David Chilton wrote the Wealthy Barber a number of years ago and its message and its delivery are still very valuable today. The message of pay yourself first and spend less than you make will never be bad advice. In his updated book The Wealthy Barber Returns, David Chilton, 2011, Mr. Chilton offers more advice in a different format. The first thing even though the message of spend less than you earn is great advice, it is hard to do – we live in a consumer society; often your spending habits depend on the neighbourhood you live in; we are “sold” on having everything right now; and as long as we are managing or look like we are managing, very few have an interest in us not doing what most of us do well – spend money. If you are in the wonderful position of not owning money, then investments come into your focus.

With investments the rules you will learn to quickly love are compound interest and the rule of 72. The years for your money to double is 72 divided by the rate you are earning. If you were receiving 12%, the answer is 72/12 = 6 years; at 6%, the answer is 72/6 = 12 years. In terms of investing – you maybe one of the 20% of the people who consistently beat the averages of the stock exchange, for the other 80% an index fund with low fees will get you there with less risk.

Linking to dividend paying stocks, another method is own stocks in mature industries that are profitable and pay dividends. The key is profitable and paying dividends, you will notice from the long list of companies on the stock exchange most do not fit the criteria. From the short list, then you choose what companies to invest in. The stock markets offer many stocks filled with hope for the future, and some of them will come through, but the bulk of your money should be in the companies already making money.

There are more questions than answers, till the next time – to raising questions