Welcome to part 3 of my review of “Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School“! If you don’t have the book yet, there’s a giveaway running across all parts of this book review with 5 copies of the book to be given away in all!
7. Peek inside a pilferer’s playbook
This is an interesting chapter about the ways of financial advisors and how they manage to prevent clients from jumping ship, even those clients that have been armed with new knowledge about the facts behind mutual funds and index funds, and how the two stack up against each other.
What are some of the arguments that advisors may use against you?
- “Why settle for average returns when we can outperform the markets?”
- “Why go in a “dangerous” index fund when we can actively keep your money safe?”
- “We’ll pick the best funds and beat the indexes.”
I know all too well about the tactics of these financial advisors. A “friend” of us sold us some back-ended funds once, when we weren’t as financially fluent as we are today. She probably didn’t mean no harm — after all, she was just a student, and she needed to put bread on the table, too.
What about those advisors that earn enough to buy themselves a Mercedes and a sweet home? Do you really want to be giving up your money so that they can enjoy it, at your expense?
I remember similar tactics that were used when we were buying our home to push us into an expensive five-year fixed mortgage instead of a cheap five-year variable. “The interest rates will be going up soon”, “You don’t want to be caught with higher payments”, etc…. Of course, they failed to mention that the world economy was still on the rocks and they were asking for a hefty premium for the privilege of a five year fixed rate.
We don’t have cheap 15 or 30 year fixed rate mortgages here in Canada, so I filtered out the noise and went for the variable. One year in, the rates are exactly where they were. The rates will have to hike up quite a bit in the next four years in order for the fixed rate to end up the cheaper option, but in the meantime, that is extra money I can put towards the principal.
8. Avoid seduction
This is the chapter where Andrew warns us to avoid falling into the siren’s trap a la Bernie Madoff! He shares an interesting story where he watched a friend pull out fantastic returns at seemingly very little risk… until the truth came up and most people lost their shirts! He goes on to talk about rich people stealing from other rich people via hedge funds. 😉
He also offers a point on how gold is not an investment in the sense that a stock or a bond is. On that point I agree with him, and I don’t want to see people duped by unscrupulous dealers. Nonetheless, I still believe that gold is an important asset.
9. The 10% stock-picking solution… if you really can’t help yourself
Finally, Andrew offers up some advice for those who just have to do some individual picking of their own. He talks about simple techniques that can be used to identify a great business, as well as the price/earnings ratio and how it can be used. He shares some of his own experiences, here, and wraps up the book with a great primer on how to select individual stocks.
Andrew is an excellent teacher, and he continues to inspire and motivate me through his passion toward finance and life. He uses humour and anecdotes to get us interested in the message, and then to show that he’s serious, he backs it up with a comprehensive set of references and research. I highly recommend this book for anyone looking to learn more about personal finance or increase their knowledge, and share in the stories of a masterful teacher.
Ordering the book
Clicking the picture of the book below (disclaimer: affiliate link) will bring you to Amazon, where you can order a copy of this great book.
- Afford Anything
- Canadian Couch Potato
- Dividend Ninja
- DIY Investor
- Ellen Roseman
- Financially Free Now
- How to Finance Money
- Larry McDonald
- Larry Swedroe
- Making Passive Income
- Millionaire Teacher Tradestreaming
- My Own Advisor
- Paula Wild
- Scott Burns
- The Wealthy Canadian
- Young & Thrifty
Please let me know if you’d like to be added to the list.
This is a continuation of the giveaway started in part one and continued in part two of the review. There are five copies of the book to be given away in all!
a Rafflecopter giveaway
So, reader, have you read this book? If so, let me know your thoughts. If not, then enter the giveaway! The giveaway is running across the entire book review, with 5 books to be given away in all.