Millionaire Teacher’s Money Moves

andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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20 Responses

  1. Mark says:

    Thanks, Andrew, for another great post.

    I think you nailed it on the head in the last paragraph when you stressed the importance of being dispassionate. I find that really hard to do. It seems counterintuitive when you're trying to make money in the stock market. For some reason I want to take a peak at the indexes a few times a day. At 52, hopefully I have enough years left that I want the prices to be as low as possible, but I must admit that my heart sinks a little when it's a "down" day in the market and the value of my portfolio has dropped.

    I know your passive approach to investing is the best approach. I'm just finding it a lot harder than I anticipated it would be!

    • Hi Mark,

      I know that it can certainly be a challenge. But if you can collar your emotions and hope for cheaper price levels, then you'll be happier when the markets drop, and perhaps you'll feel neutrally about market rises.

  2. Blues says:

    Hi Andrew, I am really glad that I came across your book! Really "opened" my eyes to index investing which I gave very little regard to previously.

    One question – will you consider having a commodities ETF in your portfolio? This could be another way to diversify.

    Cheers

    • Hi Blues,

      A small portion (less than 15%) to a commodity index would also be a very good idea. By rebalancing your asset classes, you would also smooth out the volatility of the portfolio as well. Thanks for the kind words about my book!

  3. Rookie says:

    Hello, Andrew,

    I bought your book recently and have just finished reading it. Thank you very much for simplifying the financial terms and sharing your investment approach – it is simple and yet compelling. I have always found financial investment books to be impossible to finish reading but your book came across as down-to-earth, genuine and entertaining. Well done!

    I am 39 and am now in the process of effecting the changes in my investment portfolio which comprises of two properties with mortagages and stocks as I feel real estate is also a form of longterm investment particularly in Singapore.

    My plan is to convert most of the stocks to indices. I also read about how you tried to clear your mortgage in the quickest time possible. My question is at any point of time if I should have additional cashflow and regardless of the market performance, should I be putting the money into clearing the mortgages as priority over injecting into the indices portfolio or should I split the cash between both?

    In addition, for my age at 39, what would you recommend as a guideline reference only for the indices investment portfolio value to be?

    I look forward to hearing from you and getting your advice on this matter. Thank you.

    • Hi Rookie,

      With additional cash flow, you might be wise to allocate some to the mortgage and some to your investments. You'll never know what will actually be better, at the end of the day. But if you're comfortable splitting the extra money this way, you should go for it.

      Cheers,

      Andrew

  4. Kristen says:

    Hi Andrew,

    I recently read, highlighted, bookmarked, and made notations all over your Millionaire Teacher book. I'm a 41 year old former teacher who wishes she'd learned this stuff years ago.

    To keep this comment/question simple, I'll just say that I'm totally stressing out because I now don't know what to do with all the stocks I own. I'm up 33%, which I know is great and it's probably a good time to get out, BUT do I just up and sell all those things and buy the ETFs instead? Even the ones that are in the hole? And the ones that are cranking in 100%+ returns?

    I stink at this. I actually haven't sold a stock in 17 years. I'm always afraid to sell and 17 years ago we bought our first house – that's the only reason I sold then.

    So – what do I do? Any comments, critical or otherwise, hyperlinks or reading suggestions would be greatly appreciated.

    Totally sweating it in Texas,

    Kristen

  5. Hi Kristin,

    Where is your money currently invested? If you give me an idea of your breakdown and funds, I may be able to offer a suggestion.

    Andrew

    • Kristen says:

      Thank you, Andrew.

      I have my 401(k) and 401(k) Roth in Vanguard's Target Retirement 2040 Fund (thanks to reading your book – I moved them all the first opportunity I had). All my loose stocks are in Sharebuilder.

      WOW – today I'm down to being up just 22%, down from 33% when I wrote on April 27th. This is why I don't look at these things often!

      So, I have Apple, Amazon, ConocoPhillips, Ebay, Fossil, GE, Honeywell, Logitech, Netflix, Phillips 66, QQQ, Under Armour & Exxon. Everything is currently up except Logitech (down 27%) and Netflix (down 29%). Something crazy happened to Fossil, which dropped $47.25 just today. Hmmm. Between them all I don't have much – $16,287. That's the beauty of Sharebuilder: I could buy bits of stocks over time and not spend a fortune and just get one share of one company.

      I would be perfectly happy to move to the couch potato kind of financial arrangement, but I really have no clue when to sell what I have, or whether I should just hang onto these things and stop buying more and start buying the ETFs.

      Is that enough information to help you help me?

      Thank you again for sharing your knowledge (always the teacher!).

      • Hi Kristin,

        I used to have a portfolio comprised of individual stocks and indexes. Roughly half of my equity portion was indexed, with the other half spread between stocks. In total, I had about $1.4 million in stocks: $700,000 in stock indexes and $700,000 in individual stocks.

