Millionaire Teacher by Andrew Hallam

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I’m pretty sure I’m not terrible at personal finance, but I’m equally sure I’m not in any position to offer advice on the topic. Until recently I’d been in a bit of a panic about how on earth I was going to make it through my golden years, should I even get there in one piece. That was until I finally took notice of the RetireJapan website and got round to interviewing founder Ben Tanaka here. A lot of what he said resonated with me, so when he recommended the Millionaire Teacher book for people like me (serial financial procrastinators) I had to read it.

The $15 I spent on the book (and the ¥4,000 for RetireJapan’s guides to tax efficient investing in Japan) is the best investment I have made. Possibly ever. I’m pretty good about the importance of saving money and not blowing it on frivolous pleasures (apart from books, obviously), but when it comes to investing for the future I find myself bamboozled by jargon and when I try to edu-macate myself about it with personal finance advisors (actually only one) I get the distinct impression that they (OK, he) are more interested in lining their own pockets with my hard-earned cash than offering what is best for me. Welcome to life, you might say. But where should you go to get good (let alone the mythical “unbiased” ) personal investment advice?

Well, you could start with this book. The nine rules of wealth Hallam explains are:

  1. Think and spend like a millionaire (don’t blow your cash on Jaguars and Rolexes)
  2. Start investing early after paying off credit cards and other high interest loans
  3. Invest in low-cost index funds, don’t invest in managed funds (they are high cost and no-one can consistently predict stock market fluctuations)
  4. Understand stock market history and psychology so you don’t fall victim to the craziness that infects every investing generation now and again
  5. Learn to build a balanced portfolio of stock and bond index funds that will beat returns even good pro investors can muster because of fees and taxes
  6. Create an index account no matter where you live.
  7. Find low-cost financial advisors that build portfolios of index funds
  8. Learn to fight advisors’ sales BS.
  9. Avoid schemes and scams that tickle the greed button.

And that is largely it. What I walked away from this book with was an understanding of why passive index funds (which you keep a track of once a year) are better than actively managed investments. And I finally understood what on earth the stock market is: a crazy dog on a long lead. Sometimes It races wildly ahead of its master, and other times it falls behind or is yanked back. But its master (companies’ profits) continues walking forward. I’ve still got just enough time to profitably join in that journey. Maybe you do too.

No. 18 of 100 books I intend to read and review in 2019.

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Patrick Sherriff publishes a monthly newsletter highlighting good fiction about Japan and featuring an original painting or sketch. He lives in Abiko, Japan, with his wife and two daughters.