Scott Pape - The Barefoot Investor

This book — and the solid-as-a-rock steps it gives you — is built on values that have stood the test of time. I learned a lot about life and money from my grandparents — they were part of the so-called Silent Generation who lived (and thrived) through the not-so-Great Depression.

What did that mean in a practical sense?

Well, they paid their bills on time … with cash.

They saved their money … rather than relying on credit cards.

They didn't expect handouts … being on the dole was something to be ashamed of.

They lived in modest homes — not McMansions — and they celebrated when they paid them off.

And they created a real legacy, which — ultimately — is what this book is all about.

Some finance books are wishy-washy on what you should do. They say things like, ‘Write down your dreams’.

Others are written by weirdos who have colour-coded spreadsheets for their undies drawer and whose idea of a holiday is the Bendigo caravan park (communal toilet option). They give you a laundry list of things you should be doing, culminating with:

‘You need to follow a strict written budget every single day.’

The truth?

I've never been able to stick to something as rigid as a budget, and I don't expect you to either.

For most people, budgets don't work. They're like surviving on a grapefruit diet.

Budgets set you up to fail. You feel like a loser with no willpower.

You're not. You are normal.

Here's the deal: the Barefoot Steps are not a cute way to organise a book.

They are nine specific steps that you complete in order, one by one.

The power of the Barefoot Steps is that they focus on you doing just one thing at a time.

You won't get overwhelmed.

You and I are going to plant your wealth tree, and get it growing.

By the time we've finished the ‘Plant’ part of this book, you'll have built your entire financial infrastructure, and as a result you'll be tens, or even hundreds, of thousands of dollars better off.

See, this book isn't for flicking — it's for doing (preferably while eating garlic bread and drinking wine, as you'll see in a moment).

I'm not going to throw a bunch of generic tips at you.

Instead, I'm going to be super specific about the first three Barefoot Steps that I want you to follow to plant the seeds of your future wealth.

And if you've just read this and thought to yourself, ‘Dude, my seeds are already planted’, well I've got a few surprises in store for you.

I'm going to:

show you how I manage my money in around 10 minutes a week, including the exact accounts I used at the time of writing

detail how you can live — and spend — like a multimillionaire, even on a below-average income

explain why I shut down my self-managed super fund (SMSF) … and introduce you to the cheapest super funds in the world

give you a specific script that you can follow to get ‘wholesale’ deals on your insurance

show you how to turn dumping your debts into a game you'll enjoy playing — and winning.

Plus we'll sketch out the only financial plan you'll ever need — a plan so simple that it fits on the back of a serviette.

Let's dig in.

You love going out and eating nice food, right? And you've never seen a $50 note you didn't like, right?

Well, we're going to combine the two and have a Barefoot Date Night — once a week for the next five weeks( to get you up and running with the Barefoot Steps), and then monthly thereafter.

Once a week, for the next five weeks, you and your partner are going to get dressed up, go out to dinner and put in place the Barefoot Steps — that is, actually do them: set up some accounts, and have the conversations while you munch on garlic bread and have a glass of wine.

What if you're single?

Well, you're in luck.

First, you can find a friend or family member you respect, give them this book and work your way through the steps together. However, I totally understand that you may not feel comfortable spilling your financial guts to someone.

If so, it's you and me, babe (or … dude).

Really?

Am I saying you should do a Scott No Mates and go on a Barefoot Date Night Han Solo?

Yep.

Don't believe me? It worked for Janine:

Dear Scott,

Three years ago I bought your book when I could least afford it, with sixfigure debts written on my fridge door. I took you and the book to dinner every week as I was dying inside and out.

I just wanted to say thank you for literally saving my financial life. I didn't go bankrupt. I made the calls. I cried with you. And screamed at you and learned from you. And formed a great relationship with my creditors. And survived. I began to live again. I educated myself and found a new kind of personal wealth. Thank you.

Janine

I have permission from my wife for you to take me out (well, my book) and sort your money.

And you don't even have to do it at a restaurant. It could be a coffee shop or it could be your bedroom, though it's much more fun to make a date of it. The important thing is that you intentionally carve out time one night a week for the next five weeks (and then monthly, forever).

There are three reasons you should stop what you're doing and schedule your first Barefoot Date Night immediately:

First, because it'll make you happier.The only thing that psychologists are unanimous on is that spending time with your family and friends is a direct predictor of wellbeing — and hands down one of the best things you can do for your relationship.Liz and I do our Barefoot Date Night on the first Tuesday of the month (the same day that the Reserve Bank meets to decide on interest rates … how hot is that?). She gets dressed up, I comb my hair, and we go out for dinner and talk about our money.And let me tell you, it's a lot of fun.It's like kicking off tight shoes at the end of the day. The stresses and strains of life that buzz around your brain — work, the dishes, Facebook, the phone, the kids — fall away as you treat yourself for a few hours.You'll look forward to it, I promise.(And spending an evening with your partner talking about how committed you are to providing for your family — well, that's some good financial foreplay right there … mmm-hhmm, you know what I'm talk'n 'bout.)

Second, because it's the two of you against the world.That's the way I look at our marriage. Yes, we're parents, uncles and aunties, friends and bosses, but at our core we're just two big kids doing our best to create a life for our kids that makes us proud.And if you're going to create an amazing life that isn't dictated by financial fears, you've got to work together and back each other up. There's no time for indecision — you're fighting for your family.There's no way around it: you need your partner on board. And years of experience has taught me that the way to get them on board is with nice food, a sprinkling of booze and a copy of my book.And if you're single, the good news is you don't have to play the partner mind games. You only have to look after yourself. This is going to be a snap.