New book based on Millionaire Next Door

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KlangFool
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Re: New book based on Millionaire Next Door

Post by KlangFool » Tue Jul 24, 2018 10:45 am

LiterallyIronic wrote:
Tue Jul 24, 2018 9:53 am
timmy wrote:
Mon Jul 16, 2018 7:03 am
the authors decided to take another look at millionaires in the United States to examine what changes could be seen 20 years after the original publication of The Millionaire Next Door. In this book the authors highlight how specific decisions, behaviors, and characteristics align with the discipline of wealth building, covering areas such as consumption
Am I the only one who did not like The Millionaire Next Door? It was completely unrelatable to us common folk. It was filled with stuff like, "Millionaires don't buy $5,000 suits, they buy $1,000 suits." Seriously? I buy $100 suits off the rack during sales. The book might as well have said, "Millionaires are so rich they can afford to buy $1,000 suits." Gee, thanks for the insight.
LiterallyIronic,

Please read the book.

<<Seriously? I buy $100 suits off the rack during sales. >>

http://www.thomasjstanley.com/2013/04/t ... enney-fan/

<<A significant number of the arch type millionaire next doors patronize Penney’s. In fact, as I discussed in Stop Acting Rich, fully 36% of millionaires who live in homes valued at under $400,000 are apparel patrons of J.C. Penney. In The Millionaire Next Door, “about 30.4% of the respondents who are millionaires hold J.C. Penney credit cards. Penney’s private-brand Stafford executive suits were recently given top scores for durability, cut, and fit by a leading consumer publication.” Also in The Millionaire Next Door I quoted from an article published in The Wall Street Journal:>>

I do not buy $1,000 suit. I buy $100 to $200 suits off the rack during sales at Penney's and Jos A Bank.

KlangFool

texasdiver
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Re: New book based on Millionaire Next Door

Post by texasdiver » Tue Jul 24, 2018 11:07 am

CyclingDuo wrote:
Tue Jul 24, 2018 10:42 am
texasdiver wrote:
Tue Jul 24, 2018 10:28 am
So true. In all the schools I have taught at there is basically a benefits fair in August during the back to school inservice week. It happens when teachers are hurried and stressed about wanting to get back into their classroom to prep for th upcoming school year and annoyed by all the endless red tape. Teachers make the rounds of all the booths to wait in line and deal with all the benefits sign ups: Health insurance, life insurance, group life insurance, FSA/HSA accounts, union or association dues, child care options, ancillary benefits like healthy living activities and clubs, and retirement planning. The only retirement planning people who show up are the usual high priced variable annuity sales people from insurance companies who are masquerading as financial advisors. They usually have their table booths with lots of slick literature and the fact that they are there provides the perception that they are endorsed by the school district. Teachers are trusting and get sucked in.

In my last two states teachers have had access to zero-fee 403b or 457 options but they were among the best kept secrets anywhere. I never met another teacher ever who knew they existed. In TX one can do a zero fee self administered 403b plan through Vanguard but no teacher or administrator seems to know that option exists or is possible. In WA there is a state run deferred compensation 457 plan available with extremely low fee index funds available that no one seems to know about either. But the only options that teachers ever hear about are from the sharks like AXA who show up to the benefits fair to sell variable annuities.
Although I would like to say that HR departments in education owe their employees some education when it comes to what is available, it's not the case - both in public school education and in the college/university side of teaching. They don't owe the employees this education and are not in the business of having to teach it. Unfortunate, but true.

Luckily, there is plenty of material available if one (an employee) wants to educate themselves about the plans and options available. This is true for any occupation when studying the benefits and plans available.
You would think this might be a logical role for unions or professional organizations (in non union states). But that has not been my experience either. The unions seem to get very deep into the weeds on health insurance issues but I never heard one word about 403b options. As an experienced boglehead coming into education mid career from another profession it was easy enough to search out my best options. But the vast majority of teachers are simply ignorant and too trusting. And I just didn’t have the energy or interest in trying to educate everyone else.

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CyclingDuo
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Re: New book based on Millionaire Next Door

Post by CyclingDuo » Tue Jul 24, 2018 11:37 am

texasdiver wrote:
Tue Jul 24, 2018 11:07 am
You would think this might be a logical role for unions or professional organizations (in non union states). But that has not been my experience either. The unions seem to get very deep into the weeds on health insurance issues but I never heard one word about 403b options. As an experienced boglehead coming into education mid career from another profession it was easy enough to search out my best options. But the vast majority of teachers are simply ignorant and too trusting. And I just didn’t have the energy or interest in trying to educate everyone else.
Yes, you would think it would be logical for unions and professional organizations.

