Can saving 10% of your income still secure your financial future in an economy where home prices have grown three times faster than incomes?
Mike Moffatt sits down with The Wealthy Barber author David Chilton to discuss how Canadian personal finance advice must adapt to skyrocketing housing costs, easy credit, and shifting markets. They explore renting versus buying, low-cost ETF strategies, and economic brain drain, before offering tailored advice for policymakers, recent graduates, and mid-career professionals.
If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:
Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Mike Moffatt: Hi everyone. Today we’ve got a special guest. We’re happy to welcome financial advice guru David Chilton, author of the Canadian classic The Wealthy Barber, and former co-host of Dragon’s Den. I remember reading The Wealthy Barber back in the 1990s, when I was in my 20s, and picking up some great advice. David has an updated edition that came out last year that we thought it’d be great to have him on and chat about how his advice for young people has changed over the past 40 years. Welcome. Thanks for being here today.
David Chilton: It’s great to be here, Mike. I’m a fan. I followed you for quite some time. You are the best-looking economist in Canada, and I’m drawn to you because of your outstanding hair. You are fantastic.
Mike Moffatt: Thank you. We’re a team.
David Chilton: We are a team.
Mike Moffatt: I appreciate that. My goal in life is to either be better looking than any economist and a better economist than any good-looking person.
David Chilton: I think you’re nailing both.
Mike Moffatt: The Derek Zoolander of economics.
We’re going to do something fun. We’re going to play back your own words to you. Specifically, we’re going to start by playing a clip of you talking to a friend of ours, the friend of the podcast, Steve Saretsky, who you had on your podcast not too long ago.
“I really wish this hadn't happened on the affordability front. Even rewriting The Wealthy Barber, you’d be amazed at how much harder it is to write that book now that such a high percentage of people’s income is swallowed by their housing prices. So when I’m talking about saving 10% - realistically for a lot of middle-income people - that becomes very difficult.” - Dave Chilton, August 2025
When I first read The Wealthy Barber back in the mid-1990s, the one piece of advice that really stuck with me was the idea that you should save 10% of your income and invest it in long-term growth. I still do that to this day. What about that piece of advice made writing the newest version harder this time?
David Chilton: It’s getting the 10%. The cost of living is so high. The other thing is, the ubiquitous availability of credit has made some things very challenging. I can have people pay themselves first, the most important commandment in The Wealthy Barber, but still neutralize those savings by building up debt on the other side of the balance sheet, accessing lines of credit, overusing credit cards, etc.
Remember when I wrote the original book back in ‘87, ‘88 - It came out in ‘89 - people carried one credit card, and often it had a max of $1,000. Lines of credit were not available to the vast majority of people, so people had mortgage debt only, for the most part.
Some people ran some credit card debt, but not as much as today. If you saved the 10% and paid yourself first, it came right off the top of the paycheck; you were in good shape. Again, very different circumstances now. Housing costs are chronically running way ahead of incomes. I would argue other costs have too.
I think the CPI doesn’t fully capture what the costs have done to the average Canadian family. Younger families are up against it for the most part.
Mike Moffatt: It’s an exercise I play with my dad sometimes. His inflation rate is different from mine, and it would be different from my kids’. My parents have a fully paid-off mortgage, so they don’t have to worry about home prices, and they don’t really have to worry about interest rates, or at least not in the same way I do. I’ve still got a mortgage. I don’t worry about home prices, but I’m affected by interest rates, and somebody new on the market gets hit both ways. When you look at CPI, it is an average of all of our expenditures, but at different points in your life, you’re going to be hit differently by it.
David Chilton: Absolutely, look at the last year, we had all these mortgage renewals and a lot of people have seen their mortgage costs go up 25, 30%. If you don’t have a mortgage, that hasn’t come into your life at all. Everything else related has gone up at a greater-than-CPI pace: property taxes in most areas, insurance, obviously the cost of the home. If you look at general upkeep and major renovations, they’ve all gone up, especially since 2020, well past the CPI rate. It is expensive to own a home.
There’s no question: from every angle, it’s very, very difficult. The ripple effect of that is huge on society. You have lower savings rates; you have less money available to invest.
Then of course, we’re seeing it affect how many kids people have. Young couples are saying to me, “We thought about three, we’re now going two because of costs.” Or, “We thought about two, we’re now going one.” We were already up against it on the replacement numbers. The fact that this has compounded that challenge is not ideal.
