Transcription of The Wealthy Barber Returns
1 DaveChiltonistheonlyguywhocaneffectively teachyouthewaytofinancialsecurityusingOs carWilde,evolution, ,itwilleasemymother smind,andforthatIwillbeeternallygrateful . GeorgeStroumboulopoulos,CBCHost Ifyou vealwaysthoughtofmoneyasadryanddustysubj ect, reatit, ,too!Ithoroughlyenjoyedthisbook! GailVaz-Oxlade,TVHostofTilDebtDoUsPartan dFinancialAuthor slong-awaitedTheWealthyBarberReturns. JonathanChevreau,NationalPostColumnistan dAuthorofFindependenceDay sdowntoearth,funtoreadandwisetoallthemis takespeoplemakeinmanagingmoney. RobCarrick,PersonalFinanceColumnist,TheG lobeandMail Fromthemanwhoencouragedmillionsofpeoplet osaveforthefuture, sfunny,heartfeltandtimelybook. PatForan,CTVNews EllenRoseman, , , , , ,Davealsopublishedthebestsellingcook-boo ksLooneyspoons,CrazyPlatesandEat,Shrink& BeMerry! ,guiltfinallyoverwhelmedDaveandheleftthe sisters ,however,remainstheareaofpersonalfinance , ,andamuchsought-afterspeaker,Davelivesju stoutsideWaterloo, TheWealthyBarberReturnsshouldbeonthedesk ofeverypolitician,chief, ChiefClarenceLouie,CEO,OsoyoosIndianBand DevelopmentCorp.
2 IseldomendorsebooksbutI ,practicaladvicewritteninaclear, ,likemostCanadians,arelookingforwaystoim proveyourfinancialsituation,thisisthepla cetostart. MalcolmHamilton,Partner,Mercer Brilliant! sideasintoourfinanciallives,we llbemuchricherforitandnotmerelyinmonetar yterms. RamBalakrishnan, Chilton sgood,old-fashionedadviceandfreshinsight swillhelpyouspend, ,punchystyleensuresthatyouwillbenefitfro mhisseasonedwisdomintobothwhatworksandwh atdoesn t. TalbotStevens,FinancialAuthorandSpeaker$ :Layout 1 12/17/13 1:38 PM Page 1 through the world of personal finance will help a lot of people. I loved it! Amanda Lang, CBC Senior Business Correspondent The Wealthy Barber ReturnsSignificantly Older and Marginally Wiser, Dave Chilton Offers His Unique Perspectives on the World of Money David Chilton More than 2 million copies of The Wealthy Barber sold in CanadaThe Wealthy Barber ReturnsThis page has been intentionally left blank.
3 Copyright 2011 by David Barr Chilton All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system, without permission in writing from the publisher. Library and Archives Canada Cataloguing in Publication Chilton, David Barr, 1961 The Wealthy Barber Returns : significantly older and marginally wiser, Dave Chilton offers his unique perspectives on the world of money / David Chilton. Includes bibliographical references. Issued also in electronic and audio formats. ISBN 978-0-9683947-4-8 1. Finance, Personal. I. Title. 2011 01 C2010-907932-9 Edited by Susan Chilton and Fina Scroppo Book design and production by photographed by Terry Manzo The following information is intended as a general reference tool for understanding the underlying principles and practices of the subject matter covered.
4 The opinions and ideas expressed herein are solely those of the author. The author and publisher are not engaged in rendering legal, accounting, tax, insurance, financial, investment or other professional advice or services in this publication. The publication is not intended to provide a basis for action in particular circumstances without consideration by a com-petent professional. The strategies outlined in this book may not be suitable for every individual, and are not guaranteed or warrantied to produce any particular results. Further, any examples or sample forms presented are intended only as illustrations. The author, publisher and their agents assume no responsibility for errors or omissions and expressly disclaim any responsibility for any liability, loss or risk, personal or other-wise, which is incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this book.
5 All inquiries should be addressed to: Financial Awareness Corp. 2 1241 Weber St. E., Kitchener, Ontario N2A 1C2 519-747-2298 1-800-665-3913 you re interested in bulk purchases of The Wealthy Barber Returns , we offer an aggressive discount schedule. Please call us at one of the above numbers. Printed in Canada Printed on 100% post-consumer recycled paperThe Wealthy Barber ReturnsSignificantly Older and Marginally Wiser, Dave Chilton Offers His Unique Perspectives on the World of MoneyThis page has been intentionally left blank. This page has been intentionally left blank. vDedication I VE MADE A LOT OF MISTAKES in my life, but for reasons beyond my control, I somehow managed to follow the best advice ever given: Choose your parents wisely! My mom and dad have been, and continue to be, hugely positive influences on me. As important, they are the ultimate grandparents to my children, providing not only unconditional love and support, but also strong examples of living with integrity.
