(Ugh. This has been the most popular article on this blog for a long time, despite the fact that there are far more interesting and useful articles on this site. I’ll update this article soon – including expanding it so it talks more substantively about where the Barefoot Investor isn’t relevant to Kiwis, and why I disagree with Scott Pape in a lot of ways. If you’re interested, bookmark this page or sign up to my mailing list for updates. You may also be interested in the very active “Following the Barefoot Investor” Facebook group, which is unrelated to this blog. Ruth from The Happy Saver also talks more explicitly about applying the Barefoot Investor in NZ.)

I’ve been meaning to write about Scott Pape – also known as The Barefoot Investor – for a long time.

I have a lot to say. So consider this Part I, with Parts II and beyond being published at some point in the future.

I like Scott Pape’s values 

The Barefoot Investor is all about batting for the consumer. It’s refreshing.

He calls a spade a spade, and he’s not afraid to say the things that most people in the financial services industry are afraid to say.

On this, I’m with him 100%.

He also seems to value the right things in life. Yes, on the face of it he talks about money. But he talks about money as a means to an end: of treading your own path through life.

Pape also appears to put the important people in his life first. I like that.

I don’t like the way Pape writes

I want to start by saying I’m probably not in Pape’s target market.

The way he writes, and the things he says, really grate with me.

This blog is made possible by Fairhaven Wealth, my independent, fixed-fee, advice-only financial advice business.

Here are some specific things that get my goat:

  • The subtitle of The Barefoot Investor is “The only money guide you’ll ever need”. I take massive exception to that. It shouldn’t be the only resource you read! (And Pape clearly doesn’t believe this either, as he wouldn’t have written a follow-up: The Barefoot Investor for Families. If his original book was the only guide you’ll need, surely it would apply to families as well? Nor would he offer his “Barefoot Blueprint” service.)
  • He uses an us-versus-them/us-against-the-world mentality: after explaining that the people who “make it” financially have an “alpaca attitude” he explains that “most people aren’t alpacas – they’re groundhogs”. This is just an example. But this mentality seems to seep through the book.
  • He creates strawmen: for instance, he says “Some finance books are wishy-washy on what you should do.” “Others are written by weirdos who have colour-coded spreadsheets for their undies drawer and whose idea of a holiday is the Bendigo caravan park (communal toilet option).” Maybe he has different reading habits to me, but that’s not the case with the finance books I’ve read.

(As I read this article with fresh eyes, it doesn’t seem like a coincidence that Pape has a cult-like following. Because these are exactly the sorts of techniques cult leaders use.)

  • I take exception to quite a few things he says. For example:

Here’s Scott: “It’s not about what you earn, but what you save.”

Here’s me: “It’s mainly what you save, but what you earn makes a pretty big difference.”

Or he says: “my publisher would have liked me to be a bit more ‘self-helpy’.”

I say: “Are you kidding me? This book is self-helpy all the way down.”

  • Pape talks about the “belly of this book” coming from the moment when he lost his home in a fire. It’s a great story. But he wrote earlier versions of this book, and was very well known, well before he wrote this book. Maybe he’s telling the lie that tells the truth. But it means I don’t fully trust him.
  • Boy, does the book seem to have a lot of filler.
  • My broad sense from reading The Barefoot Investor is that it is a one-size-fits-all kind of book. To my eyes, it is very black-and-white, and more of a shades-of-grey, many-paths-up-the-mountain kind of guy. When providing advice, I usually provide very simple and straightforward recommendations. But those simple and straightforward recommendations are always unique and tailored to the individuals I work with. At a personal level, I don’t think life would be living if my wife and I were to divide all of our income into “splurge” and “mojo” and “fire extinguisher” accounts. Our system works well for us. Which is a roundabout way of saying that Pape’s system might work for some, but it isn’t a prerequisite for financial success.

Perhaps I’m being too literal. But I love reading, and I read a lot of books. If his book wasn’t so popular, there’s no way I’d have finished it.

The book is short and easy to read (unless you share my temperament).

He seems to be changing people’s lives for the better

Pape claims to hear from people all the time saying that he’s changed their lives. I believe him.

As I write this, I get the feeling that I sound like a curmudgeon. I promise, in real life I don’t come across that way!

Most of my criticisms in this article relate to the fact that his writing doesn’t resonate with me. In the same way, my writing doesn’t resonate with a lot of people – but seems to resonate with a specific type of person.

Interestingly, I have had a lot of clients who have read his book before engaging me and they all tell me my advice and philosophy very closely aligns with Pape’s.

And the end of the day, if he resonates with you, he’s got a good message and the right values. He also doesn’t have an agenda to sell you financial products, and that goes a long way.

We all need to tread our own path, and Scott Pape appears to be doing a good job of treading his – and helping others do the same.

Sonnie Bailey

Sonnie is an Authorised Financial Adviser (AFA) and former lawyer with experience in the financial services and trustee industries. Sonnie operates Fairhaven Wealth (www.fairhavenwealth.co.nz).

4 Responses

  1. Rebecca Phillips says:

    There’s also a bit of confusion for kiwis because some of his advice is not that appropriate for the NZ environment eg regarding superannuation and mortgages – both these aspects of our financial environment are quite different between Australia and NZ and accordingly may need a different approach

    • Hi Rebecca. Thanks for your comment. Yes! Australian Superannuation is a completely different creature to KiwiSaver in lots of regards – including its tax concessional status, and the ability to pay for insurance premiums through superannuation. (It also doesn’t help that NZ Super doesn’t map on to Australian super in any way – the difference in terminology can also lead to confusion.) Also, health insurance is quite different in Australia compared to NZ – with the tax advantages and greater distinction between the private and public health system compared to NZ. I’m not too familiar with the differences in relation to mortgages, but that sounds interesting (I’m guessing LVR restrictions, and perhaps lending in SMSFs?). Cheers, Sonnie

  2. Jill says:

    Thanks Sonnie for sharing your view and referencing Ruth’s article on Barefoot.
    As a kiwi living in Australia, I am a Queenzlander with a foot in each camp.
    My introduction to Barefoot through the Money magazine weekly newsletter initially invoked a similar response to yours. However when I took the time to read the whole book I found a broad overarching plan, complete with verbatim scripts that made complete sense and was entirely doable.
    A year down the track from setting up our buckets and date nights we are already reaping mighty rewards. This is exactly what we needed and were looking for years ago. We are much more confident now and heading into new investment territory with a helpful plan.
    Our challenge for our New Zealand finances is to get them into equally good shape. Do you have anything as useful to recommend for that?

    • Hi Jill

      Thanks for the comments. If you’ve set up your buckets and have been working diligently on using Pape’s method and having date nights etc for a year – well done!

      (I’m curious what constitutes “mighty rewards” for you – my hope and expectation is that you’re in a significantly better place financially than you would have been if you hadn’t come across The Barefoot Investor, and you feel a lot more confident and comfortable about your financial position and trajectory, plus perhaps about life in general?)

      As I mention in my article I’ve got plenty to say about The Barefoot Investor. Unfortunately, I don’t have the time to write parts II, III, and beyond at the moment. My initial thought is that if you’ve been following his process for a year it shouldn’t be too hard to extrapolate his process from Aussie to NZ. As someone who has applied and benefited from his method, can you be more specific about what you’re actually looking for?

      Is there anything that isn’t covered by Ruth’s article you mention? (For reference it’s located at https://www.thehappysaver.com/blog/applying-the-barefoot-investor-in-nz. FWIW I provided some limited feedback on the article before it was published).

      Cheers

      Sonnie

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