Wealthy barber says Canadians face more opportunities — profits and dangers

Surrounded by faded wood paneling, Chilton wrote the book by hand on a brown-lit card table in the basement of his home in Kitchener, Ont., and went ahead with it despite “very mixed reviews” from industry experts on the first few chapters. Instead, guided by feedback from a dozen “beer-guzzling” softball teammates, he emerged from the cellar more than a year later with a personal finance classic that now graces the bookshelves of more than two million Canadians.

Rich barber gets modern update

While much of the advice in “The Rich Barber” feels timeless, as real estate prices continue to soar, an alphabet soup of TFSAs, RESPs and FHSAs has emerged amid the din of online personal finance experts and stock pickers. It’s time for a modern eye update.

The investor, businessman and former “Dragons’ Den” star is now at the same poker table for a completely rewritten version of his 1989 hit that, like the original, is filled with fond memories and candid yet humorous conversations about personal wealth and investing. Released last month, The Rich Barber tackles the issues of the new financial world, touching on topics from investment vehicles to home buying to life insurance, all with simplicity as the theme.

Today’s young Canadians face a tougher financial climate, marked by high housing prices and social media “influencers,” Chilton said, but it’s also rife with opportunities to build a prosperous life for anyone from hairstylists to shift workers.

Saving first is more important than ever

In an interview, he reiterated that his “golden rule” of saving 10% of your salary to pay yourself is more important than ever, as that money can be quickly spent on the continuing decline in the cost of living. “Saving has never been easy, but it’s even harder now,” he said. “It’s not just real estate prices, it’s the cost of everything… If you go to a restaurant you’ll see it, when you pay your car insurance you’ll see it.”

Chilton’s book advises young Canadians to grab newer financial instruments like index funds and tax-free savings accounts, avoid funds with higher fees, accept money from their parents’ bank if they have one, and be wary of TikTok influencers.

His genial prose includes a reference to the Bank of Canada in one sentence and Kitchener’s former Central Meat Market in the next. It rattles off fascinating truisms—“Invest for success” and “Procrastination is the worst enemy of compound interest”; dark humor—“Let’s talk about death!” says one character in a section about wills; and plenty of quips, including one from the narrator’s fictional wife: “That night she threatened to ground our unborn child because she had terrible heartburn.”

Chilton guides readers through how to avoid “cash-out” – becoming financially powerless through the purchase of real estate, leading to “housing poverty”. He noted that buyers are likely to be able to manage mortgages, property taxes and maintenance costs, only to find “nothing to ‘negatively surprise,’ nothing to entertain, and nothing to save.”

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“Sadly, we are in a time where ‘choose your parents wisely’ has become such an important commandment. But if you do have parents who can help, don’t let your pride stop you from accepting it.”

Tiny Houses, Smart Finances, and Side Hustles

In addition to your parents’ generosity, a side hustle also provides a way to accumulate a lot of cash. “I don’t mean necessarily driving for Uber,” but rather “monetizable hobbies,” such as dog walking, teaching piano or French, or selling handmade goods or second-hand furniture online.

Like his namesake barber, Chilton, 64, sympathizes with the struggles faced by many millennials and Gen Zers. “The younger generation’s complaints are valid,” he said, noting that housing may never be within reach. A 20% down payment on a $700,000 home equals $140,000. “It’s difficult to do.” So alternative solutions are needed, such as renting a room in the home or simply living in a smaller room.

“I’m lucky to be doing well and I still live in a 1,300-square-foot house. I find them more comfortable,” he said.

Stick to simple strategies and ignore the online noise

Chilton also highlighted how online marketing and questionable financial advice from social media influencers come with their own dangers, exploiting “human weaknesses that allow us to be overwhelmed by the temptation to buy with one click,” he said in the interview. “Now more than ever it’s easier to give in to all our impulses.”

He noted that there are many helpful educators (often chartered finance professionals) to be found on social media, citing Richard Coffin, who runs the YouTube channel “The Plain Bagel,” and YouTuber Ben Felix.

“But there’s a lot of trash out there, too,” he said. This includes AI spillover. Since 2022, AI has given amateur investors around the world the opportunity to consult AI-generated videos or chatbots to learn about financial strategies and portfolio options.

Artificial intelligence may become more useful this month through virtual assistants like ChatGPT and Google’s Gemini, “but it’s not there yet,” Chilton said. “You’re still going to get the wrong answers. When it comes to finances, you don’t want to get the wrong answers,” he stressed, warning against relying on AI to create comprehensive financial plans.