Mike Moffatt: Back in the late 80s, early 90s, when the first edition came out, there was this term, “brain drain,” that was really in vogue. It was mostly Canadians looking for economic opportunities and higher wages in the US. Now we’re starting to see, particularly after the pandemic, this “brain drain” pick up again among younger folks. It seems to be more driven by affordability concerns and particularly house prices. You talk so much about making the financially responsible choice. Is there a point where we look at this country, or even just the GTA, where we say the financially responsible choice is just not to be here anymore and to go somewhere more affordable?
David Chilton: You’ve nailed it. The good news is home prices in the GTA and parts of Ontario have come off as much as 25 and 30% in some instances. Rents have been heading down over the last little bit. We’ve had so many purpose-built rental units come on board, and that’s helping the supply side. But the general problem still exists.
Since I wrote the book, home prices have risen three times faster than incomes. Obviously, that’s put people up against it. Today’s interest rates, 4.1% on a five-year mortgage, are lower than they’ve been on average during that 35-year term, and that negates some of the pain, but not all of it. Building the down payment is incredibly tough.
I think what you’re leading to is we’re seeing a bit of a brain drain from some of these centers where a lot of the better opportunities are; people are going elsewhere because that’s what they can afford. I’m seeing this with some of the young people I know directly. They love the lifestyle, they grew up there, they have a lot of friends there, but it’s just so expensive they can’t afford to live there. Or if they can, they can’t live in the kind of house they want.
They’re going to have to go to a high-rise condo for a family, which isn’t ideal, instead of being in a detached home, which is what their dream was. The reality is a lot of people are going to have to start living with that kind of trade-off going forward.
Mike Moffatt: Even where we’re from in southwestern Ontario, if you want a single-detached home, you’re looking at 600, 700,000. I was always taught never to buy a home that’s three times greater than your income. You’ve got to be making quite a bit even in some of the secondary markets to hit that threshold.
David Chilton: You’re exactly right. Let’s go to London, where you are. You can go into some of the centers, like Byron, and get a relatively small house right now for $600, $650 000. But if you use the three-times multiple, you’re still looking at a family income need of over $200,000. Two teachers don’t quite get there in many instances. This is not something we’ve seen before. It is very challenging.
Remember, all the other costs I mentioned with homeownership have risen at a greater-than-CPI pace, alongside so many other costs in life.
You understand this intuitively as an economist having a PhD, but it’s amazing how many people struggle with the fact that when inflation comes back under control - let’s say we got it down to 1.5% - that doesn’t solve the problem of high prices. The prices have risen dramatically over the last five years. They’re not going down. They’re just going up at a much slower pace.
For people like you and me, we understand that intuitively, but a lot of people don’t seem to grasp that. They’ll say inflation is under control, but high prices are still there, and incomes for the most part haven’t kept up. Now we’re running into some economic challenges with tariffs and everything else. It’s very tough, and a lot of families are squeezed.
A lot of families are doing well, too. In fact, as I put the book together and did all the writing and research, I was amazed at how tough it was to put people in buckets and speak to them. Everybody’s situation seems so different. Some people have parents helping out, and grandparents helping out. Some people don’t live in the big centers. Some people have one good income. It’s really tough.
One of the things The Wealthy Barber really helped me with was having multiple characters in the barbershop, and that let me cover a number of different scenarios because we’re all so different now.
I’m jumping all over the place, but I want to talk about a point you brought up. You did an excellent job on your podcast trying to address why aren’t builders building smaller homes? If there’s a marketplace for that, why aren’t we servicing it? That’s normally what you see in capitalism, and you nailed it. The math doesn’t work, and it’s because of the stubborn land costs, especially. There are other factors in the construction costs, but the stubborn land costs have been a big part of it. You have to amortize the cost of land over a certain number of square feet and at a high enough price to get back the investment you put in. We’re really in a bit of a tough spot here. The good news is it’s a less tough spot than it was a year or two ago because prices have come down a bit.
Mike Moffatt: We have seen those land costs come down. We’re seeing governments try to get some of those taxes, like development charges, down. I remember talking to some policymakers a few years ago who suggested getting a little bit more innovation and more productivity on homebuilding. I’m all for that. But if we look at large parts of southwestern Ontario or eastern Ontario, you could rub a magic lamp and have a genie construct the home for free, and a lot of people still couldn’t afford it because of the land costs and development charges. Understanding all of those costs is important.
