Millionaire Teacher Adds $29,000 to International Index


Investing money between 1989 and 2000 was such a disappointment because the markets kept rising.

I started my investing (1989) in the middle of history’s longest stock market rise and, in retrospect, I see how unfortunate that was.   I kept adding money to the markets, but the markets kept getting more and more expensive.

Metaphorically, I was grocery shopping in a store that got 17% more expensive every year.

Fortunately for young people investing today, the markets are much more favourable.  The stock supermarket sells its goods at a much more reasonable rate, and from time to time, we’ve had some generous storewide sales.

Sure, the world’s stock markets have averaged (as an aggregate) roughly 10% per year for the past 100 years, but that ride has never been smooth.

Sometimes (as with the time period from 1982-2000) the market grows ridiculously expensive.  At other times (1965-1982, for example) the market takes a breather, allowing much more reasonable prices for investors.

If you’re young, and you celebrate market rises, then you really don’t understand how the game works. And unless you change your thinking, it’s going to cost you plenty of money, as you succumb to the giddiness of buying high and feeling depressed by the prospects of buying low.

Yesterday I took advantage of the recent market drop, adding 1000 shares of the first world international stock market index (VEA).

Unlike most people’s investment accounts, my bank in Singapore doesn’t allow me to automatically reinvest dividends.  The dividends collect in the cash portion of my account over time.

Last night, I noticed that the collected dividends had grown to roughly $25,000 USD, so I added the proceeds to my investment for the month, allowing me to buy the heavily discounted international stock market index.

I own just three indexes (ETFs):

  1. The Canadian bond market index (XSB)
  2. The U.S. stock market index (VTI)
  3. The first world international stock market index (VEA)

You might think I can do better.  You might wonder why I own one index over another.

The bottom line is this:  these intellectual questions aren’t going to be your biggest challenge as an investor. If your account is diversified and low cost (as mine is) then quibbling over which specific index to buy is going to be the least of your future challenges.

Your biggest challenge will come from how you think about the stock market.

I receive countless emails questioning me about why I made a specific purchase.  After this post, the most commonly emailed question will be:  “Don’t you know about the troubles in Europe?”

Here’s a tip for those asking that question:  you will NEVER get a decent price in the stock market if you invest where the scenario is rosy. 

My investment decisions are simple.  I look at the stock market once a month, shortly after getting paid.  My goal allocation is as follows:

  • 40% Bonds (XSB)
  • 30% U.S. Stock Market (VTI)
  • 30% International stock market (VEA)

If the stock markets drop, giving me a disproportionate percentage of bonds, I put fresh money in the stock market indexes.  If the stock market rises, giving me less than my goal allocation of bonds, then I add fresh money to my bond market index.

It really is this simple. And if you scroll through the Andrew’s Money posts, you’ll see examples of me doing this, time and again.

Great investing won’t come from which index you choose.  Nope. It comes from being diversified, keeping costs low, and having the guts to enjoy stock market drops while abhorring the rises.

Can you do that?  Most people can’t.

But I’m hoping that you won’t be “most people.”


andrew hallam

andrew hallam

I'm a freelance finance writer, lucky enough to have been nominated as a finalist for two Canadian National Publishing Awards. I'm also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, a book explaining how I became a millionaire on a teacher's salary, while still in my 30s. Working to empower people financially, I'm available to motivate and inspire people on basic retirement planning and index investing. I'm happy to comment on your questions, first, please read the Terms of Use.

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76 Responses

  1. sendaiben says:

    Hi Andrew

    Thank you so much for putting this out there: I finally finished your book, and am just getting to the good bit in A Random Walk Down Wall Street. Fascinating stuff.

    I asked you an ill-considered question about dividend stocks a couple of weeks ago, and think I have figured out the answer all by myself: dividend-paying blue chips sacrifice future growth so over a long time span are a losing proposition.

    I have also figured out how to buy Vanguard ETFs here in Japan. Would be happy to chat with Japan-based investors if you get any questions.

    All the best

    ben s.

    • Thanks Ben,

      Interestingly, if you took a high dividend paying index and a high growth stock index, the high dividend paying index (in virtually every 20 year period) would outperform the growth stocks with low dividends. If you want an excellent read, check out Jeremy Siegel's book, The Future for Investors.

