"Quite simply the best financial self-help book." --Money Book Club, Book-of-the-Month Club
Even if you consider yourself a financial "basket case," Chilton explains how you can easily put an effective financial plan into action.
In this third edition of one of the biggest-selling financial-planning books ever, David Chilton simplifies the complex puzzles of personal finance and helps you achieve financial independence. With the help of his fictional barber, Roy, and a large dose of humor, Chilton shows you how to take control of your financial future--slowly, steadily, and with sure success. Chilton's plan (detailed in an entertaining story) is no get-rich-quick scheme, but it does make financial independence possible on nothing more than an average salary.
This third edition has been updated with assistance from the Arthur Andersen Corporation.
I like to think I'm a halfway intelligent human being, but an understanding of the financial world has evaded me for longer than I would have liked. I cringe at government paperwork, nod and agree with suggestions at bank meetings, and hand over bank statements to my more money-savvy wife. My brother, an accountant, has tried to break down some key facts for me, but it's always come out as too jargon-filled or has made it seem like excessive effort would be required. The eldritch and arcane world of finance just didn't seem like anything I'd ever master.
I might have continued along with my financial ignorance were it not for my pediatric mentor handing me the slim volume and proclaiming that it had changed his life. The guy hasn't let me down with much before, and I figured another swing wouldn't hurt my chances at understanding what goes on with my bank account.
Happily, I can report that David Chilton's Canadian classic, The Wealthy Barber, has done what financial lectures, slide shows, and personal experience would never have provided: understanding.
Chilton houses financial advice in a surprisingly charming, easy-to-understand, and less than 200 page package. The book distills complex concepts into financial suggestions that are relatively simple to follow. The Wealthy Barber adopts the schtick that three individuals in different financial situations seek advice from a wily, funny, and affluent hair man. I worried that the dialogue and concept would end up being gimmicky and fail to deliver the info I so sorely needed. Not so, as Chilton does a good job of making the dialogue cute and the problems facing our trio relatable.
I couldn't have told you my approach to a mortgage, how to properly handle debt, or an approach to creating a retirement fund before reading this book, but I'd gone through the motions of getting it all done. The Wealthy Barber makes me cringe at some decisions, but also makes me happy to do better in the future through more informed decision making. Though the book is in many ways dated (the LOLs: $15 000 for post-secondary education is considered a reasonable estimate), the principles are sound and applicable with a little updating.
Definitely a useful and surprisingly readable book.
This one might have been better in book (versus audiobook) form. The framing device of an ongoing conversation about financial matters between (obnoxious, faux humorous) people in a barber shop was excruciating. Suddenly, Stephen King's admonitions against adverbs in On Writing made a WHOLE LOT OF SENSE. And the narrator's self-description at the beginning makes him sound like a total jerk--I didn't WANT this guy to be financially successful! However, buried in the dialogue is really good, straightforward, useful financial advice, which is why I kept listening. So, aces on the information, but boo to the sharp pieces of glass on the ground through which one needs to crawl to get the useful bits of information.
This is the first personal finance book I've ever read, and I'm really, really happy to have done it. By presenting a boring topic in a conversational format--including lots of baseball chiding--Chilton makes personal finance accessible to anyone and everyone.
He presents a really simple system that anyone can follow, starting today, to get your finances in order. Put 10% into a "I'm going to be rich someday" fund. Put another 10%+ into retirement. Do whatever you want with the rest (essentially). He even describes dollar cost averaging and the power of compound interest so that the reader can left really understanding the importance of both.
What I found really interesting were the sections on insurance, wills, and other elements that I consider to be in the weeds. A few years ago I started taking out some whole life insurance to supplement my company's group policy, but, according to Chilton, I shouldn't have been doing that at all, for reasons that are made really clear in the book!
I do, however, fundamentally disagree with his stance on mutual funds. I think if you're a layman, you should be investing in indexed funds, no question. Absolutely no question. This is the one major knock I have on the book.