Both my wife and I received a packet of information during our respective orientations with perhaps a brief sentence or two from HR with regard to the retirement plans (mine was a packet from TIAA and hers was from her pension plan and the voluntary 403b/457b plans that were available). It was really skipped right over come to think of it. Much more time was devoted to other benefits, especially the health care plan options. This is most likely the norm. Throw in the societal stigma of talking about personal financial matters as more on the taboo side of the discussion realm, and it's not a shock to me that a lot of it remains a mystery. I would like to see a workshop or a unit in classes for education majors to go over benefit plans and what to look for when applying for jobs to include benefits as part of their decision for choosing where to apply. Utopian idea maybe, but it would not be hard to include in their college education for prospective future educators.

Yes, I agree with you about the energy and interest when it comes to discussion with colleagues. I remember chatting with a group of colleagues a few years ago and I brought up the subject of ER fees for the various funds in our employer sponsored TIAA plan (Vanguard funds had been added to our plan). Not a single one in the room even knew what an ER fee was. Another time, a group was bemoaning that our employer match of 8% was being cut down to a lower percentage after the faculty elected budget committee had recommended it in an effort to help get the annual budget in line for our college at the time. I agreed that the employer match dropping from 8% to 5% was indeed going to be a loss of some nice free money for all of us that we had previously been receiving, but simply mentioned I was going to increase my part of the contribution to make up for it so I could keep on track for retirement (this was during the financial crisis years) and I got nothing but blank stares and a few "Huh's?"

I have been in a job hunt for the past 8 weeks, and believe me - I have reviewed and poured over every single benefit plan as part of my due diligence before even submitting my application(s). I received a verbal offer yesterday and the HR person asked me if I was aware of the 401k and benefits. I mentioned "Yes!" and that I had been studying them the past few weeks. I would imagine if new educators were more "in the know" before they applied, we might not see so many posts here at BH or other forms (403bwise.com) revolving around the subject of being in a bad plan with nothing but very high ER fees, and then the poster lists other plans that are available and asks for guidance on what to do. All it would really take would be a class unit or segment provided for the seniors in college going into education to go over some of the basics they could use for their own due diligence when applying for their first jobs. Many times it comes down to choosing between several offers, and if they knew which offer had the better plans as part of their information they could use to choose their first job....

Oh well. I've done my part over the years in working with college students to prepare them.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

getthatmarshmallow
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Re: New book based on Millionaire Next Door

Post by getthatmarshmallow » Tue Jul 24, 2018 11:49 am

CyclingDuo wrote:
Tue Jul 24, 2018 11:37 am
texasdiver wrote:
Tue Jul 24, 2018 11:07 am
You would think this might be a logical role for unions or professional organizations (in non union states). But that has not been my experience either. The unions seem to get very deep into the weeds on health insurance issues but I never heard one word about 403b options. As an experienced boglehead coming into education mid career from another profession it was easy enough to search out my best options. But the vast majority of teachers are simply ignorant and too trusting. And I just didn’t have the energy or interest in trying to educate everyone else.


Yes, I agree with you about the energy and interest when it comes to discussion with colleagues. I remember chatting with a group of colleagues a few years ago and I brought up the subject of ER fees for the various funds in our employer sponsored TIAA plan (Vanguard funds had been added to our plan). Not a single one in the room even knew what an ER fee was. Another time, a group was bemoaning that our employer match of 8% was being cut down to a lower percentage after the faculty elected budget committee had recommended it in an effort to help get the annual budget in line for our college at the time. I agreed that the employer match dropping from 8% to 5% was indeed going to be a loss of some nice free money for all of us that we had previously been receiving, but simply mentioned I was going to increase my part of the contribution to make up for it so I could keep on track for retirement (this was during the financial crisis years) and I got nothing but blank stares and a few "Huh's?" ...

Oh well. I've done my part over the years in working with college students to prepare them.
No kidding. My guidance was limited to being handed a list of target date funds by HR and hastily estimating when I'd be 65. And when I decided to max out my 457, I had a lot of quizzical looks from HR asking me if I was sure that I wanted $X taken out, did I understand it was every two weeks, not every month, etc. I have to conclude that not many people take advantage of the option. I'm thinking a presentation from TIAA might be a good thing to put on the agenda at the new faculty retreat...

