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71 reviews for:
The Wealthy Barber: The Common Sense Guide to Successful Financial Planning
David Chilton
3.78 AVERAGE
71 reviews for:
The Wealthy Barber: The Common Sense Guide to Successful Financial Planning
David Chilton
3.78 AVERAGE
hopeful
informative
inspiring
lighthearted
reflective
fast-paced
informative
slow-paced
Financial advice written so regular people can understand it, told as conversations between a wealthy barber and people who'd like to learn his secrets.
A little dated (especially in regards to active fund management, taxes, and retirement accounts), so try to get your hands on the newer edition.
Overall, I did like the approach of narrative non-fiction and the humor surrounding it. Plus, the overall advice given seems sound.
Overall, I did like the approach of narrative non-fiction and the humor surrounding it. Plus, the overall advice given seems sound.
funny
informative
lighthearted
medium-paced
great intro to financial planning, looking forward to implementing some of this soon!
I like financial planning books, but as a single income no kids person, this one didn't speak to me as some did.
“The Wealthy Barber” attempts to show that anyone can become financially independent, regardless of their level of income.
The story takes place in a barbershop. The narrator, his best friend and his sister have been referred to the local barber, Roy for financial advice. Roy has achieved millionaire status by applying basic personal finance management principles. These are laid out in the rest of the book.
Key Takeaways
1. Save 10% of income for long term growth. (this is intended to help you afford the “finer” things in life later)
a. Put this amount in equity focused mutual funds
b. Dollar cost averaging – means that even when the fund price is down, you can buy more shares. The market will recover and you will have more shares at a higher price.
c. Problems with mutual funds: market fluctuations (solved through dollar cost averaging), timing (since you’re consistently contributing to a fund, this doesn’t really matter)
d. How to choose a fund? 1 – look at past performance of fund over long periods; 2 – make sure the person responsible for good past returns is still there; 3 – invest in a global fund that invests in a range of industries; 4 – pay attention to the commission; 5 – look for funds that offer value and growth
e. Consider real estate investing as well, but not in the earlier stages of life.
2. Plan for the future by ensuring you have a will and a life insurance policy, if necessary
a. Even single people ought to have wills determining who will inherit their estate
b. Life insurance is necessary only if you have dependents. It provides a way to maintain the lifestyle of your dependents and cover the costs of your burial. Basically, single people and children should have no need for life insurance
c. Difference between term insurance and cash-value insurance. Use term insurance – this expires after a period eg 20 years. If following the other principles, your estate should grow so that you don’t need to renew it after it expires
d. Put as much as you can into retirement now. If possible, put as much as you can into your employer’s plan – if they offer one.
3. You don’t necessarily need to own a home
a. Property is a good investment if you are going to sell. If not, the appreciation in value is rather meaningless
b. Also it might not be appropriate for people just starting out or people who can’t appropriately maintain their homes. In those cases, it may be better to rent
c. Only makes sense if the mortgage is going to be less or the same as the equivalent rental. But how likely is this? Not very
d. Shorter term mortgages are better, but it might not be smart to pay ahead on your mortgage.
4. Budget…or don’t – just so long as you follow the other rules, you will be fine
a. For things besides home mortgages, try to always pay cash.
What did I like about the book?
I found the book to be immensely practical and immediately actionable, for the most part.
Related to this, it was very easy to read. The author did well to avoid using complex jargon. When unfamiliar terms were used, these were explained well.
What I didn’t like?
Sigh. The problem with books like this is they are written almost strictly for an American audience. While this is no fault on the writer’s part, I struggled to relate to many of the laws, policies and analogies given.
Which leads me to my next issue with Chilton’s writing: the dialogue was painful to read. In an attempt to simplify and give the effect of a casual conversation, the banter between the characters is dry and unfunny. If I wasn’t rolling my eyes, I was restraining myself from tearing them out.
I also think it will be difficult to apply all of the advice laid out in the book directly to my current situation.
“Huh? But didn’t you just say…”
Yes, I did.
But here’s the thing: while the book IS practical, it assumes (like most personal finance titles do) that all things are held equal. No economic turmoil, no personal tragedy or long term obligations (other than student and consumer debt) seem to be factored in here.
Finally, the book is dated. The first edition was published in the 1980’s. Nuff said.
In the end, I would recommend Dave Ramsey’s “The Total Money Makeover” for a solid personal finance guide. While “The Wealthy Barber” is okay, it’s not really ground-breaking in any way and suffers from the weaknesses outlined above.
The story takes place in a barbershop. The narrator, his best friend and his sister have been referred to the local barber, Roy for financial advice. Roy has achieved millionaire status by applying basic personal finance management principles. These are laid out in the rest of the book.
