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Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School Paperback – November 1, 2011
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Q&A with Author Andrew Hallam
I think my book has a couple of differences to most personal finance books. First, it's very easy to understand—even for someone who knows nothing about finances. Second, it's real: I followed this advice myself, building a million dollar portfolio on a modest salary, at a relatively young age. My book doesn't just espouse financial theory, but it shows how I utilized that theory in real life.
And I chuckled while writing it, so readers get a chance to see my quirky sense of humor.
To be honest, many of the great endorsements I received came from my financial heroes---people who literally changed my life at a very young age, by teaching me (through their writing) the sound financial concepts that don't get taught in schools. My book espouses very similar, common sense messages about living below your means, investing effectively in low cost index funds, and thinking correctly about stock market swings (young people, for instance, should rejoice when the stock markets fall).
Why should anyone rejoice when stock markets fall?
Anyone with a job (who intends to keep working for a number of years) should prefer stagnating or falling stock markets. Foundations for great wealth are never established by purchasing stock market investments that are rising in value. Instead, we lay foundations for huge wealth when we enthusiastically buy assets that are cheap. For instance, the stock markets in the U.S. jumped up and down from 1965 to 1982 (17 years) without going anywhere. Most people, during this 17 year period, were growing distrustful of the stock market because they hadn’t made any money. But for patient investors who regularly invested during those 17 years, they were seriously rewarded when the markets erupted nearly 1,700 percent in the following 18 year period. All of those stock market assets they previously bought, at low prices, rose significantly during the next 18 year period (from 1982-2000). People who didn't start buying until the stock market started getting more expensive, voluntarily gave up significant, future riches.
The stock markets haven't made much headway in the past decade. Does that mean this is a good time to invest?
It seems counter-intuitive, but yes. And when the stock markets are volatile, or not moving much, the media is always suggesting that stocks are a bad investment—and that you should seek financial safety elsewhere. For 200 years, the same story has played out over and over again. The general population is always afraid of the stock market when it's most attractive, and they love investing when it gets more and more expensive to do so.
I'm currently preparing to teach a personal finance class to high school kids. And I'm going to show them a huge, long-term stock market chart, spanning the past 200 years. Then I'll ask them: "Show me what would have been the best 15 year historical time periods to plough money into the stock markets, on a monthly basis." Simply by asking them questions (and not giving them the answers) they'll quickly see, without me telling them, that the best times to regularly add money to the markets have always been when markets were stagnant or falling. And coincidentally, media headlines have always been scariest during those times as well! To maximize wealth, my students—and readers of my book---will need to think long term, not short term. And they'll learn to ignore the media.
Your book is a withering critique of the financial service industry. Why is that?
I definitely join the chorus of investment academics who believe that the investment business is (mostly) a giant scam, filled with empty promises and high fees, which hurt the average investor's returns. The big picture is pretty shocking. Take this example: If you had put $10,000 in the AVERAGE global stock, in 1981, and held it until today, with all reinvested dividends, it would be worth nearly $200,000 by 2011. I’m not talking about buying Microsoft or Apple shares, I’m talking about the average stock. But if you ask people who were investing 30 years ago, how many of them turned $10,000 into $200,000, you probably wouldn't find anyone who had. Most investors deal with brokers and financial advisors who skim money off the top, in fees that may appear small---but aren't. And people also become victims to the silly decisions that many brokers and advisors make.
You can find advisors without a conflict of interest (which my book shows) but you can also easily invest your own money. Warren Buffett suggests that, as an aggregate, financial advisors don't tend to add value. And I agree with him.
"...if you are looking for the first, and possibly only, book to read if you want to figure out how to finance the rest of your life, you can read Andrew Hallam’s “The Millionaire Teacher.”" -- Scott Burns
"'Millionaire Teacher' is a an inspiring must-read." -- Canadian Business
"It’s that kind of experience and wisdom that makes 'Millionaire Teacher' such an outstanding book. It’s easy to find excellent books about investing, but it’s rare to read an author who so clearly understands how people think and act in their financial lives." -- canadiancouchpotato.com
"The book itself focuses on nine rules of wealth that people should have learned in school... These rules nicely distill what has been said in many of the better personal finance books out there: particularly those that cover indexing and the futility of high-cost actively managed investment approaches." -- Financial Post
"I would recommend Hallam’s book as a great investment guide for the investor that wants to be more engaged with their portfolio." -- Jim Yih, retirehappyblog.ca
"Written simply, the book is suitable even for those who have little knowledge of finances." -- Personal Money"If you want to make sure that your money is invested wisely, then this is the book for you." -- turnonepoundintoamillion.com
"...quirky, upbeat and above all interesting...a book for anyone." -- blog.iii.co.uk
"This book is engaging and easy to read." -- retireby40.org
More About the Author
To do so, I learned the strategies that would give me the highest statistical odds of success in the stock and bond markets, while keeping my risks to a minimum. Using index funds, and following Warren Buffett's mantra of embracing stock market drops, I built a million dollar investment portfolio by the time I was 38 years old.
