The lowdown: Learn how to manage your money, beat the overwhelm, and take control of your finances with The Barefoot Investor summary.
If you’ve ever struggled with your finances you’re not alone.
Millions of people around the world put off looking at their bank balance every week.
But what if I told you it didn’t have to be this way?
In The Barefoot Investor, Scott Pape shows the few things you can do to take control of your finances.
Pape’s Barefoot Investor is an institution for 20-somethings in Australia who decide to start being an adult, but the methods are great for everyone.
Pape even discusses how to get your kids interested in finance.
While a lot of this book is targetted for Australian audiences in regards to the suggested banks and accounts, anybody can take the basic principles no matter where they live.
- Audible Audiobook
- Scott Pape (Author) – Scott Pape (Narrator)
- English (Publication Language)
- 01/01/2017 (Publication Date) – Audible Studios (Publisher)
The three main lessons from The Barefoot Investor Are:
- Organize a monthly date night to plan your finances
- Multiple bank accounts make things easier
- Get rid of that debt
Lesson One: Organize a monthly date night to plan your finances
Okay, I want you to think about a less enjoyable way to spend time than planning your finances.
Go….
Yep, I couldn’t think of anything worse either.
However, it doesn’t have to be that way.
Rather than making your finances a stressful situation, save one night a month to go over your financial decisions and make the night a treat.
Get takeout food, go out for dinner, head to a wine bar (preferable after doing the calculations), or whatever it is you do yo enjoy yourself.
You’ll be surprised just how much you can do in under an hour every month.
Who knows, combined with the night out, you may even start to enjoy your finances.
Lesson Two: Multiple bank accounts make things easier
Like previously mentioned, thinking about your bank accounts sucks.
So, it may surprise you that The Barefoot Investor tells you to use five different bank accounts.
Look for ones with no fees and a great interest rate; these accounts are usually not found in your country’s ‘big banks’.
These five accounts may take some planning at the start but can be put on auto-pilot soon afterward.
All five accounts should serve a different purpose:
- Daily expenses
- Small indulgences like that night of Uber eats
- Savings for more expensive treats like a holiday
- Paying off your crucial costs like debt
- The final one is retirement
The filtering of your finances may sound
complicated but can be automated through your bank.
- Make sure all money goes into your daily expenses account, and keep 60% of it there. This is where you’ll pay for food, bills, etc.
- 10% to go into your treat account
- 10% into your holiday account
- The final 20% is in a ‘fire extinguisher’ account that is a break-in-case-of-emergency fund that pays off debts and emergency costs. Once debts are paid, you can use it to invest for retirement.
When you start filtering 20% of your income int debts, you’ll be surprised how quickly they disappear.
Lesson Three: Get rid of that debt
Once you start pumping 20% of your income into debts, it can disappear quickly.
Which is a good thing, because the biggest blocker to financial comfort is someone’s debt.
While many finance books embrace using credit cards wisely, The Barefoot Investor encourages you to cut them up, as thy coax you into spending beyond your means.
There are a few methods in the book that can help you get rid of debt.
- Call your bank and tell them you want zero interest on your debt for 18 months; Tell them you want them to match another bank’s transfer offer. It is highly unlikely they will do it, but they’ll at least be likely to cut something. Make sure you stand firm.
- Use your fire extinguisher to pay off debt. Using 20% of your income to pay debts will knock it off quickly
- Domino your debts by paying the smallest one first
- Paying off a car? Consider selling it and buying a car outright with what’s left on the loan. By buying a car you can afford, you’re not paying interest on a depreciating asset.
My Personal Takeaway
The Barefoot Investor puts finances in an easy-to-follow system that you can do at home.
I have taken parts of the Barefoot Investor to pay off debts and will continue to do so.
The program is simple but incredibly effective.
Put it into action
Start your first date night!
Either yourself or with a partner, tackle your finances by organizing one night a month where you can get on top of your finances.
You should consider buying this book if…
If you’re trying to have power over your finances, the book will be a great asset.
Also, if you’re a side hustler, then having a finance system will help your business.
If you’ve enjoyed the Barefoot Investory summary, you can see the latest prices and read reviews on Amazon.
Or, read our other business book summaries.
You should also check out..
a Swedish university student, marketing professional, and life-long learner. Here at BookSummaryClub I summarize my favorite non-fiction books into easily digested posts. Hope you like what you’re reading!
🤙 Your Next Step… 🤙
Head across to one of the following pages for more goodies
🍕 Read our Blinkist review and become a member of Blinkist. Read or listen to 3000+ full version quality summaries!
🍕 Read our list of the best business books of all time
🍕 Read some more of our book summaries
🍕 See our top book summary apps