Any personal finance discussion or book can get bogged down in complexity through the sheer amount of options available. The Barefoot Investor removes that complexity and recommends a bank, a super fund, your first investment – it has it all. It could be described as Financial Literacy 101. And Scott Pape is “fiercely independent”. He doesn’t receive any money for recommending any product, so there is no conflict of interest or wondering, what is he getting out of this.
For beginners (like myself) with no personal finance education (or any financial idea at all) managing finances was overwhelming. It was easier to ignore my finances and not choose anything until it was too late. This resulted in a lot of bad decisions and wasted money. The barefoot Investor book was a huge thing for me. I followed the slow progression of steps, I understood the recommendations and felt good about making progress. The hard work and stressful indecision was gone. I trusted Scott Pape and I could see it working. And I became one of the thousands of people that have followed the steps and changed their lives. All you have to do is believe in the book, believe in yourself and just do it!
What Are the Barefoot Investor Buckets?
The Barefoot Investor Buckets are part of a “serviette strategy” to simply manage your money using three buckets:
- Blow (Expenses and some money to splurge)
- Mojo (Safety Money)
- Grow (Long Term Wealth)
The interesting part here is that the buckets are designed to keep your budgeting simple. Three buckets that allow you SAVE and LIVE and SPEND. Hardcore savers can get by not spending anything, but people with a wife and kids need to find that balance. And the concept and use of the barefoot buckets is simple enough that it works under any personal scenario.
The Most Important Bucket
The most important barefoot bucket is the Blow bucket. The Blow bucket is versatile and can be altered depending on your circumstances. You pour your income into the Blow bucket and use the barefoot investor bucket percentages to budget.
- Blow Bucket (60%): This is used for daily expenses (bills, rates, school fees etc).
- Fire Extinguisher (20%): used to put out any fires/debts.
- Short-term splurge (10%) used for fun stuff now
- Smile account (10%) used for long term fun (holidays etc).
And if you don’t have any debts, you can save the 20% Fire extinguisher amount and invest it or save it for a home or whatever. This approach is great as militant budgets don’t work for most people. You need to pay bills and save, but you also need to treat yourself too.
Do I need to follow the Barefoot Steps In Order?
The barefoot investor steps are designed to be followed in order, but they can be followed out of order and you can still be successful. It’s not unusual to already have a home (step 4) before you decide to start step 1 (schedule a monthly date night). Or if you already have a home (Step 4) and you have an offset account, that could be used as your Mojo account (step 6).
If you are new to personal finance education, I’d recommend just following the steps in order as intended and if you skip over a step, you can always go back when ready.
Barefoot Investor Book: Top 5 Insights
The Barefoot Investor Book was a life changing book for me. It entered my life by chance and it helped me crawl out of debt after being made redundant 3 times in 2 years. It was a terrible time but the barefoot investor book triggered what I called a “financial awakening”. I knew literally nothing about finance, and this book awakened a passion for financial independence and the FIRE movement.
Saying all of that, having worked through the book a few years ago, I have gone back to it repeatedly and these are my top insights from the book.
Don’t Overlook Step One: Schedule a Date Night
To succeed financially or in life, you need to ensure you and your partner are aligned. Without this alignment, it will result in disagreements and problems down the road. This is even more important when it comes to finances. If you are a saver and your partner loves spending, following any budget or succeeding financially will be difficult.
I glossed over this step years ago and my wife wasn’t that interested. But later I found that although I’m more serious about financial goals and FIRE, I still need to bring my wife along on the journey. This ranges from mortgage changes, new bank accounts or a weekly look at our spending. That frequent conversation is required and the Barefoot date night set’s the wheels in motion. Open and honest communication is important, especially when it comes to your finances. So make sure you don’t skip this step.
The Serviette Strategy to Budgeting Is Simple and It Works
Any budget born in a spreadsheet will die in that spreadsheet. Complexity will overwhelm you and your budget will simply fail. The serviette strategy works because it is super simple. It fits on a serviette. But it is also realistic and allows for some fun which usually requires spending money. Following this strategy provides a great way to break down your income into the barefoot buckets with percentages of how much goes into each bucket. This is great at the end of the month, where you can review your total spend VS total save. I still use the barefoot buckets years later and appreciate their simplicity and versatility.
“Any budget born in a spreadsheet will die in that spreadsheet”
Investing Is Not Risky and Compound Interest Is Awesome
The common consensus is that the share market is risky and you will lose money if you invest. It’s like gambling. Usually people that don’t know anything about investing will tell you that. I didn’t know a thing about money or investing, so I believed it. The Barefoot Investor book helped me understand the truth.
