The Wealthy Barber, Updated 3rd Edition: Everyone's Commonsense Guide to Becoming Financially Independent

by David Chilton

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.

Genres: Personal Finance, Finance

Kindle Edition

Published August 21, 2022

Reviews

[Jake Strong]

Feeling: educated

[kamryn]

i was forced to read this

[Peter A]

Based on a conversation from a friend who had given this book to his children and said they were following the advice, I wanted to read it.

The Wealthy Barber is a commonsense approach to financial planning and, as the book’s subtitle claims, financial independence. We are first introduced to Dave, a person who is married, is expecting a child with his wife, and feels unprepared and ignorant of basic financial planning and actions. After talking with his dad, who rarely mentioned finances to him, Dave’s dad refers him to the “wealthy barber” Roy. Through a series of monthly haircuts, Dave, his sister Cathy, and their friend Tom meet Roy, and a few of his regulars at the barbershop.

At each meeting, Roy imparts one or a few key lessons, and makes these three do their homework. These are presented in chapters:
• The Ten Percent Solution, covering paying yourself first 10% of your income, using compound interest and dollar cost averaging to your long-term advantage.
• Wills, Life Insurance and Responsibility, discussing the need for life insurance, enough but not too much, which can disappear over time.
• Planning for Retirement, stating that in addition to saving regularly, one needs to plan for retirement. The chapter talks about various investment options, including IRAs and Roth IRAs, and plans for those self-employed.
• Home, Sweet Home, discussing the advantages of home ownership, and when it is appropriate.
• Saving Savvy, mentioning the value of saving, through a “dollar saved is two dollars earned” relating that to raise in salary that, of course, after taxes and other deductions may come down to one dollar in one’s pocket.
• Insights into Investments and Income Tax, saying it can be wise to have a professional do your taxes for the savings you might make.
• Graduation, including the need for both health and disability insurance.

Each of Dave, Tom, and Cathy have difference circumstances, e.g., Dave is a teacher, Tom has invested in rental property, and Cathy is self-employed, giving Roy a chance to talk about various scenarios.

The first several lessons are extremely valuable, and relatively easy to implement. These will give a person the best long-term financial stability.

A note of caution. Some of the specific information, especially about IRAs and tax rules, and in particular costs of houses, are likely out of date. However, the basic principles are still valid.

Overall, though some of the conversation is cheesy, the messages are clear and convincing.

FB. Great financial advice and strategies, still relevant, easy to implement, and a great present to any young person who is interesting in his or her financial future. Caution though that some specifics have changed with respect to tax laws.

[Credo Vita]

Chilton wraps foundational personal finance advice — save consistently, invest early, let compound interest do the heavy lifting — inside a fictional narrative following a small-town barber who quietly became wealthy through disciplined, unglamorous habits, shared in conversation with younger clients.

Written in an accessible, folksy Canadian voice, the story format makes concepts like tax-advantaged accounts and long-term investing feel like something a trusted neighbor is explaining over a haircut, not a finance textbook. A gentler, more narrative-driven entry point than most tactical money books, closer in spirit to The Richest Man in Babylon than to Rich Dad Poor Dad.

Part of the money-and-life shelf on The Credo Vita (thecredovita.com/products.html?utm_so...).

[Nicole]

Personally I think this book is structured with a lot of common sense. Sadly, not a lot of people have the common sense to recognize this. All in all I think this is a worthwhile read for anyone to refresh their ideas on how to save and prepare yourself for a successful financial future.

[Alexandra O'Neil]

Some really great takeaways in here, and I like how there are three “characters” at different points in their life (affluent vs starting a family; business owner vs individual, etc).

My only con is I didn’t like the conversational writing style. It may be great for some people, but not for me.

[Charlene Lochner]

Good, but outdated. I recommend Suze Orman

[Madalene]

Enough helpful material even now that it's useful as a financial start guide.

[Olivier Chabot]

significant update from the original version. one of the best intro to finance books for young canadians.

[Hope M]

easy to understand, great read!

[Michael Viola]

Great book, more interesting than any other financial planning book and sound advice