March 24, 2008, 6:57 am

The Wealthy Barber Reviewed by The Financial Blogger

by: The Financial Blogger    Category: Reviews
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Yup, another review of this personal finance best seller. Why would I bother reviewing something that has been read by a million bloggers and reviewed too many times? Simply because it worth it! Since I started my quest in the financial world, I keep hearing about this book and how good it was. Since I had nothing to do (does this really happen?), I bought the book and opened it. It took me two days to devour and it was absolutely delicious (the coffee and cheese cake or the book? I won’t tell you!).

wealthy barber

I was kind of curious to see if this book could bring something more to my existing financial plan. Well it did! While The Rich Barber’s rules are fair and simple, I would like to add some TFB spices in the melting pot:

#1 The 10% rule

Pay yourself first. If there is one rule you need to remember, it is this one. Take an automatic withdrawal of 10% of your pay cheque, and invest it in mutual funds. There is nothing sexy with a “Pay Yourself First” plan and definitely nothing exciting about systematic investment. However, it works perfectly if you want to get 1M$ in 30 years. I basically pay less on my mortgage and use the Smith Manoeuvre for a good part of the 10%.

#2 Get insured

The very first time I had concerns about insurance was when we find out that my wife was pregnant of our first son. This is where I realize that a family needs proper coverage. On the other side, if you are all alone and have no dependants, there is no point of getting a huge insurance. Insurances have not been created to make people rich but to financially cover for the lost of an individual.

#3 Get a will

Then again, this is crucial when you have a spouse or kids. Nonetheless, everybody should have a notarized will and close family members and friends should be aware of where is your important paperwork.


Yikes, the 10% was not for my RRSP? No, the 10% of my income was for the vacation property, my trip to Greece and my brand new BMW. I still need to save more money into my RRSP in order to have a decent retirement income. Fortunately, I have a good pension plan at work so I don’t have much room for my RRSP contribution.

#5 Buy a property

If there was one thing that caught my attention from this book was the fact that, in finance, you are always better be the owner than the lender. Be the owner of your investment, don’t lend money to banks. Buy a property; don’t pay a rent to a landlord. You could technically rent and invest the difference; however chances are that you will do something else with this money!

#6 Be Frugal

This was a well debated subject in the book. Basically, if you follow the 10% rule and you contribute to your RRSP, budgeting and being frugal will not become the key to your financial freedom. This is a very good thing for me as I always have a hard time containing myself!

#7 Investments and taxes

There is a tight relationship between those two terms. The main question was the following: “are you better off paying your mortgage down or investing more money than your 10%?”. This is where something obvious hit me in the face: you are paying mortgage interest with after taxes money. Therefore, paying off your mortgage gives you a net saving of 6%. In order to make the equivalent return on the market, you must make 8,57% (after commission fees or MER’s) with your investments. Chances are that you are better off paying down your mortgage and invest the difference later on.


Oh man! Do I have to put money aside for my kids too? Is this will ever end? In fact, the book suggests that you take your kids allocation and invest it into a RESP. This is quite simple and quite profitable.

I really liked the book overall because it is a really good recap of what I had learned so far. The things was that I could have learn all this reading the book in 2 days instead of taking 4 years to think, experiment and establish priorities in my financial plan!


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Save 10% no matter what, that’s the rehashed “Richest Man in Babylon” message of every decent PF guru. The add a little here and there. Maybe change the 10% to 20%, or tell you a different place to put the 10% or whatever, but it’s all the same. Wealthy barber is one of the best modern ones I find. But you only need one of those kinds of books. I wasted so much time ready Suzy and Latte Factors when it’s all the same message.

by: The Financial Blogger | March 24th, 2008 (7:50 pm)


I totally agree with you. There is no rocket science behind PF. I found the Wealthy Barber very interesting from its structure and its creativity to explain something that most people consider boring 🙂

I agree with just about every said. And I recently started my own company, and it’s a little harder for me to budget everything myself. Before, I had my employer take out my ten percent and put it in my 401k. Now I have to remember to do it myself, along with paying my own taxes, etc. Very different, and lots more to remember, but I’m very excited for the way things are going.

I also really agree with number 2. Get insured. I work in life insurance and I think life insurance is one of the most important investments you could make. It may be an expense at this point, but if you were to die, that expense all of a sudden becomes a huge blessing to the loved ones you leave behind. It can be hard to pay for something that you may never need, but the peace of mind and potential financial protection are worth it.

If you’re interested in seeing how low prices are for life insurance these days, you can go to any number of online sites. The one I like is They compare all of the top companies and there is no obligation to apply. You can check it out and see how low the rates are these days.

Well said! I always maximize my own RRSP contributions as the way I see it, I’d rather keep the money than give it over to the government! The way I ensure I always maximize the contribution (which can be hefty – this year was $19k!) is to take out a 12 month RRSP loan at prime -1%. I know it’s a bit of wasted money on the interest, however I’m FORCED to repay the loan each month so I can’t procrasinate! I also have a VISA card that gives me 1.5% back on every purchase and allows me to pay down lump sums against my loan in increments of $100.00. With my annual spending, this almost covers the entire amount of interest on the loan.
Good luck to you! I’ve just started my own financial blog and would love any feedback!
check it out at

by: Stewart Kimble Shaw | June 14th, 2009 (7:59 pm)

I am 50 years of age with combined household income of $175,000 per year. We have $220,000 RRSP and one pension plan worth about $15,000 a year. My debt consists of a $230,000 mortgage on a home in Montreal valued at $419,000. I have $15,000.00 available to invest this year, $20,000 next year and around $30,000 every year after. I am self employed and incorporated paying myself via dividends and therefore do not qualify for tax advantages from RRSP’s.

Given that the only assest that I own that has risen substantailly in value over the past 4 years is the value of my property, I am thinking that the wisest choice for my future investments would be to pay off my mortage but was wondering if this would be the best decision given my age and the fact that I may want to retire at 65.