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CyclingDuo
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Re: New book based on Millionaire Next Door

Post by CyclingDuo » Tue Jul 24, 2018 12:33 pm

getthatmarshmallow wrote:
Tue Jul 24, 2018 11:49 am
No kidding. My guidance was limited to being handed a list of target date funds by HR and hastily estimating when I'd be 65. And when I decided to max out my 457, I had a lot of quizzical looks from HR asking me if I was sure that I wanted $X taken out, did I understand it was every two weeks, not every month, etc. I have to conclude that not many people take advantage of the option. I'm thinking a presentation from TIAA might be a good thing to put on the agenda at the new faculty retreat...
Absolutely have a presentation on the faculty retreat agenda! That's a great idea.

I can attest to meeting with HR to adjust my contributions to max out my 403b. We have an academic staff of 85+, and I would imagine a similar number of staff. The HR person told me I was only one of a short list that maxes out and it would be easy for her to make the final tweak in the month of December adjustment to make sure I hit the full amount within a penny. Pleasing to work with, but I found it interesting that - at least from her comment that it was a short list - more colleagues were not taking advantage of it. Especially those in two income households and having taught for enough years that their salaries certainly could cover it. TIAA does come to campus for individual meetings for those who sign up, but I don't recall large open meetings for all employees to hear a TIAA presentation.

My wife's organization is much larger, and there were no questions asked from her HR guy about getting the right amount taken out of her bi-weekly paychecks so she hits the max on both her 403b and 457b. He has always been great to work with over the years, and the information they provide on the internet is very informative for all of the options, but you do have to dig around and know what you are looking for in the first place. Plenty still remains a mystery unless you dig, ask questions, and figure things out on your own.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

wmackey
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Re: New book based on Millionaire Next Door

Post by wmackey » Tue Jul 24, 2018 12:56 pm

DW works in a small hospital. When she leaves, they will see a 5% drop in their overall 401k. I don't think many people are taking full advantage of the benefit.

Maverick3320
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Re: New book based on Millionaire Next Door

Post by Maverick3320 » Tue Jul 24, 2018 1:07 pm

texasdiver wrote:
Mon Jul 23, 2018 11:50 am
golfCaddy wrote:
Sun Jul 22, 2018 1:31 pm
seligsoj wrote:
Sun Jul 22, 2018 12:46 pm
Here's a blog post I created for a blog I have never developed yet on teachers becoming millionaires...I haven't had time to edit so there may be errors :)

Can a teacher become a millionaire?

For this example, I took the average national public teacher salary based on years of experience and utilized: an average salary of $45,000 for years 1-10, an average salary of $55,000 for years 11-20, and an average salary of $62,500 for years 20 through 35. If the average teacher invests 15% of their income for every year worked, during a 35 year career span, at an average of 7% interest compounded, they would have $1,117,609.78 by the time they completed their career. Pretty sweet, huh?
That might be possible, if you are invested aggressively and at the right time. The long run, real return on stocks is about 5.3%. 30-year TIPS yield less than 1%. For a balanced portfolio, I would consider 4% after inflation but before taxes to be on the optimistic end of expected returns. Using the same salary assumptions and a 4% rate of return, you would accumulate $582k. With a 3% rate of return, you would accumulate $483k. With two teachers in an average district, not counting your home value and pension, you might make into millionaire status, but barely.
I’ve taught in two states: TX and WA

In Texas your hypothetical teacher retiring after 35 years with a final salary of $62,500 would earn an annual non-COLAd pension of $50,313 with NO social security ($62,500 x 35 x 0.023) Once in a blue moon the state pays a 13th month bonus pension payment to retirees but it never goes up.

In WA your same hypothetical teacher would earn a COLAd pension of $43,750 PLUS social security ($62,500 x 35 x .02). So the WA teacher clearly comes out ahead.

In both of these examples you have the teacher retiring at about age 60 if they started teaching at about age 25. They could goose the pension an additional 15% or so by working an additional 5 years to age 65.