David Chilton: Over the next little while, we’ll look at ways to mix modular home building with conventional home building. All of those things help. But to your point, that’s only one component of the total cost. Development charges, the land, all of these things come into play. Fortunately, rates are still relatively low, but it’s really difficult out there for younger people.
Imagine if you’re single right now. You’ve decided not to take on a romantic partner, and you really want to own your own home. You’re happy to own something relatively small. Good luck putting together the down payment. It is very difficult on a single income. You’re trying to save 20% of that 600,000 you mentioned. That’s $120,000 after tax off a single income in a high-cost environment. Very challenging indeed.
You can see why I said in the redo of The Wealthy Barber, the most important personal finance advice now is to choose your parents wisely. We don’t want a country where that is the most important factor. I say it somewhat jokingly, but sadly, there’s an element of truth to it.
Mike Moffatt: It really is. It does feel like we’re moving to an almost dynastic society where your ability to own property is a function of who your parents are.
I’m really appreciative that you brought up the winners and losers. I’m one of the big winners in this, at least directly. I worry a lot about what this means for my two kids, but I’ve had years where my home has made more than I have. When it comes to a home, it is housing, but it’s also this strange savings vehicle. It’s one of the reasons why my parents would often tell me, buy a home because you can live in it and save at the same time. Does that advice still hold today?
David Chilton: There’s lots of truth to that. It is great for savings; there’s no doubt about it. You have to make the mortgage payment to the bank. It’s very annoying. People say, I’ll rent, and I’ll invest the difference. We don’t always invest the difference. It’s tempting to go on a trip and do other things, especially in a high-cost environment. Of course, we have the tax break on capital gains upon sale later in life. If the house has gone up dramatically and you choose to move down, rent, or use a reverse mortgage, there are all kinds of equity there that can do wonderful things.
There’s lots of merit to owning a home. Psychologically, it’s very important. Research says more so for women. I don’t know if that’s always the case, but on average it seems to be. For a lot of us, it is. We want our kids to have a yard. I have a dog, and owning your own home gives the dog more access to a yard. For most people, it’s still important.
Interestingly, we think times have changed so much, but when I did all the pre-research for the redo of The Wealthy Barber, almost the exact same percentage of people wanted to own a home as they did back in the 80s, and 80 to 90% of them wanted to own a detached home. Nothing had changed on the desire front from when I wrote the book almost 40 years ago. The reality is, though, it’s more challenging.
I’m very sympathetic to the challenges that young people are dealing with. There is one oddity I see where I just shake my head. That same group, people talk about them spending too much on travel. Some do, some don’t, as we did. Everybody makes mistakes with their spending, but too high a percentage spend too much on cars by any common-sense measure. Even though there’s a great case to be made for the fact that homeownership is unfairly expensive now, you don’t have to spend as much on cars as so many younger people do, often two good cars in one family. I recognize that cars in general are expensive. All cars have risen a lot in price, especially since 2020. That’s one area where people have to do a better job of staying on top of their money.
I’m a huge fan of spending summaries where people chronicle every dime that leaves their life over three months. What a great learning experience. Nothing can shine a light on where the leaks are, but also where you’re getting proper joy back for the money you’re spending.
I advocate doing that for all younger people. But again, it doesn’t solve the problem that things are very expensive.
Mike Moffatt: It really doesn’t. At least nowadays there are apps to help you with that. Not all progress is leading us to necessarily borrow and spend more money. There has been at least some progress to help us save.
I’m going to give you a case study here. Let’s say you’ve got a young renter who’s decided homeownership isn’t for them. They don’t like the roller coaster up and down, and they don’t think they’re going to be able to afford a down payment. One: What should they be doing on the spending side, or not doing? And two: How can they build up financial security without having the forced savings of homeownership?
David Chilton: Interestingly, it’s very possible. In fact, you can make a fairly compelling argument right now that in certain parts of Canada, you’re better mathematically to rent. You have to have the discipline to see the difference between the overall cost of homeownership - not just the mortgage, but the property taxes and everything else you add in - and the rent, set it aside, and invest it for long-term growth. You have to more or less match expected market returns.
If you think the broad market averages are going to average 7%, you have to capture that, meaning you can’t have a lot of high-cost products in your portfolio. If you can do that, Ben Felix and other very sharp researchers in the States have said you may well end up ahead of the game. I am seeing more people think that way.
