Teacherapple

The Book: Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned In School

The Big Idea: You can beat the financial pros and become wealthy simply by investing in low risk, low cost index funds.

The Author: Andrew Hallam worked as a high school teacher but didn’t let his teacher’s salary hamper his dreams of attaining wealth by the age of 38, all on a middle class income.

Key Points: The stock market has traditionally earned an annual rate of return of 8% to 10% over time, despite depressions, recessions, and market declines.

Unfortunately, most people fail to capitalize on these wealth building returns because they (1) are too busy chasing the latest hot stocks, (2) give in to fear and panic when the market drops, and/or (3) get fleeced by managed mutual funds whose high fees erode any chance of achieving decent returns.

The Review: What if I were to tell you that you could become financially independent by investing in the stock market? You’d probably never believe me. You see, fear inducing headlines and first person accounts of incredible stock market losses make most of suspicious about using the stock market to become wealthy.

But, I guarantee the Millionaire Teacher will change your mind. Andrew Hallam’s practical guide shows you how to earn great returns using the stock market without suffering gut wrenching fear or anxiety.

The author’s secret:

Live below your means and use the money left over to invest in index funds.

Hallam spends the first part of Millionaire Teacher extolling the virtues of aggressively paying down debt, learning to control spending, and living below your means.

All of this is pretty much standard personal finance information, but it is the next section of the book that’s worth its weight in gold.

MillionaireTeacherBookHere, Hallam explains how to effectively invest the money you’ll have after you start living below your means, and his advice runs counter to what most of us have been taught.

According to Hallam, investors fall into the classic trap of investing their money in actively managed mutual funds, either as part of their 401Ks or at the prodding of their financial advisors.

Typically mutual funds are accounts in which a manager purchases a basket of stocks for the investor. The common belief is that a mutual fund manager will use his education, knowledge, and experience to purchase the best bag of stocks for you, maximizing your returns.

Unfortunately, the fees associated with actively managed mutual funds quickly devour your investment returns. Consider the following fees you’ll likely pay with many managed mutual funds:

Expense Ratio – This is the fancy term that encompasses the costs associated with running the mutual fund. It includes, for instance, the costs to pay for salaries, utilities, and office leases. The expense ratio even covers the costs associated with marketing the mutual fund.

Trading Costs – This represents the expenses that the mutual fund manager incurs to buy and sell the stocks in your basket. These expenses can become substantial.

Load Fee – This is basically the money you pay to actually buy into the fund. It is the sales commission your financial advisor or financial institution receives for selling you the mutual fund.

Instead of falling into the actively managed mutual trap, Hallam suggests that the average investor should instead purchase low cost index funds. Unlike actively managed mutual funds where a manager actively tries to pick the best stocks, with an index mutual fund, you’re simply purchasing a piece of all the stocks in a particular index.

Plant Growing In Savings Coins - Investment And Interest ConceptAn S&P 500 index fund would, for instance, allow you to own a small piece of every one of the 500 largest companies in America. The advantage is that index funds are not actively managed, drastically reducing the amount of fees you pay and improving your returns.

Hallmam provides evidence showing how, over years and decades, index mutual funds far outperform actively managed mutual funds. By investing at an early age in index mutual funds, Hallman arugues that you can easily create a path that leads to financial freedom.

Should You Buy This Book?: Millionaire Teacher is clearly for the person who has already begun taking control of their financial life. It will guide that person through the next step, showing them how to invest their money without enduring the high risks typically associated with investing.

In addition to discussing index funds, Hallam skillfully explains the importance of diversifying your portfolio and using bond indexes to further reduce your risk. For those of you looking to invest and make your money grow, Millionaire Teacher should be one of the first books you read.

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So this is the year you’re going to get your finances straight. You’re determined to become the Dollar Diva, the Money Maven, or the Greenback Guru. But what if you don’t have the time to wade through Dave Ramsey, Suze Orman, or Michelle Singletary?

