Financial independence on a teacher’s salary

Financial independence on a teacher’s salary

To many, financial independence (FI) seems reserved for just high-income earners. There is no way FI can be achieved on a teacher’s salary – or can it?

While the recipe for financial independence is absolutely enabled by earning more money and saving a bundle, this formula is not guaranteed.

One must fight their investing behaviour gaps to achieve financial independence (FI), with any salary.

You must also avoid lifestyle inflation including this slick ride below:

In some respects, the proverbial “middle class” might just have the best chance at realizing FI because that’s exactly the income level they need and where their current needs are.

Financial independence steps for the middle-class

As a follow-up to my six phases of financial independence (that got thousands of pageviews on my site BTW), I thought it would be interesting to talk to someone who has realized their financial dreams – and much more – from the middle-class.

In fact, this individual has done so well for himself, it’s hard to believe they’ve accomplished so much from a teacher’s salary.

Andrew Hallam is no stranger to frugality, personal finance and investing, and geo-arbitrage.  He is a best-selling author, sought-after speaker, and thankfully for me – a fan of My Own Advisor.

You can check out Andrew’s previous articles on my site, including some stellar answers to my interview questions in these posts here.

Catching up with a Millionaire Teacher.

Here are Andrew’s nine rules of investing you should have learned in school – to reach millionaire status.

Since Andrew has long since conquered any enemy in the investing mirror, to achieve FI, I thought it would be great to check in with “where is Andrew now”, his thoughts on the #FIRE movement, and how any modest-income earner let alone folks earning $100k+ can realize financial independence.

Andrew, great to chat again.  It’s been a few years!

Always a pleasure to connect Mark.  Glad your site is doing so well.

Thanks Andrew!  More pageviews over time, approaching 4,000 email subscribers soon, which is great.  Before the FIRE-side chat about other financial independence stuff, what have you been up to?  I try to follow along your progress via your site as much as I can – but you seem very busy!

I am busy Mark, but I love it.

My wife and I have been travelling a lot, coupling a lifestyle of adventure with financial education.  For example, we’ve lived most of the past two years in a 21 foot-long Winnebago Travato.  We decided to drive from British Columbia to Argentina in it.  Yet, we found ourselves taking much longer than we expected.  The U.S. National Parks are incredible.  And we especially loved Mexico.  We spent 10 months driving around Mexico, exploring as many regions as we could.  Then we dipped into Belize, Guatemala, Honduras and El Salvador.  But when we arrived at the border with Nicaragua, some civil skirmishes had broken out.  We considered a Cannonball Run through the country, after contacting a French couple online that did it.  But in the end, we decided it wasn’t worth the risk.  

We went into a holding pattern instead.  Several times, during our journey, we flew to other countries to give financial talks.  This seemed a bit hairy at first.  We paid $85,000 for our van (not including some expensive upgrades) and we were leaving it at storage facilities in Mexico and Central America while we left the country to give talks.  Some of the storage facilities looked great.  Others were really dodgy!  It was a pretty regular pattern. 

(Andrew Hallam, the man with a plan living in a van!)

We would travel in the van for about 8 weeks, then we flew away for at least a month for a series of financial talks.  We followed that up with another two months or so in the van, and then another month or so giving talks.  It was a fun, varied process of, Rinse and Repeat.  Each time we got back to the van, I always thanked the Mayan gods that the van was still there, and in one piece.  

And the talks weren’t “all work.”  We plan plenty of fun times around them.  I’m writing this while relaxing in Bali, for example, after giving a series of talks in Singapore.  

In 2018, we decided to dial back the talks a bit.  In 2017, for example, I foolishly said yes to every talk.  I ended up giving 90 talks in 15 different countries:  the U.S., the UAE, Kuwait, Bahrain, Egypt, Jordan, Qatar, Kenya, Tanzania, Ethiopia, Switzerland, Hong Kong, mainland China, Thailand, and Singapore.  In 2018, I think we gave just 46 talks.  We stopped saying yes to every request.  But it was still a lot.  

Ironically, in 2019, I gave my first financial talk in Canada.  I still find that so hard to believe, considering that I’m Canadian. I put 100% of the proceeds towards Youth Soccer, in Victoria.  After that talk in February, we traveled to several places for more talks:  Germany, Turkey, Malta, Dubai, Abu Dhabi and Singapore. 

Wow.  I don’t know what else to say.  Andrew, I’ll sure you’ve heard of the FIRE movement, but I’ll ask the question anyhow…what do you make of this movement amongst 20- ,30-, and some 40-somethings who aspire to leave their corporate world behind?

Well Mark, my wife, Pele and I are living examples of the FIRE movement.  We love it! 