If they want zero or one child, they’re thinking, “Do I want the hassles of homeownership? I may be willing to rent instead. Maybe I’ll rent a small home or a larger-size condominium. I like the flexibility it gives me. I don’t have to take care of things. I don’t have to remove the snow and do the lawn work. I can take off and do a little travel that may match up to my job.” It’s important to remember that as positive as that sounds, almost the same number of people want to own a home now as they did 40 years ago. That group is maybe getting a little bigger, but not dramatically bigger. Most younger people still want to own a home, and if they’re going to have a traditional relationship and have kids, they really do want a detached home in most cases.
You asked, what else am I seeing careless spending on? I would say two things:
A lot of the younger generation is accused of overspending on travelling, but it’s better to spend on experiences than on stuff, and they benefit dramatically from that. They are incredibly good at travelling cost-effectively. It’s part of the younger people’s culture.
I’m amazed when they show me their spending summaries from some of the trips they’ve taken relatively cheaply, and they get a lot of knowledge from those trips. It’s a wonderful bonding experience in their early 20s; I get it. I’m actually quite supportive of that one. For the most part, they are doing a good job watching their spending on meals out. Obviously, younger males are gambling too much. The data is starting to get borderline scary on how much males under 35 are spending on gambling right now, and it really is wreaking havoc on their finances. Females tend not to fall into that trap nearly as much.
A lot of the people I run into are doing a pretty darn good job with their finances. You mentioned the apps. The problem isn’t lack of discipline. It’s income relative to expenses, and they don’t have full control over that. Expense costs keep running hot. There are ways to rent to do very well, but it does require discipline.
Mike Moffatt: It really does. I often feel that young people are unfairly maligned for their spending habits. There are greater temptations than there used to be. I remember all the stupid stuff I bought in my 20s. Part of that was a lack of options. I used to spend $100 to $200 bucks a month on CDs.
David Chilton: Just think about how much money you have spent on hair care products.
Mike Moffatt: We’re talking tens of thousands of dollars here. But I’ve got my money’s worth. I figure it’s a capital investment. Once I figure out how to write it off on taxes, I’ll be happy. I’ll look at whether there is a countervailing tariff on hair care products. My personal CPI might be going up a little bit this month.
David Chilton: You mentioned something there that we should explore a little bit.
There’s so much more temptation out there because of the online world, and there’s so much less friction. You can just tap when you’re anywhere. You can just one-click online. Friction was our friend, not our enemy. The tech industry brags about taking it out of our lives, but it was better when it was in it. It slowed us down.
One of the things I preach now is to inject a 24-hour waiting period before making any kind of significant expenditure. When you do, in most cases, you forget about it. You don’t just decide against it; you forget about it.
With the redone book, chapter nine, which is on Saving Savvy, shares all kinds of tips that I’ve learned over the years from watching adept people and what they do to save more efficiently. That’s been the most well-received chapter in the book. I thought for sure it would be Pay Yourself First, compounding, or TFSA versus RRSP. Chapter nine has been the number one chapter for feedback because it’s such a struggle to save now. If you can pick up some tips on how to avoid giving in to that temptation, it’s absolutely crucial.
I preach this, though nobody listens to me, but using cash is still a wonderful way to go. Instead of using credit cards, if you force yourself to see the money leaving, you feel the pain. You realize it’s finite, and it slows you down. All those things are positive. But I’ve learned not many people are going to go that route.
Mike Moffatt: As a believer in behavioural economics, I will tell you that the cost of that isn’t so much getting the money, but you do get some eye rolls, particularly from the younger generation.
Speaking of the habits of Gen X and Boomers, one of the challenges I have with dealing with the housing crisis is that older generations understandably see some of these issues as, “If younger people want cheaper homes, that’s going to mean my home value goes down.” How do we navigate that? How can we convince Boomers and even Gen Xers like me that that’s a necessary thing to do, instead of just telling Millennials and Gen Z to knock off the avocado toast?
David Chilton: That part of The Wealthy Barber really went over well. One of the characters says, “What about this housing crisis?” Another responds, “What housing crisis? My house has gone dramatically up in value. That’s not a crisis. That’s a windfall.”
One person’s crisis is another person’s windfall. Roy literally goes through and talks to the various characters in the barbershop who already own a home. They say they’d love to have a cheaper home for kids as long as it’s not their house.
