Help For Expat Investors From Andrew Hallam

If you or someone you know is working outside of their home country, you need to get

The Global Expatriate's Guide to Investing

by Andrew Hallam.  The subtitle From Millionaire Teacher to Millionaire Expat refers to his immensely popular book Millionaire Teacher.

Hallam's gift is the ability to explain, using stories and humor, some of the most intricate parts of the investment markets facing everyday workers seeking to attain a secure and satisfying retirement.  These are the parts of the market where a huge part of the financial services industry have, sadly, taken great advantage of investors in the U.S. and, even to a greater extent, globally.

If U.S. citizen investors think they face a complex task investing in the U.S., they should consider the task from the perspective of the out-of-country expat investor.  All countries have their own rules; but, in general, the expat has no type of social security, has to be careful choosing a broker because of how difficult it is to compare fees and different offerings, be aware of laws that could affect tax exclusion, be aware of possible estate taxes from investing too great an amount in certain counties, factor in the cost to convert currencies--and the list just goes on and on.

All of this has not gone unnoticed by the unscrupulous who have invaded expats, especially teachers teaching abroad, with retirement schemes that lock in participants for decades into high cost, commissioned products.  These outrageously priced products have the potential to wipe out almost the entire contributions as well as earnings, if participants decide they want to change course.

In the book, Hallam gives explicit advice for successful investing for all investors--using the low-cost index approach recommended in the first book as well as by such market stalwarts as Buffett, Bogle, and Malkiel--but also introduces the permanent portfolio which has an incredible record.  The second half of the book covers expats in specific countries.  Again, actionable steps are presented so that expats in those countries know exactly what to do.

Part of the problem is that human resource departments are not generally investment savvy.  This book is a must read for them!  This book should be given to every new hire.

Simply stated, the information in this book is available nowhere else.  Everyone would profit by reading it--but especially expats.

Presentation Preview

Millionaire Teacher Andrew Hallam

Tonight I give a wrap-up talk for the online discussion of Millionaire Teacher by Andrew Hallam conducted via the Howard County Library System in Howard County, Maryland.  As one part of the presentation, I will give the following overview that hopefully will help people as they think about saving for retirement.

How to Invest

• Asset Allocation - Percentage in Stocks/Bonds/Cash. Most important decision for investors. Pick asset allocation and stick with it.
• Low Cost Index Funds - forget market timing and stock picking. Understand the cost of the funds you use and minimize those. Use index funds. 
• Monitor - keep track of performance. Performance should be close to market returns. Understand that, in accumulating assets, declining markets are your friends.
• 10% Max Play Money - You are introduced to 3D printing and want to invest. You eat at Chilpolte's and want to invest. Limit these investments to your "10% play money."

Organize 

• Taxable, Qualified (401k, 403b, TSP, IRA), Roths - Put accounts statements in this order. This, by the way, is generally the order you'll spend in retirement.
• Consolidate - Many people have accounts with several brokers and banks. Simplify as much as possible. It helps in getting the big picture and monitoring the overall results.
• Bonds in Qualified Accounts and Roths/Stocks in Taxable and Qualified Accounts-Two tax rules:  defer taxes and pay as little as possible. Understanding the idea behind location of investments helps along these lines.

How Much to Save and Invest?

• Add Social Security + Pension + Nest Egg * .04 + Other Income - The idea is to estimate potential income  when you stop drawing a paycheck. Online calculators will help you with this by putting in estimates of inflation and market returns.
• Income should typically  = 80% to 110% of current lifestyle expenses - Estimate living expenses at retirement and get within the range. 

What Can Upset the Apple Cart?

• Lose Breadwinner Income - Carry term insurance. 
• Health - Think about long-term care insurance.
• Lawsuit - Carry umbrella insurance.

This outline is intended to get the wheels turning.  People need wills and trusts.  People need to consider what it would cost to replace a homemaker.  People need to understand how to rollover 401ks and educate their heirs how to title inherited IRAs.  This outline isn't intended to suggest that dotting all the i's and crossing all the t's is easy but, hopefully, get people started on the right path. Reading the Millionaire Teacher goes a long way down this road.

