Millionaire Teacher

Andrew Hallam, 2011

Nice, short and tight introduction to investing—something I started to think about since becoming 30. Andrew discusses what are conservative as well as high-risk strategies, as well as what he considers to be a smart way of doing investing are. If you are a newbie in investing like me, give it a read.

Highlights & Margin Notes

Yes, I can hear your Aunt Matilda. “Talking about money really isn’t polite.” But that kind of thinking leads to huge personal debts, financial exploitation, and leveraged lifestyles on the edge.

It charges eight basis points. That’s just a fancy way of saying that the hidden annual fee for his index is 0.08 percent.

A post-tax comparison of a mutual fund’s performance against the performance of a stock market index isn’t something that you will likely see on a typical mutual fund statement. But the post-tax gain is the only number that should count. This also applies to Canadians and those of other nationalities who invest in taxable accounts.

His theme echoes what Warren Buffett once said. People will pay a lot more money to be entertained than they will to be educated.

Since then, two other index funds have been introduced that he feels are better. Investors can get broader stock diversification with Vanguard’s Total Stock Market Index (VTSMX). For the bond component, he says investors will have higher odds of beating inflation with Vanguard’s Inflation-Protected Securities Fund (VIPSX).

But I suggested that Kris—who was 35-years-old at the time—should keep things simple: buy the broadest stock index he could for his US exposure, the broadest international index he could for his “world” exposure, and a total bond market index fund that approximated his age. I call it the Global Couch Potato Portfolio. Here’s the allocation I recommended: 35 percent Vanguard US Bond Index (Symbol VBMFX) 35 percent Vanguard Total US Stock Market Index (Symbol VTSMX) 30 percent Vanguard Total International Stock Market Index (Symbol VGTSX) I gave my advice on this basis: […]