One of my favorite personal finance books is The Wealthy Barber, written by David Chilton. It’s one of my faves not because it is the most comprehensive money guide I’ve ever read, but because it was one of the first – back in my early 20’s. Too bad I didn’t put into practice anything I read back then!
I discovered The Wealthy Barber in the early 90’s – when I was in college or maybe right after – and loved it because it was written in the form of a novel.
It’s the story about a trio of young adult siblings who learn basic lessons in personal finance – particularly how to become financially independent – from an unlikely source: Roy, their family’s barber.
But Roy is not just any barber, and the young people soon realize. Roy is a wealthy barber. He became wealthy not just by cutting hair but because of smart money strategies he used to save and invest his money.
The subtitle of The Wealthy Barber is: Everyone’s Common Sense Guide to Becoming Financially Independent.
It lived up to its billing.
As I read the story and the financial lessons Roy taught his students, I learned several important and timeless personal finance strategies in a way that was much more fun and interesting to me than just reading a book full of facts and information.
Unfortunately, I didn’t put anything I learned into practice!
Yeah, I’m a slow learner like that. I wasn’t a money wise anything back then.
The very first lesson the wealthy barber shared with his three students was what he called the “golden rule:” “Invest 10% of all you make for long-term growth.”
I’ve heard the point elsewhere: “pay yourself first.” I so wish I would have saved 10% of all I earned throughout my adult life so far.
Unfortunately, many years my wife and I spent just about all that we made. And like most, sometimes we spent more than we made, too.
For years, we always assumed we’d earn more “some day” in the future, and we decided to start saving more then. Of course, you know what happened. When our income would increase, our lifestyle quickly adjusted to match it. So we kept putting off saving – until tomorrow.
The key to saving 10% of your income, according to the wealthy barber, is automate your savings so it comes out of your checking account right after you get paid, so you won’t ever miss it and don’t think you can spend it.
Today, with so many online banking options, it’s never been easier to pay yourself first and automate your finances.
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In addition to long-term savings, the Wealthy Barber also covers other important personal finance topics like:
- Life insurance
- Smart Home buying strategies
- Retirement planning
The Wealthy Barber was first published in 1989, a year after I graduated from high school. It has sold several million copies and has gone through a number of printings.
Last year during a trip to Canada to visit family, I browsed the personal finance section of a McNally Robinson bookstore in Winnipeg, Manitoba, and was pleasantly surprised to see that David Chilton had just published a new book: The Wealthy Barber Returns.
I’m looking forward to reading that one too, but I first wanted to read the original again, which I just did earlier this month during our cottage vacation.
After re-reading The Wealthy Barber, I decided to have my teenage boys read it this year as part of their home school economics studies. And I’m praying that they’ll take the lessons to heart and make it a lifelong habit to pay themselves first through long-term savings.
Have you read the Wealthy Barber before? What’s your take on it?