Book Review: The Barefoot Investor
Written by R. A. Stewart
A personal finance book which is worth a read is “The Barefoot Investor” by Scott Pape. This book is practical and down to earth. It is written in a way that is easily understood.
Some of the things covered are strategies for using your money to grow your long-term wealth, having a safety net, and having some splurge money, or as it is often called, “discretionary spending money.”
These three types of money are what he describes as buckets.
Another section of the book explains the mistakes made by home buyers; they are:
1.They are waiting for a crash
- They rent but forget to save
- They buy a house they cannot afford
- They buy an investment property first.
- They don’t consider other options.
You cannot plan your life around something which you have no control over, the author says in reference to number one. Various websites publish articles about the crash which is about to hit the housing market. Pape claims this to be clickbait to attract visitors to their websites.
Mistake number two is renting but forgetting to save. Such people live from one payday till the next and have nothing to show for their labours.
Many people who did have the self-discipline to save make the mistake of buying a house they can’t afford, and then to compound their financial struggles, kids come along. Such people are sometimes referred to as “The Squeezed Middle.”
Buying an investment property first with the intention of moving in later on. The advice given in the book is, if you want a family home, to save up and purchase one.
People who have given up the notion of purchasing their own home sometimes lose heart and instead of saving money will instead fritter it away so that they have nothing to show for their labours.
Scott Pape writes in a down to early style which makes the book easy to understand, making finance less intimidating for beginners.
A feature of the book is that Pape encourages everyone to have a healthy relationship with money which does not mean living in deprivation.
The book focuses on Australian financial systems and this has to be adapted to your own country’s local context.
If you want to improve your financial literacy you will enjoy reading Barefoot Investor; this book will steer on to the right path toward a more successful future.
Read my other articles on www.robertastewart.com
