Andrew Hallam is a former international school teacher at Singapore American School, where he taught English and personal finance to secondary students, providing them with the tools to become academically and financially successful.
Encouraged by his success, Hallam now works as a personal finance journalist, speaker, and international best-selling author of Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas. In addition to his books’ success across the world, Hallam has spoken at businesses and international schools in over 30 different countries on a range of topics ranging from investing to happiness.
Most international teachers avoid planning for their own retirement financially. For Andrew Hallam, this is a head scratcher. “It’s simpler than seventh grade math and it takes less than an hour a year of your time,” he tells Teacher Horizons. “Most people spend more time clipping their toenails than I spend managing my money.”
While planning for retirement is not an attractive way to spend your free time, it is important for international teachers to pull their head out of the sand and face the reality head on.
With our candidates in mind, Teacher Horizons sat down with Andrew Hallam to ask him how international educators can begin preparing for a more secure financial future. We want our teachers to enjoy exploring a new home abroad, and feel comfortable about their years ahead.
Financial guidance for overseas investors—thwarting the ‘demon in the closet’
Hallam says teachers abroad have taken a huge risk by not contributing to assets such as social security or pensions. Additionally, international teachers on average end up retiring with far less cash flow in their retirement years than those teachers they left behind in their home countries. Andrew Hallam refers to this as the “demon in the closet” facing international school teachers later in their career.
Hallam wants to help expats confront that demon and get a better handle on their retirement goals, to secure a “front-end and back-end loaded lifestyle.”
Hallam refers to “front-end loaded” lifestyles that many international teachers enjoy which comes with experiences like traveling, but often leaves individuals less monetary security in their later years. Securing a comfortable retirement, teachers can also ensure their post-career years aren’t plagued by financial worry and therefore also enjoy a “back-end loaded” lifestyle.
Hallam’s advice is applicable for all teachers, those who have just begun their international teaching careers, or those who have been on the circuit for a long time. But for those younger teachers who want to start preparing early, there is enormous benefit because money invested for a longer period of time accrues significantly larger returns.
Step 1 – Define success by tracking your expenses
It might come as a surprise but a habit that the majority of millionaires follow, Hallam explains, involves tracking their income and expenses.
Hallam makes the distinction between tracking the ins and outs of one’s finances and budgeting your money. A distinction that Hallam relates to eating—being conscious of what goes into your body, instead of depriving yourself of food. “Budgets are really boring. They’re kinda like diets, they don’t work”
Studies show we spend less money when we track our budgets, and therefore hold yourself accountable for what we do spend. If you can see what you spend on, you can align your spending from your value system. You can find categories where you spend excessively and if these don’t provide you with enough value, you can cut them out.
The key to this approach, says Hallam – treat your household like a business. And to do that individuals need to enter their expenses manually, not just rely on their online banking services to do this. Simple expense tracker apps enable users to manually enter what goes into and out of their bank account, track how they spend their money, and cut away the fat accordingly.
Step 2 — Smash your debt
For some in the Teacher Horizons community, this section may not apply, but for many educators—especially those from the United States—student debt presents a significant obstacle. Other debts that remain, credit card, medical, non-mortgage related debt, need to be addressed and repaid before taking any further steps.
The first step many need to take, Hallam urges, is to write that number down, the amount owed, and imagine yourself demolishing it with a hammer—inviting people to take their head out of the sand. Then those teachers need to come up with a plan to repay any debts with high interest rates which will continue plaguing professionals.
Hallam says he has met countless international educators who are carrying around student loan debt., but he argues that they need to “slay that dragon” before they can start saving for retirement.
“Just as you make a plan to get your degree and you know which courses you are going to take and we get really systematic about that….The whole debt slay is just as important and we have to attack it the same way.”
By attacking this debt consistently and intentional, soon-to-be investors can begin chipping away at high interest payments. To support this endeavor, individuals may need to ask themselves, “How am I going to cut costs?” Which returns to the idea of tracking income and expenses.
Step 3 — Develop the mindset of a great investor
Hallam uses the analogy that investing is like a bar of soap, “The more you mess with your bar of soap, the smaller it gets.” It’s for this reason, he recommends low-cost index funds for individuals who want the most profit for the least amount of work.
For those who seek professional help managing their funds, Hallam cautions, the more money paid in investing fees the less money investors can expect to receive. Index-funds alternatively allows investors to capture the entire stock market’s return at the lowest possible cost.
In his years as an international teacher and speaking in over 30 countries on personal finance, he has heard his fair share of personal finance horror stories. But a large part of his decision to write Millionaire Expat came from his utilitarian urge to warn international professionals about the danger of offshore investment packages.
Otherwise known as investment-link insurance schemes, these packages often come with “advisers” who make promises of large returns yet fail to mention the high fees associated with the scheme and snagging contract details. These nefarious practices are banned in many countries including the US and UK, but with no regulatory oversight in other countries, expats make for great targets.
This brief and helpful advice from Hallam is just a sample of the insights offered in his book: Millionaire Expat: How To Build Wealth Living Overseas. Hallam provides simple investment strategies and personal finance tips in a humorous, digestible manner that will ensure every international educator can achieve financial freedom in their retirement years.
All the while maintaining a “front-end loaded lifestyle”, which educators can achieve by partnering with Teacher Horizons and making a career out of exploring.