Key Takeaways
1. Save 10% of income for long term growth. (this is intended to help you afford the “finer” things in life later)
a. Put this amount in equity focused mutual funds
b. Dollar cost averaging – means that even when the fund price is down, you can buy more shares. The market will recover and you will have more shares at a higher price.
c. Problems with mutual funds: market fluctuations (solved through dollar cost averaging), timing (since you’re consistently contributing to a fund, this doesn’t really matter)
d. How to choose a fund? 1 – look at past performance of fund over long periods; 2 – make sure the person responsible for good past returns is still there; 3 – invest in a global fund that invests in a range of industries; 4 – pay attention to the commission; 5 – look for funds that offer value and growth
e. Consider real estate investing as well, but not in the earlier stages of life.
2. Plan for the future by ensuring you have a will and a life insurance policy, if necessary
a. Even single people ought to have wills determining who will inherit their estate
b. Life insurance is necessary only if you have dependents. It provides a way to maintain the lifestyle of your dependents and cover the costs of your burial. Basically, single people and children should have no need for life insurance
c. Difference between term insurance and cash-value insurance. Use term insurance – this expires after a period eg 20 years. If following the other principles, your estate should grow so that you don’t need to renew it after it expires
d. Put as much as you can into retirement now. If possible, put as much as you can into your employer’s plan – if they offer one.
3. You don’t necessarily need to own a home
a. Property is a good investment if you are going to sell. If not, the appreciation in value is rather meaningless
b. Also it might not be appropriate for people just starting out or people who can’t appropriately maintain their homes. In those cases, it may be better to rent
c. Only makes sense if the mortgage is going to be less or the same as the equivalent rental. But how likely is this? Not very
d. Shorter term mortgages are better, but it might not be smart to pay ahead on your mortgage.
4. Budget…or don’t – just so long as you follow the other rules, you will be fine
a. For things besides home mortgages, try to always pay cash.
What did I like about the book?
I found the book to be immensely practical and immediately actionable, for the most part.
Related to this, it was very easy to read. The author did well to avoid using complex jargon. When unfamiliar terms were used, these were explained well.
What I didn’t like?
Sigh. The problem with books like this is they are written almost strictly for an American audience. While this is no fault on the writer’s part, I struggled to relate to many of the laws, policies and analogies given.
Which leads me to my next issue with Chilton’s writing: the dialogue was painful to read. In an attempt to simplify and give the effect of a casual conversation, the banter between the characters is dry and unfunny. If I wasn’t rolling my eyes, I was restraining myself from tearing them out.
I also think it will be difficult to apply all of the advice laid out in the book directly to my current situation.
“Huh? But didn’t you just say…”
Yes, I did.
But here’s the thing: while the book IS practical, it assumes (like most personal finance titles do) that all things are held equal. No economic turmoil, no personal tragedy or long term obligations (other than student and consumer debt) seem to be factored in here.
Finally, the book is dated. The first edition was published in the 1980’s. Nuff said.
In the end, I would recommend Dave Ramsey’s “The Total Money Makeover” for a solid personal finance guide. While “The Wealthy Barber” is okay, it’s not really ground-breaking in any way and suffers from the weaknesses outlined above.
[3.5 stars]
The Wealthy Barber is a book that is thrown at all Canadians who are interested in financial planning and I definitely understand why. It’s easy to follow with its narrative format and his “common sense” philosophy that advocates for paying yourself first above all else is something that everyone could get down with.
Unfortunately, I think the first edition of this book was plagued by its time. It’s a book written pre-internet, pre-2008, and pre-COVID; therefore, I found myself second guessing a lot of the information I was reading. Additionally, the goofy novel style definitely read like a 90s PSA that your teacher would play on a wheel-in TV. I understand the hype, but I think for someone my age (there were a lot of chapters about things that I will not have to worry about for awhile like wills and life insurance) and someone in my generation, there are better financial planning books out there.
The Wealthy Barber is a book that is thrown at all Canadians who are interested in financial planning and I definitely understand why. It’s easy to follow with its narrative format and his “common sense” philosophy that advocates for paying yourself first above all else is something that everyone could get down with.
Unfortunately, I think the first edition of this book was plagued by its time. It’s a book written pre-internet, pre-2008, and pre-COVID; therefore, I found myself second guessing a lot of the information I was reading. Additionally, the goofy novel style definitely read like a 90s PSA that your teacher would play on a wheel-in TV. I understand the hype, but I think for someone my age (there were a lot of chapters about things that I will not have to worry about for awhile like wills and life insurance) and someone in my generation, there are better financial planning books out there.
I give this about 3.5 stars. It isn't a well-written book from a fictional perspective, but it wasn't really meant to be taken in as fiction in the first place. I think Chilton was brilliant for making a "financial self-help book" something more digestible to the average financially-illiterate Canadian. However, I still have to say that the extra, meaningless dialogue and interactions between characters made me eye-roll more than I normally allow before I put the book in my donation box. I get that Chilton wanted readers to be able to identify with a character in some way, but it was poorly executed in my opinion. There's sports talk. There are poor attempts at not being sexist that end up just feeling like jokes. There are dated references (my fault for being young I suppose). That's really all I can remember from all my skimming I did when I encountered those passages.
