Barefoot Investor, Scott Pape with advice for Australian PhD students

Safety shoes and the Barefoot Investor

Part 1: making the best of being broke but brainy

“Young people who invest in their education almost feel like they can’t sit at the big people’s table at Christmas time. They don’t own property. They’re just starting out. But their friends, who may have dropped out of school at year 10 to be tradies, own three houses at the same time their student mates are still struggling to pay the bond.”

Sounds familiar doesn’t it? Anyone who’s taken the plunge into a PhD knows the drill – more study, a scholarship valued below the poverty line, four years without superannuation contributions and the feeling that you’re dropping behind financially. It’s frustrating, to say the least. Scientists are supposed to be important to the Clever Country, and this is what we have to do?

The Barefoot Investor, better known as Scott Pape and the man educating GenY about finance, gave Science Hub an exclusive interview on matters monetary. While his last foray into the lab was a year 8 experiment with Bunsen burners, he holds the scientific world in high regard.

“The most interesting people I know don’t have all the status symbols around them. They don’t feel they need them. If you’re doing a PhD, you’re an interesting person anyway. You’re doing really interesting work. That would be the first thing to remember.”

In part one of our interview, the Barefoot Investor encourages us to make the best of our situation as PhD students – learn early about good financial management, and appreciate the value of money when you’re earning very little of it.

“Personal finance is 20% knowledge and 80% behaviour. So while you’re struggling and only just getting through – living off $10 pot and parma nights – you’re setting in place financial behaviours that will last you a life time.

“You have to understand that education is an investment, not just in a career, but in you as a person. Although you need more money – I suppose we all could – you’re surviving. When you become a high income earner, you’ll look back on your student days and know that you don’t need the materialistic trophies around you.”

“And appreciate just how good things are,” Pape continues. “If you’re feeling down in the dumps, go to www.kiva.org. Loan $25 to a struggling entrepreneur in the developing world. She’ll pay you back at $3 a month and you’ll see your money being used to build a business that supports a whole family, and therefore a whole community. It puts the little money you have back into perspective.”

The second piece of advice Pape offers is to learn how to manage your money. He speaks from personal experience.

“I’ve been a stock broker and company director. I’ve met lawyers and doctors, scientists and dentists, who don’t have a cracker to put together at 30 or 40. They just don’t have any money. But I’ve also met cleaners who live comfortably and have a really good life.

“Income doesn’t equal wealth. It’s about being smart with your money and the sooner you learn how to manage it, the greater the compounding of that knowledge. You just have to set in force a plan that will get you to your main goal, whatever that may be.”

Next month, in our part two of our interview, Scott gives us the practical advice needed to be more financially secure, even as PhD students.