Once people reach financial independence, they can choose to work…or not work.  They can take massive chunks of time off.  Or they can volunteer if they want.  Life is like a dark hourglass.  It gets tipped at birth. And nobody can see how much sand they have left.  That’s why I think the FIRE movement is so important.  It encourages people to embrace a different way of thinking.  I know several couples who embraced the FIRE movement decades before it had a name.  

Several people follow bloggers in their 30s who have achieved “FIRE”.

To them, I say, “cool.” 

But I don’t consider them total financial experts.  They definitely have useful tips to share.  But if they haven’t been retired for a few decades, they aren’t exactly models of experience.  Will some of them HAVE TO work in their 40s or 50s?  I think so.  Some of them will. 

However, there are genuine experts. This couple is my favourite:  Billy and Akaisha Kaderli.  I’ve met them several times in Mexico.  They’ve become good friends.  And I think they know more about FIRE than anyone. They retired in their 30s, 28 years ago.

You and others can check out their site here.

Good story about the Kaderli’s for sure. So, back to the thesis of this post Andrew.  Ultimately you encourage others to “spend like you want to grow rich”… but a lot of folks seem to believe you need a high income coupled with a high savings rate to achieve financial independence.  What about realizing FI on a middle-class teacher’s salary?

I’ve met a few expats in Dubai who retired in their early 30s.  But they had massive incomes.  I never could have retired at age 32…not on a teacher’s salary.  And I began investing at 19.  I also lived an early life of frugality that would have made some dumpster diver’s cringe. 

But FIRE is achievable on a middle-class income, as long as we ignore Mr. and Mrs. Jones.

Here are some examples of what I mean.

Most people borrow money to buy cars.  They buy expensive houses as a primary residence.  These are huge wastes of financial potential. 

Happiness, after all, comes from our experiences:  spending time with people we love and seeing and learning about new things. Happiness doesn’t come from material acquisitions.  Science backs that up.  So…if we can put our money to work, buying cash-flow positive real estate and / or investing in a portfolio of low-cost index funds, we can buy financial independence and the choices that will follow.  

You know better than most that behaviours trump everything when it comes to reaching for a goal. What are some of the ways, behaviours that is, we could all benefit from regardless of any salary to save more money to achieve FI?

People need to track every penny they spend.  Use an app if you need to.

My wife and I have been doing that for years.  I don’t think people are reaching their full financial potential unless they’re doing that.  Budgets are like diets.  They’re boring.  They often don’t work.  But Weight Watchers did a study to see what isolated variable helped people lose the most weight.  It wasn’t diet.  It wasn’t exercise.  It was tracking what they ate. 

The same applies for spending and income too.  If you track it, you can manage it.  We become accountable when we track what comes in and what goes out.  That allows us to save more money for our future…and waste a lot less.  

Tracking your spending is a universal behaviour anyone can do on any salary, and I can’t emphasize how beneficial this can be enough!

Do you believe in any form of retire early/early retirement yourself?  (Given you are FI and continue to work).  Why do you believe folks that are FI continue to work?  

For the simple reason that work provides purpose….but it provides more purpose when it’s on our own terms. 

You wrote about FIWOOT.  That’s perfect Mark!

I love teaching people about this stuff.  But I have the luxury of saying yes or no….to continue to live the life that we want to live. 

Very inspiring stuff for me Andrew.  So, lastly, what’s next?  More books or updated versions of books? 

Pele and I are taking another run at Argentina, starting in January.  We’ll continue to periodically park and store the van along the way (so I can give talks) but we know we can get through Nicaragua this time, then eventually to Panama, before shipping to Colombia (around the Darien Gap) before continuing to head south. We’ve met so many amazing people during our journey, those who travel on shoestrings.  It’s so impressive and humbling to see. 

And we learn a lot from them:  about life, time and priorities.  In fact, we learn much more from global travelers than they could ever learn from us.  

Carving your own path – financial independence or otherwise

Certainly, one of the great things I always take away from Andrew’s answers is the enthusiasm and joy he has from following his passions and living his best life – today. 

Financial independence has brought him (and Pele) a world of opportunities that he continues to seize.  While my journey has been and continues to be very different, I must say I continue to gain a great deal of inspiration from his experiences – helping me carve out my own unique path to financial independence.

I look forward to sharing more updates from Andrew, and of course myself, related to the subject of FI.

You can follow Andrew Hallam like I do on the Twitter machine @aphallam.

You can find Andrew’s articles on his site here.

For those striving for FI – what takeaways do you have from this latest interview with a Millionaire Teacher?  For those already near or at FI – what experiences can you share with others?