        I realized that rebalancing a portfolio of indexes was easier than trying to figure out which stocks to sell off. So I sold ALL of the individual stocks on the same day and immediately indexed my entire portfolio with the proceeds.

        And I'm sooo happy that I did. It might be tough to do, and I wouldn't recommend it if I hadn't done it myself.

        I wrote about it here: http://andrewhallam.com/2011/01/why-am-i-selling-700000-worth-of-individual-stocks/

        I hope this helps you somewhat.

        And if you have a couple of minutes, I’d be thrilled if you could write a brief review of my book on Amazon. Here’s the link, in case you have time!

        http://bit.ly/mtreviews

        Thanks Kristin!

        Andrew

  6. Penny says:

    Hi Andrew,

    Does the Singapore portfolio profiles in your book on

    20% Singapore Bond Fund A35

    20% Singapore Stock Fund ES3

    20% Canada ST Bond Index XSB

    20% Canada Stock Index XIC

    20% World Stock Market Index VT

    is this percentage still valid for building a portfolio in current times?

    Do the above funds give out dividends as well?

  7. Hi Penny, that account would still be great. And yes, such funds do also pay dividends.

    • Penny says:

      Thanks Andrew,

      Going to give it a go but will be using the Singapore Fund, Bond Fund & World Stock Market fund instead.

      Great going, wonder why those investment gurus never mention this.

  8. Sean says:

    Hi Andrew,

    I just finished your book "The Millionaire Teacher" and I must say it is the best book on investing I've ever read for a normal person like me. It has me very excited to get started. My question is what do you recommend for someone who can only put away $200 a month to invest in stocks and bonds? The minimum investment for the total index stocks and bonds from Vanguard are $3000 each. Should I open a Vanguard account and place the money in low cost stocks until I have enough to switch over to a total index fund? Or should I save up the $6000 to open both the stock and bond total market index funds? Any advice would be deeply appreciated. I don't want to miss out on 2 years of compounding because I don't have enough to open the funds.

    Thanks!

  9. Hi Sean,

    Many thanks for the kind words about my book. I'm glad it was so helpful.

    If you want, you could purchase a Vanguard Target retirement fund for just $1000. It will rebalance automatically for you, so you can get on with the more important things in life. If you prefer to rebalance yourself, you could start with a target retirement fund, and then sell it (should you choose) when you have more money to enter the individidual indexes. The target funds are amazing, however. They are combinations of indexes that will grow more conservative as you age. I highly recommend them.

    Cheers,

    Andrew

  10. CY says:

    Hi Andrew,

    Vanguard Target retirement fund – is it an actively managed or passive fund? Since some balancing act will be done.

    Currently a 20-year old student with no income and having a saving of below $10K, how can i embark on the same path as you did 20 years ago?

    Will be graduating in 3 years later, 2015.

    Looking forward to your advice.

    Thanks!

    • I wouldn't really call rebalancing "active investing". With indexes (such as the Vanguard Target retirement funds) it's a disciplined rebalance with passive indexes and because you don't do the rebalancing yourself, it's even better. It's what I do myself..but I have to drive the stick shift. As a non American, I can't buy this product. I would if I could.

      Cheers,

      Andrew

      • CY says:

        Hi Andrew,

        Thanks for your quick reply.

        Any advice for a 20-year student with little saving?

        Perhaps i should save more and adopt capital accumulation strategy through stock investment before turning to index investment?

        Thanks Again!

  11. Jonathan says:

    The thing I dont like about commodities index like DBC is that first it's expensive at $0.85 and second is i don't think it gives any dividend and that's a bummer.

  12. April says:

    Hi Andrew, I just bought your book and am 1/3 through but can't hold the excitment of wanting to know more about index funds! You have made investment sounded alot easier than I ever thought. I read other books on investment before but they never triggered my investment interest as it seem only feasible for peopl with deep pockets but you have made it easy! Thank you ( only thing with the book is its written very much for American readers with interesting quotes/jokes which as a Singaporean, it may turn first time readers off cos they cant relate to it, asian readers like it straight forward and writings in books like who moved my cheese, peak and valley, e-myth are the kind of writing which uses context that makes it easy to relate ..just my personal comment which I thought I'd share 🙂

    Ok my question, I am 1/3 through but I can't help but wonder if you wrote about Nikkei, I flip to the back of the book to fast forward but I didn't see Nikkkei in your index reference, how do u view Nikkei 225? That's an index right? FYI before I read your book, I can never tell the difference and even though I attended short finance class in uni I didn't know what S&P, Dows, Nasdaq, Nikkei are and just 1/3 through your book, I kinda figured out these are the index funds you refer to…

    Nikkei is at one of the all time low if I am correct (got the info from yahoo finance),and I guess it focuses on Japan equities?(pardon we if I use wrong term) , Japan performance is weak for past years but over say a 5-10 yrs investment, how do u view it? Can't wait to hear from you!

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