In my experience, most teachers do not have much in the way of additional retirement savings. Maybe some IRAs or a small 403(b) variable annuity they were sold by the sharks. What teachers typically do is either keep working until the pension math works out for them to retire, or else find a side gig like real estate after they retire. I’m guessing that the great majority of “millionaire” teachers either have inherited wealth or higher earning spouses or both. It would be a small minority that saved 15% of income into additional retirement accounts for the duration of their careers.
Don't a lot of teachers take side gigs during their summers off? I remember my mom (a teacher) used to teach at the local community college in the summers. I think she mentioned it was worth 3000-4000 per summer. Multiply that by 30 summers, and it adds up pretty quickly.

texasdiver
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Re: New book based on Millionaire Next Door

Post by texasdiver » Tue Jul 24, 2018 1:17 pm

Maverick3320 wrote:
Tue Jul 24, 2018 1:07 pm
texasdiver wrote:
Mon Jul 23, 2018 11:50 am
golfCaddy wrote:
Sun Jul 22, 2018 1:31 pm
seligsoj wrote:
Sun Jul 22, 2018 12:46 pm
Here's a blog post I created for a blog I have never developed yet on teachers becoming millionaires...I haven't had time to edit so there may be errors :)

Can a teacher become a millionaire?

For this example, I took the average national public teacher salary based on years of experience and utilized: an average salary of $45,000 for years 1-10, an average salary of $55,000 for years 11-20, and an average salary of $62,500 for years 20 through 35. If the average teacher invests 15% of their income for every year worked, during a 35 year career span, at an average of 7% interest compounded, they would have $1,117,609.78 by the time they completed their career. Pretty sweet, huh?
That might be possible, if you are invested aggressively and at the right time. The long run, real return on stocks is about 5.3%. 30-year TIPS yield less than 1%. For a balanced portfolio, I would consider 4% after inflation but before taxes to be on the optimistic end of expected returns. Using the same salary assumptions and a 4% rate of return, you would accumulate $582k. With a 3% rate of return, you would accumulate $483k. With two teachers in an average district, not counting your home value and pension, you might make into millionaire status, but barely.
I’ve taught in two states: TX and WA

In Texas your hypothetical teacher retiring after 35 years with a final salary of $62,500 would earn an annual non-COLAd pension of $50,313 with NO social security ($62,500 x 35 x 0.023) Once in a blue moon the state pays a 13th month bonus pension payment to retirees but it never goes up.

In WA your same hypothetical teacher would earn a COLAd pension of $43,750 PLUS social security ($62,500 x 35 x .02). So the WA teacher clearly comes out ahead.

In both of these examples you have the teacher retiring at about age 60 if they started teaching at about age 25. They could goose the pension an additional 15% or so by working an additional 5 years to age 65.

In my experience, most teachers do not have much in the way of additional retirement savings. Maybe some IRAs or a small 403(b) variable annuity they were sold by the sharks. What teachers typically do is either keep working until the pension math works out for them to retire, or else find a side gig like real estate after they retire. I’m guessing that the great majority of “millionaire” teachers either have inherited wealth or higher earning spouses or both. It would be a small minority that saved 15% of income into additional retirement accounts for the duration of their careers.
Don't a lot of teachers take side gigs during their summers off? I remember my mom (a teacher) used to teach at the local community college in the summers. I think she mentioned it was worth 3000-4000 per summer. Multiply that by 30 summers, and it adds up pretty quickly.
Yes, very common. A lot of young teachers stick with their college summer jobs. I knew a couple teachers in TX who worked at Sea World over the summer. My Dad painted houses every summer when he was a teacher but that was back in the 70s. These days HS coaches have lots of summer gigs. There are ENDLESS sports related summer camps run by universities and various other organizations that hire lots of HS coaches for summer gigs. Some of the HS football and basketball coaches I taught with would spend every summer working at Big12 or SEC football and basketball camps and would make good money doing it. AP teachers often do summer AP workshops or AP grading. Someone has to read and grade those thousands of AP exams. The opportunities are pretty endless for teachers who want to earn summer cash.

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CyclingDuo
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Re: New book based on Millionaire Next Door

Post by CyclingDuo » Tue Jul 24, 2018 1:18 pm

Maverick3320 wrote:
Tue Jul 24, 2018 1:07 pm
Don't a lot of teachers take side gigs during their summers off? I remember my mom (a teacher) used to teach at the local community college in the summers. I think she mentioned it was worth 3000-4000 per summer. Multiply that by 30 summers, and it adds up pretty quickly.
You would think.

https://www.brookings.edu/blog/brown-ce ... cond-jobs/

Data shows from the Brookings Institute that only 14% of teachers take on a 2nd job - summer or otherwise. Why so low? I guess we could speculate that part of that, speaking as a teacher for the past 15 years, is the summer is a sacred time to recharge the batteries and the downtime is worth its weight in gold. During the academic year it can be a 12 hour/7 days a week job with lesson plans, paperwork, assessment, grading, etc... .

