Barefoot Investor reveals the three ‘simple’ things he invests in to make money
The Barefoot Investor has revealed the surprising way he invests his money, which he believes will ultimately yield high returns with little effort.
Scott Pape, 46, wrote in his newsletter of which he keeps ‘roughly 95 percent of’ [his] net value’ in low-cost Exchange Traded Funds (ETFs).
“An Aussie share index fund and a few international share index funds. That’s it,” he said of his simple trading philosophy.
“Although I am classified as a ‘sophisticated investor’, I firmly believe that keeping things simple is the ultimate high net worth strategy,” Mr Pape added.
‘And one that will deliver higher returns than the vast majority of professional fund managers.’
The Barefoot Investor Scott Pape prefers to keep his investing strategy simple by sticking to ETFs and automating payments to deposit money into his investment accounts each month
The investor believes that online trading apps can cause people to check stock prices too often, which can lead to “stress and overtrading.”
The Barefoot Investor said his simple strategy has another benefit besides making money.
“Better yet, it means I spend just four hours a year managing my investments,” he said.
Mr Pape explained that he saves time every year by refusing to have an investing app on his phone – for the same reason he doesn’t have a social media app.
“When I’m on the throne, all I want to do is scroll through toilet paper, not TikTok,” he said.
‘I don’t want to check my stock prices every day, or even every week. It’s a trap that leads to stress and overtrading, and ultimately to flushing your returns down the toilet.”
The investor said he instead has all his investments on “autopilot.”
The 46-year-old explained that his automatic setup means a fixed amount is paid into each of his investments every month.
“It used to be expensive to do this, but today you can trade for a few dollars, or in some cases for free,” he wrote.
Mr Pape only checks his share prices four times a year – when dividends are released
As part of reducing the time he spends managing his investments, Pape said he just needs to keep an eye on dividend payment dates.
“When you buy something, you can Google the historical payout dates and put them in your calendar, just like I do,” he said.
“And that means I only check my stock prices four times a year… like this week when my dividends come in.” This way you can do something more productive with your time… even scrolling TikTok on the toddler!’
What was once an activity for wealthy people, trading has become more accessible with many apps allowing Australians to make smaller trades.
Australian trading app Superhero recently changed their minimum trade from $100 to $10, which costs just $2 per trade, with Aussies able to buy Wall Street shares for a fee of $2US, with a minimum spend of $10US.