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'Wealthy Barber' says save, save, save...

Canadian finance author David Chilton to speak on personal finance next Wednesday, May 25 at 7:30 p.m. at the Whistler Conference Centre

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The Wealthy Barber has sold over two million copies, but author David Chilton said his book's success in 1989 had everything to do with luck. Many would argue the content of the book had everything to do with its propulsion to international bestseller lists but Chilton insists he's no genius.

"Everything fell that book's way, it was a lucky stroke and all those years later I still shake my head," he said with a laugh from his home in Sarnia, Ontario. "I think people got sick of me because no one was doing what I was doing but today of course we have a much more crowded landscape and therefore it's more difficult. My timing was very fortuitous."

At the time of the The Wealthy Barber's release, it was one of only a handful of financial tomes on the market. Today there are thousands of fiscal self-help books being published per year. Not only is the competition stiff, the way people absorb information has changed, something Chilton is cognizant of as he writes the final chapters of his second novel, The Wealthy Barber Returns: Significantly Older and Marginally Wiser, Dave Chilton Offers His Unique Perspectives on the World of Money.

"I think society has collective (Attention Deficit Disorder) now, it's very difficult for people to sit down with text-heavy books and read through them and the research is very supportive of that," he said. "You have to keep things moving, you have to keep things short and I think that's doubly true in the finance area where people are intimidated to begin with."

Chilton credits the financial circumstances of the late eighties for the timeliness of his success. Baby boomers were just getting started with their early savings and the decline of interest rates was moving people away from conventional (Gua ranteed Investment Certificates). While some of the messages in his second book are the same as the first (don't spend more than you make and save, save, save), he thinks the Canadian public is facing a whole new set of problems.

"The more stunning piece is that it's incredible in Canada how many people we have that have made pretty big money that have saved almost nothing," he said. "It's not that they saved too little, it's that they have saved nothing. I have a lot of people come to see me in their forties and fifties and they're just hoping for some advice and they show me their financial situation and you're looking at their earnings over the years, then you're looking at their assets and you're going 'What the heck have you been doing?'"

Calling one of the trends an "optimism bias," Chilton said many people spend on frivolous items because they believe things will get better in the future, although they don't know how to make it happen. Complicating that trend is the reality that finances typically get more complicated as people approach later life.

"As you get older you may have a divorce, you may have two kids go to university simultaneously, and the one thing we've seen a lot of over the past 10 years is one of the two partners may lose his or her job," he continued. "If any one or two of those things happen then the catching up on the saving front becomes almost impossible, so I know it's really trite advice but pay yourself first and start young, those are the two most important bits of advice in financial planning, everything else pales in comparison to those two. And don't have kids."

If, per chance, you're one of the many who happens to have children (like Chilton himself), another way of circumnavigating financial difficulties is teaching them how to be fiscally prudent at a young age. Parents who raise children who know how to save create adults who are more likely to be financially independent at an earlier age, not to mention more confident with money throughout their lives.

"When I see parents who have done a great job of that, I find over and over again that the kids become fairly good at educating themselves in their twenties on investing, they have a vested interest -they have a little money and understand the importance of saving," he said. "Getting them to set aside 10 or 15 per cent, that's the bare minimum of what you want to teach them and we've tended in the past ten years to go the opposite route, we have tended to spoil kids fairly badly."

Another key factor in being money-wise is kissing the Joneses goodbye. Chilton attributes much of the accumulated debt he sees to people who feel pressured to live beyond their means. Living well doesn't mean living in excess, and the burden that comes with all the extras can often kill any temporary fun had with unnecessary purchases.

"I still live in a really tiny house," he said. "I live in a 1,300 square foot house with no basement and no garage. I don't like big houses and I'll always live in this house, I'll never sell it. I live a very normal life - I don't like having a lot of stuff, I think it all kind of weighs you down."

Chilton's new book will hit bookshelves this fall. Pre-registration for his talk next Wednesday is mandatory - call Community Futures at 604-892-5467 or register online at www.cfhowesound.com.

 

 

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