I just finished reading “Millionaire Teacher” by Andrew Hallam yesterday. I read the book in record four days. It may not be a mean feat for the ardent Harry Potter fans but it is for me as I’m not exactly a fast reader.
I knew about this book during Invest Fair 2011 when I visited the MPH booth. There were posters put up in the booth pertaining to the launch of the book in the coming months. The author also gave a talk on that day but I couldn’t attend due to other commitments. I was keen to read this book as it was written by a school teacher who became a millionaire with a middle-class salary and I wanted to know how he did it. He is currently residing in Singapore.
I have to confess that I thoroughly enjoyed reading this book and it is one of the best investment books I have read so far this year. The cover has a testimonial by Burton G. Malkiel who is the author of “A Random Walk Down Walk Down Wall Street” and it says, “The newbie investor will not find a better guide than Millionaire Teacher”. I would say this is rather misleading as investors with all kinds of experience will benefit from reading this book. There might be some theories not heard elsewhere as they are from his personal experience or from his friends/colleagues.
This book is an easy read for beginners as it’s written in simple English, is funny and doesn’t have financial jargons. The advice given is also useful and some were new to me. Andrew also uses lots of statistics and references (found at the back of every chapter) to back up his investing methods. The emphasis of this book is how to make investment low-risk by investing in index and bond funds (known as exchange-traded funds or ETFs) and how to allocate the funds accordingly to one’s age. It also takes very little time to monitor the portfolio. Even though most of the passive investing methods he employ can be found in other books (can be seen from the references), he has collated all the theories and methods together into a single concise book. This makes it practical for readers to read this book.
Investing in bond funds was new to me as I hadn’t paid much attention to it previously. My focus was solely on stocks. I will certainly pay more attention to bonds from now on after reading this book. It’s my first time reading extensively on bond funds and how it helps to keep one’s portfolio from excessive risk that might emerge from the stock market.
Andrew places very little emphasis on individual stock-picking ala Warren Buffett style. He says if investors really want to pick stocks, they should reduce the exposure to less than 10%. This is because he believes it’s hard to beat the market for the long-term consistently by buying individual stocks. So, he rather buy ETFs.
Even though the average return of the passive investing portfolio was around 10% annually, he still made it to be a millionaire by investing prudently. After having read this book, it has given me added confidence that if a teacher with middle-class salary can do it, why can’t I?