The Wealthy Barber: The Common Sense Guide to Successful Financial Planning [Paperback]

Chilton's book is well-written and an enjoyable read. I went through the entire book on my day off because I couldn't put it down. The author has devised a very simple investment plan that is both conservative and almost sure to pay off, except he doesn't guarantee exorbitant returns -- only long-term security. Most notable are the "pay your self first" concepts and a "a dollar saved is two dollars earned."

The author covers a wide array of essential topics covering mutual funds, wills, insurance, RRSPs, home ownership, and a little bit on additional savings. It's a great primer and the author makes sure to discuss some of the complexities involved in investing and dispels a few common myths (e.g. that buying a home is ALWAYS better than renting). Just following the lessons in this book, the average person could profit greatly in the long run.

That said, there are some problems with the book. First the book is filled with overly optimistic calculations, using average returns of 12% -- which is actually considered very high in today's standard and by long-term historical returns. Even TD give averages of 8% for international mutual funds and less for domestic. Also for popularity, the author tries to minimize discussion of developing a strong budget and cutting back expenses, and fails to illustrate how much this could add to savings over a lifetime. Finally, he doesn't discuss that it may be appropriate to consider the probability of risk and how this influences insurance decisions, and that it is logical for people to consider waiving insurance depending on their personal situations, even when some liabilities exist.

Overall, the book is a pleasurable read and provides valuable principles for investing. It is a bit simplistic, but even an intermediate investor will learn a trick or two, and it serves as a valuable reminder for the simple things you may forget. Most importantly, these basic lessons are logical and will help even the least savvy investor earn their way to prosperity. In a time of financial illiteracy, this book is a great resource.

I am a former banker who now as a financial coach work with Canadians coast to coast to help them improve their finances by eliminating debt. As a professional with 32 years experience I could not find anything in this book that I disagree with. Believe me when I say that this book is a MUST READ if you are serious in getting ahead with your personal finances so you can achieve your goals. David's writing style is easy to read and the book is full of great tips and pearls of wisdom. This book should be given to our kids in high school before they get their 1st credit cards. Well done David! Eric Putnam, Managing Director, Debt Coach Canada

First off, I should point out that I'm a big fan of David Chilton. He "gets it."

On the topic of basic money management, there is some good advice in this book (pay yourself first, the 10% rule). For anyone struggling to pay down debt, or avoid living beyond their means, they may need more specific guidance and encouragement found elsewhere, perhaps in a Dave Ramsey book.

There's at least one critical flaw in this book, however. When it was written in the late 1980s, Canadians didn't have many options for low cost investment vehicles. Through the narrative of this book, Mr. Chilton advises readers to "pick a mutual fund with a good manager." The author himself has debunked this fallacy in the intervening years. Mr. Chilton does an excellent job explaining this in an interview with the Globe and Mail's Rob Carrick: [...]

Mr. Chilton fights the good fight, going toe to toe with Kevin O'Leary on CBC in an entertaining video here: [...]
I would advise potential readers to pick up a copy of this book's sequel titled "The Wealthy Barber Returns" rather than the original. Here's a link to that: The Wealthy Barber Returns : Dramatically Older and Marginally Wiser, David Chilton Offers His Unique Perspectives on the World of Money

Another book to consider would be Andrew Hallam's "Millionaire Teacher." For more advanced reading, the Canadian Financial Wiki "Finiki" and it's associated "Financial Webring Forum" will steer users toward sound investment strategies.