Millionaire Teacher Online Book Discussion Started

Andrew Hallam

The online book discussion of Andrew Hallam's best selling Millionaire Teacher has begun at Millionaire Teacher Book Discussion blog.  This is an excellent chance for Andrew Hallam fans to interact with new readers as they learn the basics of investing for a successful retirement.
 
To succeed, this discussion needs commenters offering examples, asking questions, and even debating various points. All are welcome.

No More Excuses!

On 6/20, we will kick off the online book discussion of Millionaire Teacher by Andrew Hallam.  The kickoff will be at 7 pm at the Miller Library in Ellicott City, Maryland, but YOU DON'T HAVE TO BE PRESENT TO PARTICIPATE!  The program will be online, and we will read one chapter/week and discuss.

This program will teach you how to come up with money to invest, how to invest, the pitfalls to avoid when investing, and how to avoid the traps Wall Street sets for you!  And it does it all in a highly readable fashion with a laugh-out-loud sense of humor.

I will be facilitating the reading and thus will be available for questions, comments, and to make additional points.

HERE'S THE BOTTOM LINE - ending up not prepared for retirement and having your eyes glaze over in viewing a list of mutual fund choices is over.  Commiserating in the company lunch room over the fact that you have no clue on how the company retirement plan works is no longer an option - you'll easily be able to choose the best investments from the available choices.  In fact, you'll learn an investment approach that historically has outperformed most professional investors - Andrew Hallam presents the evidence for your consideration.

So get hold of the book (used copies available online at less than $10! or check out at your local library) and start reading.  Visit the blog at http://millionaireteacheronlinestudy.blogspot.com/ and participate.

Here are some comments on Millionaire Teacher from market experts:

• "Andrew Hallam has distilled the timeless lessons for investing into nine easy to understand and easy to follow rules. The newbie investor will not find a better guide than Millionaire Teacher." Burton Malkiel, author A Random Walk Down Wall Street 10th edition.
• "Put away your checkbook. Instead give this book to every young person and you will be gifting them a lifetime of financial independence and success." Robert Miles author Warren Buffett Wealth.
• "Every once in a while I read a financial book that I think should be shared with everyone I know. Millionaire Teacher is that book!" Charles E. Kirk, The Kirk Report.

Great Gift Ideas

It's getting late, so I'll cut to the chase.  Here are two great book gift ideas:

• Andrew Hallam's  Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School.  Here  is a great resource page that lists these laws:  "Nine Laws to Financial Freedom."

•  How to Retire the Cheapskate Way by Jeff Yeager.  Here is a recent review I wrote on the book:  "Recommended Holiday Gift." 

I say these books are "great" ideas because they are life changing. They teach investment savvy and frugality.  Why are these important? Simply because understanding them enables people to lead an enjoyable final third of their lives.

Those who lack the knowledge that these books provide tend to make two huge mistakes.  First, they line the pockets of high-priced investment managers and advisors or, at worse, fail to take advantage of appropriate retirement savings vehicles.  Many people have no idea what this is costing them.  Hallam's book will let them know.  Secondly, many fall victim to an economic system that thrives on getting consumers to dig themselves into a financial grave from which they never recover.  Both Hallam and Yeager spell out how to avoid this.  Both writers are story tellers, and both have terrific senses of humor.

Investment savvy, frugality, a better life - what better gifts are there?

DIY Interviewed by Andrew Hallam

Andrew Hallam, author of best-selling Millionaire Teacher:  The Nine Rules of Wealth You Should Have Learned in School, has recently initiated a series on his blog profiling low-fee, passive index investors and has interviewed yours truly.

The highest compliments one can receive in any endeavor are from those they respect and hold in high regard in the field.  It is, thus, an honor to be included in the series.