I have taken some summer work on probably 50% of the time over the past three decades due to my discipline, both for money as well as experience, and career advancement. However, it usually didn't fill the entire summer and still left me with some down time (at least a month or two) to recharge my energy.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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goodenyou
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Re: New book based on Millionaire Next Door

Post by goodenyou » Tue Jul 24, 2018 2:19 pm

Toons wrote:
Mon Jul 23, 2018 7:04 pm
willthrill81 wrote:
Mon Jul 23, 2018 6:50 pm
Toons wrote:
Mon Jul 23, 2018 6:37 pm
Brilliant,,,
Packaging Common Sense,,,and
Selling It.



:happy :happy
Image




Excellent :sharebeer :sharebeer :sharebeer

Common sense is instinct. Enough of it is genius.


– George Bernard Shaw (Late 19th/early 20th century)
or
- Josh Billings (Mid 19th century)
"Ignorance more frequently begets confidence than does knowledge" | Do you know how to make a rain dance work? Dance until it rains.

seligsoj
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Re: New book based on Millionaire Next Door

Post by seligsoj » Tue Jul 24, 2018 6:25 pm

Maverick3320 wrote:
Tue Jul 24, 2018 1:07 pm
texasdiver wrote:
Mon Jul 23, 2018 11:50 am
golfCaddy wrote:
Sun Jul 22, 2018 1:31 pm
seligsoj wrote:
Sun Jul 22, 2018 12:46 pm
Here's a blog post I created for a blog I have never developed yet on teachers becoming millionaires...I haven't had time to edit so there may be errors :)

Can a teacher become a millionaire?

For this example, I took the average national public teacher salary based on years of experience and utilized: an average salary of $45,000 for years 1-10, an average salary of $55,000 for years 11-20, and an average salary of $62,500 for years 20 through 35. If the average teacher invests 15% of their income for every year worked, during a 35 year career span, at an average of 7% interest compounded, they would have $1,117,609.78 by the time they completed their career. Pretty sweet, huh?
That might be possible, if you are invested aggressively and at the right time. The long run, real return on stocks is about 5.3%. 30-year TIPS yield less than 1%. For a balanced portfolio, I would consider 4% after inflation but before taxes to be on the optimistic end of expected returns. Using the same salary assumptions and a 4% rate of return, you would accumulate $582k. With a 3% rate of return, you would accumulate $483k. With two teachers in an average district, not counting your home value and pension, you might make into millionaire status, but barely.
I’ve taught in two states: TX and WA

In Texas your hypothetical teacher retiring after 35 years with a final salary of $62,500 would earn an annual non-COLAd pension of $50,313 with NO social security ($62,500 x 35 x 0.023) Once in a blue moon the state pays a 13th month bonus pension payment to retirees but it never goes up.

In WA your same hypothetical teacher would earn a COLAd pension of $43,750 PLUS social security ($62,500 x 35 x .02). So the WA teacher clearly comes out ahead.

In both of these examples you have the teacher retiring at about age 60 if they started teaching at about age 25. They could goose the pension an additional 15% or so by working an additional 5 years to age 65.

In my experience, most teachers do not have much in the way of additional retirement savings. Maybe some IRAs or a small 403(b) variable annuity they were sold by the sharks. What teachers typically do is either keep working until the pension math works out for them to retire, or else find a side gig like real estate after they retire. I’m guessing that the great majority of “millionaire” teachers either have inherited wealth or higher earning spouses or both. It would be a small minority that saved 15% of income into additional retirement accounts for the duration of their careers.
Don't a lot of teachers take side gigs during their summers off? I remember my mom (a teacher) used to teach at the local community college in the summers. I think she mentioned it was worth 3000-4000 per summer. Multiply that by 30 summers, and it adds up pretty quickly.
Yes, I know a lot of teachers who bartend, waitress, work at camps, tutor, etc. either after school or over the summer.

Maverick3320
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Re: New book based on Millionaire Next Door

Post by Maverick3320 » Wed Jul 25, 2018 8:43 am

CyclingDuo wrote:
Tue Jul 24, 2018 1:18 pm
Maverick3320 wrote:
Tue Jul 24, 2018 1:07 pm
Don't a lot of teachers take side gigs during their summers off? I remember my mom (a teacher) used to teach at the local community college in the summers. I think she mentioned it was worth 3000-4000 per summer. Multiply that by 30 summers, and it adds up pretty quickly.
You would think.

https://www.brookings.edu/blog/brown-ce ... cond-jobs/

Data shows from the Brookings Institute that only 14% of teachers take on a 2nd job - summer or otherwise. Why so low? I guess we could speculate that part of that, speaking as a teacher for the past 15 years, is the summer is a sacred time to recharge the batteries and the downtime is worth its weight in gold. During the academic year it can be a 12 hour/7 days a week job with lesson plans, paperwork, assessment, grading, etc... .

