Financial advice from The Barefoot Investor Scott Pape will change your life

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Barefoot investor Scott Pape has praised one Australian’s simple financial advice.

In a letter to Mr Pape, the man, named Darren, said he was finding it hard to get in touch with the Australians, who were struggling despite earning over $100,000 a year.

Darren revealed how lucky he is to make half of that in a year – but was still able to save a 20 per cent down payment and buy a house.

This is despite being a single-income family with five small children who all depend on him.

A visibly impressed Mr. Pape told Darren he had discovered how debt “slaves”. He also told him, “You got that!”

In a letter to Barefoot investor Scott Pape, the man, named Darren, said he had a hard time connecting with Australians, who were struggling despite making over $100,000 a year

In a letter to Barefoot investor Scott Pape, the man, named Darren, said he had a hard time connecting with Australians, who were struggling despite making over $100,000 a year

Darren shared how he and his family, which includes five young children, travel across the country in a trailer

Darren shared how he and his family, which includes five young children, travel across the country in a trailer

Darren wrote, “What an expensive neighborhood and lifestyle do your readers live?”

“We travel the country in a small trailer with a convertible top and homeschool our kids while I work online.” I don’t believe in cheating the government either, so we don’t reach out for welfare.

“You don’t have to make a lot of money to have a worthwhile life in this country, and kids don’t need to go to a fancy school or be looked after after school to get an education or be successful.”

Mr. Pape said to him: “You have found out what many people eventually realize when it is too late: Debt enslaves you.”

And if you manage to avoid excessive debt, you will be happier. Life is short and the time you have with your children is even shorter.”

In another Ask Barefoot article, Mr Pape warned Australians to think twice before buying a home with just a 2% down payment.

He revealed a letter from a woman who had managed to buy an apartment as a low-income single mother who also worked as a carer and sent money to an expatriate parent.

Jane said she put down a 2 percent deposit using the then coalition government’s First Home Loan Deposit Scheme when interest rates were low.

But now her fixed interest rate is about to expire, her mortgage has tripled, she is ‘scared’ and wants advice on switching banks to keep her costs down.

Mr Pape was blunt in his reply, saying: “Jane has about as much chance of changing banks as Peter Dutton has of becoming Prime Minister.”

Scott Pape (pictured left with his wife Liz), better known as the

Scott Pape (pictured left with his wife Liz), better known as the “Barefoot Investor,” has met with double approval for the idea of ​​buying a home with just a two percent down payment

Mr Pape was blunt, saying:

Mr Pape was blunt, saying: “Jane has about as much chance of changing banks as Peter Dutton has of becoming Prime Minister.” Pictured is a house for sale

“She had next to no equity in the joint to begin with, and it just kept going down from there,” he said.

“So not only is she deeply in the red, but more importantly, her interest rate is about to triple, and her repayments could take her food off the table.”

Jane had admitted in her email to him that she went “against your recommendations” because “the government said they would help me buy a unit”.

Mr Pape said their mistake was trusting politicians.

“I don’t blame her for wanting to buy her house,” he said.

“The problem is that she trusted politicians to act in their best interests, not hers.”

Mr Pape said he put Jane in touch with a financial adviser who will work with her and her bank to find a way forward.

“But it won’t be easy,” he said, adding that a down payment of just 2 percent is by no means his limit.

“I think if you can save just a five percent down payment…then you really can’t afford a house.”

This saves you a deposit during the rental

Find out your deposit amount and price range

Research where you want to buy, what type of property you’re interested in, and be realistic about how much you can afford for the monthly home loan repayments.

This will help you determine your deposit amount and give you a realistic savings target.

Create a budget

As a general guideline (and depending on your lifestyle needs), you should use about 50 percent of your income on living expenses (like rent, transportation, insurance, and utilities), and 25 percent of your income on entertainment (like dining out, going to the movies, and concerts) and about 25 Percent should go to your savings.

About 15 percent of the amount you save should go directly into your deposit fund.

Find more ways to reduce your expenses

Find a roommate, move to a cheaper suburb, or consider downsizing to a smaller or older apartment. If you’re currently paying $300 a week in an inner-city location, consider moving to a suburban location where you might be paying as little as $200 a week.

Saving $100 a week might not seem like much, but it could add over $5,000 to your savings account each year, which could help get you into the real estate market faster.

Look for a savings account with higher interest rates

Open a high-yield account dedicated solely to your savings. You can separate your deposit balance from your other accounts and keep track of how much interest you earn each month.

When you apply for a home loan, making regular deposits into a high-yielding savings account shows the lender that you have good financial discipline.

Source: finder



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