As I have in the past, I highly recommend Andrew's book and blog for those seeking a clear path to a satisfying retirement.  This is a man on a mission.  He shows how a bit of frugality and investment knowledge achieves this goal, and he does it with interesting anecdotes and humor.

2 Great Weekend Reads

Below are 2 pieces from 2 of my favorite bloggers:  Andrew Hallam and the intriguingly named Mr. Money Mustache (aka Pete). Reading these 2 bloggers will change most people's lives - to some extent.

Understand that you don't have to buy into their respective life style or investment philosophies 100% to benefit from them.

For example, Andrew Hallam is a 100% indexer and thinks hard about lifestyle.  His mission is to lay out a clear path to creating wealth.  To that end, he has written Millionaire Teacher.

I get it that indexing turns off some investors.  I understand that some people just can't buy into the idea that indexing will outperform most investors who actively seek to beat the market.  I've met a lot of people who have no doubt that they can pick high-priced mutual funds that will be in the 10% that will outperform the market over the long term after all fees.

And I know for a fact that most people have never been challenged on the frugality front.

On the investment front, many investors like matching wits with Mr. Market, like the challenge of analyzing individual stocks to try and pick winners, and bask in the adrenaline rush of timing the market.

But you can both index and invest actively. You can invest in line with Hallam's philosophy with 70% or 80% of your money (I always recommend at least 80%!) and try to beat the market with the rest - if that's how you want to spend your time.  By doing this, you can have the best of both worlds:  having the bulk of your assets invested with the odds on your side à la Hallam's approach and meaningful assets seeking to capture what the industry calls "alpha."  One thing Hallam will teach you, unambiguously, is how to avoid the cost of investing in high-priced funds and using high-priced advisors!

The second blogger, Mr. Money Mustache, is frugality (frugal, not cheap - he will teach you the difference) to the extreme.  In his strong language, engaging style, he provides a path for young people to be able to retire early by thinking hard about life style.  Again, you don't have to buy in 100% by, say, seeking to live close enough to your job so that you can bike to work.  I believe, however, after reading Mustache you will question why you're buying that huge flat screen TV for your small apartment when you have unpaid credit bills.

In fact, it wouldn't surprise me if most of you who read the piece below join the rapidly growing army of Mustachions!

This interview of Andrew Hallam, "How I Made My First Million," lays out the key points of his book Millionaire Teacher.  Here is a piece that lists his "Nine Laws to Financial Freedom."

Here is a piece, "Get Rich With:  Good Old-Fashioned Hard Work," by Mr. Money Mustache.  It is representative of his engaging style and includes (warning if you've got sensitive ears) strong language and a valuable lesson for young and old alike.

Enjoy!

2 Must Reads For DIY Investors

Source: Capital Pixel

For this blog, I am constantly on the lookout for succinct articles that I believe offer great education value for DIY investors and point them in a practical direction in their investment process.  One of the benefits of living in the information age is that such articles are at our finger tips.

Here is one from Andrew Hallam, author of Millionaire Teacher, that offers really all the essentials of successful investing.  It tells you how to diversify.  It tells you how to use your time economically.  And it tells you how to rebalance.  Pay close attention because he points out the important point that accumulators really want markets to fall.  It is a 10-minute read. Enjoy!

Millionaire Teacher Prepares to Buy

To build on what you have learned, I suggest you get his book, Millionaire Teacher:  The Nine Rules of Wealth You Should Have Learned in School, and read that.  In a weekend, you will learn about an approach to investing that has outperformed 90% (it's hard to beat the lucky ones! ;)) of professional managers.  Buying the book and spending a weekend with it could turn out to be the best investment you ever make!

On a different front -  here is a good piece from Morningstar on Treasury TIPS:  Are TIPS as Safe as You Think?  It notes there are two points to keep in mind in valuation decisions:  inflation expectations and the overall level of rates.  A case can be made that they are cheap on the first count but expensive (along with the overall bond market) on the second.  Pay special attention to the argument that shorter maturity TIPS may offer a special opportunity.