I have taken some summer work on probably 50% of the time over the past three decades due to my discipline, both for money as well as experience, and career advancement. However, it usually didn't fill the entire summer and still left me with some down time (at least a month or two) to recharge my energy.
I've known enough teachers to know that it is often not a 12 hour a day/7 day a week job, unless you are mixing in high-end private schools and/or academia.

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CyclingDuo
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Re: New book based on Millionaire Next Door

Post by CyclingDuo » Wed Jul 25, 2018 9:01 am

Maverick3320 wrote:
Wed Jul 25, 2018 8:43 am
I've known enough teachers to know that it is often not a 12 hour a day/7 day a week job, unless you are mixing in high-end private schools and/or academia.
I would be in the latter group (academia), and my wife's particular job includes non-stop paperwork and forms to file for the state as she is part of the federally mandated law known as the No Child Left Behind Act. 12 hours are often not enough for her and weekends are needed to "catch up" with paperwork. Throw in the before and after school meetings with the parents of these children and the "team" assigned to work with them, the weekly phone calls to parents about the progress, tutoring the parents over the phone with suggested help they can provide the children, and it's a challenging proposition in terms of work hours.

That being said, I am sure you are right that there are many you know who are able to leave it at the door when the final bell rings for the day's end of classes. Even then, it's an exhausting 8 hour day.
"Everywhere is within walking distance if you have the time." ~ Steven Wright

nova1968
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Re: New book based on Millionaire Next Door

Post by nova1968 » Wed Jul 25, 2018 9:06 am

Maverick3320 wrote:
Wed Jul 25, 2018 8:43 am
CyclingDuo wrote:
Tue Jul 24, 2018 1:18 pm
Maverick3320 wrote:
Tue Jul 24, 2018 1:07 pm
Don't a lot of teachers take side gigs during their summers off? I remember my mom (a teacher) used to teach at the local community college in the summers. I think she mentioned it was worth 3000-4000 per summer. Multiply that by 30 summers, and it adds up pretty quickly.
You would think.

https://www.brookings.edu/blog/brown-ce ... cond-jobs/

Data shows from the Brookings Institute that only 14% of teachers take on a 2nd job - summer or otherwise. Why so low? I guess we could speculate that part of that, speaking as a teacher for the past 15 years, is the summer is a sacred time to recharge the batteries and the downtime is worth its weight in gold. During the academic year it can be a 12 hour/7 days a week job with lesson plans, paperwork, assessment, grading, etc... .

I have taken some summer work on probably 50% of the time over the past three decades due to my discipline, both for money as well as experience, and career advancement. However, it usually didn't fill the entire summer and still left me with some down time (at least a month or two) to recharge my energy.
I've known enough teachers to know that it is often not a 12 hour a day/7 day a week job, unless you are mixing in high-end private schools and/or academia.
Yes, there are challenges for teachers becoming millionaires, However, a teacher that contributes the maximum to an IRA and lets it compound for 30 years could have a pretty substantial sum plus the 50K a year pension could provide for a comfortable retirement. A retiree with 1M in retirement accounts with no pension withdrawing 4% a year is living off of 40K a year.
Teaching can be rewarding and three months off during the summer plus a couple weeks during spring break and Christmas is a good benefit versus the average worker who gets 2 weeks vacation a year. I agree that teachers in some states are under paid versus Factory workers, the person who picks up your trash etc, but there is often more to consider that just the pay.

Maverick3320
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Re: New book based on Millionaire Next Door

Post by Maverick3320 » Wed Jul 25, 2018 9:35 am

CyclingDuo wrote:
Wed Jul 25, 2018 9:01 am
Maverick3320 wrote:
Wed Jul 25, 2018 8:43 am
I've known enough teachers to know that it is often not a 12 hour a day/7 day a week job, unless you are mixing in high-end private schools and/or academia.
I would be in the latter group (academia), and my wife's particular job includes non-stop paperwork and forms to file for the state as she is part of the federally mandated law known as the No Child Left Behind Act. 12 hours are often not enough for her and weekends are needed to "catch up" with paperwork. Throw in the before and after school meetings with the parents of these children and the "team" assigned to work with them, the weekly phone calls to parents about the progress, tutoring the parents over the phone with suggested help they can provide the children, and it's a challenging proposition in terms of work hours.

