Millionaire Teacher

by Andrew Hallam

  With luck, many of the principles in this book will become part of a mandatory high school curriculum. People want to learn this. When I taught high school personal finance, it was one of my school’s most popular electives. The school had class-size limitations and wasn’t supposed to break those limits. But I couldn’t, in good conscience, refuse any of the students who wanted to enroll.

  Routinely, well-meaning counselors allowed my class sizes to swell beyond the maximum. I’m glad they did. One year, 40 percent of my American students opened index fund portfolios with Vanguard.

  Those kids, and their parents, wanted to learn about money. They also wanted to teach. Many of my students recorded screencasts that they uploaded onto YouTube. They wanted to show how young investors could get started right away. I linked a few of them to this blog post at andrewhallam.com: andrewhallam.com/2013/04/high-school-students-open-investment-accounts/.

  These students learned what we all should have learned in school:

  Think and spend like a millionaire if you want to become rich.

  Start investing early—after paying off credit card debt and any other high-interest loans.

  Invest in low-cost index funds instead of actively managed funds. Nobody can consistently pick “winning” actively managed funds ahead of time.

  Understand stock market history and psychology so you don’t fall victim to the craziness that infects every investing generation (often more than once).

  Learn to build a complete, balanced portfolio of stock and bond index funds that will beat most professional investors after fees.

  Create an indexed account no matter where you live.

  Find low-cost financial advisory firms that build portfolios of index funds.

  Learn to fight an adviser’s sales rhetoric.

  Avoid investment schemes and scams that might tickle a greed button.

  Live long, prosper, and please pass on what you learn.

  Thank you!

  Andrew

  About the Author

  Andrew Hallam was a high school personal finance and English teacher. He writes investment columns for The Globe and Mail and for AssetBuilder, a US-based investment firm. He was also a columnist for Canadian Business magazine. His work has appeared in a variety of publications, including MoneySense magazine, Reader’s Digest, Personal Money, Malaysia’s Sun Daily, and L’actualité.

  Andrew and his wife, Pele, are Digital Nomads. They give public talks about money and investing around the world. They love to explore hidden (and not so hidden) corners of the globe—while avoiding cold winters whenever they can.

  Index

  A Random Walk Down Wall Street

  Actively managed bond funds

  Actively managed mutual funds/unit trusts

  12B1 fees

  expense ratios

  futility of trying to pick top funds

  global fund fee comparisons

  morningstar five-star funds

  odds of beating indexes

  percentage in

  sales commissions

  survivorship bias

  trading costs

  Adviser’s sales rhetoric

  American Funds

  AssetBuilder

  Automobiles car-purchasing strategies

  cars purchased by millionaires

  Backfill bias

  Balanced allocation

  Behavior of investors

  Betterment

  BMO Smart Folio

  Bogle, John

  Bortolotti, Dan

  Brokerage fees

  Burns, Scott

  Cars, buying and leasing

  Coca-Cola

  Common Sense on Mutual Funds

  Corporate bonds

  Couch Potato Portfolio Canadian couch potato

  during market declines

  global couch potato

  Currency hedged funds

  CXO Advisory

  Dimensional Fund Advisors

  DIY index fund investing in Australia

  in Canada

  in Great Britain

  in Singapore

  in United States

  Dollar-cost averaging

  e-Series index funds

  Exchange-traded index funds (ETFs)

  Fidelity

  Forecasts

  Gilder Technology Report

  Global economic crisis

  Globe and Mail

  Gold, poor long-term returns

  Growth stock funds

  Hedge fund returns

  Hulbert Financial Digest

  Human emotions sabotage returns

  Index funds American

  Australian

  British

  Canadian

  Singaporean

  Infinity Investment Series

  Inflation

  Insta-Cash Loans

  Internet technology stock madness

  Investing early

  Investment magazines

  Investment newsletter performance

  Investment newsletters

  Ignition Wealth

  Journal of Portfolio Management

  Kahneman, Daniel

  Kelson Financial Services

  Large-Cap

  Madoff, Bernie

  Market timing

  McGugan, Ian

  Mid-Cap

  MoneySense magazine

  Morningstar

  NestWealth

  New York Times investment contest

  Nobel prize winners support indexes

  Nutmeg

  Orman, Suze

  Pension fund performances

  PE Ratio

  PlanVision

  Proadviser

  PWL Capital

  Qtrade

  Questrade Portfolio IQ

  Quietgrowth

  Raymond James

  Rebalance IRA

  Rebalancing

  Reinvest dividends

  Robo Advisors in Australia

  in Canada

  in Great Britain

  in United States

  RW Investment Strategies

  S&P 500 Index

  Samuelson, Paul

  Schultheis, Bill

  Sharpe, William

  Siegel, Jeremy

  SigFig

  Singapore American School

  Small-Cap

  Smart Beta or Factor Based funds

  Smartly

  SmartMoney magazine

  Solin, Daniel

  Standard & Poor’s Persistence Scorecard

  Stanley, Thomas

  Stockspot

  Swensen, David

  Tangerine

  Taxable US accounts

  The Little Book of Common Sense Investing

  The New CoffeeHouse Investor

  US stock market average returns of

  Value stock funds

  Vanguard Canada

  Australia’s Life Strategy funds

  target retirement funds

  UK

  Virgin Money

  Virgin U.K.

  Wasilewski, Robert

  WealthBar

  Wealthfront

  Wrap fees

  Zurich International

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