The Barefoot Investor has labelled a single mother who said she doesn’t want her $3 million inheritance a “weirdo” – albeit a wise person – and encouraged her to accept it.
The Tasmanian mother, who is raising two children while working as a nurse, said she was about to receive a surprise inheritance from a relative but was unsure whether accepting it was the right decision for her family because of the “complexity of wealth”.
“This is generous, but such richness brings complexity,” he wrote in a letter that was published in a Herald of the Sun column.
The mother explained that she already earns enough money to support herself and makes significant contributions to her pension fund.
“I’ve just paid off my house in Tasmania and I’m now adding 10 per cent to my retirement fund with each payment,” he said.
‘I don’t do renovations or travel far. I don’t have a dishwasher and the oven is broken. I’m planning to retire on $42,000 a year when I’m 65.
‘I don’t need more and I prefer the simple life of living within my means.
“I want my children to be successful and eventually own a home. However, I don’t want to deprive them of the satisfaction of doing it themselves.”
Barefoot investor Scott Pape (pictured) called the mother a “weirdo” but acknowledged that her “weirdness comes from a place of deep contentment, wisdom and living her values.”
The woman admitted she was considering accepting the money to buy “a large plot of land in southern Tasmania to protect it from developers in the future”.
Scott Pape’s response to the mother started off very bluntly: “You’re obviously a weirdo.”
‘Yet your weirdness comes from a place of deep contentment, wisdom, and living your values.
‘You have something that most people will never have: ENOUGH!’
Rather than turn down the sizable inheritance, Pape encouraged the nurse to separate the funds into three accounts.
“The first thing I would do is put a small amount into an online savings account for emergencies… and to fix the oven!” she said.
‘Secondly, I would invest a large amount of money in an ethical index fund, given that you have that tendency.
‘Finally, I would create a private auxiliary fund, which is a kind of charitable trust.’
Pape recommended that women set aside money to match the money their children save for their future home (file image)
Pape explained that the stock fund would allow a mother to match the funds her children set aside for a future home, dollar for dollar, which would incentivize them to save more.
Meanwhile, the PAF could be used to make tax-deductible donations to any charity of the mother or her children’s choice.
“The key is to involve children in deciding where to donate this money,” Pape said.
‘Who knows, maybe some of what you have will rub off on them!’