  2. Phyllis says:

    Hi Andrew,

    How do you decide what price to go in? Do you decide to buy when the market drops more than 1% for example and take whatever price that the market is offering?

    Pls advise

    Thank you

  3. Hi Phyllis,

    I've always taken the market price when I make purchases. I don't mess around or speculate.

    I look only at my portfolio's allocation. If there's an index that's lagging (Ie, if I want 30% international stock index and find that I now have just 27% international index) then I buy the lagging index, based entirely on what percentage it represents in my account. If a fresh purchase brings it from 27% of the total to 33% of the total, I don't sweat it. I'd rather buy one investment at a time, to keep costs (commissions) down.

  4. Matt says:


    I read your book in the fall and purchased the TD Canadian, American, International and Canadian Bond e-series indexes you recommended in January, each in a 25% allocation. Since then I've been putting an equal amount of money into each fund each month. I've noticed that my overall portfolio has taken a hit. It's actually lost money over the time period.

    I'm new at this investing thing, and I'm not prone to over reacting. I guess I'm wondering if this is just the natural consequence of starting investing when the market is low? If it is, I guess I should be happy?

    • Hi Matt,

      You certainly should be happy. Keep buying every month and consider market drops as good news. I get very upset when my investment rise in value. I'm only 42, so I want to take advantage of cheap prices. Let's hope the market crashes!

  5. Matt says:

    Thanks Andrew,

    Quick question, have you read any David Trahair? My colleague gavee the book and in it he advises against investing in mutual funds due to volatility and instead opts for GICs and such. Am I correct in thinking that the bond component of my portfolio significantly reduces my exposure to stock market swings and volatility? I want to chat further with my colleague and just want to be clear. Thanks


  6. Steve says:


    So if you are just starting out creating a portfolio, should you just buy all 3 funds at once in the right allocation? (international, US index, bonds). Or do you buy the struggling funds first and the higher priced funds later on when their value drops? For example, if I'm putting money for the first time into the bond portion of a new portfolio, I might buy the Vanguard Total Bond fund. But the current price of this fund is its highest since inception.

  7. Chad says:

    I recently come across a lump sum of cash to invest. I don't believe in market timing, and know you don't either, so I'm wondering if you had any advice about how to go about entering the market with my lump sum.

    If I invest everything on the same day, wouldn't that equate to market timing?

    My idea is to invest a part of it, wait a month, invest a bit more (rebalancing at the same time), and continue again the next month, and so on… How many months should I draw this out until all my cash is invested?

  8. James says:


    Why do you use VEA over VXUS? Do you not want to have emerging markets in your portfolio? Wouldn't including them be part of a global indexing strategy that you advocate? I know you have mentioned VXUS in past articles and in your book but I wanted to know the reason for the omission in your portfolio.

    • "The bottom line is this: these intellectual questions aren’t going to be your biggest challenge as an investor. If your account is diversified and low cost (as mine is) then quibbling over which specific index to buy is going to be the least of your future challenges."

  9. Hi Chad,

    Market timing is when you try jumping in and out, based on your suppositions of the market's direction. I would feel very comfortable investing it all right now. But do what you are comfortable with.

  10. James says:

    While I understand your point and choosing a particular etf is not something I lose sleep over. I am sure that an investor such as yourself, one who scrutinized heavily over past purchases, has a reason for choosing VEA over VXUS. I am curious if you will share it?

    • Hi James,

      I like to keep my portfolio really simple. I have been adding to VEA for years now–long before VXUS was available. I think VXUS would be a great ETF, but I'm not going to complictate things each time a new index comes along. I'm also not a huge fan of the emerging markets. That said, VXUS would be a more complete international index. But over the long haul, I don't think it will perform any better, or worse, so I'm not going to add a new index, nor sell a position that would cost me hundreds of dollars in commissions (to sell VEA and buy VXUS). I have a lot of VEA.



  11. James says:

    Thanks for the reply.

