Over the years I have tried to read as many personal finance books as I could get my hands on. None had as big an impact on my life as David Chilton’s, The Wealthy Barber. Now, more than two decades later, Chilton is back with The Wealthy Barber Returns.
The author claims to be significantly older and only marginally wiser than when he wrote the first book, but he’s fired-up about the state of our finances and offers his unique perspectives on the world of money.
About The Author
David Chilton wrote The Wealthy Barber in 1989, which went on to sell two million copies in Canada. Since then, the mantra of “pay yourself first” has been preached by financial experts around the world. David’s passion is personal finance, and he tries to mix humour and common sense to help people handle their money more wisely. A frequent guest on national TV and radio shows, and a much sought-after speaker, David lives just outside Waterloo, Ontario. For some inexplicable reason he loves the Detroit Red Wings and the Detroit Tigers.
About The Book
I enjoyed reading The Wealthy Barber Returns even more than the original. Gone is the novel format of its predecessor. This book is more about David writing about the state of Canadian finances while offering his own unique words of wisdom about our savings rates, debt levels and investment returns. In the author’s own words, “Essentially it’s just me chatting casually about the world of money. It’s almost as though I’m in your living room except better because, well, I’m not.”
The book is slightly over 200 pages long, but consists of more than 50 short chapters within 2 sections:
- Insights into Savings, Spending and Borrowing
- Random Thoughts on Personal Finance
What I Liked
The author is quick to admit where he got some things wrong in the first book; for example advocating using a Line of Credit for an emergency fund, and foregoing a detailed tracking of your spending as long as you pay yourself first. Chilton readily admits that with our increasing debt-loads and infatuation with “stuff”, not only is a Line of Credit a bad idea, but not tracking our spending is leading to over-consumption and we’re now carrying debt along side of our savings.
I also like Chilton’s take on investing, given that The Wealthy Barber’s focus on mutual funds returning 12-15% was a bit far-fetched (maybe not at the time). Chilton is a big proponent of indexing your portfolio rather than chasing returns through individual stock picking or actively managed mutual funds with high fees.
He does throw us dividend investors a bone by stating, “If you insist on building your own equity portfolio instead of using a mutual fund or ETF, it’s probably wise to emphasize companies that consistently pay a healthy dividend.”
What I Didn’t Like
What’s not to like? Chilton doesn’t pull any punches when discussing the harsh realities of savings, spending and debt. That’s fine with me, most Canadian’s need a dose of reality when it comes to handling their finances. There were a few minor points where I disagreed with the author’s views.
One was Chilton’s absolute detest for using credit cards for everyday spending. I understand his point, that people are probably inclined to spend more if they believe they are getting travel rewards like Air Miles or Aeroplan. But when used responsibly I believe that rewards cards can save most people a few hundred dollars a year.
Final Thoughts
If you enjoyed The Wealthy Barber you will absolutely love The Wealthy Barber Returns. Chilton’s writing style is very unique; his humour and easy-to-understand financial concepts will appeal to beginner’s, and he still offers up enough substance and new ideas to keep the more financially savvy readers engaged.
