The Barefoot Investor argued that a young woman was entitled to her $30,000 inheritance after she complained that her mother was keeping the money from her.
Olivia, 26, wrote to Mr Pape saying her mother had kept the money she received after her great-uncle’s death for fear she would misuse it.
She said her plan to put the money in a high-interest savings account to save for a house with her partner wasn’t good enough for her mother.
‘She says you would tell me to invest it in shares or use it to pay off my HECS. Is that true?’ Olivia’s letter to Mr Pape reads:
“Until I agree to the ‘Barefoot Method’, she won’t give it to me.”
Mr Pape stood up for the young woman in the debate, explaining that she had apparently already followed the ‘Barefoot Steps’ to achieve financial freedom.
“In the case between you and your mother, I decide in favor of…you,” Mr. Pape wrote in his News Corp column.
Mr Pape said Olivia’s plan to save for a house was step four of his nine-step plan.
A mother held back $30,000 of her daughter’s inheritance from her great-uncle for fear she wouldn’t invest it the same way Barefoot Investor Scott Pape (pictured) did
“You should definitely put the inheritance into an online savings account for your house,” he wrote.
After completing step four, Mr Pape urged Olivia to increase her pension contribution to 15 per cent, saying it would be ‘a tax-efficient long-term investment’.
“Well done, and please say goodbye to your mother from me!” he wrote.
If Barefoot Investor’s advice helps Olivia collect the inheritance, it will only be around one-sixth of the standard 20 percent deposit on the average Australian home.
Data from the Australian Bureau of Statistics shows the average house price rose by $14,300 to $959,300 in the first quarter of 2024.
The cost of securing a mortgage has risen significantly for people looking to buy a home in capital cities where house prices are soaring.
New data from Domain shows the price of a 20 per cent deposit on the average Sydney home has increased by $125,424 over the past five years.
It found that buyers now need to save $332,000, compared to $207,066 in June 2019.
Meanwhile, the amount needed for the average Melbourne home has risen from $165,212 to $213,761.
The daughter, Olivia (stock photo), got Mr. Pape’s approval because she planned to use the money as a down payment to purchase a home
Compare the Market chief economics officer David Koch warned that rising deposits could see young Australians priced out of the housing market.
“With home prices rising by tens of thousands of dollars in some parts of the country, many buyers are feeling like they’re behind the curve as they try to save that 20 percent down payment,” he told Yahoo.
Brisbane had the second highest recommended deposit increase of $81,498 to $195,293.
It was followed by Adelaide with $78,563 to $186,994, Perth with $64,313 to $170,000, Canberra with $58,143 to $208,286, Hobart with $41,039 to $137,211 and Darwin with $12,012 to $117,009.