I am pleased to have the honor of having Andrew Hallam with us today for an interview. Andrew is a highly respected investor currently living in Singapore, where he works as an English teacher at Singapore American School, and writes freelance finance articles. Nominated a finalist for two Canadian National Publishing Awards, his writing has appeared in MoneySense Magazine, Reader’s Digest, and L’Actualite. He has also been quoted in three investment related articles for The Globe and Mail, and in The Wall Street Journal—with a quirky plea to Warren Buffett.
Kevin: Hi, Andrew! I’m glad to have you here with us today. To begin, please tell us a little bit about yourself.
Andrew: I was born in Nottingham, England, grew up in Kamloops, British Columbia, and currently live in Singapore where I teach high school English at Singapore American School. My wife, Pele, and I love travelling, and living in South East Asia gives us plenty of opportunities to see some amazing places.
Kevin: I’ve also seen parts of Southeast Asia with my girlfriend, and I greatly enjoyed my time there. You live in a pretty interesting part of the world! So, how did you get started out in investing and personal finance?
Andrew: When I was in college, I met a 47 year old millionaire while I was working at a bus depot during the summer. He was a mechanic, raising two kids on his own, and he suggested that I should choose a job that I’d love doing—rather than choose a job simply because it paid well. Inspiring me, he said that if I learned about money, I could earn a middle class income and become a millionaire in my 40s, or earlier. That was 20 years ago. I remember him trying to convince me to invest money in the markets, and when I said that I couldn’t afford the $100 a month he advised me to invest, he just laughed. He asked if I could afford to buy a couple of Cokes and a couple of chocolate bars out of a vending machine every day—if I really wanted them. I figured that I could. Then he did the math: $100 a month was $3.33 a day. If I could afford to buy a couple of Coke drinks and a couple of chocolate bars on a daily basis, then I could afford to invest $100 a month. It was just $3.33 a day.
So twenty years ago, I started investing a minimum of $100 a month. And every year I increased that. To this day, I still increase the monthly amount I invest, every year.
Kevin: That was quite a valuable lesson you learned at a young age! In investing, starting early puts time on your side. What motivates and excites you, as an investor?
Andrew: As a kid, I never really caved in to peer-pressure. In many ways, I beat to my own drum. And as an investor, it’s the conformists who generally do poorly. As an investor, I tend to think independently as well, and I enjoy watching my money grow over time. I also love competing against the professionals who run mutual funds. Most of them are conformists, so they’re fairly easy to beat if you can think independently.
I don’t spend much money, and I don’t really care about the things that money can buy (as strange as that might sound) but I love watching my money grow, and I like thinking about what I can eventually do with it. Giving it away, selectively (so that it empowers people or makes them happy) is a lot more enjoyable than spending it myself.
Kevin: You grew up in British Columbia, but you eventually moved to Singapore. What drew you to living in “police state paradise”?
Andrew: I was drawn to Singapore by the adventurous travel prospects from there. The low tax bracket is one of the things that kept me in Singapore—along with the perpetual summer weather. This school year will be my 8th year in Singapore.
Kevin: What do you enjoy the most about being a teacher?
Andrew: Working with students keeps me young. They have so much energy, and I have to admit, I feed off that: jumping on desks to make a point, pretending I’m a character out of a novel, or acting out the life of famous novelists like Hemmingway, Salinger or F Scott Fitzgerald before introducing their writing. My job is such a blast. It honestly doesn’t feel like work.
Kevin: Haha, that sounds like a lot of fun. I know that as a student, I would appreciate teachers that brought life to the subject and to the material. You are currently working on a finance book to help teach people about common-sense investing. What is your primary motivation in writing your new book?
Andrew: Last year I was asked to teach a personal finance course at Singapore American School. My first job was to find a “textbook.” But I didn’t like what was out there. Generally, finance books tend to be pretty boring for most people. So I wanted to write something “kid friendly” that might put the odd smile on the reader’s face.
Kevin: Andrew, you’ve been bullish on the long-term prospects of the U.S. stock market. Why do you think that it will continue to be a good play, and what is your outlook on the emerging markets?
Andrew: Suggesting that investing in the U.S. is “old news” and something like investing in a “dying economy” isn’t looking at the whole thing with a historical lens. I think there’s a great future, investing in the U.S.
I imagine England, 150 years ago. Manufacturing was becoming less and less predominant—as it is with the U.S. today. Do you remember the British automobile industry? Jaguar, Austin, Triumph, Rolls Royce? Of those that still exist, I don’t think any of them are British owned today.
