The Wealthy Barber

Yesterday I spent the day at a convention mingling with other teachers, and listening to keynote speakers.  I started my morning with a glo-bar and a coffee.

 

Some teacher friends and I went to Earls for lunch where most of us ordered the Kung Pao.

In the afternoon our keynote speaker was David Chilton, author of "The Wealthy Barber: The Common Sense Guide to Successful Financial Planning."  He was incredibly amusing, and entertaining, and I got a lot out of his presentation.  

Some of his main points that really stood out for me include:

- Beware of line-of-credits (basically, don't get one!)

- Save 10% of your income into a high interest savings account (TFSO is best - tax free savings account)

- Cheer Up!  He talked about how people complain a lot, and don't appreciate how spoiled they really are.

- Max out your RRSPs (he went on to talk about how lucky teachers are to have such a great pension ... we basically get 60% of our income, with inflation increases, until the day we die - guaranteed).

- We don't need all the things we think we need (granite counter tops, huge homes, hardwood floors, etc.).  

- Good debt is debt that will be paid off by the time you retire, does not cut into your 10% savings, and is for something that won't depreciate in value.  By this logic, vacations and vehicles are VERY poor choices for things to go into debt for.  Houses are okay, as long as you are not house broke and cannot afford to save 10% and enjoy life.

I have always had good money managing skills.  When I was a 12 year old kid making money for babysitting, I would budget my money, setting aside some for saving, some for spending, etc.. I continue to do this, and when I met the hubby (we started dating when I was 16) I taught him the same money skills.  Neither of us have ever paid a cent of interest on our credit cards, and we refuse to buy something we cannot afford to pay for upfront (with the exception of our house and 1 small car loan).  I also do not see the point in buying an expensive vehicle - what a waste of money!!  Cars depreciate in value the second they are off the lot.  Also, all vehicles eventually breakdown.  I don't care if I made an extra 100,000 grand a year, I still wouldn't waste my money to show off my BMW or Mercedes.  I couldm't care less what I drive, or what people think about what I drive.  I am not here to impress anyone with my stuff.  What about you?

I used to want, want, want for material things, but I have realized that these things do not lead to happiness.  When living in this way, there is never a time where you acquire enough.  There is always something new and better to buy.  In my opinion, experiences, especially those shared with others, lead to happiness.  The hubby and I choose to spend the majority of our extra money on experiences, not on objects.  I think of people who spend all their time consuming, and wanting more and more, showing off their brand names and expensive purchases, and I wonder if those things really are making them happy.  I think some people feel as though the objects they own define them.  

Is the constant pursuit for more one that makes us happy or miserable?

Are you good at managing money?  What are your spending rules? 

Do you have a pension plan through your work?