If you're in your 20s, I'd recommend picking both this up and I Will Teach You To Be Rich, which is more current and relevant to 20-somethings in the 2000s.
This book has a cult-following amongst Canadians, and now that I've read it, I know why. It was first published in 1989, and is written like a "novel", except with more dialogue than any book I've ever read.
Here's the set-up: 3 twenty-somethings go to a barber for financial advice. They go eight times (there are each time is a chapter), and have seven lessons with the Wealthy Barber, Ron, who gives them financial advice.
1. Save 10% of your income for long-term growth. Pay yourself first. He talks about mutual funds and investing here too. My favourite line from this chapter is when he talks about why it's harder to budget for individuals than it is for businesses: "...for too many people, a want becomes a need." 2. Prepare for your death. Have a will, and, if you have dependents, have life insurance. 3. Save for your retirement. Put as much into your RRSPs as you can-- this is, of course, in addition to your 10%. Start young, so you can take advantage of compounding interest. 4. Think about buying a home. I loved this chapter. I'm in no position to buy a home, but I so often feel pressured to, even though it's not the right decision for me. Chilton writes: "Let me start by saying that whoever the ubiquitous 'they' are who say 'renting is like throwing your money away' aren't accurate. I've read that opinion in several well-known financial planning guides, and I just don't know where the authors are coming from."
That's right. He later describes home ownership (and paying a mortgage) as "the ultimate forced-savings program", and talks more about mortgages, but I appreciated that he wasn't like: "Buy, buy, buy!" 5. Saving, spending and credit management. This isn't "saving" like the RRSPs and the 10% fund, this is saving like for a trip. Don't spend too much on your credit cards, and save to buy something before you buy it-- don't just pay it back. A dollar saved is worth more than a dollar earned, because a dollar saved is an after-tax dollar. Be wise with your after-tax money. 6. Investment and income tax. If you have debt, pay off the loan with the highest interest rate first. Credit cards before mortgages. Investing is hard. 7. RESPs. I don't remember too much of this, because I don't have kids. But there was some other advice in the chapter: emergency funds, disability insurance, and staying informed.
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.
I think this is such an important book for those that are interested in learning (in relatively simple language) how to take control of your financial planning for the future and present. Covering topics of how to save/budget, tax planning, retirement accounts and what you need to retire, investment options, debt, etc. These key principles that are discussed are in a conversational manner where it is easy to follow and grasp the concepts. Personally, I have a background in finance so it was a nice refresher to the concepts and accounts, however the tips and tricks provided by 'the wealthy barber' are relevant to this timeframe in my life. I would recommend this to those that have little knowledge or would like to increase their understanding on personal finance as it is a good reference for each reader to go forward and do their own research into their personal financial situation.
A must read for any friend, it approaches personal finance in a nonchalant, meaningful, practical and funny way which makes the read a breeze. I wanted to read the book for its content on personal finances, but I ended up being caught in the story and enjoying it for its storytelling.
There is some very good, general information here that just about anyone can benefit from. I did, however, hate the presentation. It's all presented in a painfully cheesy conversation between a barber, 3 30-somethings in need of knowledge, and a couple of old farts who live in the barber's shop. It made me want to slap someone.
Still, I must recommend the book for there was good information inside. It's fairly well rounded, providing value to just about anyone.
This book could be shorter than it sounds. A few Google searches about the summaries would be good enough. . . . . . . . . Summaries of Each Chapter Chapter 1- The Financial Illiterate
The author gives a description of what he enjoys and what he likes to do in his spare time. For example, he enjoys the month of April for 4 reasons: the NBA playoffs, NHL playoffs, the start of MLB season, and April is the start of the Golf season. He then introduces his wife, and the fact she is expecting a baby soon. Both of them are excited for the delivery. The author admits that he is completely clueless when it comes to managing money. With a wife and a baby on the way, David needs to make himself a very literate financial individual. And fast.
