Sunday, June 2, 2013

Online Book Discussion Syllabus

Welcome. In today's economy  we are responsible for our own retirement. Many of us have or will have 401(k)s and 403 (b)s  and have to make our own investment decisions. We need to save enough for our retirement, invest it appropriately and be careful to withdraw a sustainable amount when we no longer are working.

Unfortunately most people have not received instructions on how to go about this. As a result many are not prepared for retirement and sadly Wall Street is expert at exploiting this lack of knowledge by charging excessive hidden fees.

Andrew Hallam, along with many others, believes the fundamentals of managing assets should be taught in schools. In this book he explains essential rules in an engaging manner that gives readers an approach that has historically outperformed high priced investment managers who claim they can "beat the market". Here you will learn exactly which funds to choose in your 401(k) and how much to invest in each. You will learn tricks to help you increase your savings. You will  learn why time is so important and you will learn so much more.

COURSE DESCRIPTION:  Our goal is to read 1 chapter/week.  We'll skip most of chapter 6.  The book has 9 chapters and, therefore, the reading will cover 2 months.

You will do best if you read the week's chapter at the beginning of the week. Questions to think about and discuss will be posed on the blog.  I encourage you to offer your own experiences as we go along.  I will respond to questions but welcome others responding as well.  I encourage adults as well as younger people to do the reading together.  Adults have experiences they can add, and some will discover useful information for themselves.

You may want to keep a journal.  You will find that Millionaire Teacher is unique because it presents a journey whereby the author became wealthy by practicing the principles he describes.  In a journal you can record your own experiences and journey and keep track of what you can do specifically that incorporates the lessons you learn.

Upon completion of this reading, you will have learned how to take specific steps that will put you on the road to becoming wealthy.  Just as important - you will discover how to avoid the common mistakes people make because of general financial illiteracy.

FACILITATOR BACKGROUND:  I have invested assets for pension plans, college endowments, corporations, etc. as well as for individuals over a 30-year period.  I have seen firsthand the mistakes people make and the need for the lessons Andrew Hallam presents.  Much of this understanding has come from advising families as a fee only registered investment advisor and president of RW Investment Strategies.

I also taught Economics at Howard Community College in Columbia, Maryland for 12 years and will introduce some economic concepts that will go along with the book's main tenets.  At Howard Community College, I was named Outstanding Adjunct Faculty, Social Sciences Division on two occasions.


WEEK 1:  Spend Like You Want to Grow Rich

     How do the rich spend differently? Don't the have the fanciest cars? What is the difference between appearing rich and being rich? In fact, how do you define being wealthy?

WEEK 2:  Use the Greatest Investment Ally you Have

     What is your greatest ally? How can you use it? Poll after poll shows that this single lesson is not understood by young people today. But it is not just for young people - it is for everyone trying to become wealthy.

WEEK 3:  Small Percentages Pack Big Punches

     OK...we get into some numbers here, but we will make it as painless as possible. You will see what just 1% in additional performance (or fees, for that matter) can mean over a longer period of time.

WEEK 4:  Conquer the Enemy in the Mirror

     Hmm...this implies you may be your own worst enemy when it comes to building wealth - unless you see Warren Buffett looking back at you when you look in the mirror. How can that be?

WEEK 5:  Build Mountains of Money With a Responsible Portfolio

     How do we even build a portfolio? Don't you need a lot of fancy graphs and an MBA from the University of Chicago? Well, actually, no!

WEEK 6:  Peek Inside a Pilferer's Playbook

     Yikes! You mean there are people out there in the investment world actually trying to take advantage of little ol' me?

WEEK 7:  Avoid Seduction

     My friend follows the advice of a newsletter and is making a killing buying gold bars/ jumping into internet stocks, etc. Should I follow?

WEEK 8:  The 10% Stock-Picking Solution...If You Really Can't Help Yourself

     Stock picking is fun. If you want to take up the challenge, do it with a portion of your assets you can afford to lose; then do it the right way and consider the ideas presented here.


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  2. I am looking forward to the fall session!

  3. I don't understand why the author would tell you to double the interest rate to see if you couldnafford a house payment. Is he only talking about adjustable mortgages?

    1. Good question. He is using the "double the interest rate test" to ensure that you have some leeway. If you buy up to the absolute hilt you are more vulnerable to a cut in pay if you change jobs etc.

    2. I agree. My mom always said that if you are married, and husband and wife make about the same...make sure that whatever house you living expenses can be covered by one person's salary. In this way, if income is lost or something goes wrong, you have a cushion. This worked for me for many years until a few years ago when I bought a house that requires both of our incomes. When the housing bubble burst, so did our wallet. Biggest mistake ever. Never buy a house that results in you living up to or beyond your means. You need to have a sizeable cushion in order to weather any economic downturns or personal downfalls such as loss of a job.

  4. I agree. And if you think you might need a bigger house in the future buy a house that can be added onto. Once we had 3 kids and were bumping into each other and having to wait for the bathroom we put on an addition - at a time we could afford it.
    I have a client who actually is a surgeon and makes a really good income and who bought a $3.1 million house in 2006. Today it is the single factor stressing him out! He constantly says he never needed that big a house! In his case he got caught up in the housing boom where it seemed house prices would go up forever!