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on November 21, 2011
As with most reviewers have said, the author's writing style is non jargon and causal which makes it a fun read. I love books from non professionals as they are so rare and bring to the investing table a personal experience not shared from the volumes of professionally written finance books. The best part of the book is its focus on the investing process, living within ones means, shunning advisers and seek a low cost diversified index portfolio. And we can learn this stuff! Wonderful. I anticipated he would show us exactly how he made his million on an educator's salary.

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.

I commend the author for his excellent metaphors to explain complex concepts such as using Willy Wonka's Chocolate Factory on what exactly does an investor own when he or she owns a share of stock. Brilliant. It one of those things that may be shocking, but so many people in our profession as educators don't know what a share is and are rightfully embarrassed to ask at a seminar.

The book has nine rules or chapters. Most are devoted to the investing process, specifically to index or passive strategy by John Bogle. He references all of the great authors on this subject, Bernstein, Swedroe, Samuelson, Buffett, Malkiel, Sharpe, Burns and the Bogleheads. I agree that investing is not that difficult as most people think. Learning what your "knowledgeable" and super "nice" financial adviser is doing with your money is crucial. Index investing is so simple to use, but it's hard to teach a subject when the learner does not have to do much with a passive portfolio. But he does an excellent job of explaining this popular strategy by rebalancing with a bond allocation. By reading the first 8 chapters the reader should learn that the best way to invest is by using the established "couch potato" or "lazy portfolios".

My harshest criticisms resides with his last rule, rule #9 and its implications for the rest of the book. Here I part philosophical company with the author BIG TIME after agreeing with every word in the first 8 Rules. IMO he is pandering to those folks (and the publisher?) that think they can pick stocks by following the authors detailed methods, after explaining all the way through the book that the active managers of funds cannot! What?

I was dumbfounded. Mutual fund companies and brokerages firms have entire departments devoted 24/7 to researching stocks. They have analysts who do this for a living using powerful computer technology hiring quants from Ivy league schools to try and pick the winning stocks and beat the market? The author explained in great detail with graphs of past returns comparing active management to passive management with passive strategy generating better returns over the long term.

Also, the author spent a good deal of time rightly explaining that we should not use newsletters! The author then says that he uses and recommends one newsletter, Value Line, to pick his individual stocks, after debunking all of the other newsletters. Heck, I read Value Line newsletter that he touts years ago and bought one or two of their recommendations--I'll won't make that mistake again. The author appears to want it both ways and thinks nobody will notice: Stock picking and index investing are as far apart philosophically as the moral fabric of Pope and Attila the Hun.

As a literature teacher he should have known as a writer that the author SHOWS the reader what the author has done. With the sole exception on his frugal living experiences, he unfortunately LECTURED us on everything else. He might as well have been a professional investor writing a book. Yes, it's good, but it's impersonal. As everybody else has said, it was funny, different, entertaining and encouraging, but nevertheless, he broke a cardinal rule in writing: "thou shall not tell, but show."

At the beginning of my review I was anticipating a case study about how this non financial professional made his million. But it's not here, unfortunately! I was disappointed.

Since he did not show us how he made his million before age 40, we are left guessing how he actually did it, outside of the fact that he started young. What if we are older, what do we do? Is it too late?

I read an interview online where he said that he recently sold $700,000 in individual stocks and is now invested in the 3 VG funds he suggested throughout his book. Did he make his million investing in individual stocks or index strategy or combination? Did he use timing?
He spend a good deal of time explaining about the investment club he formed and some of the stocks he bought, but that's all he reports. He didn't say how much he contributed, how much he lost (except for the $7000 example) what were the returns on his investments over the years. How much was his wife involved in tabulating his million or their million? Again we are left guessing. This book would have been great if he finished the job.

Aside from my 2 criticisms, I highly recommend this book with one qualification: Read and apply the first 8 rules, but ignore rule 9.
I would rated the book a 5 star without the last Rule. Rule nine is a 0 and his lecture style brings it to a 3.
Rule 9 is all about individual stock picking. IMO investing in individual stocks is speculation for us ordinary investors, the authors he quoted above would agree.

Here is an excellent example of another book written by non professionals: The Average Family's guide to Financial Freedom by Bill and Mary Toohey. He was a teacher and she was a secretary. Its over a decade old, but it's still current. The authors show in great detail how this Iowa family of five, saved $467,000 in only 8 years while raising 3 children (one with disabilities) in a 1 bathroom house making $65,000 a year! They cover a lot of ground in their book and they were in their late 30s. Highly recommended.

After reading these two books, readers will be on their way to their financial freedom.
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on October 4, 2011
I highly recommend this book to anyone that invests, plans on investing or wants to know anything about investing. Whether you are a seasoned financial advisor with a book of your own or you are just starting to invest your own money, this book is a must read. With a finance degree, MBA and experience working on Wall Street this book brought me back to school for the best education I could get and should have gotten prior. The author uses strong empirical data to back up his analysis and plainly spells out how to operate a portfolio of your own with more ease and success than any of the commonplace alternatives. This book has changed my view on investing for the better and if you are serious about making money investing, you should read this book.
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on April 4, 2013
This is my first written review. I had never before felt so compelled to write, despite a voracious appetite for books. I wanted to love this book. As a fellow English teacher with a passion for personal finance, I certainly have enough in common with the author.

