The Barefoot Investor

I guess this is the best place to post this

Is anyone reading or following some of the processes by the Barefoot Investor on money management?

Currently we are looking at the best place for an online high interest bank account and transaction account. ING has changed since the book, however some ME, RAMS and ING products look enticing

• Step1: Schedule a Monthly Barefoot Date Night
  Get dressed up, go out to dinner and put in place the Barefoot Steps—actually do them: set up the accounts, have the conversations while you munch on garlic bread and have a glass of wine.
• Step2: Set Up Your Buckets
  This is what I call my ‘Serviette Strategy’ – a simple three ‘bucket’ solution where you put your money on autopilot so you’ll never have to worry about it again.
• Step3: Domino Your Debts
  Turn the process of paying off your debts into a game of dominos—it’s the fastest way I know to escape the cult of credit once and for all.
• Step 4: Buy Your Home
  Buying a home is one of the biggest (and best) financial decisions you will ever make. My commonsense plan could see you in your very own home in as little as 20 months
• Step 5: Increase Your Super to 15 Per Cent
  Boost your super to 15 per cent and you’ll never have to worry about money again. It’s time-tested. It’s totally tax-efficient. And it works.
• Step 6: Boost Your Mojo to Three Months
  Boost your Mojo to three months of living expenses. This move takes character – what true wealth is all about.
• Step 7: Get the Banker Off Your Back
  Most people have a home loan. Very few people go through this process of systematically knocking down their mortgage, and that’s exactly how your lender likes it. But not you…
• Step 8: Nail Your Retirement Number
  Let me be clear. You do not need a million dollars in super to retire. All you need is my Donald Bradman Retirement Strategy.
• Step 9: Leave a Legacy
  How do you want to be remembered? An important part of building wealth is thinking about how you want to make a difference in the world.

 

Umm no. This advice is for people who are in a completely different place financially to where I am. This is great advice for people who are not financially disciplined but not for me. For example: I don't have non-deductible debt and if my buffer got down to 3 months I think I would have a panic attack. Not sure what it is now. Probably 24 to 36 months

 

As I get older I'm starting to reconsider credit cards,savings accounts etc TBI may have some worth here

After all, tis the season

 

I see his articles in the daily paper regularly and they appear very simple and aimed at very young people. Although even at 20 I was already building my own house with my husband Brick by brick.
He is obviously attracting non financial people as his books apparently sell well.
Maybe we should all write a book with a chapter each....
We have some amazing stories between us.

 

Barefoot is for newbies who are trying to dig themselves out of a hole. Great in that respect.

Once you've done that, you need to distance yourself from the hole (don't think, I must not fall into the hole again - negative motivation) and instead aim to climb that mountain (positive motivation).

As for his Blueprint investment newsletter, I gave it a decent shot and put almost $200k into his share recommendations. Total return is only 5.6% after 1 year... just pick any index ETF and you'll outperform this by double (if not more).

 

Yes, that's his target market. The kind of advice he provides is really important to the people who need that kind of advice. For example, if someone has a $30,000 credit card debt because they can't control their spending then I think it is good advice to cut up their credit card and pay down debt. I have seen the specific advice he has provided to people who ask questions on his site and mostly it is spot on.

That same advice would not apply to someone who understands how to use a credit card and has no non-deductible debt.

 

I think most people on here and most that have a genuine passion/interest in furthering their financial iq would put his book and material in the 'for kindergarten audience'.

 

I love this idea! @Simon Hampel - make it happen!

 

I think its a book I'd want my kids to read when they turn 17. I haven't read it but have read plenty of his articles. I think he offers good advise for those who aren't doing anything with their money yet. Also good for older people who have bad debt

 

I prefer BFI book over the 'Rich Dad, Poor Dad' fabrication of lies book.

Everyone needs to start somewhere and I agree that it's a great start for many people that require a direction to the right path. The fundamental lessons of saving, setting up everyday accounts that does not attract a bank fee/ atm fee are pretty sound advice. I think like the 'Money' magazines, it certainly has a market.

 

I subscribe to his newsletter... I agree with sentiments that his advice is very basic and conservative which is at odds with the actions of many of us here... but for a large percentage of the population it is simply practical advice that can add lots of value.

 

RDPD may be a fabrication but it gave me some very powerful "eureka" moments - the most important being about buying bog basic investment properties, rather than what you dream to live in, and the importance of cashflow.

 

I like the BFI for some things - what he suggests is conservative, but required for a lot of people. Once you can do conservative well, you have the opportunity to be a little more aggressive within the realms of your comfort zone, hopefully with enough wisdom to manage the risks effectively.

 

I bought it earlier in the year because I was attracted to the chapter on Donald Bradman-style retirement. I was really disappointed, I'm not even sure that I understood what he was proposing.

I did enjoy the comic relief though. The book prompted me to change over most of our insurances following too many years of "lazy tax" as it was several years since the last time I did a domestic overhaul.

Another good basics book is Noel Whittaker's Getting it Together.

 

I had a read of it, having not previously been exposed to anything he had said/written.
Had I of heard of him, I probably wouldn't have bothered as his message is directed at those with very low financial literacy (I like to think I'm above that level... but maybe I'm not?)

I'm glad I had a read.

Taken - there is a lot in there which I found too simplistic, and my situation is (generally) a bit beyond some of his recommendations.
However, like anything I think I can take a bit of wisdom from any strategy.

My wife and I generally had pretty poor communication when it came to money. Our general method was that I organized the money and did all the planning. She manages the 'day to day' operation of life. That is keeping the family running (food, bills, shopping etc). Without me really knowing it, this caused her a lot of angst and stress, as I was getting her into stuff which she didn't know much about, and didn't fully understand. My comfort level with debt FAR exceeds hers when she doesn't understand the plan, and she regularly just went along with it as she trusts me to know what I'm doing. Albeit it stressed the hell out of her. We had numerous tear filled conversations.

I read the book, got her to read the book and we implemented the monthly date night to talk specifically about finances, plans goals and dreams. If nothing else it gets us out together for a nice meal without the kids, and she feels more comfortable with what we are doing (as she now knows what I (we) are doing).

I recommend a read of it. Its an easy read, you may look over 90-95% of it, but then, there may be 5-10% of usable wisdom contained within.

Blacky

 

I wondered if people continued with the financial date nights after the first one. I haven't read it but have read an article where he talked about this. I don't think I could get my hubby to listen for more than 30 seconds he has zero interest in any of our finances. I wish he did though, however then I would probably wish he didn't if he did! As much as everyone thinks they are above the book, I think Im going to borrow it from the library and check it out anyway. I was going to buy it but not at $30 I saw it for at the shops this morning.

 

I have a quick read of TBI years ago, if all you did was read the book and stick to it's basic principles you would be better off than the vast majority of people.

Easy to forget when reading places like PC that the majority of people are living pay to pay. Been out of debt with 4 figures in a savings account is a massive achievement some peoples books.

 

Totally agree - it has amazed me how many people struggle when an unexpected bill for a small amount (less than 1k) occurs.
Barefoot Investor would make a great addition to any colleges reading list.

 

You know that you're out of touch when you get a $10k land tax bill and just pay it for the 2% discount before the due date (one more for the LOC).