Shortly after I wrote the post noting how The Simple Path to Wealth: Your road map to financial independence and a rich, free life was one of only a handful of books that could be a worthy candidate to break my list of the top five money books, I found another one that has possibilities.
I first heard about Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School during a podcast interview and made a note to check the book out. Coincidently I received an email the next day from the author’s PR team asking if I wanted a free copy. Of course I did. 😉
I read the book over a couple weeks (a bit at a time) and today want to share some thoughts on it with you.
Nine Rules for Becoming a Millionaire Teacher
As you can tell from the sub-title, the author lists nine rules that are designed to make you a millionaire. They are (his official wording with my commentary added on):
- Spend like you want to grow rich. Watch your spending and save a large amount of your income.
- Use the greatest investment ally you have. Make the most of time/compounding.
- Small fees pack big punches. Keep investment costs low. The solution to this is low-cost index funds.
- Conquer the enemy in the mirror. Many of us are our own worst enemies when it comes to investing.
- Build mountains of money with a responsible portfolio. You need a good asset allocation of both stocks and bonds.
- Sample a “round-the-world” ticket to indexing. Include international funds in your allocation.
- No, you don’t have to invest on your own. But it’s a smart idea to do so. Many financial advisors are not experts on finances but experts at selling.
- Peek inside a pilferer’s playbook. More reasons not to trust/invest with a financial advisor.
- Avoid seduction. Don’t fall for scams and get-rich-quick “investments”.
Not a bad list at all.
My Take on the Nine Rules
Here are my thoughts on the nine rules specifically:
- I can’t argue with saving money. It’s certainly an important part of achieving financial independence. My savings rate was key in allowing me to retire early.
- Yes, time is your greatest investment ally. Investing as much as you can for as long as you can is a tried-and-true path to wealth.
- You know what I think about index funds. 😉
- A key part of getting a high return on your investments is to stick to your index investing strategy and not fall prey to your own “I can do better with my own plans” line of thinking. The author details how people fall into this trap and as a result sabotage their investment returns.
- I agree with the asset allocation and financial advisor suggestions, of course. You know what I think of “experts.”
Overall, the rules are good and in line with much of my thinking. That said, the book and I are not 100% on the same page.
My Take on the Book Overall
Here are some thoughts I had on the book overall:
- Why nine rules and not three? 😉
- He’s a bit over-the-top with the saving. I don’t want to have to bike 45 minutes to work and eat clams I find on the beach to save 50% of my income. In fairness though, teachers usually don’t earn a lot and don’t have tons of upside (though he could have talked about summer side hustles.)
- After listening to the podcast with the author, I thought the book would be more “general personal finance” and less “investing”, but it’s certainly more of the latter. It’s a good investing book IMO, but I would have preferred the former option.
- To that end, he does not focus on earning at all, a big miss IMO. (He does cover saving and investing, though). This clearly puts the book into the “investing” category where it has to compete with The Bogleheads’ Guide to Investing and The Simple Path to Wealth: Your road map to financial independence and a rich, free life for a spot at the table.
- Many people assume that teachers can not earn a high salary, but that is hogwash. If you doubt it, check out Seeking a Six-Figure Income.
- LOVE his thoughts on index funds! He does one of the best jobs I’ve seen of breaking down the fees of actively managed funds and making a case for index funds. That said, he devotes probably 25 pages too much to the topic. It’s a bit over-kill.
- LOVE his thoughts on financial advisors! He does a great job of showing how they work to make your money their money. That said, he devotes probably 25 pages too much to the topic. It’s a bit over-kill.
- If I had my way with this book, I’d pare the index fund and financial advisor sections and add in an earning section. You’d then have a home run IMO.
- His thoughts about the importance of not being your own worst enemy make the book worth the cost. These thoughts can save people thousands of dollars over a life-time of investing.
Generally, it’s a solid book and worth the read.
My Final Analysis
In the end, I’d say the book falls short of the top five.
It’s good, but I’d rate it behind The Bogleheads’ Guide to Investing and The Simple Path to Wealth: Your road map to financial independence and a rich, free life for the investing spot in the top few.
That said, it’s a good read and worth checking out if you’re interested in new personal finance books. I’d certainly put this book in the top 20 money books and maybe in the top 10.
Have you read the book? If so, what do you think about it?
M22 says
My wife the teacher became a millionaire when she married me the engineer. Difficult to accumulate $1M when her highest pay was $26K after 18 year of teaching (but had great healthcare insurance) and now a pension of $9889 per year.
O17 says
She was not in a good district/state. I make 95K teaching and will have a 50K pension when I’m in my late 50s.
Debbie says
Thanks for the review for I had been curious. I’ll just keep sticking with “Automatic Millionaire”, “The Millionaire Next Door” and “The Simple Path to Wealth” along with Boglehead’s investing in Vanguard Index funds.
Wealthy Doc says
I liked it a lot. I’m always impressed when I hear of a teacher who can amass over a million bucks. I get several pieces of good advice from the book. Looking back, I did most of what he recommends (high savings rate, index investing, etc.) but I made other mistakes (investing in individual stocks). Any reader would do well by reading what he has to say and trying to implement it into a habit (that is the hard part for most of us).
Jeremy says
I wonder if he spends so long on active management vs indexing because of how 403b’s are structured in K-12 settings. Because of the requirements on K-12, they often outsource their 403b reporting and the third-party administrators often solely work with firms that push active management (front end fees, loads, back end fees, hidden fees)…
But, I think you are right that the focus needs to be on growing a career. If a teacher starts today at $38,500 and works for 40 years (averaging 2.5% raises), they will earn 2.59 million, crossing $100,000 in their final year of work.
