Barefoot Investor Scott Pape warns every Aussie to do one thing now

Barefoot investor Scott Pape has issued an urgent warning that Australia is heading into ‘treacherous waters’ financially.

In his recent column, Mr. Pape pointed to a comment made by Howard Marks, co-founder of Oaktree Capital Management, who is also a well-known financial writer.

“He’s so influential that Warren Buffett says when Marks writes something, he stops and reads it immediately,” Mr. Pape said.

He noted that late last year Mr Marks wrote about an economic shift that could dramatically change the financial landscape.

Mr Marks wrote: ‘In my 53 years in the investment world I have seen a number of economic cycles, swings, manias and panics, bubbles and crashes, but I only remember two true turnarounds. I think we’re in the middle of a third today.’

Mr Pape said the ‘big change’ he was referring to is continued higher interest rates.

Australia has experienced a prolonged period of falling and low interest rates since their record high of 17.5 per cent in 1990.

‘As a result, many people still think that an interest rate of 2 percent is normal. They’re not,’ Mr Pape said.

He said inflation has ended Australia’s economic “smooth sailing”.

The Reserve Bank has made 11 consecutive rate hikes in just over a year, with economists divided on whether another will follow later today.

“Inflation in Australia is past its peak, but is still too high at 7 percent and will take some time to get back into target range,” RBA Governor Philip Lowe said of the latest increase.

Mr Pape said the rocky financial outlook could begin.

“Soon we will be entering much more treacherous waters… You must understand that the economic wind is blowing against us now.”

“So let’s focus on you, and where your ship is heading… You’ve been putting off making that financial decision, haven’t you?” Mr. Pape asked.

Reserve Bank Governor Philip Lowe has made 11 rate hikes since May 2022

He urged Australians to do something they had been avoiding that would improve their financial well-being.

“Maybe it’s selling that dud investment property… or downsizing your current home.”

“Maybe it’s contacting your superfund’s financial advisor about your retirement… or calling you to get a better mortgage rate.”

“Hopefully it’s to sell your Dogecoin…or maybe it’s calling the Small Business Debt Helpline.”

“Maybe you’re telling yourself it’s not the right time, or you don’t have all the facts, or you’re too busy. But deep down they’re all excuses.’

Mr Pape said that actually taking action was the most important thing, as he explained to a reader who wrote to him.

Taylor said they’d had strange occurrences of luck since they’The Magic Of Manifesting Money: 15 Advanced Manifesting Techniques To Attract Wealth, Success And Abundance Without Hard Work‘.

The small business owner said she scored three new clients, bringing in about $15,000 in revenue, and that her husband got a call saying he was entitled to an old insurance policy worth $3,000.

She asked Mr. Pape to share the book with his audience, but he seemed unconvinced when he related a story of a time when he had seen deep-seated poverty with his own eyes.

He said when he visited a favela during a trip to Brazil, “tens of thousands of families lived in small tin sheds” in areas controlled by criminal gangs.

“All these miserably poor people have to do is just think the right thoughts and they magically get rich?

Mr. Pape said his problem with such a philosophy was that people who follow it are less likely to “do that which radiates true success.”

He said this was “a well-thought-out plan backed by hard work and a commitment to taking massive action.”

He explained that people who contact him and follow his money management books tend to see their version of success within a few years because they are determined to make positive changes.

“The results people show often surprise me… but there’s nothing magical about it,” he said.