To your point, there’s a trade-off here. If we have lower-priced housing for the younger generation, that means those of us who are a little bit older have to accept less back in return for our home when we go to sell it. Interestingly, I don’t find that the media has this right. I find most Boomers are okay with that. When I have one-on-one discussions with people, they’re sympathetic. They have kids, they have grandkids. They want those people to be able to get into the housing market at an affordable level for their income, and they know they have to take a little less for their house.
It’ll be interesting, as Steve Saretsky and others have pointed out, what’s going to happen 10, 15 years down the road as all the Baby Boomers go to sell their homes. If they try to maintain these types of price levels - let’s say interest rates are low, or there are fewer foreign buyers - how are people going to be able to afford to buy them in the numbers that they’re going to come to the market? All of that’s going to be fascinating to watch.
In general, when the media says the Boomers don’t want the price of their homes to fall at all, of course nobody really does. But when they think through the fact that it’s better for the younger generations, I’ve actually found them pretty cooperative and fairly open-minded.
Mike Moffatt: I think politicians might overestimate that.
I know an anecdote isn’t quite the same as a scientific poll, but back in the 2021 election, a friend of mine, a Member of Parliament, was running for reelection. He told me it was the most remarkable thing. He and his volunteers had been knocking on doors, asking people what their issues were. Home prices were particularly picking up. He said, “I’m getting an earful at the door about housing prices.” Not surprising. But he added, “Here’s the surprising thing. The people I talk to who are angriest about it are not people in their 20s; they actually seem kind of resigned to their fate. They’re disappointed and upset, but they’re not necessarily angry for the most part. The group I find angry are moms in their 50s, usually, who have a 20-something in their basement that they’d like to see fly away.” Many of them thought at first their son or daughter was just lazy and not trying hard enough. Then they sat down, did the math with them, and realized this truly is broken.
I can’t speak for the Boomers, but I do think Gen X is sometimes unfairly maligned. Many of us do understand that prices need to go down.
David Chilton: That is a great anecdote and very much matches up to my experience with both Gen X and the Boomers. When they think it through, and you have a good conversation, they’re very aware that this isn’t fair to younger people and some sacrifices have to be made. If policies come in that knock the value of their home down, I think they’ll accept that better than you think, especially if it’s well positioned and well explained by politicians.
On the other hand, if you go to Boomers and try to take any of their OAS away beyond the current clawback rules, that is not well received at all.
You have to pick your poison here when you’re politicians on where to even things up and help the younger generations. This is the theme you’ve been hitting over and over again: we’ve got to make some changes to help the younger generations.
For the most part, it’s not a zero-sum game, but that could involve some sacrifices from older people. How do we share those sacrifices to make sure that the people who are older but in trouble aren’t hit at all, and instead it’s others? Then people start talking about redistribution and taxing the rich too much. All of this is very tricky stuff. I wouldn’t want to be a politician in today’s times.
Mike Moffatt: I totally agree. I would not want to be a politician right now. I also agree about the third-rail nature of OAS, because we hear it here.
When you wrote the first edition in 1989, there were indications throughout the book that if you do the right thing - save and invest early - you can reasonably expect certain things in your life: an annual vacation, a nice car, a comfortable home, early retirement, the ability to give kids what they need and want, and baseball season tickets. That one is near and dear to my heart. Does that list still apply today, or would we have to amend that?
David Chilton: First off, I don’t think even I, the author of the first book, thought it would work out that well. The markets were so strong, both real estate and the stock market, that anybody who read The Wealthy Barber in the 80s and 90s and bought in did very well. Not because The Wealthy Barber is so smart, just because the markets were incredibly supportive. If you do those same things now, you can’t count on the same market returns.
Real estate had an unbelievable run because interest rates fell significantly over a 35-year period. The stock market returns have been robust. Precisely because they’ve been so strong, valuations are now stretched, and future performance may not be as good. The techniques will still work, but will they work as well going forward? The odds don’t favour it, but that makes it even more important that you save the appropriate amount, the 10 to 15%, because you may not have strong returns backing you up. How do you save 10 to 15% of your income when you have so much going on with housing and school costs?
Something nobody ever talks about is that we have a lot of wealthy people now. Wealthy people, especially stateside but also Canadians who are well off, are willing to spend a crazy amount on the things they’re passionate about. What you’ve seen with inflation in concert tickets and live sporting events is crazy. The middle-income person has almost been priced out of those. Or if they want to go, it is a major expense now that impacts their financial planning.
