Paying Yourself First:
A Reflection on David Chilton’s “The Wealthy Barber”
Money management and financial planning is an aspect of life that everyone encounters. Despite one’s income or financial status, every adult and child has a concept of money and how to manage finances. Learning effective tips for financial success is very important to ensure future prosperity. For students especially, it is vital to be exposed to money management advice to learn and adopt good spending and saving practices early in life.
In his book “The Wealthy Barber”, David Chilton tells the story of how he and his siblings learned about financial management from Roy, a local barber who achieved financial success through following simple planning concepts. Chilton provides his readers with straightforward, realistic guidelines and strategies for planning financially and real-life examples.
From all of the lessons Chilton’s book teaches, one financial planning tool I learned about is called the ten percent solution strategy. “Wealth beyond your wildest dreams is possible if you learn the golden secret: Invest ten percent of all you make for long term growth,” writes Chilton in chapter four of “The Wealthy Barber”. It is recommended that this strategy is set up by automatically having ten percent deducted from your earnings and invested in a form of growth savings such as mutual funds or real estate. By automatically transferring funds and ‘paying yourself first’, it is suggested that you do not begin to miss ten percent of your pay when you begin this program but rather do not notice the difference after a few months of committing to this strategy. As Chilton shares, the ten percent solution strategy can ensure future financial comfort as it transforms small amounts of money into substantial savings over an extended period of time. To describe the financial tool of investing ten percent, Chilton uses the tagline “pay yourself first”. By this, he reminds readers that the...
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