3 life changing financial lessons
I was asked recently what business book had the most impact on me. The title came quickly to mind. It wasn’t written by Peter Drucker, or Malcom Gladwell, or Jack Welch, or Steve Jobs. It was The Wealthy Barber, written by author and former Dragon’s Den member, David Chilton. And, while it focuses on a personal finance, its impact on me reading it 25 years ago was huge. As I reflect back on the book there are really 3 major benefits I took away.
- What’s the old saying, when the student is ready the teacher will appear. This was certainly the case with me. I was in my mid-twenties, I had graduated University and was working in the pharmaceutical industry as a sales representative. I was ripe for some education on how to manage personal finance. The first thing The Wealthy Barber offered was a directive to start thinking about the future. I had never really given much thought to where I would be in 5, 10, 25 years. The content of the book nudged me into thinking about it, and setting, for the first time, goals around what I wanted to achieve in my life. For the first time I thought about and established goals around a mortgage and how I would approach paying it off, paying for a post-secondary education for my then, unborn, children, and finally, defining and establishing a plan for my retirement.
- The second benefit I derived from reading the book revolved around gaining an understanding of personal finance terminology. I had been previously aware of many of the various terms but David’s “folksy”, narrative style allowed me to see them in a new context. It set me up to interact with my banker, my lawyer, and insurance representative with a real sense of confidence. For example, I understood what an RSP was and what I wanted it comprised of, the significance of a will, different types of life insurance and I was able to effectively get what I needed to put me on the path of reaching my goals.
- The third benefit from the book centered on David’s “10 percent solution”. If you were to poll 100 readers, I believe this would be noted as the most important aspect of the book. As I mentioned, I had never spent any time thinking about the future, nor did I think about managing my money and saving. I was making decent money, paying my bills, and spending everything that was left over. The concept of paying yourself 10 percent of your salary first was an easy concept to grasp, and undertake. It also dovetailed nicely with my other newly established financial goals. Paying myself first is a philosophy that I maintain to this day.
I have read a great many business books over the years but still marvel at the impact The Wealthy Barber had on me. It got me thinking about my future, it got me to establish what I needed to reach my goals and save for the future.
