Millionaire Teacher

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The voice of youth

A new book promises to reveal "The nine rules of wealth you should have learned at school". This is what 15 year old Danny Beddard made of it:
I’m not a fast reader. In fact I hardly ever finish books. I read about halfway before getting bored and skipping to the end. Millionaire Teacher is different. It will teach you step by step about how to become a successful investor.

The book is easy to read and flows well from page to page. However, in parts it becomes a bit bogged down in the matter. For example when Andrew Hallam, who built a million dollar investment portfolio on a teacher’s salary, talks in depth about stocks rising and falling in value, the two page explanation he gives made it more confusing for me. Maybe that’s because I’m young – it will probably make perfect sense to you. The layout of this book is simple, understandable and very effective. The book is split into nine different rules, and, within each rule there are neat subtitles.

The rules encourage you to start investing early in low-cost index funds, and warn you about the craziness that affects every investing generation, the sales pitches of financial advisers investment scams, and the pitfalls of picking stocks for yourself.

The rules are easily achievable, and what makes it more reassuring is he has already successfully followed them and achieved phenomenal success. For me, rule one, ‘Spend like You Want to Grow Rich’, and rule five, ‘Build Mountains of Money with a Responsible Portfolio’ are potentially the most useful rules in the book.

We can all follow rule one. It doesn’t take much, just cutting down costs. It will also teach you a lot, guaranteed. Your view on how a millionaire spends her money will change. The average ‘decamillionaire’ owns a car worth $42,000, which might sound a lot to you, but it’s nothing to them. The people with the really expensive cars are often the ones blowing money they don’t even have.

This rule is so simple yet so effective and we have known about it for years and years, it’s just common sense. Spend less money and you have more money, yet we are always breaking that rule buying needless items. This rule is important. Rule number 1: ‘Spend like You Want to Grow Rich’.

I didn’t know anything about bonds before I read this book and my dad (who is supposed to be very clever at this sort of thing*) has never enlightened me.

This chapter is not just about bonds. It tells you why you should have a balanced portfolio, and once again it makes sense. He says if you just own a stock market index fund, it will move with the stock market, i.e if the stock market goes down 20% so will your portfolio. This is why this chapter is useful. It is almost like beating the system. By having a mixture of bonds and stocks, making your portfolio balanced, you are reducing the risk of failure in your portfolio. Rule 5: ‘Build Mountains of Money with a Responsible Portfolio’.

Obviously, these are not the only important rules in the book. I picked these because I thought that they were the best for me. I will leave it up to you to find your favourites.

I don’t think Millionaire Teacher is ‘perfect’. A quick flick to the end would show you the nine rules you must follow and perhaps they don’t need so much explanation. Sometimes, it’s a bit slow. But it’s quirky, upbeat and above all interesting. It’s a book for anyone. Give it to your teenage sons or daughters and (after a bit of reluctance) they will read it and probably enjoy it. Give it to your mums and dads, and they will enjoy it. Give it to friends and they will enjoy it. I did.
Astute readers may have worked out Danny is my son. Having been offered a review copy by the author and noting the positive reviews on, I bunged Millionaire Teacher at Danny, promising him £25 if he wrote a review I could publish.  When I handed over the loot at the weekend, he promptly pre-ordered SSX, a snowboarding game for the PlayStation (total cost £39.50).

Naturally, I challenged him with Rule number 1, reminding him how important he thinks spending like you want to grow rich is. He replied:
This [gesticulating at his PlayStation] is way more important.
* I don't know much about bonds.


So has he offered you a GBP 14.50 article yet...?!

:-) He had the rest of the money and was just waiting for the chance to blow it...

For the sake of balancing his financial education I have offered him another bung to review One Up on Wall Street, the book that started me stock picking...

Nice review to the young man there, not sure i can say young myself!.

I have this exact problem with KFC, McDonalds vs my investment funds.
If im to follow the meaning of one particular paragraph then owning a holding
in either company should hedge me on this one :)

Blimey. When I was 15 I think I hadn't upgraded from the Spectrum 48k. The Sega Mega-drive wasn't out at that point (mid-80s).

Having your son write a review on an investment book is quite interesting as it highlights various issues with bothering to teach young people about finances. Generally, in my experience, the young have more interesting things to do than think about their welfare when they're 65... or even 25. They're not interested. Give them £50 cash to listen to a 3 hour lecture on the perils of not having a cash buffer, and they'll still spend the cash as your son did.

I think it might be more important to have free financial educational material available to people who will actually use it... i.e. those who pay the bills, who have a car and a job and have to pay for the food every week. It's people who run their financial affairs badly who need this sort of education, not kids in school who have zero interest in it and in 99% of cases will never remember a word of it when they leave the classroom.

I guess that's anecdotal but it’s still probably true.

Hi John, we're obviously contemporaries. The problem with finance, as you say, is that you're talking about payoffs that are a long way in the future, particularly if you're a kid. As always there's a balance to be struck, and Hallam's rules, or ones like them - living within your means, not taking big risks with money (except perhaps if you are backing yourself in business perhaps) are as much the responsibility of parents to pass on as schools.

In defence of Millionaire Teacher, which I haven't read, I think the book is aimed at the people you describe, rather than school children. I just thought I'd take the tagline seriously and see what a school boy made of it.

I actually think about this quite a bit. I'm absolutely gobsmacked that NO part of the basic educational system seems to think that teaching basic financial math/knowledge/budgeting is important. I'm reminded of the American university system, where courses/degrees lost all connection with life/job skills over the years - finally being questioned as people saddled with student debt for 10-20 years can't seem to get ahead, or even get a job... (sorry, researching US student debt - the next sub-prime crisis..!)