That wealth divide is having spin-off effects that are quite dramatic in terms of costs in certain spending areas. I see it right now when I’m travelling. A lot of the high-end restaurants are doing exceptionally well, but many middle- and lower-end restaurants aren’t doing as well. It all ties into what income levels you’re servicing. It’s a fascinating time in history right now, and it will get more so with AI coming on and about to impact society on many levels.
Mike Moffatt: It really does seem that rich people are able to buy more baseball tickets and things like that. It does seem that sports leagues have been catering to that. The Rogers Centre has significantly fewer seats than it used to have, but more boxes.
David Chilton: You’re from London. Are you a Jays fan or a Tigers fan?
Mike Moffatt: I’m a Jays fan now. I actually grew up a Montreal Expos fan. I got into baseball just young enough before the Jays were good, during the Dawson, Raines, Valentine era. I’m a huge baseball fan. How can you not be growing up in southwestern Ontario? You had Tom and Jerry with the Jays. You had Ernie Harwell with the Tigers. There was always so much to listen to. I’ve got to ask, you’re from Sarnia. Jays or Tigers?
David Chilton: Listen, if I’d known you were a Jays fan and not a Tigers fan, I would not have done this interview.
Mike Moffatt: My brother-in-law is from Bright’s Grove and is a Tigers fan. I have to deal with this almost every day.
David Chilton: It’s my hometown area. I’m a Detroit Lions fanatic. I hate to say this, but I care more about the Lions than I do about my family. But the good news is my family cares more about the Lions than they do about me. We’re all working on an even playing field here.
We’re big Detroit sports fans to the n’th degree. Obviously, they collapsed in baseball recently, but the Jays have come on and have a very good chance to make the playoffs again.
Mike Moffatt: As a Lions fan, I think you then understand the suffering that young people are going through.
David Chilton: Exactly.
I said to my father, who is 93, “Dad, if you could go back and tell your 20-year-old self something, knowing what you do now, what would it be?” His answer was classic Bob Chilton. He said, “Don’t be a Lions fan, and eat more shepherd’s pie.” Those were his two pieces of advice. Everybody out there listening, write those two down.
Mike Moffatt: Your dad gave you some good advice.
I want to go back to something you said before we started talking about baseball. You mentioned how difficult the environment is to invest in these days. The stock market looks overvalued, and we had this massive run on real estate. How should you invest these days?
In particular, one of the pieces of advice you’ve given in the book is to work with a financial planner, but you’ve got a lot of people doing the opposite, figuring that’s going to eat into their returns. Nowadays we have low-margin, expense-ratio ETFs. Does the advice about using a financial planner still hold today, or would younger people just be better off investing their money in a handful of ETFs?
David Chilton: I think younger people, for the most part, are better off just using the low-cost ETFs, the all-in-one asset allocation funds. You get 25 basis points or fewer per year. That’s tremendous. You get built-in diversification. I’d invest in the same way I taught 34 years ago: dollar-cost averaging into equities. You’re going to have some tough times and long downturns, but that’s fine. You’re still in there buying on an ongoing, monthly basis. You’re worried about long returns ten, 20, and 30 years down the road. Even though the markets are a little rich now on the valuation front, I wouldn’t pay much attention to that.
In general, one of the things I’ve preached aggressively is don’t pay attention, period. Make the bet on human creativity and ingenuity, trusting that over the long term, capitalism is going to win out. Many companies will prosper, many will not, but overall, the returns will be quite satisfactory if you just focus on the long term.
People like my father have been very good at that—he pays no attention and has done very well.
I do think these low-cost ETF products are worth a look. Later in life, as people hit 50 or 55 and are looking at retirement planning, accumulation, and estate planning, financial expertise is needed. At that point, you often need to sit down with a financial planner. It can be an advice-only planner, or somebody who is very competent, has their CFP, and does AUM. The advice changes a little bit then.
For younger people, keep it simple, keep your costs low, dollar-cost average, and automate everything.
The key is to get it off the top of the paycheck or directly out of the bank account before you have an opportunity to blow it. If I look at my career, I’d say the biggest impact has been “pay yourself first.” Getting people convinced that if they take it off the top of the paycheck or directly out of the bank account, they won’t miss it that much and they won’t screw up because it’s automated.