One point not mentioned is that TIPS can be easily bought from the Treasury at Treasury Direct and, thereby, fund expenses avoided.  It is always worthwhile to think about expenses but especially here where yields are so low.  I also recommend the comments section for Morningstar articles.  The commenters there tend to ask very good questions and offer useful observations.

Simplicity

Source:http://www.capitalpixel.com/

Steve Jobs:  “That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” [BusinessWeek, May 25, 1998]

I recently sent in my iPod to Apple because they notified me the model I had might have battery problems.  This iPod was the size of a playing card, had to be strapped into this holder that went around my bicep so that I could listen to music when I ran. There were days I spent more time trying to strap it on than I did running.  Apple returned an iPod the size of a postage stamp. It clicks on my t-shirt, has photos, and all kinds of neat fitness-related stuff built in--the end result of hard thinking by passionate people.

Jobs' observation is just as true in the investment world as it is in technology and other parts of life. Thinking hard about the investment process, studying the data, and clearly setting out the objectives will get you to the point where you realize the optimal approach is simple and elegant.

Fortunately, many hard thinkers have done the required thinking to understand why investors--both individuals and professionals--underperform so badly over long periods and how to construct portfolios. Below is a short post detailing the performance of a 3-fund portfolio  (as basic as you could possibly get, short of the more expensive life cycle funds) that has had performance over the last 5.5 years that has outperformed, I would guess, at least 75% of both professional and individual investors.  Note that this period spans the sharp downturn in 2008/early 2009 as well as the European problems of the last couple of years.

Setting up the portfolio would take about the same amount of time it takes to read the article - approximately 5 minutes.  Rebalancing the portfolio to reset the risk level also takes about 5 minutes. This is the end result of hard thinking.

Line up all the investors over the past 5.5 years who have spent chunks of their lives listening to CNBC, Jim Cramer, et al., and tried to time the market and pick stocks.  There will be some who beat the portfolio shown here, but there will be many many more who didn't.

My suggestion:  the next time a friend or co-worker or anyone, for that matter, starts whining about their investment performance, whip out a copy of Andrew Hallam's post, Don't Forget That You're Getting Older, and recommend to them that they read it.  Better yet--suggest they think hard about what it says. You could be a retirement saver!

Best-Selling Author Commends RW Investment Strategies' Approach

Andrew Hallam, author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, says "If the average American Fund salesperson saw what Wasilewski charges, they would hide their pink heads under the covers of shame."  Nobody can ever say that Hallam doesn't have a way with words!

My conviction has long been that the financial services industry overcharges by charging sales fees, marketing fees, outrageous management fees, and  numerous additional hidden costs to individuals who are led to believe that market timing and stock picking are superior approaches.

I, of course, am not the only one practicing along the low-cost index approach.  Hallam mentions Assetbuilder as well, and there are others.  In fact, my sense is that the movement is growing - helped along by the works of Hallam et al. .

Although I work with all age groups, I am especially interested in getting the message across to young people.  Too many procrastinate with their investment program because they won't take a bit of time to learn how it works.  They convince themselves they are right whenever they see markets drop, when, in fact, they should see declining markets as a great opportunity.

What Cancer and Investing Have in Common - from Andrew Hallam

Some really good advice from someone who has "been there and done that."  Andrew Hallam tells you all you need to know to beat the pros at their own game in the investing world.  His ability to get at the essence of the best approach to investing is why I continually recommend Millionaire Teacher:  The Nine Rules of Wealth You Should Have Learned in School.  Get it for your kids, get it for yourself.  Read it!

Great Holiday Gifts!

The joy of the holidays brings the stress of choosing gifts.  Some of us will participate in that sanity-testing tradition of "Secret Santa" and draw the name of the least liked or least known person in the office or even (yikes!) the boss. Others stress over getting something for someone in a different age bracket with tastes they can't relate to.  Still others dread meandering in crowds of rude shoppers trying to get a feel for what's out there.

