The Wealthy Barber Returns: 5 Takeaway Tips

Have you ever read The Wealthy Barber by David Chilton? The year before I graduated from high school, this book on personal finance hit the bookstands with a storm! Over two million copies have been sold in North America, and I think that’s because of its unique fictional format. Here’s how Wikipedia describes the book:

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.

All I can remember from the book is the advice to save 10% of your earnings every year for retirement. As a young person, I can also remember thinking that this was absolutely impossible.

Now that I’m older, personal finance and retirement planning have taken on more of a focus. That’s why I was interested in taking a read of Chilton’s second book, just recently published and on my January bedside table reading, titled The Wealthy Barber Returns.

And last night, I had the opportunity to attend a speaking engagement and author book-signing that was hosted by PC Financial. It was held at the new(ish) Ottawa Convention Centre. I had not yet been inside the Centre, so that alone was interesting. But I also had the chance to catch up with a bunch of folks I hadn’t seen in ages that Kathy Buckworth, a spokesperson for PC Financial, had invited for a little pre-event shindig.

I thought Chilton seemed a little ill at ease with the “smoozing” part of his role before he was to speak. (Although I don’t blame him, I would be too!) The room was fairly large, and completely filled.  But when he hit the stage – Wow! He is an amazing public speaker. One of the best I’ve ever heard, actually.

Yes, my eyes are closed. What of it?

Here are the top 5 messages I received from his talk:

1. You should still be aiming to save 10% of your earnings for long-term investments.
2. Two things that are very dangerous in combination: Lines of credit and renovations. And no, granite is not a necessity for life.
3. Buy a house you can actually afford. Otherwise, you’ll never be able to save.
4. Pay yourself first. Take human temptation out of the equation: use automatic withdrawals via your paycheque or the bank.
5. If you’re starting late and trying to choose between RRSPs or RESPs, choose your own retirement savings.

A bonus, ingenious tip? Chilton believes RESPs are great, and they’re even better when the grandparents are buying them. To get this rolling, bring over some RESP brochures to your parents and say, “Hi, I brought over those brochures you were asking about.” When they look at you puzzled, you then reply, “Oh! Sorry! That was the other grandparents! The in-laws. My mistake.” This, he claims, is a surefire way to get them to volunteer to contribute to the kids’ RESPs. Hee hee!