I agree with John above, in one sense - sure, kids aren't interested and they would gladly forget everything they've ever been taught. But isn't financial 'literacy' just as basic a skill as reading/'riting/'rithmetic (em, sorry, are teachers in favour of teaching these this year?!)? Absolutely! Schools want to teach kids about trigonometry, history, foreign languages, sex...but not money.

What's more important in our lives (no, I don't mean this in a good way), why do most of us get up and go to work each day, and what do most married couples fight about? Money, of course - and too many people appear to have no real clue how to confidently and competently deal with money, and all its issues.

OK, this is one of those discussions where I read what one person says and it seems sensible then I read what the other says and it also seems sensible. Kids do financial maths -compounding for example, but I'm not sure whether they study the features of financial products they will be encouraged or forced to buy as they get on in life. Annuities are a long way out but mortgages and student loans aren't, and neither, necessarily, is saving in a pension.

The problem is the need for education is increased by the fact that financial intermediaries have proved time and time again to be untrustworthy (not all of them of course, but enough of them to make it nigh on impossible for the unsuspecting member of the public to know whether he is getting good advice) yet that's when the education is required.

I don't think it's a school's job to prepare young people to manage their own finances because they can't trust advisers, these things will only be relevant when they come to do them. We don't teach kids law, we trust that if they need a lawyer they will get a good one. We teach them the biology of reproduction as an academic subject but we don't get them acting out the preposterous birthing positions they will in ante-natal classes!

So there's a limit I think or we will bore them. The most important thing at school is they learn the basic tools (maths, english, and analytical and critical thinking skills) that will be useful when they face major financial decisions. Although I don't think it would do any harm to show them a balance sheet :-)

I read "Rich Dad Poor Dad" and "The Motley Fool UK Investment Guide" as a teenager. The first opened my eyes to the importance of building an independent asset base, the second as to the power of compounding. I think it's fair to say that although neither provided my with investment skills, both have been a great influence on me.

However, I think it's fair to say that not all teenagers are as studious as I was.

Amazingly enough, I really like Rich Dad Poor Dad. The basic idea that putting some of your money into assets (assets sound more exciting than investments) that grow and generate a growing income stream is simple. If you can get kids/people to realise that this income stream will replace their job at some point so they don't have to keep doing the same crummy job with the annoying boss forever, that should get them interested.

Then tell them that their time to retirement is inversely proportional (or some nicer phrase) to the amount of money they put in and you might get somewhere.

Then tell them that every pound they put on a credit card is paying for someone else to retire on a beach in the Bahamas and we might put them off credit too!

Personally my 'book' that got me going was 'Your money or your life' which I read in the mid-90s. It has this incredible idea that you can retire earlier if you save and invest your money.

The FSA has a nifty site here: It's really good but I'm not sure if anybody has ever heard of it. It's also probably too complex for education, it's more for adults who need really independent guidance.

I think the Motley Fool 10 steps are about right for education. They're simple and cover just about all of the key points (power of compounding, living below means, no debts, buy a house, save, invest for retirement etc).

Print that out on a 6 foot high poster and put it on the national flag and in every classroom from primary school to university and we might get somewhere.

Amazing! I never buy that type of book...but I was flipping through 'Your Money or Your Life' (in the mid-90s!), and it really struck a chord with me. I snapped it up, and have read it a few times since. This book was way ahead of the pack, so many different/incremental concepts in there.

What really blew my mind was the concept of life energy, and measuring your real salary** - had to give up thinking about that whole aspect though, far too shocking/depressing!

Incidentally, I agree much financial education (about mortgages, annuities, pensions) can be saved for later in life, but what needs to be pounded home nearly every day of school is how to make financial choices, how to budget and how to save. These are the core, get them understood and ingrained, and everything else will follow.

** Say you work 35 hours a week (HR depts. are such liars!). Think about your REAL work hour total, once you count getting up/ready, blackberrying, evening/weekend laptop work, commuting, office related entertaining, education, decompression hours/evenings/holidays, stress related illness etc. etc. Then calculate your real wage per hour...shocked? It's not too hard to imagine a scenario where that girl working down the local newsagent is actually earning a better hourly wage than a hard-pressed middle-manager..!?!

Getting (/ bribing) Danny to review the book was a stroke of genius, and I'm very impressed with his skills as a literary critic.

Not that I'm even remotely qualified to comment on the topic myself, but I will say that here in Japan, on average people save between 15 and 20% of their wages (even more in China, as far as I know), which isn't necessarily because they study finance at school, but more because it's culturally ingrained.

So while I also think that in principle, educating kids about credit cards, loans, investment etc. is a good idea, I'm not sure that it would fundamentally change the way they handle money when they grow up.

Personally I've always struggled with the 'build up a pile of assets/retire early philosophy'. It's just not for me. And I think that's the problem with educating children about 'how to be happy', or 'how to be financially successful'. There is no blueprint.

The idea of retiring fills me with horror, and the idea of living like a hermit in my youth didn't really appeal (which people at the extreme end of that philosophy do). Neither does the idea of a life of conspicuous consumption I hasten to add - I'm somewhere in between.

And that's the problem. Rich Dad Poor Dad would be deeply uninspiring to a lot of people. In the same way the National Geographic magazine inspired me to travel when I was young but Danny (son) who'se been given it for Christmas by his aunt has not even opened the cellophane wrapper of the latest edition. Florence Nightingale has inspired nurses, and Branson entrepreneurs.

My kids hear about Buffett et. al. like I heard about Louis Armstrong. Some of it might rub off on them, or maybe they'll get their inspiration elsewhere. I don't think school can teach them this. I don't think parents can. All we can do is help them develop their inquisitive minds.

Bribing Muzuhashi, let's not mince words :-)

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