The Barefoot Investor has revealed the surprising way he invests his money, which he believes will ultimately generate high returns with little effort.
Scott Pape, 46 years old, he wrote in his newsletter which maintains “approximately 95 percent of [his] net worth’ in low-cost exchange-traded funds (ETFs).
‘An Australian share index fund and a couple of international share index funds. That’s it,” he said of his simple business philosophy.
“Although I am classified as a ‘sophisticated investor,’ I deeply believe that keeping things simple is the ultimate strategy for high net worth,” Mr. Pape added.
“And one that will offer higher returns than the vast majority of professional fund managers.”
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 frequently, which can lead to “stress and excessive trading.”
The Barefoot Investor said his simple strategy has another benefit besides making money.
“Even better, it means I spend just four hours a year managing my investments,” he said.
Pape explained that he saves time each year by refusing to have an investing app on his phone, for the same reason he doesn’t have social media apps.
“When I’m on the throne, all I want to see is toilet paper, not TikTok,” he said.
‘I don’t want to check my stock price every day, or even every week. It’s a trap that leads to stress, over-trading and ultimately flushing profits down the toilet.’
The investor stated that he instead has all of his investments on “autopilot.”
The 46-year-old explained that its automatic setup means a fixed amount is paid into each of his investments each month.
“It used to be expensive to do this, but today it can be exchanged for a few dollars or, in some cases, for free,” he wrote.
Pape checks the price of his shares only four times a year, when dividends are distributed.
As part of reducing the time he spends managing his investments, Pape said he just has to keep track of dividend payment dates.
“When you shop, you can Google their historical payment dates and put them on your calendar, like I do,” he said.
‘And that means I review my share price only four times a year… like this week, when my dividends arrive. That way you can do something more productive with your time… even scroll through TikTok on the tot!’
Once an activity for rich people, trading has become more accessible with many apps allowing Australians to make smaller transactions.
Australian trading app Super Hero It recently changed its minimum trade from $100 to $10, costing just $2 per trade, and Australians can buy Wall Street shares for a fee of $2, with a minimum spend of $10.