That being said, I am sure you are right that there are many you know who are able to leave it at the door when the final bell rings for the day's end of classes. Even then, it's an exhausting 8 hour day.
Yes, I'm familiar with No Child Left Behind - that is a whole 'nother conversation :)

So there is no confusion: teachers (academia obviously included) are vitally important, and I appreciate what you guys do. One could reasonably make the argument that teaching is among the most important professions (if not the most important), but that is also another conversation.

However, I suspect most people have a tendency to over-promote their own profession, though, particularly when it comes to sensitive issues such as hours worked and salary. The data shows that teachers generally work less hours than other professionals and most teachers are given significant time during the day to grade papers, prepare lesson plans, etc. If they are members of a union, which a good percentage of teachers are, they generally have time for administrative requirements as well, as negotiated per their union contract. Not always, but usually.

https://stats.bls.gov/opub/mlr/2008/03/art4full.pdf

As for "exhausting" work days, that's pretty subjective. More exhausting than janitors? Or plumbers? Or psychologists? Or Marines? Or police officers? There are an awful lot of exhausting jobs out there, and those professions don't get three months off in the summer to recharge the batteries.

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CyclingDuo
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Re: New book based on Millionaire Next Door

Post by CyclingDuo » Wed Jul 25, 2018 10:43 am

nova1968 wrote:
Wed Jul 25, 2018 9:06 am
Yes, there are challenges for teachers becoming millionaires, However, a teacher that contributes the maximum to an IRA and lets it compound for 30 years could have a pretty substantial sum plus the 50K a year pension could provide for a comfortable retirement. A retiree with 1M in retirement accounts with no pension withdrawing 4% a year is living off of 40K a year.
Quite true for the IRA alone. $5500 per year ($458.33 per month) at 6% return until age 50, then $6500 per year ($541.66 per month) at 6% until age 65 = $991K. Add in pension, social security, 403b/457b - or whatever mix an educator is able to utilize based on their cash flow and options (cash flow will most likely not allow much in the early years) - gives educators a fighting chance like some other careers with comparable salaries.
nova1968 wrote:
Wed Jul 25, 2018 9:06 am
Teaching can be rewarding and three months off during the summer plus a couple weeks during spring break and Christmas is a good benefit versus the average worker who gets 2 weeks vacation a year. I agree that teachers in some states are under paid versus Factory workers, the person who picks up your trash etc, but there is often more to consider that just the pay.
Yes, it is important to remember the teacher pay is for 9 months of work (unless one is in administration or a department chair in academia). I don't want to join the discussion of pay being fair or not as I look at all of the benefits as a package - including the time off. Cannot complain about the whole package: [9 months of work. Health care. Life insurance. Dental. 403b/457b. Pension. Plus SS (in our state). $54K average salary in our state which is a LCOL area.] Granted, a lot of course development/research/syllabi preparation/lesson plans is done during the time off which is on one own's time for no compensation unless you get a grant. So for any teacher that has a new course they need to prepare for an upcoming semester or year, some of the time off in the summer will be devoted to that.

Same sort of work schedule applies to a lot of performing artist careers (orchestra, ballet, opera, etc...) as well since most seasons are September to May/June and then the choice of taking some summer festival work is an option. I only mention that as I had that career for 20+ years before moving to teaching. So I have 33 years under my belt of that type of work schedule. Due to an upcoming new job, that will change for me next summer and I will finally get a chance to see how everyone else lives. :beer
"Everywhere is within walking distance if you have the time." ~ Steven Wright

getthatmarshmallow
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Re: New book based on Millionaire Next Door

Post by getthatmarshmallow » Wed Jul 25, 2018 10:53 am

The norms of American work discussion are always that everyone is working 50 hour weeks, and teachers in particular are susceptible to people thinking they work only when they're in front of the classroom. We are all kindergarteners that can't believe Teacher goes potty and eats lunch, too.
That the rhetoric emphasizes all of the after-hours prep doesn't surprise me -- I see it with academics although as I grow more curmudgeonly I'm lately apt to respond to academic friends boasting about 55 hour work weeks that they need to become more efficient so they can go skiing.

The discussion this turn has taken is amusing me. Here's a totally uncharitable gloss:

Boglehead conventional wisdom: anyone can become wealthy with diligent effort! $5K a year will make you a millionaire at 65! LBYM, save, read if you can!
Bogleheads on discovering that teachers can become millionaires: they must be all gold-diggers married to doctors or trust-fund babies!