That is still the biggest message I push.
Mike Moffatt: I think that’s fantastic. Are there any other pieces of advice from 1989 that you feel still hold up today?
David Chilton: A lot of the common-sense advice, like buying a smaller home than you can afford or qualify for, is still very good advice. Some people watching might say, “Dave, had you bought the biggest home possible, it would have gone up even more on an absolute basis, and you get the tax break on capital gains.” True. But it also would have had a lot of side costs hitting your cash flow: higher property taxes, higher insurance, higher hassle factor.
Go way back to The Millionaire Next Door, that famous book that has stood the test of time to the nth degree. One of the fundamental principles is buying a relatively small house compared to your income. Keep it simple. Keep your costs low. That tends to lead to more happiness, not just better financial results.
The biggest thing I’ve learned doing this for 40 years is that people who are more on top of their finances are happier and less stressed. There’s a feeling that if you save money and make sacrifices, you’ll be less happy, doing less, and having less fun with your buddies. It’s not the case. When people get on top of their finances, pay off non-deductible debt, and build towards their future, they’re less stressed. They just feel better about things.
We still don’t do a good job of teaching that in the education system. That’s why books like The Wealthy Barber are important, and it’s why getting messages out there about housing is important. I think the information out there is very good now.
Mike Moffatt: I do as well.
I think there are three groups here I’d like you to provide some advice to. Your first group is the politicians and policymakers who listen to this podcast. What do you want to see from them? What would help the financial security of younger Canadians, whether it’s an attitudinal change or an actual policy?
David Chilton: I wouldn’t do something specific to financial planning. I wouldn’t necessarily introduce more instruments or expand the TFSA. What really helps younger groups prosper and have hope for the future is strong economic growth. We’ve got to get back to higher productivity. What does that look like? We need to attract more capital, and therefore we need to be attractive to capital. We’ve got to watch our tax levels and our regulation. We can overwhelm the marketplace.
One of the things that hurts Canada is the concentration of power we have at the top of so many industries. If you look at everything from banking to telecommunications to grocery, we have three, four, or five dominant players at most. Therefore, there’s less innovation and less risk-taking. It’s more about market share and cooperating than it is about innovating and doing exciting things. Any policy changes that help on the productivity front, lead to future growth, keep capital here, and keep younger people excited are crucial. We’re losing some of our best, youngest, and brightest right now to the States.
I’m more concerned with those big-picture policy issues than little things to do with RRSP and TFSA tinkering.
To expand on that, you mentioned the brain drain earlier and how real estate is pushing some people away. I really saw that in Waterloo over the last few years, where founders have told me they’re probably going to start their company stateside. People say they’re turning their back on Canada, but they didn’t leave because of taxes or regulation. They left because they couldn’t attract talent in Canada. They could in the States because of real estate prices. People look at it and say, “If I locate in Texas, real estate is so much less expensive than it is in Canada.”
The other thing they bring up regarding attracting talent is the weather. A lot of Canadian talent says, “These winters are killing me.” We can’t do much about that one. But you can see the spillover effect of extremely expensive real estate impacting a lot of different things in our lives.
The big picture answer is we need more growth. We need more productivity gains. What can we do to help on that front?
Mike Moffatt: Now we have an answer if politicians say that that’s too tough. We can say the alternative is changing the weather. Pick your battle here.
Next, I’d like some advice for younger people, because you’re retiring and have gone through the lifecycle of your employment; I’d like the advice to be non-financial in nature. If you have a 22-year-old graduating from Western, what advice would you give them?
David Chilton: First off, be optimistic and be hopeful. There are a lot of wonderful things happening in the world. It is so easy to get caught up in the negativity now. You watch the news, trade battles, what’s happening in the Middle East, but all of us are living better lives now than people did 50 and 100 years ago by a dramatic margin. The trends in most areas are up and to the right, not down and to the right. We’re going to have major breakthroughs in things like health care over the next few years because of AI and all the smart people out there. It’s a world full of opportunity. Do not buy into the negativity. Look at the possibilities with side gigs, old-fashioned businesses, AI, and Facebook Marketplace. I meet so many younger people in their 20s and 30s making thousands a month doing things on the side.
My biggest message to young groups is: do not buy into this all-negative narrative. There are challenges, like real estate prices, but there’s lots of opportunity.
