Mr. Pape’s folksy manner delivers down-home truths: Don’t get swept up in trendy investments; pay off your debts; analyze how banks are managing your money. As a result, it’s uncontroversial with experts. Chris Richardson, an economist at Deloitte in Canberra, said that Mr. Pape’s major tenets, like his argument that Australians have generally overvalued property and undervalued stock trading “are more real then people realize.”
Another cornerstone of the Barefoot Investor’s plan that resonates with economists is the importance of renegotiating bank fees, which, according to the Reserve Bank of Australia, run to 480 Australian dollars, around $355, a household per year. “Over ten years,” Mr. Pape writes, that’s “enough to take you to New York City and stay at a five-star hotel.”
Bank fees are lower in the United States; in Australia, just four banks represent about 80 percent of the total share of the market. “We certainly have high market concentration by international standards,” said Danielle Wood, an economist at the Grattan Institute, a public policy think tank in Melbourne. Ms. Wood sees high bank fees as a result of status quo bias, or the tendency to accept things the way they are, perhaps understandable for a country doing so well economically. “I think the message of the Barefoot Investor gets traction because he encourages people to think about things, and think about why they’re paying too much,” she said.
Jackie Frankel, a 47-year-old factory worker from Australia’s Mornington Peninsula, is a zealous Barefooter, as Mr. Pape’s fans are known. She concedes that her two grown daughters don’t completely understand his appeal. “They say to me, it’s common sense stuff to figure out what you owe, but I say people need it in black and white,” Ms. Frankel said. After reading the book, she and her husband, who also works in a factory, started going out for “date breakfasts.” (Nights were out because of their shifts.) After talking it through over eggs, they moved their money from one of the “big four” banks to an online-only account recommended by name in Mr. Pape’s book. (He says that he does not accept any endorsements, and will pull a recommendation if he sees a company using his name in advertising.) “We saved $500 a month just doing that, and now we’re going to New Zealand on a cruise,” Ms. Frankel said.
Australians love to travel internationally: about 60 percent hold passports, compared with around 40 percent of Americans. Mr. Pape doesn’t come across as abstemious about these sorts of big-ticket expenses. Instead, he advocates for letting the good times roll by divvying money into “buckets.” This approach ensures daily expenses are separated from “splurges,” like lattes, and “smile” purchases, which, like vacations, make you smile when you think of them. Call it the set and forget principle of money management.
“He doesn’t subscribe to the idea that you’ve got to get down to the bare bones and have no fun,” said Ali Cusack, a 31-year-old lawyer in Melbourne. “He just says, build it into your budget.” Ms. Cusack has been to Europe each summer for the past two years and recently started her own maritime law practice. “I got so ridiculously good at saving money that I didn’t even need to take out a loan to start my own business,” she said.