BUT! The financial bits that you actually read the book for are good and I liked the different perspectives each character gave as to drive the point that there is no one-size-fits-all answer to how you should plan your finances. I'm glad I read this as my first step to understanding how to plan my finances as I get older and I now think everyone should read this, or something maybe more recently published, before they finish their undergrad at the very least. While some of the characters in the book dreamed of becoming millionaires, I just want to be able to feel like I can live comfortably in the future, especially as I pursue a career that isn't known to make large amounts.
BUT! The financial bits that you actually read the book for are good and I liked the different perspectives each character gave as to drive the point that there is no one-size-fits-all answer to how you should plan your finances. I'm glad I read this as my first step to understanding how to plan my finances as I get older and I now think everyone should read this, or something maybe more recently published, before they finish their undergrad at the very least. While some of the characters in the book dreamed of becoming millionaires, I just want to be able to feel like I can live comfortably in the future, especially as I pursue a career that isn't known to make large amounts.
This was recommended to me when I said "I know nothing about finances or investing and I want to learn" but I'm honestly not sure why because it's SO dated. Even I know the maximum annual contribution to an IRA has changed since 1998.
But being dated is not the worst part. You know those employee training videos from the 90s where they hire a friend with nice hair and a former frat boy who took drama in college and force them to convey a point through stilted dialogue peppered with dreadful jokes? This is that in book form. It's. Awful. Add in a dash of misogyny (apparently it was still ok to body shame pregnant women in the late 90s and just out and say that you preferred a son because you wouldn't be able to relate to a daughter???), combine it with the author's clearly high opinion of his wit and mocking of the sister who makes more in a year than he and his dad combined (which leaves me wondering where is HER book???), and you have...The Wealthy Barber.
Ok, so it's that bad, then why not rate it 1 star instead of 2? Because BECAUSE two things... 1. There is some evergreen good advice in here that is not completely irrelevant (although it becomes irrelevant the moment you start talking specifics because every law concerning everything from mortages to tax brackets has significantly changed), it's just that it can be found in other more current, less cringe-worthy sources.
But 2. This book does do something that I haven't seen other financial planning or investing advice books do. I was already doing this, so it's not revelatory, but I was glad to see it all the same. This book does NOT tell you to live an ascetic life and have no fun so that you can retire and live it up. No, finally, this book honors that if you ARE saving for retirement, if you DON'T have debt other than mortgage or education, then why the heck are you budgeting yourself down to pennies every month and waiting to live your life until you're 75? Live now. I have watched all my biological grandparents reach old age, retire, and be shocked and devastated to discover they didn't have the health, knowledge, or travel buddy to do all the things they had promised themselves they would do once they retired. They subsequently had a boat load of money and a lot of regrets. While saving makes sense, saving to the point of just waiting for the day you retire to start enjoying life has always seemed backward to me. I'm grateful to this book for pointing this out.
But there, you just got all you needed to know from my review sooooooo...read it if you really love dad jokes, I guess.
But being dated is not the worst part. You know those employee training videos from the 90s where they hire a friend with nice hair and a former frat boy who took drama in college and force them to convey a point through stilted dialogue peppered with dreadful jokes? This is that in book form. It's. Awful. Add in a dash of misogyny (apparently it was still ok to body shame pregnant women in the late 90s and just out and say that you preferred a son because you wouldn't be able to relate to a daughter???), combine it with the author's clearly high opinion of his wit and mocking of the sister who makes more in a year than he and his dad combined (which leaves me wondering where is HER book???), and you have...The Wealthy Barber.
Ok, so it's that bad, then why not rate it 1 star instead of 2? Because BECAUSE two things... 1. There is some evergreen good advice in here that is not completely irrelevant (although it becomes irrelevant the moment you start talking specifics because every law concerning everything from mortages to tax brackets has significantly changed), it's just that it can be found in other more current, less cringe-worthy sources.
But 2. This book does do something that I haven't seen other financial planning or investing advice books do. I was already doing this, so it's not revelatory, but I was glad to see it all the same. This book does NOT tell you to live an ascetic life and have no fun so that you can retire and live it up. No, finally, this book honors that if you ARE saving for retirement, if you DON'T have debt other than mortgage or education, then why the heck are you budgeting yourself down to pennies every month and waiting to live your life until you're 75? Live now. I have watched all my biological grandparents reach old age, retire, and be shocked and devastated to discover they didn't have the health, knowledge, or travel buddy to do all the things they had promised themselves they would do once they retired. They subsequently had a boat load of money and a lot of regrets. While saving makes sense, saving to the point of just waiting for the day you retire to start enjoying life has always seemed backward to me. I'm grateful to this book for pointing this out.
But there, you just got all you needed to know from my review sooooooo...read it if you really love dad jokes, I guess.