  12. Stan Mayes says:

    I have equal amounts in my RRSP and taxable accounts. I have a 50/50 asset allocation. It makes me a little nervous to place all my bonds in the RRSP and all my equity in my taxable account. Bernstein seems to suggest equal allocations in both and you seem to suggest all bonds in the RRSP and all the equity in taxable. I have trouble thinking about losing half my taxable account.How do I overcome this concern or do I do as Bernstein seems to suggest?

    • Hi Stan,

      I think you should do what you are comfortable with doing. But keep in mind that your asset allocation is a product of all your assets, not just your assets in any given account. Psychologically, you would still have the same assets, regardless of what account you choose to put them in. So you need to ask yourself if you are being rational. If you don't want to be rational, that's OK too, of course. Fear isn't rational, and I'm the last guy to harp on about irrational fears (every time I get in a MRI tube I panic!)

  13. Bernie says:

    Your account shows good diversification across the globe other than Canadian equity content which is 0%. Why no Canada?

    • Hi Bernie,

      That's a great question. I don't live in Canada, and may never live in Canada, so my 40% Canadian bond allocation gives me disproportionate exposure to the Canadian dollar, especially when compared to Canada's representation of global capitalization, which I believe to be roughly 3 percent. This is the reason I don't own Canadian equities. I'm already heavily "Canada bias" for a guy who doesn't plan to live there. If I were living in Canada (or definitely planned to live there at some point in the future) then I certainly would have a Canadian equity component to my portfolio. In fact, half of my equity exposure would be Canadian, if that were the case.



  14. ljhallan says:


    I do not receive your emails yet when I try to subscribe I am told that I am already subscribed. Can you help me as I really enjoy reading all your all your emails. ljhallan

  15. Hi Steve,

    I wouldn't worry about buying the lagging index during the initial phases of starting your account. Just build the portfolio slowly, adding money to each index when you get paid (assuming you won't pay commissions).

  16. Hi Matt,

    You're right. Having a bond allocation significantly reduces your volatility. But bonds also allow you to take advantage of cheap stock market drops when they occur. If you don't own bonds, after all, you won't have anything to sell when the stock market offers mouth-watering price levels. For the dispassionate investor, volatility is one of the best friends you can have. It's a frightening thing for a retiree with an irresponsible portfolio (ie. too much exposure to the stock market), but if you're collecting stock market assets, as a relatively young person, and you can rebalance with bonds, then you should embrace volatility.

  17. Daniel says:

    Andrew you can probably imagine if when you started your investing . it was in the middle of a bear market like we have now . . and have been having since year 2000 . you might not have been happy about stock investments as you would have seen little or no returns on your hard earned money.

    Well since I've started investing in 2010 I have seen losses. Granted, the worse losses happened before I read your book and switched to index investments . but even my index investments are down a bit from their book value at this moment. And the headlines are nothing but doom and gloom, since the Japanese Tsunami until now. What with most of Europe and North America sinking in debts.

    I feel a bit like a Pollyanna. . continuing to put every extra penny into a losing market. However, even if used my savings to purchase a home. . that is not much of a safe haven in Canada anymore either, seeing as home prices are about 3X that of USA.

    We live in interesting times.

  18. Josephine says:

    Thanks Andrew!

    Your website has given me the no-nonsense type of 101 guide I needed. I have two questions.

    1) When do you choose to rebalance your portfolio? Do you do it once a year? When you notice the dividend's accumulating?

    2) I am a Canadian living in the UK at the moment (which is why your website has been so easy!) and so my paychecks are in GBP in stead of CDN. Why do you say you concentrate your equity in the country yo plan to live in the future?

    Thanks again!

    • Hi Josephine,

      Many people rebalance once a year. But sometimes, you won't need to. Personally, if my portfolio is out of alignment by roughly 10-15% and my new purchases aren't make a difference (I buy the lagging index) then I will rebalance. I don't usually do it on an anniversary date (although many people do, and that's fine too). In most accounts, you can actually reinvest the dividends automatically. My bank is an odd exception. Usually, if you own a specific index, you can opt to have the dividends buy more shares automatically, which is a pretty nice way to do it.

      I think it's a good idea to concentrate your equity in the currency that you will one day be paying your future bills in. To me, that makes sense.

      If you are staying in the UK for long, I recommend you invest with HSBC's tracker funds. They have very low costs, and they're indexes (Brits call them tracker funds). Have you read my book yet?



