The Wealthy Barber sounds financial alarm bells

Marc Lalonde
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'Granite countertops don't define you as a person,' Chilton tells Pointe Claire crowd

One of Canada's top personal-finance specialists said Canadians' rising levels of personal debt are cause for concern over the next five to ten years in a presentation held at the Holiday Inn Pointe Claire Wednesday morning.

"I'm really worried about the total personal debt being carried out there," said David Chilton, author of The Wealthy Barber , The Wealthy Barber Returns and co-host of the CBC venture-capitalist show Dragon's Den. "You don't have to be an economist  to see there's not going to be a happy ending for this story. We're on a 50- to 60-year credit binge, and there's no way we can pay it all back," he said.

Chilton advised the crowd of about 400 people – made up of business owners, opinion leaders and decision-makers at those businesses –  Canadians would do well to grab some perspective in our consumption-driven economy.

"Our pets live better lives than people in some other countries," Chilton said. "I travel all over the country, and one thing I've noticed about Canadians is that our national pastime is not hockey but complaining. People are constantly complaining about the littlest things. A long line at Tim Horton's is not a big problem," he said, drawing laughs.

Chilton, whose debut novel remains the best-selling book in Canadian history since it was released in 1989, said the economy north of the 49th parallel has changed – and not in a good way.

"In the last 30 years, we've gone from a growth-based economy based on strong investing to an economy that borrows to consume," meaning economic volatility will be the order of the next few years, adding paying off personal debt is always a good way to shore up your personal economic situation.

"You can't screw up that way," he said.

One way Canadians have been consistently screwing up, Chilton said, is in the realm of credit, and the way it's used to get more "stuff."

"There's nothing more dangerous than the combination of a line of credit and home renovations.  Renovations are great, but they must be done in the realm of affordability. I call it the granite-countertop phenomenon. You don't need to have granite countertops. You don't need to have stainless-steel appliances. I speak with people who choose to have heated floors in their bathrooms instead of topping up their RRSPs or RESPs. For heaven's sakes, put on some slippers," he said.

Dorval distribution company Nortesco vice-president of operations Natalie Hess said Chilton's presentation made her re-think some of her priorities, both at work and in her personal life.

"Obviously, it gave me some motivation, knowing the next few years are going to be tough, we'll have to tighten our belts at work," she said, adding she is one of the people Chilton referred to that really lies "stuff," and will try to re-think some of her personal spending priorities.

Holiday Inn Pointe Claire general manager Mario Colucci said Chilton's visit was designed to get decision-makers at businesses in the door to get a look at the impressive $20 million upgrade the hotel has gotten in the last year.

"We're showcasing our properties across the country and trying to get people in the door – anyone who is responsible at a business for getting people into hotels -- to show them 'hey, come and see what we look like now,'" Colucci said.

The Holiday Inn Pointe Claire's parent company partnered with Chilton for the series of conferences in Holiday Inns across the country because of their "shared values," a representative said.

"We have a very similar outlook when it comes to spending money wisely," said Intencontinental Hotels Group vice-president of brands marketing Jo Allan. "We want people to know that we are all about comfort, quality and affordable convenience."

Organizations: Holiday Inns, CBC, Tim Horton's

Geographic location: Pointe Claire, Canada

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  • Don Chaumont
    November 13, 2012 - 11:57

    I attend this presentation and came out with the same thoughts of Natalie Hess. Where is our priority in everyday life. As a Leadership consultant I work with companies and their Leadership practices. Leaders are meant to model the way and inspire a shared vision. I think more companies need to look at how they are doing this. Let's not all do as the neighbors do and maybe even take a path less traveled. We are shaping the future by the examples we demonstrate today. Somewhere in our lives we all lead and we need to remember the only way to lead consistently is to act consistently whether someone is watching or not. We need to get out of our routine to make extraordinary things happen.

  • Rob Gordon
    October 07, 2012 - 06:38

    It can be hard to veer away from being “consumption-driven” if you’ve been borrowing to spend for some time. This behavior, obviously, won’t do much good for your financial health no matter how emotionally rewarding it can be for the interim. Many people accept debt as part of their lives and their overall financial planning, and not something to be cleared up and eventually eliminated, because this allows them to make purchases that they don’t really need, but only want. Budgeting is all about spending less than you make so there’s enough money to go around for more important things: bills, food, mortgage payments, and so on. If you have adequate savings to help you in case any urgent emergency expenses come up, then good. If you don’t, you should consider a laminate countertop instead of a granite one, or a simpler budget instead of one ridden with impulse buys and purchases you can’t really afford. http://www.solvingdebt.ca/blog/3-easy-ways-avoiding-debt-problems