As part of the Boost My Budget project I’m challenging myself to read one personal finance book every month! See previous reviews here.
[easyazon_image align=”left” height=”500″ identifier=”1119356296″ locale=”UK” src=”http://www.boostmybudget.com/wp-content/uploads/2017/01/51HCZp1kGVL.jpg” tag=”boomybud-21″ width=”333″]This month’s book is [easyazon_link identifier=”1119356296″ locale=”UK” tag=”boomybud-21″]Millionaire Teacher[/easyazon_link] by Andrew Hallam.
Andrew Hallam became a millionaire before he was 40 – while working as a teacher.
In this book, he explains how he did it… and how you can do it too.
Hallam’s claim is that anyone on a normal, middle-class salary (or even less) can become a millionaire. You don’t need to have thousands to spare or be a financial genius. You just need to follow the very simple rules set out in this book.
At less than 180 pages long, you can get through this book in a few hours but I would say it is probably once of the most important personal finance books you will read!
Hallam covers a few different aspects of wealth-building in this book, but his key message is that you should invest in index funds:
Index funds are a passive form of investing. They take almost no time to manage and require no knowledge of the stock market.
Most of the book is a series of very persuasive arguments as to why this is the best way to invest.
Nine rules of wealth
Millionaire Teacher is sub-titled ‘The Nine Rules of Wealth You Should Have Learned in School’. It’s organised into nine chapters around these nine basic rules. These range from the importance of spending less than you earn, to the power of compound interest, how to build a balanced portfolio, and how to avoid being duped by convincing investment scams.
Seriously, why don’t we learn these things in school? I know I was never taught a single thing about personal finance. I wish someone had given me this book when I was a teenager – even a small investment would be worth thousands by now!
Spend like you want to grow rich
This is the title of the first chapter, which points out that you’ll never get rich if you carry on spending the whole of your salary each month. It’s a concept that should go without saying, but passes a lot of people by: if you want to build wealth, you have to make sure there’s money left over to invest. In Hallam’s words, ‘The surest way to grow rich over time is to start by spending a lot less than you make’.
The surest way to grow rich over time is to start by spending a lot less than you make. – Andrew Hallam
He also points out that most truly wealthy people are quite frugal. They buy second hand cars and don’t over-extend themselves with unaffordable mortgages. This is part of the reason they got so wealthy. A lot of people who have luxury cars, designer clothes and expensive holidays are creating a mirage. They have nothing left over to save or invest, and if they lost their jobs tomorrow their world would come crashing down. Which would you rather be?
Why index funds are winners every time
Hallam made most of his million through investing in the stock market, but he’s not a professional trader who spends all day buying and selling. His secret weapon is index funds.
Index funds basically give you ownership of all the companies listed on a particular index or market. You automatically own shares in hundreds (or even thousands) of companies, just by investing in one product.
This means you don’t have to keep buying and selling individual stocks trying to make a profit. You portfolio’s value goes up or down with the stock market as a whole.
Index investing works best when you just leave your investments to grow over a long period of time. Of course, the stock market lurches up and down all the time in the short term – but over a period of several years, the average growth is 7%-10% per year.
Index funds beat actively-managed investments most of the time, they require almost no input from you, and they have very low fees. Also, a whole range of experts generally agree that they’re the best thing you can do with your money, from several Noble Laureates in economics to Warren Buffett himself.
If you’re at all interested in this form of investing, I strongly recommend you read [easyazon_link identifier=”1119356296″ locale=”UK” tag=”boomybud-21″]Millionaire Teacher[/easyazon_link] for more information on how index funds work and how they can help you make a million! It even has recommended sample investments for readers in different countries.
This is a short book but it gives you all the information you need to start investing, even if you’ve never invested before.
Hallam must be a great high school teacher. I would love to attend one of his seminars or lectures in person if I ever get the chance. This book is so engaging, humourous and easy to read. You could give this to a high school student and it wouldn’t be beyond them – but at the same time, it doesn’t patronise older readers.
This book makes investing seem so easy and approachable. If you have ever considered investing but didn’t know where to start – you need this book. If you are not interesting in investing, but have even the vaguest interest in getting rich – you need this book.
This is now one of my favourite finance books, and I’m recommending it to everyone!
Boost My Budget rating
It will only take you a few hours to read this book, but it could change your financial situation forever. Get it now!
Here are some of the other personal finance and money-related titles on my reading list.
Have you read any of these? Any more recommendations for me? Come back soon for more reviews!
- [easyazon_link identifier=”1563523302″ locale=”UK” tag=”boomybud-21″]The Millionaire Next Door[/easyazon_link] by Thomas J. Stanley and William D. Danko
- [easyazon_link identifier=”0061234060″ locale=”UK” tag=”boomybud-21″]It’s Not About The Money[/easyazon_link] by Brent Kessel
- [easyazon_link identifier=”0553813641″ locale=”UK” tag=”boomybud-21″]The Millionaire Mind[/easyazon_link] by Thomas J. Stanley
- [easyazon_link identifier=”1615890424″ locale=”UK” tag=”boomybud-21″]The Richest Man in Babylon[/easyazon_link] by George S. Clason
- [easyazon_link identifier=”0340998059″ locale=”UK” tag=”boomybud-21″]I Will Teach You To Be Rich[/easyazon_link] by Ramit Sethi
- [easyazon_link identifier=”B00QH9NTSI” locale=”UK” tag=”boomybud-21″]A Random Walk Down Wall Street[/easyazon_link] by Burton G. Malkiel
- [easyazon_link identifier=”1481528777″ locale=”UK” tag=”boomybud-21″]Rich Bitch[/easyazon_link] by Nicole Lapin
- [easyazon_link identifier=”1447286316″ locale=”UK” tag=”boomybud-21″]The $100 Startup[/easyazon_link] by Chris Guillebeau
- [easyazon_link identifier=”1781800685″ locale=”UK” tag=”boomybud-21″]Money, A Love Story[/easyazon_link] by Kate Northrup
Disclaimer: this post contains affiliate links. All opinions are my own.