The Wealthy Barber – Book Review

I love personal finance books, and since every financial blog I read talks about how good ‘The Wealthy Barber’ was by David Chilton, I decided that I’d have to go to the local library and give it a read.

I’m glad I did.

The Wealthy Barber

Now I should mention that I’m not finished the book yet, but I already like it as I’m about half way through it. It really hammers down a bunch of points which I already know.. but always good to know that it’s a smart thing to do and gives you lots of hints on how to go about starting to save, plan, and invest properly.

Some of the points which really hit home in the book are the following:

1. the power of compound interest – this can’t be understated.. see my blog post here to know what I’m talking about.. it’s amazing.
2. choosing the right investment vehicle – now they focus on finding the right mutual fund, buying every month, and keep on doing it. The book gives a great example on why it’s important to make monthly contributions for dollar cost averaging, and I will also write a post on this later on.
3. finding the money to save - the book advises us to save, right off the top .. 10% of your earnings. Even if it’s only $100 a month, put it away.. when you put it into a compound interest calculator with some very achievable interest rates.. well, how quickly it can add up will surprise you.
4. the importance of a will & life insurance – pretty nice to have a whole chapter devoted to this rather boring subject, I particularly liked the life insurance part in which they give you some guidelines on how much you should have, or, if you have no dependants, how little you should have. Very interesting stuff.

As I say, I’m only 1/2 way through the book, however the points that they bring up in it are extremely valuable so far.. I only expect it to get better in the 2nd half, however even if it doesn’t.. I think this really should be a book which ALL CANADIANS SHOULD READ! I also believe that all Canadian students should have personal finance taught to them in high school, and this book would be a very good ‘text’, hell.. I could even draw up a curriculum on it.. as the book itself is written such that a barber is teaching the author about personal finance… very cool idea. Don’t you think that all of us would be better served with having knowledge on the power of compound interest, savings, and investment types rather than how long the Civil War in the US lasted? As interesting and important as the Civil War in the US was.. I’d rather read about it during my retirement years.. which would be a lot easier to achieve if I’d been given the right information back in high school… wow, that would have been 15 years of compounding interest this year. *sigh*