Don’t worry we’ve got you covered. Your cliff notes await. Below you’ll find the quick and easy guide to mastering your money, courtesy of the greatest financial minds to ever walk the planet.

Financial success explained in 90 seconds flat:

“Never spend your money before you have it.” – Thomas Jefferson

We live in a world where common sense is nothing but common. If you can’t pay for something in full, walk away. Step back from the Manolo’s. Put down the iPad. Return the ultra high definition 65-inch flat screen TV. Your bank account will love you for it.

“A wise man thinks ahead; a fool doesn’t, and even brags about it!” – Proverbs 13:6

Why is it that some people seem to have the Midas touch? They do more with the same amount of money and always seem to have their finances in check. It might be related to how they think.

Businessman planning year 2017. Business new year plans, goals and targets concept.

According to author T. Harv Eker, the poor think day to day, the middle class think year to year, while the rich think decade to decade. Creating a long-term plan for your life and your money puts you on the road to wealth. Remember, to become rich start thinking like the rich. Plan ahead.

“Pay yourself first.” – David Bach

We spend much of our lives hustling to pay others. Yet, only when everyone else is taken care of do we serve ourselves the leftover scraps. It’s time to flip the script. Pay yourself first.

Have 5% to 10% of your paycheck direct deposited into a savings account earmarked for your financial goals. Only then should you use the rest of your paycheck to pay everyone else.

“Save your money and one day it will save you.” – African Proverb

Life kicks us when we least expect it. The plumbing breaks, the car won’t start, or Junior needs new braces. But with an emergency fund you can stare back at Life, laugh in its face, and be on your way.

Plant Growing In Savings Coins - Investment And Interest Concept

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” -Will Rogers

Ouch!!! Like my mama used to tell me, “Boy why are you trying to impress people that don’t care two cents about you.” Instead of building an impressive wardrobe, worry about eliminating debt or creating an impressive stock portfolio.

“The rich rule over the poor, and the borrower is servant to the lender.” – Proverbs 22:7

For my grandparents and great grandparents DEBT was a four letter word. And now we see why. DEBT = SLAVERY. Debt is the weight crushing the soul out of life. True freedom is found by avoiding debt like the plague.

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“The art of living easily as to money is to pitch your scale of living one degree below your means.” – Sir Henry Taylor

Yes we’ve all been guilty of mentally spending our raise, bonus, or tax refund before the money has even hit our hands. As humans we can’t help but spend everything we make. But according to the universal law of wealth, to be financially secure you must spend less than you earn.

“Live today like no one else so you can live tomorrow like no one else.” – Dave Ramsey

Do what other people aren’t willing to do. Cut expenses, vigorously eliminate debt, and avoid credit cards at all costs. The small sacrifices you make today will allow you to grow your money so that tomorrow you can afford what others cannot.

MMsinkingpiggybank“Beware of little expenses: a small leak will sink a great ship.” – Benjamin Franklin

Few of us pay attention to the dollars and cents that flow freely from our pockets, but these small amounts quickly add up. Your morning Starbucks fix, noon lunch runs, or daily bottled waters could be quietly decimating you finances.

Long before there was the Latte Factor, Ben Franklin recognized that it’s the little expenses which slowly bleed us dry.


“One man pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.” Proverbs13:7-8

Act rich or be rich. That’s the choice. According to Thomas Stanley, author of The Millionaire Next Door, most of us wouldn’t recognize a millionaire if they were standing right next to us. That’s because millionaires are more concerned with building wealth than looking rich.

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick

You know those friends who say they want a better life. They want to go back to school. They want to get out of their apartment and buy a home. Yet, you see these very same friends purchasing the latest electronics, eating out every night, and always sporting the latest fashions. How you spend your money reveals your true priorities.

There you have it. The quick run down on how to achieve financial success. So how about you? What money advice would you add to our personal finance cliff notes?

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