Scott Pape, known to many as the Barefoot Investor, isn't like most slick, suit-wearing financial experts in the media - not least because you rarely catch him in anything but jeans and boots.
Despite being younger than many financial experts, Scott's appeal is ageless. Initially starting with the idea of helping people in their twenties come to grips with their finances, Scott was overwhelmed by the response to his straight talking 'back-to-basics' finance advice from readers ranging from teenagers to retirees.
Now, Scott is the author of bestselling book The Barefoot Investor and reaches millions of people every week through a nationally syndicated newspaper column and regular guest spots on radio and TV. He covers topics from basic savings (or 'building your Mojo', as he calls it) to investment. He's also a big advocate of having the right insurance for all stages of life.
Scott has gained a dedicated fan base not by sugar coating his personal finance advice, but by combining his own brand of tough love with humour. He tells his readers to stop looking for a financial 'magic wand' and start taking responsibility for their own money. After all, he maintains, nobody cares as much about your money as you do.
We talked to Scott about how important having the right level of insurance cover is to a strong financial plan, and how a recent 'tree change' to the country is helping him get balance in his own busy life.
You're a country kid from a tiny town in rural Victoria. How did you end up taking it upon yourself to educate Australians about managing their own money?
When I graduated from university, I went to work at the Australian stock exchange. I soon realised that there was a lot of financial advice written for people with far less hair than me. What I couldn't work out was there were all these financial guides for people who were old, but nothing for people who were young.
At the time, Australia was going through a property boom and people were asking me questions about what to do with their money. I thought this was a niche that I could perhaps fill and, from there, I've gone from being not just about young people to being more mainstream.
We know it's hard to boil down your brand of advice to a few basics, but can you give us a rundown on what being 'barefoot' is all about?
Basically, I give the same financial advice as my grandfather does, except I keep my teeth in while
I give it. As the core philosophy, I really encourage people to save and to steer clear of debt, to buy your own home, pay it off, and to look to making your money work for you.
Building wealth is also about securing wealth when things go pear-shaped. How important is having the right types of life insurance to a good financial plan?
One thing that I always talk about, and I’ve devoted columns to it across the papers I write for, is about the importance of being insured. I always preface that with saying that your number one asset isn’t your house; it’s your ability to earn an income.Unfortunately too many young families are underfunded as a result of the property boom we’ve been in. We’ve got a lot of people who have huge debt but don’t have that basic insurance, or don’t have enough.
You get hundreds of emails and calls from people struggling to stay on top of their finances, many who go on to use your advice to change their lives. What’s the most amazing success story you’ve heard? I’ve had a lot of people who have dug themselves out of debt, but one of the stories I’m most proud of is a single mum who read my book in a doctor’s surgery. All her friends were basically single mums on welfare, and she was inspired. She went back and she started working. At the time she said to me “I can only afford to put $20 a week into my mojo [savings] account,” and I told her it was okay, that every bit counted.
The really cool thing is that even though her mother had never worked, and she was never going to work, it’s not about money for her now. It’s about showing her daughter that she’s a winner.
You travel a lot and work quite long hours on your own business. What do you do to get balance in your life?
Copious amount of alcohol! No, just kidding. Well, I recently moved from the melbourne CBD to romsey [in the Macedon Ranges outside of melbourne, and it’s going really well. I think for me it’s the division between work and home. When I go home, even though it’s a 45-minute drive in the car, I’m in the country. I’ve also got to know a lot of people, I take the dogs for walks and I’m the barman at the local golf club. It’s really nice, it’s a nice balance.
Finally, what advice would you give to Balance readers to help them secure their financial futures?
It’s the idea that while everybody focuses on earning more, over the last 20 years we’ve had an explosion of more. more debt, more stuff; but has it really made us any happier?
I think that the one thing we can all agree on is that being financially secure may not make us happy necessarily, but it makes us feel content and safe. one of the big things about being secure is having the right insurance, and the other big thing is having a little bit of money in the bank. They’re the two core steps of being barefoot.
To sign up to some straight-talking personal finance tips from Scott, join the barefoot Tribe at barefootinvestor.com