As teachers, we all know about UBD (backwards design) model, where we start planning by having the end in mind (what students need to learn). How many of you have a financial plan? Do you know how much money you need to start saving for your retirement? What is your “number”?
I had the privilege of sitting down at the home of the author of the best selling book, Millionaire Teacher, Andrew Hallam. He’s a teacher at my school here in Singapore and teaches personal finance in the high school. He graciously had some of us new teachers over to his place for a talk on investment and good tips for us international teachers.
Andrew shared with us the analogy of the UBD model and then grilled us with these tough questions. As we failed to answer his questions quickly and accurately, we knew we were in some trouble. It was the reality check that we needed. I think he said it best when he said that most international school teachers live in a bizarre dream world. It seems like a dream job, long vacations, cheap living costs, and amazing travel opportunities.
However, what they don’t tell us when we sign our contracts is that when we leave public school systems in the states and give up our pensions, those are substantial assets that we are loosing. Also, since most international schools provide housing, we are not going to have mortgage-free homes when we retire. So that brings us to another question, where will we live? Will we have the money we need to plan for that?
Now, if you didn’t spend many years in the public school system, and you are a young new teacher, trying this international school thing, don’t fret yet. Start saving now for retirement, by putting away money each month and you can be well prepared for retirement.
Andrew talked to us about having our “number” that we need to reach in order to retire. This is an amount that you calculate based on how much money you need to live for a year, when you retire, not including mortgages (hopefully you shouldn’t be paying a mortgage into your retirement). He goes through the steps for finding your number and all that good stuff on his blog post here: Savings and Retirement Planning for New Teachers
I’ve figured out my “number”, so now what?
Make sure to read Andrew’s book, Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School. I just started reading his book, and he writes it in a way that makes it engaging and easy to understand for us non-finance people! It was the first financial book that I didn’t want to put down.
Also, be very careful about signing up through financial services/advisors that may come to your school to invest your money for retirement because they usually have 3-4% investment costs on variable annuities, which in the end means they get a lot of your money! Many thanks to Andrew for organizing this talk with us. I know I definitely learned a lot and already made some changes in how I’m handling my finances and saving for retirement.
If you have any other questions, please leave a comment! Maybe we can have a follow-up Q&A with Andrew on a future post.