Chapter 2- A Surprising Referral
The author talks to his father about saving money and paying for big purchases such as vehicles. His father tells him that he never bought anything without saving for it first. There was one thing that the author's father did borrow money for, which was a house. He assumed a 30 year mortgage. He tells his son that he became financially literate from the local barber named Roy. David decides to pay a visit to Roy so he can become financially literate.
Chapter 3- The Wealthy Barber
David goes with his sister named Cathy and Cathy's husband, Tom to visit Roy. He tells them how they handle their income and assets will determine their success. To ensure this, he tells them they must manage their cash flow. He promises by the end of 7 months all of them will be on the road to prosperity.
Chapter 4- The Ten Percent Solution
Roy tells them his story of becoming wealthy and he says an old man once told him to "Invest ten percent of all you make for long term growth." Roy goes on to tell them that if they saved 30 dollars a month from age 18 to age 65 at 15% annual return, they would end up with 2 million dollars.
Chapter 5- Wills, Life, Insurance, and Responsibility
Wills are important. If you die without a will things will not work out as planned. When there is not a will, the estate assets are frozen and the court manages it. No thought is given to the deceased or the family of the deceased. Each state as different rules. Donations, scholarships, gifts for children, none of it would be given to the people it was intended for. A living will is a document that states that if a person is ill they do not have to be kept alive but machines. People should buy life insurance so that wen they die, they can allow for their financial affairs to wind down and provide a standard of living for their dependents. it guarantees dependence and is financial protection. Your living estate and insurance must provide enough money to cover all debt, future obligations, and support dependents.
Chapter 6- Planning for Retirement
We all plan for the future and should plan to save for vehicles for retirement. Roy says that retirement should be the best years of your life and should be planned in advance while you are younger. You must accumulate substantial savings before you retire so that you can stay comfortable. Roy also goes on to say that Social Security is intended to be a safety net for retired Americans or an augmentation of retirement income, investment assets or even both.
Chapter 7- Home Sweet Home
Roy tells Dave and Cathy that renting is not throwing money away. Shelter is one of the biggest necessities in life and you need a place to live. He goes on by saying that there are some wide misconceptions about renting. There are 2 things that can lead to an inability to carry debt: rising interest rates and layoffs, wage cuts, and shut downs. The reason that these are feasible to occur is that many people have been living beyond their means for an extended amount of time and it will eventually take a toll on the economy.
Chapter 8- Saving Savvy
Dave comes back to the barber shop after having a new baby and purchasing and moving into a new home (which he spent 10,000 less than he expected to). Roy gives a lesson on the merits of thrift. He says thrift is exercising a degree of self-control. He goes on to say that it is virtually impossible to budget perfectly because wants become needs and the budget goes out the window. "A dollar saved is 2 dollars earned."
Chapter 9- Insights into Investment and Income Tax
Roy's lesson is about how to reduce annual income tax. He says that an investor is doomed if they do not have an eye for failure and discipline. With out discipline you are a sheep heading toward slaughter. Finally you should do some reading. Skim a few books, and become familiar with common mistakes when doing taxes.
Chapter 10- Graduation
Finally you need to keep an emergency fund for if and when you become out of work. Life will be less stressful knowing that you have a little extra saved a way for a rainy day.
Really good starting point for financial literacy.
Highlights of the book are that: 1) our school system is failing miserably at teaching youth about how to handle their personal finances 2) it’s never too late to start planning for a better financial future 3) pay yourself first (take money out of your pay check automatically before you ever see it and put it into an investment account).
This book’s greatest strength also happens to be somewhat of a weakness. Chilton’s financial tips, framed within dialogue, are easily digestible and accessible, but because they are framed in dialogue, what could be summarized easily in a page takes a whole chapter.
As a financial novice, I found this book quite helpful and practical, despite the often unnecessarily protracted dialogue. As a lover of quality literature, I found this book quite horrendous. But I won’t be so petty as to go on and on about adverbs and the jarring insertions of the author’s voice in the present tense and all that—it is, after all, a book about financial planning.
