When I give financial seminars to international school teachers, I tend to shock them with this:
“As international school teachers, you aren’t as wealthy as your counterparts in England, Canada, the U.S., Australia or New Zealand.”
At first, they stare at me with the crazy look you’d reserve for someone who just ate a handful of cockroaches.
Their salaries are often higher than those of their teaching counterparts back home, they think. And their taxes might even be lower. So how can they, as international school teachers, be poorer than the teachers in their home countries?
Upon retirement, the average public school teacher usually has the following:
- A house that’s paid for
- Total savings of $100,000 or more
- A pension which could give him/her an income of $50,000+ each year
For an international school teacher to generate $50,000 per year, he or she would need to have at least $1.2 million in investments, or they would need to give an insurance company roughly $1 million to receive $50,000 in annual income.
To match the retirement benefits of a public school teaching couple with a pension and social security, a private international school teaching couple would require roughly $2 million.
And I’m not the only person believing this. Jonathan Chevreau, of The National Post, recently reviewed my book, Millionaire Teacher. And he felt (correctly so) that any career school teacher could consider themselves a millionaire.
When a review copy of Millionaire Teacher first landed on my desk, initially I didn’t pause to look at it. (Nothing unusual there: We get a lot of books here: probably two or three a day).
I imagine I processed the title and thought it a bit strange. After all, most teachers in Canada are relatively well paid and enjoy those Defined Benefit pension plans the rest of us in the private sector generally envy.
From where I sit, any career teacher who makes it to age 65 is already a millionaire, since the rest of us would need $1 million of capital in order to spin out an annual $50,000 from it.
So my initial impression was that the very phrase “Millionaire Teacher” was redundant.
My point is this: most international school teachers I’ve met believe they’re wealthier than they are. Rather than living the life of Riley (which many do) they really need to hunker down, save significantly more for their retirements, and pay far more attention to their investment costs.
International teachers can, in many cases, enjoy the fruits of their international experiences, while amassing comparable levels of wealth to their home country counterparts.
But they have to get serious about their saving and investing.
With a new year dawning, the best time to start a disciplined regime is right now.