  19. Gerard says:

    Hi Andrew,

    I have chanced upon your blog and bought your book and I must say you have opened my eyes to an area of investment that was not pervously apparent to me. Very thought provoking indeed. As such, I have 2 questions related to the indexes you buy:

    1) you mentioned that yiu shouldj invest in indexes which pay the same currency as what you pay your bills. However, you own VEA, VTI, XSB but you live in Singapore. Is there a reason for that?

    2) if I want to buy a bond that I can sell easily, what would u recommend?

    Btw I'm a Singaporean.

    Thank you for your articles and keep writing.


    • Hi Gerrard,

      I'm glad you discovered the book and the site. I did not mention that you should only buy indexes in your home currency, which is the reason I don't own fully Canadian or fully Singaporean currency indexes. I have mentioned, however, that I think it's prudent for a person's bond component to represent a home country bias. Having said this, I don't think you should worry about a bond component yourself, considering that your CPF is much like a bond, and although you can't rebalance it, you can rebalance your equity based ETFs over your working lifetime.



  20. Sheryl Lee says:

    Hi Andrew

    I picked up your book after reading your interview in the Sunday Times in Singapore. I must say that I have gotten a few friends hooked on your insightful book as well! I have just started reading Bogle's book and am anxious to get in on some ETF action.

    I saw your reply above about CPF being like a bond component, since l'm a Singaporean too; I shall assume that I should only concern myself with stock indexes?

    I currently have S$100k to invest ( and I would like to be able to access the principle sum of S$100k in 10 years time) as it's a loan from a family member. In such a scenario, would you still recommend investing the full sum into index funds at one shot or do it over a year on a monthly basis?

    I have my personal funds to invest which I will be allocating to a few index funds – mixture of singapore and US. I'm 30 years old this year, would you have any recommendations on what proportion would be good?

    Would really love to hear back from you regarding your thoughts.

    Many thanks in advance!!

    • Hi Cheryl,

      As a 30 year old yourself, I'm going to give you a bizarre scenario to think about. If you are going to have to return the $100K in 10 years time, then I would invest the money as if you were between 50 and 60 years old. Yeah, that's going to sound weird, but here's my reasoning. If you were a retired 50 year old (assuming no CPF) then I would recommend that your money be roughly 40%-50% in bonds, not stocks. The reason? You'd be selling some of that money to live on, within the next ten years and you wouldn't want it to be volatile as you're selling off pieces of it. Now, that hypothetical (soon to be) 60 year old won't be selling it all at once, but in essence, you will be selling your $100K, Cheryl, in 10 years time, if I've interpreted you correctly. In that case, you would want to make sure that your money wasn't completely at the whim of the stock market. You could try a bond market index for 40-50% of the money and diversify over stock market indexes for the rest. You could also rebalance this money annually (couch potato style) and despite the low bond yield, the rebalancing process could ensure that (even if the stock markets rise a lot and your bonds lag) your overall account could do very well, without having to take on the risk of 100% equity. Make sense?



  21. Sheryl Lee says:

    Greetings Andrew!

    I picked up your book after reading your interview in the Sunday Times in Singapore. I must say that I have gotten a few friends hooked on your insightful book as well! I have just started reading Bogle's book and am anxious to get in on some ETF action.

    I currently have one hundred grand to invest ( and I would like to be able to access the principle sum of 100 grand in 10 years time) as it's a loan from a family member. In such a scenario, would you still recommend investing the full sum into index funds at one shot or do it over a year on a monthly basis?

    Some have said that stocks at their levels now are overpriced, but I am not savvy about the market and like you, don't believe in timing the market, as I have been burnt many times before.

    I have my personal funds to invest which I will be allocating to a few index funds – mixture of singapore, international and US. I'm 30 years old this year, would you have any recommendations on what proportion would be good?

    I saw your reply above about CPF being like a bond component, since l'm a Singaporean too; I shall assume that I should only concern myself with stock indexes?

    Given what you said about the CPF being like a bond, does that mean that Singaporeans need only concern themselves with rebalancing – re proportion of US, Singapore and International stocks?

    Would really love to hear back from you regarding your thoughts.

    Many thanks in advance!!

