The Wealthy Barber Returns

By: David Chilton

The Wealthy Barber Returns was written by David Chilton in 1989. It was two decades after writing and publishing The Wealthy Barber. This book has sold two million copies in Canada. Financial experts all across the world have preached the mantra “pay yourself first.” Personal finance is David’s passion. He attempts to use humor and common sense to help others manage their money better.

 

A Painful Truth and a Positive Spin 

 

“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.” David started his book with this harsh reality. In order to be wealthy, you need to spend less than you earn.  You must learn to live within your means. And having a small cutback in your spending rate will result in savings. You just need to exercise having a little discipline and common sense. 

 

Your Opponents

 

Why is it difficult to save? It is because no one out there really wants you to save. They want you to spend as much as they spend. It is hard because you don’t have much of a support group that encourages you to save. The three people who would want you to save are your future self, your financial advisor, and David Chilton. It is possible to live within your means. Those who do it can teach you a lot, and those who don’t can teach you even more!

 

Consumed with Consumption

 

Shelter, food, clothing- these are the three basic needs we all share. And it’s only natural that our desires expand beyond our basic requirements into a pool of wants. But sometimes, we tend to go a little too far that nothing is ever enough. And it gets us distracted from what is really important. And for David, “One of the most damaging misconceptions in personal finance is that saving for the future requires sacrifices today that lessen people’s enjoyment of life. Surprisingly, it’s quite the opposite! People who live within their means tend to be happier and less stressed.”

 

Status Update

 

The majority of us yearn for a position of power. Almost everyone is concerned about what others think of them. According to David, we don’t judge people’s financial success based on their financial statements. We based it on their material possessions. People mostly buy these possessions with others in mind, as if telling them: “Look at me – I’m worthy.” It may be shallow and financially harmful, it’s quite understandable. It’s not simple to fight our biological wiring, societal forces, and deeply set behaviors.

 

Infatuation

 

“EVEN WHEN OUR EMOTIONS don’t overwhelm our reason, they can still trick it into making bad judgment calls.”, David opened this chapter with this.  

 

The price we’re willing to pay is determined by how much value we believe the item will add to our lives. When we buy something that we’ll consume immediately, we know that the price we pay is enough. It is because the joy it gives us is worth more than the price. But if we’re going to buy something that will last for years like a car, in the first few months we’ll surely enjoy it. But after three or more years, will you still feel the enjoyment you felt when you had it new? We get less intrigued as our exposure increases. That’s human nature. “Repetition trumps wonderfulness — our possessions yield less pleasure each time we use them.” Despite this, the product will always give us the same sense of pride and joy that we had when we bought it. Neuroeconomists’ research suggests that this flawed and unrealistic anticipation occurs because when our emotions are involved, our wiring leads us to project our immediate feelings into the future. Our “executive’s” voice of experience is silenced. 

 

Choose Your Friends Wisely 

 

LIFE IS COMPLETELY RELATIVE. How we feel about our possessions and lifestyles is relative to the possessions and lifestyles of our friends

 

and colleagues. We don’t always recognize what we have for what it is. Instead, we only consider ourselves fortunate when we have as much as or more than the people with whom we identify. We make comparisons. We desire more. We devour.

 

The Power of Perspective

 

As much as possible, broaden your circle of references. Take a look around the globe. Everyone should be included. A dose of perspective is the most effective medicine for the sickness of envy. We are so preoccupied with what we don’t have that it interferes with our ability to appreciate what we do have. We should broaden our reference groups to include not only the less fortunate. We should also broaden it to encompass those who have gone before us. 

 

The Eternal Question

 

“SHOULD I PUT MY SAVINGS INTO A RETIREMENT PLAN OR PAY DOWN DEBT WITH THEM?” Both are excellent choices. Paying off a personal mortgage, on the other hand, is never a bad idea. There are no risks associated with investing. And, if you anticipate you’ll be able to withdraw money at a lower tax rate in the future, RSPs are a great way to save for retirement.

About the Author

  • David Chilton is a Canadian author, investor and television personality from Waterloo, Ontario.
  • Chilton enrolled in Wilfrid Laurier University, but postponed his education in order to pursue prospective business ventures. He returned to Wilfrid Laurier University in 1995 to complete his BA in Economics. Chilton currently resides outside of Waterloo, Ontario. He is a divorced father to a son, Scott, and a daughter, Courtney.
  • Chilton began his career by self-publishing his book The Wealthy Barber in 1989.
  • The Wealthy Barber is one of the best-selling Canadian books of all time, selling over two million copies since its release. Chilton also collaborated with authors Greta and Janet Podleski as publisher to many best-selling cookbooks, including Looneyspoons, Crazy Plates and Eat, Shrink and Be Merry!.
  • In 2011, Chilton released a sequel to The Wealthy Barber in response to the 2008 financial crisis, titled The Wealthy Barber Returns.
  • Chilton has made numerous guest appearances throughout his career, with his first being on The Hour (George Stroumboulopoulos Tonight) in 2010. Chilton gave a total of six guest appearances on The Hour between 2010 and 2013. He has also appeared as himself on the Royal Canadian Air Farce New Year’s Eve episode in 2012, and appeared once on The Lang and O’Leary Exchange in 2013 as the host.
  • Chilton won the H.L. Gassard Memorial Award for the highest mark on the Canadian Securities Course in 1985

Source: David Chilton From Wikipedia, The Free Encyclopedia

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  • The Wealthy Barber: The Common Sense Guide to Successful Financial Planning
  • The Wealthy Barber Returns
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  • The Wealthy Barber, Updated 3rd Edition: Everyone’s Commonsense Guide to Becoming Financially Independent by David Chilton, Currency
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