Lessons from a millionaire teacher

My apology to all of the teachers who have been in my life over the years. My wife is a retired teacher and there have been many teachers in our family and circle of friends.

Our school system does a poor job of teaching children about money – spending it, managing debt, using consumer products such as bank accounts, lines of credit and mortgages, budgeting, insurance, financial planning and retirement planning – that kind of thing.

Related article: It’s important to teach kids about money

In his wonderful book, The Millionaire Teacher, Andrew Hallam lays out nine simple rules about money that you should have learned in school – but didn’t, because they don’t do that kind of thing.

Not only do our schools fail at teaching about money and finance but money is a taboo subject in most families. It’s no wonder that we raise young adults who are financially inept.

Did your parents tell you how they saved for and bought their house? Did they tell you how they manage spending and debt? Did they teach you good money values?

It’s unlikely that they discussed these things in front of you. Taboo, right!

As Hallam writes, “Without a sound financial education, students can graduate from top universities with starry academic titles, but with little more financial knowledge that an eighth grader.”

People need to take control of their financial lives otherwise they risk developing the same bad habits that most people have. We spend more than we make, build big debt, put our families at risk with inadequate insurance and have woeful preparations for retirement and for the education of our children.

Related article:  Building good financial habits

Author Andrew Hallam didn’t come from money. He became a multi-millionaire on a teacher’s salary. If he can do that, anyone can. I’ve always felt that it’s not what you earn that determines your financial success but what you do with what you have.

Hallam belonged to an investment club whose returns often beat the stock-market indices. That – plus managing his money well – enabled him to build his large portfolio and high net worth.

Millionaire Teacher is interesting and humorous. Hallam is a story teller and he uses those stories to present his nine rules. His book doesn’t overwhelm you with facts – only enough to reinforce his rules.

Rule 1, for example, is one that most investment books ignore. The most important factor in determining your financial success is not, as most people believe, the investments you choose or your rates of return, but your personal savings rate. The road to riches, he writes, is simple and mundane: live within your means, avoid the pitfalls of easy credit and overconsumption, invest your surplus and build your wealth.

Related article:  Principles of Saving Money

Millionaire Teacher is a guide to understanding the wealthy, how they think, how they act. It reminds me of The Millionaire Next Door. In fact, Millionaire Next Door authors say that most millionaires live modest lives, with nice, average cars in the driveway. They live well but don’t show it. That’s how they became millionaires.

These average millionaires follow a basic receipt of, as Hallam effectively puts it, living “within your means,” which is simple, straight-forward concept that many of us have failed to adopt.

For the rest of Hallam’s nine rules you should read this outstanding book.

Related article:  Another review of the Millionaire Teacher

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