    • Sheryl,

      My apologies for spelling your name incorrectly.



      • Sheryl Lee says:

        Thanks Andrew for this – and no worries about the name at all :)

        Wow – that's really an interesting way of looking at it. Because my main concern was definitely the 100% exposure to equities for a sum of money which I needed to access in 10 years.

        I have set up a DBS Vickers account and am all set 😉

        Just one more question though – with My personal funds given that I have CPF – my guess is that I wouldn't have to allocate 30% into bonds (as a 30 year old)? Would simply investing into equity indexes suffice ?

        Thanks very very much!

        Your book is amazing and I'm glad there's someone like you who is so passionate about spreading the good word.

        Have a great weekend! Cheers

      • Sheryl Lee says:

        And one final question – for the S$100k i have now..

        Would you recommend

        1. Going in all at once with the 40-50% allocation for bonds and the rest for equity indexes?

        2. Or going into the market slowly over the next one year's time, on a monthly basis? Using the same allocation of course but starting with a smaller sum and accumulating until the 100k is fully invested.

        Going by what your book and your blog entries, I'm gonna guess option 1? Because I will have the added option of rebalancing every month and all my money will be invested within a shorter time frame…

        Interested to know your thoughts :)

        Thanks again in advance!

        • Hi Sheryl,

          I would probably invest it all at once. Of course, I can't see the future, but that's what I would do.

          As for your personal money, I think you could go 100% equity based on your CPF allocation—which is much like a bond.

          Thanks for the kind words about my book.


          • Cheryl Lee says:

            Hi Andrew

            With regard to 100% equity for my personaly money- would the following allocation be alright?

            40% – Singapore stock market index

            20% – VTI

            20% – VEA

            Given that it would be all equities, and because CPF is basically money which we can't touch, the principles that you teach about rebalancing re bonds and stocks wouldn't be applicable here?

            As such, I'm assuming that I would only need re-balance my equity holdings in accordance with the percentages I have set out above?

            Am I on the right track?

            Many thanks Andrew – :)



  22. Jude says:

    Hello Andrew,

    I'm Jude from Singapore and I would like to thank you for the amazing book!!! After reading the book, I ended up spending another 130 on the others books which you have recommended: the 4 pillars of investing, random walk down wall street and common sense on mutual funds.

    Well the sad thing is I am 3 years late in reading all these as I have already invested 3 years in Zurich vista :( the good thing is that I am still young (30). Called up my ifa and suspended the plan and am hoping to cash it out(with penalty) After the suspension ends.

    Anyway I have already allocated 20k in A35, ES3 and VT like what you have said in the book and using a 30/35/35 ratio. :)

    Again, I would like to thank you for the book. Without it, I would have been shortchanged!!

  23. Jude says:


    I have a question for you. Would investing in ETFs be the same as investing in the funds itself over long periods?

    Reason being, there is a platform called ifast in singapore which sells funds from vanguard singapore pte ltd which is a subsidiary of vanguard.


  24. Daisy says:

    Hi Andrew

    you mentioned that it is most profitable to invest when the market is down and the outlook is negative, because in the long run the market WILL recover. So in that case isn't it a good idea to invest in the European stock market index right now? Rather than, say, the Canadian or Singaporean stock market?

    Also I've read in one of your articles elsewhere that investing in the emerging markets index is not as rosy as it looks. But then you also said that the choices of stock market indexes that you pick for your portfolio doesnt matter as long as you rebalance them well. So in that case, investing in the emerging market index (instead of, say, the US index) should also be profitable in the long run, shouldnt it?

    • Hi Daisy,

      If you are rebalancing your portfolio or buying the lagging index (in an effort to rebalance your portfolio with your deposits) then you will be putting more money where the market sentiment is negative. That's what I am trying to model here, by explaining each of my investment purchases as I keep a balanced account. Don't try speculating which market you should inves in. Just add to the lagging index to ensure that your portfolio remains roughly within the parameters of your goal allocation. Easy breezy. And yes, you just read which index I recently bought.

  25. Hi Jude,

    It's unlikely that they're offering these products out of the goodness of their hearts. Check into the fee structure (which doesn't seem particularly clear on their website) before moving forward.


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