In his book, Millionaire Teacher, Andrew Hallam teaches us the nine rules of wealth you should have learned in school. It’s a shame that our public school system does not have a curriculum on personal finance. It is such a vital and fundamental subject that is much more relevant to everyone than history or advanced mathematics. A huge percentage of our population is in financial trouble which could have been avoided had people taken a personal finance course.
I really like the Millionaire Teacher. The book is engaging and easy to read. It is perfect for someone who is starting to accumulate wealth or even people who are well on their way. Andrew started off with his own compelling story of how he became a millionaire on a teacher salary. It is not impossible. Anyone can do this; it just takes a lot of time. He didn’t use any tricky get-rich-quick gimmicks. His investment plan is simply stock and bond index investing. You can spend 10 minutes per year on your investment and became a millionaire too. Are you a millionaire? If you aren’t, you should read Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School.
Here are some key takeaways that resonated with me as a long term investor.
- Saving. Avoid paying for depreciation and let others do it for you. You shouldn’t pay for a new car when you can buy a used car for such a big discount. Andrew likes to buy a used car, drive it for a year and then sell it at the same price. I did this with some baby items and it worked out well for the buyers and sellers. Now I just need to put this into practice with other things.
- Investing. It’s not market timing that matters; it’s time in the market. I know I can’t time the stock market so I tend to avoid the buying and selling frenzies. This is the easy way to invest and it historically beats most active managed mutual funds in the long run.
- Bonds. Hallam shows the importance of having bonds in your portfolio. I’m guilty of having too little allocated toward bonds. I’m almost 40, but my bond holdings are only around 10%. I have been meaning to fix this, but the book lit a fire under my butt, so to speak. This will be one of my high priority to-dos for 2012.
- Financial advisors. Most brokers and financial advisors are just glorified salespeople. I agree with this. My first financial advisor steered us toward mutual funds that he makes commissions on. After I extricated myself from those piles of dung, I never talked to another financial adviser. I’m sure there are some financial advisers who have their clients’ best interest in mind, but unfortunately they are a minority.
All in all, Millionaire Teacher is a great book for anyone who aspires to be a millionaire. I highly recommend it.
For 2018, Joe plans to diversify his passive income by investing in US heartland real estate through RealtyShares. He has 3 rental units in Portland and he believes the local market is getting overpriced.
Joe highly recommends Personal Capital for DIY investors. He logs on to Personal Capital almost daily to check his cash flow and net worth. They have many useful tools that will help every investor analyze their portfolio and plan for retirement.
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