6 To my dismay, how-ever, in their retirement years they ve spent a tremendous amount of their hard-earned money on trips to far-off lands, lessening my potential inheritance considerably. I have pointed out that the Discovery Channel in high def is as good as being there, yet off they go on another cruise or tour. Nobody s they re close! So, for all they ve done for me, I dedicate this book to my mom and dad. This, despite the fact that after The Wealthy Barber became successful, my shocked father, when asked in an interview whether he and my mom were worried that I would be a one-hit wonder, responded, That s one hit more than we thought he d have. This page has been intentionally left blank. Introduction UNTIL RECENTLY, I BELIEVED I would never write another personal-finance book. Luck played such a huge role in The Wealthy Barber s success that I didn t want to tempt fate.
7 So what changed my mind? Frustration. After watching Canadians savings rates plunge, debt levels sky-rocket and investment Returns consistently disappoint over the last decade, I was pulling my hair out. I wondered, How can I help? I m hopeful that The Wealthy Barber Returns will answer that question. Although it doesn t use its predecessor s novel format (yes, that s a generous use of the word novel ), this, too, is an unusual financial-planning book. There are no checklists, no graphs and almost no charts. Heck, there s hardly any math. 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 viii IntroductionI ll admit that The Wealthy Barber Returns is certainly not com-prehensive. Neither my knowledge nor a mere 200 pages would allow for that.
8 And by no means is it the definitive word on how to manage your finances. (Sadly, that doesn t exist.) In fact, you might disagree with some of my opinions I m sure that many in the industry will. But I m confident that what follows will make you think differ-ently and more wisely about your saving, spending, borrowing and investment decisions. In a way, I ve been writing this book for more than 20 years. I really hope you enjoy and benefit from its ideas. Even if you don t, though, please tell others that you did. Dave Yes, I know The Wealthy Barber Returns isn t the most creative title. My daughter asked, What s next, Dad? The Wealthy Barber Goes to Hawaii? It s like the old Gidget series. I closed her Introduction viiInsights into Saving, Spending and Borrowing A Painful Truth and a Positive Spin 3 Your Opponents 7 Consumed With Consumption 9 Status Update 11 Faulty Wiring 15 Infatuation 21 Choose Your Friends Wisely 25 The Power of Perspective 29 Four Liberating Words 35 Ditto Diderot 39 Plastic Surgery 43 Taking Too Much Credit 47 All Too Willing to Lend a Hand 51A Borrowed Approach to Borrowing 57A Story Break 59 Owe No!
9 67 Under House Arrest 71My Frustration 75 Pennies From Heaven 79A Worthwhile Hassle 81 And Furthermore 85 The $64,000 Question 89 When You Assume 93x Contents That Doesn t Apply to Me! 97 That Doesn t Apply to Me, Either! 103 Emergency Fun(ds) 107 Money Is Time 111 Some Experience Required 113A Final Reminder 117 Random Thoughts on Personal Finance Common Themes 123An Easy Choice 125A Cool Rule 127 The Illusion of Wealth 131A Controversial Solution 135 Dashed Hopes 139A Misunderstood Shortcut 143 Incredibly Interesting Math 147 When Average Isn t 151I Wish I Could Help 157 Extra Caution Advised 161Up and Down and All Around 167 Oblivious 169 Unorthodox, 173A Widely Held Misconception 177 The Silent Killer 179I Love You, But .. 183 Why, OK Why DIY? 185A Tough Call 189A Simple Idea 193 Battle of the Abbreviations 197 Are You Sure?
10 203 The Eternal Question 207 Unbowed 213A Big Step 217 Potpourri 219A Man With a Plan 229 Insights into Saving, Spending and BorrowingThis page has been intentionally left blank. A Painful Truth and a Positive Spin I HATE TO BEGIN WITH A DOSE of harsh reality, but here goes. Unless you marry into wealth or come from a very well-to-do family (both highly advisable strategies, by the way), you ll have to learn to spend less than you make. No, this isn t a tremendous insight and, yes, you ve probably heard it a thousand times before but, unfortunately, that doesn t make it any less true. I never apologize for focusing on this sim-ple teaching because (1) it s the absolute key to successful financial planning and (2) despite the fact it s oft-heard and self-evident, it clearly hasn t sunk in with the majority of Canadians. A disturb-ing number of us aren t saving enough to fund our future goals, most notably, a reasonable retirement.
