[Book Club] Millionaire Teacher

Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School

Andrew Hallam

---

Three-Sentence Summary

Investing for the long term is not complicated. You need a balanced passive index fund and bonds. Leave it like that. Rebalance the portfolio no more than 6 times a year.

Who Is This Book For?

For those who want to have a long-term investing plan but don’t want the hustle. For those who are new to personal investment and don’t have a mentor. For those who are too lazy to do personal financial plans.

Major Concepts

There are some rules I summarized from the book resonate with me a lot.

1. Start investing as early as possible. But only do so after paying off credit card debt and any other high-interest loans.

2. Invest in low-cost index funds instead of actively managed funds. Nobody can consistently pick winning actively managed funds ahead of time. Even though, on the news, some actively managed mutual funds perform well, hidden fees eventually will drag down total results.

3. Understand the stock market history and psychology so you don’t fall victim to the craziness that infects every investing generation. The stock market is like a dog on a leash. It dashes back and forth but never leaves too far from the comparing earnings. Buy in when the market goes down, sell out when it goes up.

4. Build a responsible portfolio with stock and bond index funds**.** Bonds become parachutes when stock markets fall.

   1. Three index funds to consider and create indexed accounts no matter where you live.

      1. a home country stock market index,

      2. an international stock market index,

      3. a government bond market index. From governments from high-income industrial countries or strong blue-chip businesses.

   2. Percentages. A rule of thumb is to have a bond allocation roughly equivalent to your age. The riskier, the less. So, someone like me might have

      1. 30% China bond

      2. 15% Germany total index

      3. 20% China total index

      4. 15% US total index

      5. 20% EU total index

   3. Adjust the portfolio no more than 6 times yearly to rebalance to the above percentage.

5. If one still wants to choose common stocks, do it with a small percentage of the portfolio (around 10%) and pick a mentor such as Warren Buffett.

A question for you: how can the market guarantee that the overall stock will always rise?

---

Want your friends to know about this newsletter? Share them!