The Wealthy Barber: The Common Sense Guide to Successful Financial Planning) is afinancial planningbook franchise byCanadianauthorDavid Chilton. The first book in the series was in thebusiness fablegenre, using the story of fictional characters to convey financial advice.
The book is structured around a story of three people in their late 20s visiting Roy, the title character, for lessons in financial planning. Each chapter of the book describes a different visit and a different element of financial planning. Each month along with their lessons the three students are required to start carrying out the actions prescribed by Roy. In addition to these individuals, Roy also shares his financial knowledge with the customers of his barber shop.
The story is set primarily inSarnia, Ontario, where Roy has been operating a barber shop for several decades. As a young man, Roy had planned to become a lawyer, but those plans are derailed. He ends up taking over his fathers barber shop. Worried about money, Roy visits Mr. White, one of the towns wealthiest men, and asks for advice on financial planning. This advice paves the way for Roys accumulating wealth.
The basis of the book is Roys advice to save 10 per cent of all that you earn and invest it for long-term growth. In that, it draws from the advice first set forth inThe Richest Man in Babylon. Subsequent chapters discuss wills and life insurance,RRSPs, buying a home, income tax and saving and spending.
Roy (and thus Chilton) is not as harshly anti-debt as some other authors, likeDave Ramsey. However Roy does advise that extra money should go to pay off debt, and that credit cards areanathemato well-run personal finances. Roy does believe that if you are investing 10% and maxing out your RRSP, day-to-day spending doesnt matter too much to your overall financial picture.
Dave is an expecting father who realizes he is not financially prepared. His worries lead him to seek financial advice from the local barber.
Cathy is already rich but relates to the audience members who dont necessarily understand the market and how it works, thus do not generally invest their earnings.
Roy, the barber, poses as the financial expert who has become wealthy simply by being wary of his money and intelligently spending, saving and investing it.1
In the sequel,The Wealthy Barber Returns(full titleThe Wealthy Barber Returns: Significantly Older and Marginally Wiser, David Chilton Offers His Unique Perspectives on the World of Money), Chilton dispenses with the device of characters, representing his advice this time in his own voice. The book is divided into 54 short chapters, dispensing advice on miscellaneous topics in savings and investments, with a particular focus on avoiding reckless spending behaviour.2
The main idea is to accept that one cannot have everything and avoid impulse buying by removing temptations which trigger overspending. This may be achieved through analysis and modification of ones personal behaviour (if you overspend on clothes, stop going to the mall and reading fashion blogs), and avoiding bad debt in the form of credit cards which carry very high interest charges, though some debt may be necessary (mortgages for example). Ultimately, wealth depends more on savings than income. Chiltons bottom line, which is emphasized in his first book as well, is that we should all save 10-15% of our earnings.3
The Wealthy Barber: The Common Sense Guide to Successful Financial Planning
The Wealthy Barber Returns: Significantly Older and Marginally Wiser, David Chilton Offers His Unique Perspectives on the World of Money
. Waterloo, ON: Financial Awareness Corporation. 2011.ISBN
Hamm, Trent (January 20, 2007).Review: The Wealthy Barber. The Simple Dollar.
Carrick, Rob (September 9, 2011).The Wealthy Barber Returns. The Globe and Mail.
Yee, Krystal.5 essential money lessons from The Wealthy Barber Returns. Canadian Living.
This page was last edited on 25 December 2018, at 20:06