International Teachers: Something To Ponder This Summer
Between January and May, I visited 39 schools in 11 different countries.
I gave talks about saving and investing.
I met wealthy teaching couples with kids.
I also met two school superintendents in their 60s who made a dark confession. They had earned a lot of money. They looked rich, based on the cars they drove, the houses where they lived and the vacations they enjoyed. But in each case, they had very little money.
Who has money? It’s almost impossible to know. I’ve met wealthy kindergarten teachers. I’ve met piss poor principals. International teachers, in fact, have shocking wealth disparities.
Looking For A High Paying School?
You might think the school’s pay package is what matters most. But that only goes so far. I’ve met poor people at high paying schools. And I’ve met wealthy people that don’t work at the top-paying schools.
The richest couple I met worked in Singapore. Now retired, these parents of two children have a net worth that I believe now exceeds $6 million USD.
Most Overseas Teachers Will Have Less When They Retire
I tell the story of a former Singapore teacher. She says, “Andrew, please tell my story.” So I do. She earned a high salary, first in the Middle East, then in Singapore. She lived well. She traveled extensively. She adorned her apartment with beautiful things from around the world.
She’s 70 years old. She rents a room in somebody else’s home. She didn’t work for long, in the United States. So this American teacher earns a pittance from Social Security. Despite her fabulous life, she now languishes far below the U.S. poverty line.
Are You Struggling From Expatitis?
Expatitis isn’t a common medical term. But if you’re an international teacher, chances are either you or someone you know is infected. It’s easily diagnosed. Symptoms get posted on Facebook.
Fortunately, it doesn’t hurt—at least not in its early stages.
Unlike bronchitis, arthritis, appendicitis or colitis, expatitis is rather pleasant. Afflicted individuals get addicted to five star holidays, manicures, pedicures, massages, expensive dining and entertainment.
But expatitis creates delusions. It’s much like drinking champagne underwater without checking your air supply.
Symptoms creep up.
The better the teacher’s financial package, the greater the risk of contraction. I’ve been giving financial seminars to expatriates for more than a decade. When I ask people to estimate their retirement expenses, their needs vary. And I expect that. But here’s the irony. Those reporting they need the most money are usually saving the least.
How Much Money Will You Need?
It’s silly to say how much money you’ll need to enjoy a comfortable retirement. That depends on when you retire. It also depends on where.
I met a retired American couple in 2015. They weren’t teachers. They currently live in Mexico. They didn’t save a penny. But they worked in the United States their entire working careers.
Each month, they receive their Social Security checks. Combined, they get $33,000 a year. It’s tax-free. That isn’t a lot of money. But if you’re an international teacher, how much money will you need to match their level of income? If you don’t contribute to Social Security (or another home country government pension plan) you’ll need an awful lot.
How many mortgage-free rental properties will you need to provide you with $33,000 a year, after taxes, management fees and upkeep? How much will you need in the stock and bond markets to provide $33,000 a year, indexed to inflation?
In each case, it’s more than most people think.
Some international teachers live well today, and they’ll retire well.
But most contracted Expatitis, many years ago.
In August or September, a batch of new teachers will arrive at your international school. Many will be right off the boat. It might be their first international job.
Take those teachers under your wing. Help them with their futures. Convince your school’s administrators to initiate (or support) financial teach-in sessions.
If these teachers plan for their futures, they can soar.
But those who fail to plan really do plan to fail.
Andrew Hallam is the author of Millionaire Teacher and The Global Expatriate’s Guide To Investing.
The latter book’s second edition, Millionaire Expat gets released December 26, 2017.
You can pre-order the book here.