My methods are supported by reams of academic research. They're simple, and they take no more than 90 minutes a year. But for some strange reason, we don't learn these strategies in school. As a result, most investors are unknowingly taken advantage of by self-serving financial advisors. This book teaches the nine rules of wealth that you should have learned in school. If you patiently follow these principles, you'll dramatically increase your odds of growing wealthy. Let me show you how to do it.
Praise for Millionaire Teacher
"The newbie investor will not find a better guide than Millionaire Teacher" -- Burton Malkiel, Author: A Random Walk Down Wall Street; Princeton economics professor
"This is a great book...It's what you need to know, told with humor, in a way you can understand."--Scott Burns, Chief Investment Strategist, Assetbuilder Inc.
"Put away your checkbook. Instead, give this book to every young person and you will be gifting them a lifetime of financial independence and success"--Robert P. Miles, Author: Warren Buffett Wealth
"If you buy just one book this year, this is it."--Paul B. Farrell, JD.PhD, Author: The Millionaire Code, The Winning Portfolio, The Lazy Person's Guide to Investing
"Millionaire Teacher is an enormously thoughtful gem of an investment book that every serious investor should read, study, and learn from."--Bill Schultheis CFP, Author: The New CoffeeHouse Investor
Top Customer Reviews
His reference to the brilliant book on the subject of frugal living, Millionaire Next Door, which every living human being should read, was a great source of information. He rightfully quotes those authors often. From this reference, this author explains the crucial difference between the image rich and the real rich. It's the assets stupid, not the arrogant Jag owner with car payments, $2500 sport coats and bounced checks. True millionaires wear their finest and dine at home in their work clothes and drive a f150 Ford truck. His frugal experiences were so extreme I felt that his authenticity was at risk IMO. It's hard to believe that he had the heat off in a Canadian winter and he didn't want to turn it on with his father's visit! I know about winters, growing up in Wisconsin. But he was making an important point about frugal living and living within our means so we have the capital to invest and he showed us. I think it might be important to expand on what people can do such as always purchasing good used cars and keeping them for years--the number one expenditure that is never an asset.Read more ›
I will start with the high points. The directive to invest in index funds and to balance your portfolio with bond funds is excellent. The research and testimony behind the strategy is compelling and well-presented. I had index funds in my portfolio, but had them in amongst managed mutuals. I found myself online within the week, reallocating my funds.
So why three stars? Simply because this is the main idea of the book for seven chapters. Chapters 2-8 are essentially the same thing, presented over and over in different ways. When the author touted nine rules, I expected nine distinct pieces of information, a la Your Money or your Life or David Bach's books. Chapters 2-8 in this book could have simply been summed up by the following:
1) Buy an indexed bond fund for your portfolio. The percentage of how much of your portfolio should be invested in bonds should correspond to your age (35 years old = 35%).
2) Split the rest of your portfolio between a US stock index fund and an international stock index fund.
3) Don't jump ship when the market plummets.
As for Chapter 1, while the edict to spend less than you earn is appreciated, it is hardly novel advice. The author brings up many of the salient points from The Millionaire Next Door, but I would rather read those directly from their source than see them quoted secondhand.Read more ›
After reading Mr. Hallam's book, I'm not scared anymore. Not only did he strip away my confusion about how the stock market actually works, he made me ask myself some tough questions about how I make financial choices. The kids he teaches must love him because he writes/thinks like the rest of us. His stories are gripping, his writing cleverly engaging.
But most of all, this is a guy we can all relate to. As a teacher, he's lived most of his life with a salary less than $50K, but he was a millionaire before the age of 40. How many of us can say the same? Not me. Not even close. By clearly outlining the logic behind stock indexing, uncovering the punitive costs of working with financial advisors, and providing clear, specific evidence on how to create a balanced portfolio, Andrew has allowed me to secure my financial future. I've followed his blog for years, and after heeding his advice, I now spend less than 5 minutes a month "investing", but my portfolio is far more secure than it's ever been.
This book has been a long time coming. I only wish I'd had it 20 years ago.
Most Recent Customer Reviews
Great book on investing in Vanguard Mutual Funds or ETF's especially if you are inclined to invest the right way. Read morePublished 10 days ago by Peoh Guy
This book puts things as simple as can be when it comes to investing in your future. This is a must read.Published 20 days ago
EXCELLENT READ! EVERYONE should have to read this by age 18!! You will learn more than you could hope for.Published 29 days ago by Cortney R
The ideas and strategies won't surprise most readers, but the story is well told as allows those concepts to resonate and stay with you. Read morePublished 1 month ago by DoubleDown
I love this book. This book really shifted my thoughts on the finance industry and what I think of mutual funds. Read morePublished 1 month ago by TonyS
The investment strategy described in this book is exactly the type of strategy a young investor like me needs to employ. Read morePublished 1 month ago by Dillon Hall
Simple advice with lots of research to make you feel stupid if you don't index your investments and instead pick individual stocks.Published 2 months ago by Tan Huynh