But if you could have bought a British stock index 150 years ago, it would have practically matched the returns of the greatest emerging market of all time: the United States. Other old world economies have closely matched the returns of the U.S. market over the past 100 years as well. So much for GDP growth, I figure.
Emerging markets, I think, are over-rated. Data going back to 1985 (the earliest time we have emerging market data) shows that during the past 30 years, developed markets (USA, England, France, Germany etc) have beaten the combined returns of the fast growing, high GDP countries (China, Brazil, Singapore etc) when investing in those countries stocks and reinvesting the dividends.
Plus, living in SE Asia gives me an opportunity to see “the future” in one sense: There’s no doubt that India and China are the fastest growing economic nations. But when they develop disposable income, they tend to be very brand name conscious: they want to eat at McDonalds, drink coffee at Starbucks, buy clothing from Gucci, wear Levi’s, buy Rolex watches, drive Mercedes Benz’s, Porsche’s and BMW’s. As Asian markets thrive, they’ll just buy more Western products. Affluent Asians are far more brand name conscious than North Americans are. It’s hard to imagine that, but it’s true.
Kevin: What tips would you offer the average investor looking to improve their results?
Andrew: To beat most investment professionals, there’s a pretty simple formula:
Diversify a portfolio with low cost exchange traded funds—a portion in a Canadian stock ETF, a portion in a U.S. stock ETF and a portion in a bond ETF.
Simply splitting it in thirds and building slowly on the bond percentage as the investor gets older will be a formula that will beat most professionals. And it’s tax-efficient as well.
Most importantly, after building such a portfolio, I think the investor should just follow the course they’ve set for themself, and only read and follow investment news for entertainment purposes.
Kevin: You recently came face-to-face with your own mortality through your battle against bone cancer. Now that you have successfully recovered from your ordeal, how did that experience affect your outlook and philosophy on life?
Andrew: I’ve always lived “for the day” so I can’t say that cancer made me view life differently. But it gave me a higher podium to teach from. I could say to my students: do what you really want to do in life, and love the people you love, because you never know what can happen.
Perhaps I said a lot of things I wouldn’t ordinarily have said: lessons about how so many “Type A” personalities can really miss the boat, when it comes to things that are important. The school that I teach at is considered an “Ivy League” prep school. I told my students that if their parents thought that their GPA levels, their SAT scores and the college they end up going to is the most important thing in the world (as well as the profession they end up choosing) then their parents are dead wrong. Cancer gave me the courage to tell my students the truth about that. I asked for a show of hands—“How many of your parents would be upset to hear me say that?” Hands went up. And I said, “I don’t care. Your parents are wrong. Love yourself and love the people around you. Everything else falls a distant second or third.” At the time, I was wearing a spinal support vest after having three ribs removed, and part of my spinal processes cut. That gave me immunity!
Kevin: Wow… I can’t imagine what it was like to go through that experience. I can only commend you for your courage and will to survive! How do you do it all without burning out?
Andrew: I give myself a lot of leisure time, so I don’t get burned out. My job gives me 13 weeks off a year, so that gives me plenty of time to recharge my batteries.
Running a blog takes a lot of time, so to keep going, I’m going to start viewing it as a marathon, rather than a sprint. I think I’ll only enter one or two posts a week (max). It should ensure that I don’t get tired of it, and it will give me more time to read other blogs, like this one!
Kevin: Living in Singapore, having that time off gives you the opportunity to enjoy the diversity of cultures and environments around you; it’s not just about the long run, but it’s also about the journey along the way! Now I know why you enjoy it so much over there.
You mentioned your blog; what do you enjoy most about blogging?
Andrew: With the blog, I really enjoy the interactions with other readers. Some very diverse views are expressed, but everyone seems so respectful of other people’s ideas. I love that, because it creates a safe environment for everyone to learn from.
Kevin: I’ve also enjoyed blogging and interacting with the readers, as well as with other bloggers. I look forward to reading new comments everyday, and learning something new. In closing, if you had just one piece of advice to give to somebody, what would it be?
Andrew: If I had one piece of advice to give, I’d suggest that people should work on their ability to get along with others—with your family, other loved ones, colleagues etc. Life, I think, is so much more enjoyable when you get along well with others. No amount of money or status will ever transcend that. Good relationships are far more valuable than anything money could buy.
Kevin: Thank you for taking the time to stop by, Andrew!
Andrew Hallam is an investment consultant, an English teacher, a prolific finance reader and a freelance finance writer who has secured his financial future and is assisting others to do the same. He is currently working on his own finance book, with the working title, Sleeping on Warren Buffett’s Sofa.