Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Andrew Hallam is a Canadian who teaches English and personal finance at Singapore American School. He is the author of Millionaire Teacher: The nine rules of wealth you should have learned in school. This is the first in a series of columns based on his book.

Is it possible to teach people how to become wealthy? I believe so. And this year I'm out to prove it.

I'm a Canadian expatriate who teaches at a private school in Singapore. In 2012, I'll be launching a personal finance course – creating a curriculum from scratch for teenagers who attend the largest international school in the world.

Story continues below advertisement

My goal is to pass on to my students what I've learned, often painfully, in amassing a seven-figure investment portfolio on my teacher's salary. My course will begin with two simple rules.

The first rule – and pardon me if this seems obvious – is to live within your means. Wealth can't be built or even maintained if it's squandered. Like I said: obvious. But when I look around me, I see people spending to the very limits of their income and sometimes well beyond.

I see this in my own students. Most come from privileged backgrounds – they're typically the offspring of expat executives. Many regard jetting off to Europe for a ski break at Christmas as casually as I used to think about taking a bus to the mall when I was growing up on Vancouver Island. But this doesn't mean their families are necessarily amassing wealth.

I used to tutor an American boy in Singapore on Saturday afternoons. His dad was an investment banker; his mother dropped off their son in their Jaguar. I couldn't help but notice the Rolex on her wrist when she handed me the cheque for my tutoring fee every week.

Yet their cheques would bounce – not just once but consistently. I eventually ended the tutoring arrangement when I grew tired of the mother's phone calls imploring me to wait a few days before taking her cheque to the bank.

As a family, they were a great example of people who had a high income but weren't building wealth (at least, if their chequing account was anything to go on).

For people who earn less than an investment banker, saving can be even tougher. I sympathize. But the numbers are frightening: A poll last year by the Canadian Payroll Association found that more than half of workers would be in financial trouble if their paycheque was even a week late. That speaks to a chronic lack of savings.

Story continues below advertisement

So lesson No. 1: If you want to get rich, you have to live below your means.

You then have to invest your savings wisely. And this brings me to lesson No. 2: Avoid spending too much time following the stock market and trying to outwit the pros.

Think about it: The stock market is dominated by experts, who have more time and resources to devote to researching investments than you ever will. The typical small investor has as much chance of beating Bay Street as a Sunday afternoon tennis player has of beating one of the superstar athletes you see at Wimbledon.

Rather than spending your time trying to find the next Google, you should focus on finding ways to lower your investing risk and reduce the fees you're paying. I'm a big fan of low-cost index funds, for instance. A simple strategy of buying and holding dividend stocks can also work well.

Unfortunately, the financial-advice industry isn't geared to selling such straightforward tactics. Most financial planners attract clients by purporting to know where the stock market is headed next and which mutual fund is going to outperform the others. But there's no evidence – absolutely none – to demonstrate that planners or anyone else can perform these feats with any great success.

To make matters worse, financial planners aren't compensated based on how well they do for their investors. They're usually paid based on the money they attract to their firms or the products they sell.

Story continues below advertisement

Judging a planner's level of skill is nearly impossible when the industry, by and large, doesn't encourage full disclosure. We think nothing of asking carpenters to show us the decks they have built so we can judge their professional skills. But asking financial planners to reveal their personal investment returns over the past 10, 15 or 20 years is likely to result in odd looks and a speech about the right to privacy.

These are important lessons to learn, and they'll be a core part of my curriculum. In my next column, I'll offer more thoughts on how you can ace the personal finance exam we all face in real life.



Special to The Globe and Mail

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies