“Pay yourself first. Take 10 per cent off every pay cheque as it comes in and invest it. Through the magic of compound interest, this 10 per cent will turn into a substantial nest egg over time.“David Chilton
The Wealthy Barber: Everyone’s Common-Sense Guide to Becoming Financially Independent | David Chilton
Pay yourself first is the big take away from The Wealthy Barber, a story about being financially boring – but responsible. It’s not about getting rich quick; rather quite the opposite!
Chilton writes a story from the perspective of three people getting their hair cut – by the Wealthy Barber. Whenever they come for a snip, short back and sides or a little off the top, The Wealthy Barber provides them with thought provoking financial discussions and responsible advice instead of the usual small talk. They are impressed that someone on a barber’s salary could really become a millionaire, and are curious to find out how.
“My Barbershop isn’t the place to learn strategies for trading options or commodities. Instead we cover the basics of RRSPs, mutual funds, real estate and insurance”Dave Chilton
The Wealthy Barber is a great foundational book on personal finance education, and I would compare it to Rich Dad Poor Dad by Robert Kiyosaki (it even reads like its written in the same style and for the same audience). We know saving 10 percent of your income isn’t really enough to become wealthy and retire early, but it’s a good place to start as you learn to become more responsible. Ramp up that saving and investing rate into boring, responsible index funds and watch your required working years melt away!