Something else I learned from 35 years on the road is that 98% of people out there are wonderful. They’re kind, polite, cheering for you, and onside. They just want to add value and raise good kids. When you get all your news from the news, you get a distorted perspective that there are a lot of bad people out there. When you’re out there every day meeting new people in new environments, most people are very good, caring people.
Mike Moffatt: That’s true. As somebody who’s travelled from coast to coast to coast, we are really a country of great people.
The third group is a group of one: me. What advice would you give a minor celebrity podcaster who’s about to turn 50? This can be financial or non-financial.
David Chilton: On the financial front, I would go see a very competent financial advisor. Maybe an advice-only planner. You want to do some of your pre-retirement planning in your early 50s. Some people wait to go in for those meetings until they’re 60, and certain opportunities could be lost. That’s the one thing I would do. The other thing you have to think through when you’re 50, which I didn’t do a wonderful job of, is when you think you want to retire and what that looks like.
In general, I don’t think you need much advice. You seem like a very happy, content person. As I’ve gotten older, I’ve learned certain lessons. One of the things that stands out in the last few years especially is that friends are family. Spend as much time as you can with your friends and loved ones. As you get to be 55, 60, or 65, health issues start cropping up among some people in your friend group, and it can jolt you back. Take advantage of the time while you can. Don’t get too caught up in all this money stuff.
I’m one of the least money-oriented people you’ll ever meet. I really don’t spend a lot of money. I have low-cost hobbies. I like hanging around my buddies. I care more about my hockey pool and my fantasy football than I do about my investments. Enjoy life.
The overriding message I’ll give you is the same one I just gave to the younger people. We are lucky if we are healthy and live in Canada. Problems aside, we are very fortunate people. Instead of complaining, let’s get out there, make a difference, start something, grow something, and get involved in the community. Be a wonderful parent. There are so many ways to add value in life, and I find too many people are too negative now. There’s too much complaining.
Mike Moffatt: That’s good advice. I have someone who knows I complain too much, so it’s nice to be reminded of that. I’m going to need to bring you back on because I’m going to need help with my fantasy hockey pool. I haven’t won in decades. I seem to be better at it younger.
Thank you so much for coming on. As I said before we started recording, you’ve always been a bit of a hero of mine. I first read your book in my late teens, so you’ve always been someone way up here to me. To be able to have this conversation is great.
David Chilton: I enjoyed it immensely. I have a lot of respect for you. You’re a very sharp guy. The podcast is excellent, and I enjoy your Twitter account too. You have a lot of good thoughts on things, and you’re very good at explaining concepts. When you talked about why the builders are building less expensive homes, that was a very helpful piece. People need to understand that type of thing. Even a lot of policymakers don’t necessarily know all of that, so it’s good you’re drawing attention to it. It was an honour to be on the program. Thank you so much for having me.
Mike Moffatt: One of the life lessons that I try to teach younger people is don’t be afraid to ask what seems like silly questions. All those things I found out about the cost of building a home, I basically went up to builders and developers, acted like a five-year-old, and just kept going, “Why, why, why, why?” You learn things you otherwise wouldn’t know.
David Chilton: I’ll tell you a cute story. When I was about ten, one day my father said to me, “You can ask me; there’s no such thing as a stupid question.” The very first question I asked after that was actually stupid. He said, “You proved me wrong. Apparently, you can come up with a stupid question.” Anyway, I enjoyed it immensely, and I’m sure we’ll do it again at some point.
Mike Moffatt: We’d love that. Thanks again.
Thank you to our audience for watching and listening. Our producer is Meredith Martin and our editor is Sean Foreman. If you have any thoughts or questions around the economics of southwestern Ontario, please send us an email at the [email protected]
Additional Reading/Listening that Helped Inform the Episode:
The Wealthy Barber 2025 Indigo Exclusive: The Fully Updated All-Time Canadian Classic
The Wealthy Barber (Wikipedia) | The Wealthy Barber (Official Site)
Steve Saretsky: Canadian Real Estate—CRAZY Times Have Led to CRAZY Times | TWB Podcast #26
Why Developers Only Seem to Build McMansions
Brought to you by the Missing Middle Initiative
Really good conversation, Mike. As we know, there are policy solutions, but they require older Canadians to not just recognize the issue, which they increasingly do, but accept that there are no magic solutions. Only solutions that make life easier for younger people at the expense of older people. We have to stop feeling entitled to our entitlements.