9 Rules for becoming a Millionaire Teacher

Become Wealthy without a High Income

Several years ago I read a book called Millionaire Teacher by Andrew Hallam. The book explains 9 rules that allow someone on a teacher’s salary to become a millionaire by saving and investing. After purchasing the book I was pumped to find out how he did it. After all, if the author managed to pull it off then so can I because I’m also a teacher. ๐Ÿ™‚ So here are the 9 rules he outlined in the book.

  1. Don’t spend like you want to appear or feel rich. Instead, spend like you want to grow rich. In this life you can either be wealthy, or look wealthy. It’s very hard to do both.
  2. Start investing right away to take advantage of time. Compound interest is the 8th wonder of the world, says Einstein.
  3. Keep your investment fees low. A mutual fund with 1.5% annual fee will eat up a quarter of your investment returns every year given an 6% expected rate of return. That 1/4 return you could have made will stack up to huge missed opportunities in the future.
  4. Learn to control your emotions. Most people get worried and think about selling their investments when the market goes down. But that’s often when stocks are on sale so if anything, that’s the best time to buy. Don’t be emotional. Be rational. Investing is 10% knowledge, and 90% psychology.
  5. Balance stocks and bondsย using the age rule. This basically means keep your age in bonds, and the rest in stocks. So for a 25 year old, his asset allocation would be 75% stocks and 25% bonds.
  6. Many investors have a home country bias. But it’s important to diversify globally.
  7. Many financial advisors and brokers have a strong incentive forย you to stay in actively managed funds or other financial products. Understand that they are sales people, and don’t fall for their tactics.
  8. Don’t be seduced by the next hot stock or tempting investment opportunities that seem too good to be true. Stick to diversified index funds.
  9. If you really must pick and choose individual stocks, limit your exposure to 10% of your total portfolio.


Living below your means

The author is very frugal. He house-sits for vacationers so he could live in their homes for free. He never turns on the heat in the winter and walks around the house wearing layers of clothing. And he even catches his own food sometimes.

I generally agree with all 9 of his rules. I don’t follow rule #5 very closely as my asset allocation changes based on personal circumstances and economic indicators rather than age. But for the most part I’ve been using Andrew’s advice for many years now. My finances are in pretty good shape so I guess it’s working. ๐Ÿ™‚

I would say the book is a great read for personal finance beginners. It explains lots of fundamental principles about money management. But I don’t think someone with an intermediate level of financial knowledge will learn anything new and substantial from the book.


Random Useless Fact:

The US Postal Service moves mail using planes, trains, trucks, cars, boats, ferries, helicopters, subways, float planes, hovercraft, mules, bicycles and feet.


Author: Liquid Independence

Editor in Chief at Freedom 35 Blog.

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02/23/2017 10:09 am

Business partner’s wife is a teacher… makes 90,000 a year. Has summers off, 2 weeks of sick days a year, a rock solid pension, and works equivalent of 6hrs a day.

I’m sorry, but it is not hard for a teacher to become a millionaire.

How about millionaire fast food/convenience store attendant? That takes some work and discipline.

02/24/2017 4:15 pm

For rule #5, with current bond rates I’d recommend taking a bit of additional risk and lean more towards equities. Also, frugality must have limits, whats the point if being a millionaire if you are living in a freezing home? The goal is to be happy, not just have a million,

02/25/2017 7:01 am

There’s actually only 1 rule to becoming a Millionaire Teacher: Become a Teacher.

Teacher’s are millionaires the second the get their jobs, same goes for many other government workers. A married couple of two teachers are multi-millionaires.

02/25/2017 12:15 pm

9 rules?!?! what am I, in prison or something?

04/28/2017 4:06 am

good tips by the way. I wish one day I become this kind of person

Jaspal Singh
Jaspal Singh
11/09/2018 8:31 am

I feel mutual funds are perhaps the most safe mode of investment. Stocks are not so reliable anymore.. what do you say?

J. J. Jones
J. J. Jones
03/03/2020 11:37 am

Started investing this year. Bad time. …no but you have to wait the rough time. Invest what you can spare, not the money you need for a living. Even small amounts are important on the long run.