On the flip side, if a teacher moves through the academic ranks (teacher – assistant principal – principal – director – assistant superintendent – superintendent), they could very easily increase this 2.59 million number to well north of 5 or 6 million. My salary in Year 10 (having moved up the ranks) is 2x what it would have been had I stayed in the classroom.
Even summer gigs (driveway sealing, painting, tutoring) could add a million or more to the base.
rt says
Haven’t read his book but have been reading Andrew’s columns at Asset Builder since he started contributing over there.
Really appreciate how his expat and international experiences bring a worldview you don’t commonly find in other financial writers and bloggers. I make it a point to read his posts every couple of weeks and enjoy his writing.
Scott at Making Momentum says
Andrew’s book was one of the first I read when looking to improve my finances and better master my money. It’s hard to find PF/investing books that include specifics on the Canadian markets, so that was a big plus for me given he’s a fellow Canuck.
The book helped me build a framework of understanding around the key concepts of investing and managing my spending. Great data showcased in an easy to digest manner on savings rates, starting early, index funds, crippling fees, etc.
His metaphors to stress his points or try to relate to the reader stretch a little too long at times and the big miss as you noted is definitely the lack of earning more/growing your income. Overall I still recommend it and lend my copy to friends/family.
Buckeyecub says
It was one of the first books I read when first looking to understand how to invest. Being in a job that paid on government style pay scale at the time, I greatly appreciated the focus on doing more with what you have. I would think teachers would feel the same. It is reassuring to know that you can increase you wealth without needing a high income or a side Hussle. Had those items been included I would have found assumed they were the key reason for success. Being in a different stage now (higher income) I wouldn’t be as bothered by that discussion.
Michael CPO, From the Far Side of the Planet says
Actually I find it second to only the Boggle guides seeing it has a strong leaning to the international expat jet set like myself who live around the world …. the first copy came out in 2011 so it is not new … you probably have the second 2017 edition … the book has been on the best seller list since 2011 … He also regularly writes for the Globe and Mail … Canada’s version of the Washington Post …. his wife is American … he became a millionaire at around 36 … then did teaching on the international school circuit … and I believe became a multi-millionaire teacher like myself while on the international scene … he has just come out with the 2018 second edition of Millionaire Expat: How to Build Wealth Living Overseas … the bible of simple overseas investing for expats … he travels the world giving finance talks to international schools around the world etc …since his retirement in his forties … and has a cult like following on the international expat scene much like Mr. Money Mustache on the State local side … I had the found the book/s after I had already become a multi-millionaire teacher myself via international real estate which he touches on slightly in his second book, but his second book’s focus is on overseas expats investing A,B,C’s … options … for career expats who live around the world etc etc etc … CPO, From the Far Side of the Planet
Razorback 14 says
Thanks for sharing and the breakdown is superb. Although, I probably won’t read this book, I’m glad I read the breakdown you offered.
As for me (and my wife), I’ve been in education all my working life, and I have to signal that grabbing a few side hustles through the years truly launched my path as an educational leader —-
Over the last 40 years, my salary climbed and climbed nicely – my first salary as a teacher was $11,400 (and I coached 4 sports too) and my last year in public education was just north of $160K. I retired almost 5 1/2 years ago-worked as a teacher/coach, principal, assistant superintendent and a Supt—-since I retired, I have not spent one penny of any of my retirement checks. All has been invested back in real estate, the market and in helping others.
Today, my wife are still working (yes, I started another career) and we have a Net-Worth of over $3,000,000.00 and growing. My wife, as a teacher makes about $62K per year (gross income) –
So, when we married in 1983, our household income was $25K —- in August, 2018, it will be over $400K (pension included) —
When I graduated from college in 1977, my NW was zero and our goal is to retire with about $3.5 million – expected retirement date is December 31, 2020.
So, side hustles , consistent earning plans, intense saving and investing wisely paths have all led these two teachers (my wife and me), to a hopefully long and healthy retirement— full of adventure, travel and grandparent time.
A plan we’ve dreamed about and built many years ago.
My wife and I have been together 40 years and have been married for the last 35 years.
Teachers can and should be living examples of the ESI model. IMO
ESI says
What a great story!!!! Congrats to you!!!!
Razorback 14 says
Thank you.
Olivia Hurd says
That’s amazing ! I’m having a hard time with going for language arts content or general science in secondary school. I have to pass praxis 2 I just can’t sign up for a test because I’m so confused which program . I love reading writing communications, , but science is also fun as well!!
Curt Linz says
Razorback, very nice. my wife and I will be married 35 years soon. I never did college, but got into IT and started a business and saved a lot and bought real estate. We have a net worth of about 5 million. Still working in IT, but ready to pull the plug and work my side hustle, a farm, and help my 3 sons with there adventures and travel. I have been reading and following asset builder since Scott Burns ran it, before Andrew took it over. ESI, keep up the great work.
Kristy says
What a great review! My daughter is in her second year of teaching & wanted to see about recommending the book. She is looking to grad school in 2 years — and trying to get side hustles. Her school is in session til third week of June, so that knocks out some traditional summer side hustle.
Razorback 14 you have done a great job in your career at saving.
Financial Rookie says
Andrew’s book was the first one I read that sparked my journey to FI. After reading his book I consumed everything I could get my hands on and in the past 18 months since finishing his book I have increased my net worth by over $100k, purchased my first piece of real estate, maxed out all of my retirement vehicles, and paid down a quarter of my overall debt – all on a firefighter and nursing (my wife) salary! If we can do it and teachers can do it anyone can do it!