Saving money doesn’t have to suck.
“Learn to master money, and not let money master you.” -Andrew Hallam
The Cheat Sheet:
- How much would the average US stock from 20 years ago have earned you today?
- How $6.45 a day can get you a million dollars in 39 years.
- Why budgeting doesn’t work, and what to do instead.
- Auto loans: why they’re a bad idea.
- Who is Saint Jack and why should you care?
- And so much more…
Nearly anyone in any industry or profession, with proper education, planning and execution can become a millionaire: true or false? True according to our guest for episode 354.
Today Andrew Hallam, former finance teacher and author of Millionaire Teacher joins us to talk about the secret to compound interest, how to wisely invest, how to dig yourself out of debt and a host of other finance-related topics. Listen in for all of that and so much more on the 354th edition of The Art of Charm.
More About This Show:
Very often people believe unless they are making millions of dollars there’s no way they can become a millionaire. How could a teacher or a mechanic ever reach millionaire status? By saving and investing wisely and consistently over time, according to Andrew Hallam. And Andrew would know: he taught personal finance to the children of some of the world’s most high-octane, Type A business parents. He also wrote the Amazon top-ranked book, Millionaire Teacher.
He didn’t start out with such lofty upbringing though; he has blue collar roots and earned his way through college, the first of his family to do so. While he was working one summer he met a mechanic who was a millionaire and that man taught him to learn to master money and not the other way around.
One of Andrew’s keys to mastering money has been understanding the beauty of compound interest. Andrew learned to invest a small amount every month at a young age, and to do so consistently over time while watching that money grow, and grow and grow. On today’s show he explains how investing as little as $6.45 a day can become a million dollars over the course of 9 years, he goes into detail on how compound interest makes this possible and how we can start doing this today.
But what if you’re like millions of people who have credit card debt? Should you still invest while paying off your balance? Not according to Adam. Instead of investing, where you’re getting a 9% return on your investment, pay off your credit cards because the average card is charging 18% interest. So take the money you were going to invest and pay down your credit cards.
And here’s a trick to paying them off even faster: write out exactly how much you owe on a slip of paper and then write the date by which you’ll have them all paid off. Take that piece of paper and post it somewhere you’ll see it every day, like your bathroom mirror. Look at it and remember you’re on your way to mastering your money, and not letting your money master you.
Once you’re on your way to having paid off your credit cards and you’re ready to invest for your future, set up an automatic transfer to your 401(k) or to a separate account which you use only to invest for retirement. And if your company offers to match your 401(k) investment make sure you take advantage of it.
On the subject of where to invest, Andrew also has a suggestion: try the Vanguard Index. This particular index is set up by a company called The Vanguard Group, and the index is structured in such a way that you don’t pay a sales commission. That means there are no fat cats and no shareholders who are making extra bucks off of you, as is the case with so many other financial packages and financial advisors.
If you want to try another option, you can go with Fidelity’s Index funds as well. But in most other instances he says the banker or financial advisor who is supposed to be helping you will really be concerned with making money for themselves and their employer first and foremost.
On this episode Andrew also explains which assets are appreciating (and worth taking loans out for) and which are depreciating, and why auto loans are such a bad idea. He gives us plenty of actionable suggestions to get us started on the road to financial freedom, so have a listen and make a move after you do!
Let’s thank Andrew for sharing his wealth of knowledge (pun intended) and for sharing his time so generously. And thank you for being here, having you listen in is always appreciated. We’ll see you next time on The Art of Charm.
THANKS ANDREW HALLAM!
Resources from this episode:
Millionaire Teacher, Andrew Hallam’s book
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