The jokes are so extremely bad. But at the same time that is why they are funny.
finally got around to this one after much gentle, yet consistent urging of my father, The Wealthy Barber is a thinly veiled lesson in personal finance. aside from a few witty remarks from characters in between the barber's lectures, the book is plainly an essential guide to simply and properly managing your money. a very important read, but honestly not an engaging one. would recommend for educational purposes only, not enjoyment.
I was among the first to read and review this book for the finance section of an Ontario newspaper when it was first released back in 1989. David Chilton lived in a nearby city and was pushing hard to get reviews. I loved it because it took the dry lessons of personal finance and turned them into a parable about a barber who knew the secret to financial success. I knew the book would be a hit and said so. The rest is history.
What a great read. For a book that covered several person finance topics, it presented it in a story-like fashion that made it hard to put down. I'm also glad it covered some lesser spoken of topics like wills, life insurance and taxes that aren't as glamourous or frequently talked about as the investing topics.
Now for why its not 5 stars. 1. Published in 1989, the book is out of date. I know he has since written a sequel, "The Wealthy Barber Returns" which I have also read, but I couldn't recommend this book as an intro to personal finance for the fact that many lessons, tax laws, and other rules are outdated. The TFSA wasn't even around when this was written. This isn't of any fault to the author, its just out of date now.
2. The author suggests that the best way to pick an investment fund is by selecting the mutual fund manager with the best expertise and recent track record. Although this was the prevailing sentiment at the time, there was evidence in '89, and definitely is overwhelming evidence today that index funds outperform actively managed mutual funds. Any modern personal finance book worth its salt will recommend diversified index mutual funds or ETFs.
As a book given to me as a gift by my mother, I had relatively low expectations. That was a good thing. This book is essentially a financial self-help book thinly veiled in multiple conversations multiple people have with, you guessed it, a wealthy barber. The financial advice is, in fact, useful. However, the content is relatively dry and could be shared with the reader much more efficiently through a different means than this book. Saying that, I'd recommend this book to those who need some common-sense financial advice but are scared to expand their reading past novels.
One of the better financial strategy books I’ve read. It provides clear cut examples for setting yourself up well with a prosperous financial future. Clearly the no-BS way to long term success.
Forced Savings, Dollar-Cost Averaging & Compound Interest are truly the secrets to financial freedom.
I specifically loved Chilton’s view and perspective on Renting versus Owning. It was a very valuable discussion that I have truly been needing. Excellent. Highly Recommend to anyone looking to buy a home or rental property! Read this book! Even just for Chapter 7!
This book was a great jumping off point to help me begin to understand finance and investment. Written in the format of a novel, it has lots of great advice that makes taking control of your finances a manageable and undaunting task for all. Written in 1989, it is definitely quite dated - especially in chapters dealing with purchasing a house for $75,000 - however most of the advice on long-term investment and compounding interest is still applicable 30 years later. In it's time, a 5/5. Reading 30 years later and in Canada where the tax systems are different, it was a 4/5 for me. I am excited to follow it up with part two.
Most of the information here are only useful if you're a complete novice, and live in the US. And even if you are, you're better off watching Graham Stephan's videos on YouTube. However, if you're not financially illiterate, and do not live in the US, then I'd recommend that you look for another personal finance book to read.
A good introduction to saving money - both short term and long term. My goal was to demystify all the finance lingo. This book didn't necessarily do that but it's a good spring board into the finance world.
3.5 stars! Was told to read this book by an executive at my company. A lot of the information I already knew but would have been very helpful a few years ago as an introduction into all things finance. It is also very easy to read for the complex topics that it covers.
You can google the financial advice, which I would argue is pretty good, but the book has little boys club sexisms throughout that make you feel like you're not in the same class of people as those that are able to save 10% of their income. I get why it's popular. Look up a summary.
When you go play golf every weekend and is more worried about the local baseball team than your own job and values a vacation so much you’ll get a loan to fund it… this book is for you If you’re in 2023 - then this book is just an image of what it could have been if you were born 4 decades ago..