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. Chapter 9, on the other hand, seems to fly in the face of much of what the author discussed in the previous chapters and detracts from the overall message.

I would have liked far more information on how the author achieved millionaire status. Index funds are not get-rich-quick schemes and I cannot imagine that those alone propelled him to his current level of wealth. The author did allude to a spartan period of time in his existence when he house-sat for others without turning on their heat and caught and ate his own clams. Is this how he achieved millionaire status? Not sure I can replicate that with kids in tow and not sure I would want to do so.

In summary, the information about populating your portfolio with stock and bond index funds is spot on. That being said, I think this would have been far more worthwhile as a pamphlet or mini-book than as its current full-length version. I would not buy this book and I am sorry that I did. My recommendation would be to take it out of the library, read Chapters 2-5 and promptly return it.
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on September 28, 2011
I am a mother, a teacher, a wife and not remotely interested in finances. Of course I want to be prepared for the future and am lucky enough to be married to a man who takes care of our investments. This is the first, the only, investment book I have read that makes sense. Andrew Hallam's wit had me laughing out loud, his analogies created a clear picture and when I finished I declared I not only understood investing, I could do it! My husband and I now work together and I have a much better sense of a balanced investment portfolio. Millionaire teacher influenced my husband as well. After reading he reorganized our stocks and increased bonds. This book should be required reading in every high school, university and beyond.
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on September 26, 2011
Like pretty much everybody in my generation, I'm scared. Scared I won't have enough money for my kids' college, scared I won't have enough money for retirement, scared I won't have enough money for that inevitable rainy day.

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.
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on January 5, 2012
One single action item in this book is to open an account with Vanguard, split your investment into three parts:

Vanguard US Bond Index (VBMFX - 35% or whatever your age is),
Vanguard Total Stock Market Index Fund(VTSMX - 35%),
Vanguard Total International Stock Index Fund (VGTSX - 30%);

remember to rebalance once a year, and you are all set. The rest of the book is pretty much trying to convince you that the above is the absolute right thing to do and never believe otherwise no matter what your financial adviser tells you, which is an easy and fun read.

But what I found missing in this book is the guidance on how to deal with employer-sponsored 401k accounts. I do have an IRA account with Vanguard, but a much bigger chunk of my retirement investments are with Putnam - my employer sponsored 401k plan. The only index fund available through this plan is Putnam S&P 500 index. They don't offer any bond index or international stock index fund, and the rest are all actively managed mutual funds with quite high expense ratio. As far as I understand, you can not take money out of the 401k to put into an IRA while still employed. So in this case, does that mean I'm stuck? I tried to find answers in the real example in Chapter 6 but couldn't. The medical doctor seemed to have all the old investments at his fingertips ready to be transferred to Vanguard. Does he have an ongoing 401k at all? What to do if the majority of his investments are in a 401k plan offered by his current employer?

I've read some of the other reviews and it looks like the author responded to some of those. Thank you Andrew, for doing so. If you see my question here, could you respond with some practical suggestions? And thank you for writing such an intuitive yet useful book. I enjoyed reading it and learned a lot.
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on September 26, 2011
The difference between this money book and so many others I've read is that this book is funny. Most finance books are stuffy. Not this one. It's incredibly easy to understand....and the author is right. This stuff should really be taught in schools!! If it had, I would be in a lot better financial shape right now.
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on July 26, 2012
Because several of the rules are simply more precise instructions for a previous rule, e.g., avoid brokers who attempt to talk you out of investing in index funds, I boiled the author's good advice into three rules:

Rule 1. Spend less than you make. The author referenced stories from a book I read many years ago, The Millionair Next Door. Most million dollar homes are NOT owned by millionaires. And most millionaires DON'T live in million dollar homes.

Rule 2. I wish my parents had taught me the power of compound interest when I was in high school. I learned it later in life, but I lost out on some of the power. One of my grandsons has $300 saved up. I'm going to teach him and his brothers that if he adds $30 to it every month and earns 10% for the next 48 years, he'll have $375,000 at age 60! How can he achieve 10% interest? See rule #3.

Rule 3. Invest in Index Funds. The author explains that spreading your money over three index funds ... home country, international & government bonds ... as Warren Buffet does, a 10% annualized return over a long period of time is very achievable. The author says "It's not timing the market; it's time in the market".
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on October 2, 2011
Like most people in this day and age, I want to make sure every I cent I earn and invest counts. However, knowing how to do that can be mind-numbing and the financial books out there tend to be too technical and not reader friendly. The Millionaire Teacher has done an amazing job using humor and stories to highlight the points that he wants to make. And the point couldn't be more clear. Investing my own money CAN be done with a fair amount of ease and not a lot of time and energy. In fact, the less time I spend looking at the markets, the better. As someone who was petrified of investing and usually disinterested in investment books by page 5, I found this book to be a breeze to read and implement. Simply put, a wealth of wisdom.
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on September 30, 2011
There isn't a more concise, educational, entertaining and empowering personal investing book on the market today. Mr. Hallam writes with a clarity and passion that shines a light on what passes for "investing" advice these days and gets right to the point on what a scam it all is. He then shows you how to do it yourself with index funds and bonds. If this was required reading in schools we would all be better for it!
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