The Barefoot Investor Scott Pape’s one piece of financial advice that will change your life

Barefoot Investor Scott Pape has praised an Aussie’s simple piece of financial advice. 

Writing to Mr Pape, the man, named Darren, said he struggled to relate to Aussies struggling despite earning over $100,000-a-year.

Darren revealed how he is lucky to earn half that in a year – but has still been able to save up a 20 per cent deposit and buy a home. 

This is despite being a single-income family and having five young children who all depend on him. 

A clearly impressed Mr Pape told Darren he had discovered how having debt ‘enslaves you’. He also told him: ‘You got this!’

Darren revealed how he and his family, which includes five young kids, travel the country in a caravan

Darren wrote: ‘What kind of expensive neighbourhood and lifestyle are your readers living?

‘We travel the country in a little pop-top caravan, homeschooling our kids while I work online. I don’t believe in sponging off the government either, so we don’t put our hand out for welfare payments.

‘You don’t need to be earning big bucks to have a valuable life in this country, and kids don’t need to go to some posh school or have after-school care to get educated or be successful.’

Mr Pape told him: ‘You’ve discovered what a lot of people eventually work out when it’s too late: debt enslaves you.

And if you can avoid being in too much debt, you’ll be happier. Life is short and the time you have with your kids is even shorter.’

In another ‘Ask Barefoot’ article, Mr Pape warned Aussies to think twice before buying a house with just a two per cent deposit. 

He revealed a letter from a woman who managed to buy a unit as a single mum on a low income who is also a carer and sending money to a parent living overseas.

Jane said she had put down a two per cent deposit when interest rates were low with help from the then-Coalition government’s First Home Loan Deposit Scheme.

But now her fixed rate is about to run out, her mortgage is about to triple, she’s ‘terrified’ and wants advice on switching banks to keep her costs down. 

Mr Pape was blunt in his answer, saying ‘Jane has about as much chance of moving banks as Peter Dutton has of being Prime Minister’.

Scott Pape (pictured left with his wife Liz), better known as the Barefoot Investor, has given a double thumbs down to the idea of buying a house with just a two per cent deposit

Mr Pape was blunt, saying ‘Jane has about as much chance of moving banks as Peter Dutton has of being Prime Minister’. Pictured is a house for sale

‘She pretty much had zero equity in the joint to begin with, and it went down from there,’ he said.

‘So not only is she deeply in the red but, more importantly, her interest rate is about to triple, and her repayments could take food off her table.’

Jane had admitted in her email to him that she had gone ‘against what you recommended’ because ‘the government said they were helping me buy a unit’.

Mr Pape said her mistake was to put her faith in politicians.

‘I don’t blame her for wanting to buy her home,’ he said.

‘The problem is she trusted that the politicians were acting in her best interest, not theirs.’

Mr Pape said he had put Jane in contact with a financial counsellor who will work with her and her bank to try and find a way forward.

‘But it won’t be easy,’ he said, adding that only having a two per cent deposit is not his cut off line by any stretch.

‘I believe that if you can save only a five per cent deposit … then you really can’t afford a house.’