The Wealthy Barber

Video Blog

Picking this book

Unfortunately there was no warm trip down south this time. I was simply exhausted from all of the videos and news around potential Tariffs as well as the other sad things that have happened over the last couple of weeks. I decided to go with another much talked about book in my financial circles. Mostly facebook groups but I have a few IRL friends interested in finances as well. Once again luckily for me it is available to Spotify Premium members so there’s another subscription fee rationalization.

My Thoughts

Starting out I can relate in many ways with the author. In terms of age when we seriously started investing, from small towns and come from a comfortable if not extravagant upbringing. Differences being the author has kids where I do not and I have always had the knack for saving money.

In the second chapter the author travels back home and decides to bring up the topic of financial literacy and investing for the future with his father. His mother’s immediate reaction is that something is wrong, which while understandable is somewhat unfortunate in that it is likely a common response. Financial literacy is not taught effectively if at all in your typical curriculum the onus is put on your parents.

Unfortunately the author’s parents did not teach him financial literacy (I was lucky that my parents taught the basics outside of investing), but, at least he is starting now at age 28. Still plenty of time for the magic of compounding to occur. His father mentions that he is in luck, around 6 years ago he had the same inclination to get things in order and he found his knowledge in an unexpected place… the barbershop.

One good thing to note is that his father does mention having a solid pension plan which is a great thing. These days pension plans are mostly unheard of, or at least among my peers. So it is up to you to forge your own path and secure your future.

I really enjoy hearing another “average normal person” being wealthy story. Particularly when it is unbeknownst to the masses, so much so that the author (Dave’s) friend Tom and sister Cathy do not believe it.

Cathy who runs her own business is assumed to be wealthy by her brother Dave to whom she responds not with … and proceeds to rhyme off many expenses including her own tanning bed in her condo.

The body of the book lies in their Financial education, each month the three of them go down to the barbershop and learn the next of 12 steps. Typically all is needed is the time it takes for both boys to get a haircut. At the end of the session they are given “homework” for lack of a better term to build on next time.

There is a lot of talk about US specific accounts which was interesting but since it was not applicable to me, I increased the playback speed over these sections.

• It essentially boils down to determining what is the most advantageous account for one to contribute first and max that out as early as possible.

Interesting Quotes / Anecdotes

• The hair truck, where the barber bought an old truck installed a magazine rack and a barber chair. After this was complete he closed up shop on Tuesdays and parked the truck in the factory parking lot and it ended up being wildy successful. It actually became his most profitable day so he hired another barber and that barber operated the hair truck on Wednesdays

• A business only needs to budget for necessities an individual needs to budget for needs and wants. The main reason especially young people make their first money is exclusively for wants. The sooner you realize that the better.

• “Pay yourself first” once again pops up in this book.

• Simply saving 10% of your income, which after a few months you won’t even notice, is 50% of what you need to ensure you become wealthy.
  • This is known as the golden rule.

• Stock brokers are typically sales people that simply sell stocks like one would sell shoes. They likely know no more than you do.

• If brokers could make a ton of money from trading they wouldn’t actually need clients.

• The financial future of your loved ones may depend on you having life insurance, it is essential that you have the right type of life insurance.
  • Buying insurance when you need it is worth it. It is however an expense so if you reach a point that you don’t need it then its not needed.
  • Even if both partners have a great job and fantastic income you may need a policy that kicks in only when both people die.
  • When one spouse doesn’t work that spouse should still be insured for up to the amount of your outstanding debts.
  • For most people it is best to get term insurance since it is typically the cheapest.
    • Cash value policies are compulsory savings but for anyone disciplined mathematically it will make sense to invest your own.

• Inflation is the retirement killer.

• Statistics of social support are abysmal with our aging population. 50 years ago 40 working per 1 collecting, it is now low single digits.
  • At best it will remain a safety net or income augmentation far from enough to retire on alone.

• Home ownership is the best forced savings plan there is.

• A dollar saved is two dollars earned.
  • If you get a $2 dollar bonus at work after deductions leaves you with around a dollar.

Final Thoughts

All in all I really enjoyed this book and found it to be highly engaging, informative and even comical at times.

I was listening to the last chapter while shopping the other day and burst out laughing. I did receive at least one look that I saw but oh well I was enjoying myself.

Out of the three books I have read this far I believe this was the most enjoyable as it was a wholesome story and I would recommend it to anyone in their late teens and older.

During the ending credits two books were mentioned as potential followups to this one:

• The Truth About Money
  • By Ric Edelman
• The Warren Buffet Way
  • By Robert G. Hagstrom

If you’ve read either of the above books, or any of the three that I have read so far, I would love to hear your takes on them.

• You can reach me over on Blossom @financialfreedomanodyssey or on my youtube channel.

Thanks for stopping by and I hope to see you back here next week!

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Cheers ☕