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Here are 8 key takeaways from the book The Barefoot Investor by Scott Pape that teaches you how to manage personal finances and build wealth.
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Divide your income into bank accounts such as daily expenses (60%), savings (20%), splurging (10%), etc. This ensures balanced spending and saving.
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Use the domino method to pay off your debt by starting with the smallest debt first to build momentum. Avoid unnecessary loans and credit card traps.
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Pape recommends investing in index funds for long-term wealth building and avoiding ‘get-rich-quick’ schemes and stock-picking.
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Choose your financial tools wisely: switch to a low-fee bank, avoid excessive trading fees and select a low-fee, high-performing insurance plan.
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Spend on things that truly matter and avoid unnecessary expenses. Choose a frugal lifestyle but enjoy life to the fullest by making mindful decisions.
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Set a monthly date with your partner or your friend to discuss finances, track progress and ensure accountability in taking actionable steps to build wealth.
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Build an emergency fund with at least thrice the amount of your monthly living expenses to be prepared for any unexpected financial shock.
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After you achieve a financially stable position, give back to your community. Donate, help those in need and show your gratitude by being socially responsible.
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Thanks for reading!
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