When I was up to my eyeballs in debt and unemployed, I read this section of the book and it didn’t register. I wasn’t in a position to invest in anything and I didn’t understand it. As I crawled out of debt and re-read the book, it clicked. It finally made sense and the concept of compound interest was exciting. I realised that was what I had to learn more about as I invested in AFI as recommended, and it lead me onto the path of passive investing and FIRE. This may not make sense while attempting the steps to begin with, but it is important to understand it and utilise it for building your wealth. So make sure you spend time on this one and then start investigating FIRE (financial independence retire early).
The Squeeky Wheel Gets the Grease – Call Your Bank!
A big part of the barefoot investor book is about empowering you to take control of your finances. This includes calling your bank and making demands. I didn’t know I could just call up and ask for a better rate. So I called my bank, followed the steps – and badda bing, badda boom, I got a better rate. Saved money – just like that.
I even just did it again recently and got a better rate. These days It’s so easy to change banks, they value your business. The old saying is if you don’t ask, you don’t get. Or even better, the squeeky wheel gets the grease. Sometimes you just need to pick up the phone and squeek a little.
Being good with money isn’t just about you
The Barefoot Investor book is very focused on getting yourself on the right track with your finances. It lays out a path if you wish to take it. But that path taken impacts your family. This is particularly true if you have a partner and children, where “money issues” can cause stress and break-downs within a family. From personal experience, money stress is the worst.
The focus on finances and family no doubt led to the Barefoot families book which I also have and enjoyed. It wasn’t as revolutionary as the original book, but it expands on the concepts here. Once you get that financial education, pass that onto your children and ensure they don’t make your dumb financial mistakes. Speak openly about money (Step 1) and teach your children about saving (Step 2) and eventually, they can buy their own home (Step 4). I learned everything the hard way later in life. I’m very open with my children about money, saving money and having the right mindset about it. it’s said that education starts at home, well so should financial education. It’s really important.
What Advice Did You Ignore from the Barefoot Book?
Unfortunately, I didn’t buy the recommended Barefoot pillow. I have always looked for a low profile version, but never found one. Maybe I should have tried the pillow, because I am a terrible sleeper and I’m still looking for the perfect pillow. I agree with Scott Pape’s premise that you spend a third of your life with your head on a pillow. So it may as well be a gourmet pillow. My search continues.
And on a side note, I even put “Splurge” on my eftpos card like Scott Pape recommended. I eventually took it off because when I’d go to the pub, the bar staff would show each other and laugh at me. Those bastids.
Is the Barefoot Investor Book for Everyone?
The Barefoot Investor book may not be for everyone. If you are in financial trouble and really need a plan to get back on track and learn some basics, it is perfect for you. I read the barefoot investor book at the right time in my life and it truly was life changing.
I have met people who rave about the book and it meant a lot to them too. But I have also met people who complained about money issues, read the book and they got nothing out of it. Another person I know read a chapter and that was it. Honestly, it boils down to your personality type, and if you are open to new information, learning new things and applying them to your life.
I still recommend the barefoot investor book to everyone if personal finance comes up. Because I can hand on heart, recommend the book because of the impact it had on me and my life.
Key Takeaways
The Barefoot Investor book has advice that spans your entire life. Some sections will resonate more with you depending on where you are in your financial journey and life stage. The key Takeaways for me are:
- It’s never too late to get a financial education
- Everyone has the ability to budget and control their financial destiny
- Finances can be made simple, once you have that foundational knowledge.
- Follow the 9 steps like a recipe, and you can achieve financial success.
Just get the book and be open to it. Even if you get a few meaningful pearls of wisdom from it, you will be a richer person for it.
M. Moneyman
FAQs
Please note, the Barefoot Investor book was printed a few years ago. So some of the recommendations may not be 100% valid, so please do your own research.
What Pillow Does the Barefoot Investor Recommend?
The barefoot investor pillow is the dunpillo Luxurious Latex Classic Profile Pillow. Described as the “Mercedes Benz” of pillows, Scott Pape believes it is an “awesome purchase” that allegedly makes you you feel wealthy as you go to sleep. Zzzzzzz
What Superannuation Does the Barefoot Investor Recommend?
Scott Pape uses the Host Plus Indexed Balanced Fund. It charges a small investment management fee of 0.08 percent, and it invests one third of its money in Australian Shares, one third in International shares and the rest in cash and fixed interest. Scott Pape has since said he uses it but doesn’t “recommend” it. But he does recommend any superannuation fund that is indexed and has a low fee. So you may need to do some research on this one.
What Bank Does the Barefoot Investor Recommend?
The Barefoot Investor recommended using an ING Orange everyday account as there are no fees, even when using other ATMs. This waived fee for using other ATMs is pretty standard for most banks now. But at the time, it was a great way to not get slugged for using other ATMs.
What First Investment Does the Barefoot Investor Recommend?
The Barefoot Investor recommends the Australian Foundation Investment Company (AFI) as a great first investment. It’s a listed Investment company (LIC) that invests in other businesses. It’s low cost, performs well and it is a great way to start building a portfolio.