Here's a couple of suggestions.  Just about everyone at a certain stage in life can profitably read the following two books.  They are especially well suited for the person or couple who are in their first few years following college . This is a period where people are making financial decisions that will significantly impact their lifetime well-being.

Book #1 is Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School by Andrew Hallam.  A very quick read, even for the financial novice, this book yields insights that provide value over a lifetime.  I would suggest that a couple read it together and discuss it.  To get an idea of Andrew Hallam's writings, visit his blog.

Book #2 is I Will Teach You To Be Rich by Ramit Sethi.  Again, this is a book that young people will find invaluable.  To get an idea of Ramit Sethi's writing,s visit his blog.

Both books are available as paperbacks and are life-changing and inspirational.

America's #1 Personal Finance Book

Source: Amazon

Andrew Hallam's book Millionaire Teacher has deservedly reached #1 on Amazon's best seller list of personal finance books.  It's not hard to figure out why - it is readable, witty, and provides a desperately needed message to individuals on how to become financially literate.  If it was up to me, it would be required reading in all high schools and colleges; and Human Resources departments would do well passing it out to employees.  At least then we would know that students and workers had one real-life case put in front of them of someone who has figured out how to build wealth on a modest salary.  Millionaire Teacher spells out this valuable information.  It gives people a road map with the lessons it teaches.

But for most readers, this won't be all.  There is an added bonus... Andrew produces one of the top financial blogs in the world.  Readers will be impressed with the trips he takes and adventures he has.  It is clear that getting one's finances in order provides the means to live an interesting life.  Readers of his blog will also be inspired by the head-on battle he has fought with serious medical issues.  Not only has he fought back but he has continued as a world class distance runner.

I was honored in being asked to endorse the book.  Seeing my name in print next to the heavy hitters in the world of finance has been a thrill.  I hope that this book finds its way into the hands of the financially challenged this holiday season.  It truly has life-changing potential.

Shameless Promotion

Source: Amazon

Yesterday I gave a pitch to the Howard County Public Schools Academy of Finance board, of which I am a member, for Andrew Hallam's book Millionaire Teacher.  The book is highly recommended for anyone interested in learning the appropriate way to invest for the longer term and how a person of modest salary can attain a sizeable nest egg.  Andrew's humor and talent for explaining complex topics make the book extremely readable and, a rarity for this genre, highly entertaining.

The basic message in the book, for young people to start investing early, diversifying, and paying attention to costs, is lost on many as evidenced by the report described by Shawn at Watson Inc in his post "Young People Avoiding Investing in Record Numbers."

The Wells Fargo report Shawn reported on found that those in their 20s prefer CDs rather than investing in stocks.

The customer reviews of Millionaire Teacher speak for themselves.  Andrew's book is a giant step in the right direction for attaining financial literacy.

Full disclosure:  RW Investment Strategies is mentioned in the book.

There's No Longer an Excuse - Teacher's Journey to Wealth

Source: Dividend Ninja

An Excerpt From Millionaire Teacher

If you were considering a profession and you wanted to become wealthy, certain lines of traditionally high-paying work might tempt you. Would it be law, medicine, business, or dentistry? Few, if any, would choose my profession if they aspired to be rich. I’m a high school English teacher—a middle-class professional if there ever was one. Yet I became a debt-free millionaire in my 30s.
I didn’t take exceptional risks with my money and I didn’t inherit a penny from anyone. When I went to college, I paid the entire bill myself. How did I pay for my own schooling and amass more than a million debt-free dollars before my fortieth birthday? Fortunately, I learned from (and was inspired by) some financially savvy characters, urging me to master what I should have learned in high school. Because financial literacy isn’t adequately taught in most high schools, you might be among the millions who were shortchanged by our education system. This book is my attempt to make it up to you.

Give this book to your financially challenged friends.


For a recent interview with Andrew, check out "An Interview With Andrew Hallam" by Dividend Ninja.  Millionaire Teacher is a life-changing book for those who can grasp its lessons.