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CyclingDuo
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Re: New book based on Millionaire Next Door

Post by CyclingDuo » Wed Jul 25, 2018 11:43 am

Maverick3320 wrote:
Wed Jul 25, 2018 9:35 am
However, I suspect most people have a tendency to over-promote their own profession, though, particularly when it comes to sensitive issues such as hours worked and salary. The data shows that teachers generally work less hours than other professionals and most teachers are given significant time during the day to grade papers, prepare lesson plans, etc. If they are members of a union, which a good percentage of teachers are, they generally have time for administrative requirements as well, as negotiated per their union contract. Not always, but usually.
I can only speak from the side of academia. We have no union, but we do have an academic calendar and schedule that we are tied to and are required to get everything in within the said time frame. Our jobs are based on load. I know plenty of people in academia have spent time figuring out what constitutes a full load, but suffice it to say we have to follow the advice of whoever figured out what a full load is and stick to it unless we are asked to take on an overload based on supply/demand. I was on overload for the past six years and was compensated for it. :moneybag I can only speak as an observer of a working spouse who works in the No Child Left Behind Act side of public education. I get exhausted just watching her compared to my work load.
Maverick3320 wrote:
Wed Jul 25, 2018 9:35 am
As for "exhausting" work days, that's pretty subjective. More exhausting than janitors? Or plumbers? Or psychologists? Or Marines? Or police officers? There are an awful lot of exhausting jobs out there, and those professions don't get three months off in the summer to recharge the batteries.
I didn't mean to give the illusion that other occupations were not also exhausting, or that teaching was in any way more exhausting than another profession. My previous response was typed as I was thinking of those who are in front of a class of 2nd graders (or pick whatever age) with all of their energy, noise, and a teacher who walked out of the building after the final bell of the day being exhausted from the classroom management, noise, and ending the day with a very tired - nearly hoarse voice. I only enjoyed that experience for one semester way back in my student teaching days as a senior in college which was enough to scare me away from public school teaching. :wink:

Yes, no matter what the career, a professional learns to pace themselves throughout the day. Ending the day mentally, or physically exhausted - or both - can happen in a wide variety of occupations. Each of us only knows how we feel at the end of each and every day. :beer
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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Re: New book based on Millionaire Next Door

Post by texasdiver » Wed Jul 25, 2018 6:30 pm

Having gottten into teaching in my 40s after careers in the private sector and Federal government I can say that done right it can be an utterly exhausting and all consuming job. Many veteran teachers have learned to minimize their out of class workload by being efficient and having years worth of materials already developed. But for young teachers and teachers tackling new subjects it can be all consuming. There is simply not ever enough time to develop engaging curriculum materials, grade papers, and keep up with all the other endless administrative paperwork related to special education and such. My first couple years I was up past midnight many nights in front of the computer and worked through many weekends. The problem is that you are never “done”.

As for summers off? Typically it is about 2 months off not 3 in the summer. Last day of class for me was June 19 and inservice training for next school year begins August 23. So that’s basically 2 months. At least a week is spent doing required professional development workshops and I spend at least 2 weeks full time just getting materials ready for next year. So that leaves about 5 weeks of actual summer vacation. Nothing to complain about but it’s not 3 months like some think. We also get 2 weeks at Christmas and a week of Spring break.

As for the original point of the thread. I think the take home message is that a million dollars just isn’t what it used to be. Frankly it is about the minimum required to have a middle to upper middle class retirement these days in some combination of pensions or retirement savings on top of social security. It is not surprising that many teachers and other middle class professionals reach that threshold. It’s basically what you have to do these days.

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Re: New book based on Millionaire Next Door

Post by golfCaddy » Wed Jul 25, 2018 6:42 pm

getthatmarshmallow wrote:
Wed Jul 25, 2018 10:53 am
The discussion this turn has taken is amusing me. Here's a totally uncharitable gloss:

Boglehead conventional wisdom: anyone can become wealthy with diligent effort! $5K a year will make you a millionaire at 65! LBYM, save, read if you can!
Bogleheads on discovering that teachers can become millionaires: they must be all gold-diggers married to doctors or trust-fund babies!
I'll try to reconcile the two points. If you work until 65, which most teachers won't, and you earn 6% real returns, although that's extremely optimistic, you should become a millionaire. However, the later books aren't truly about the people who just barely make the millionaire threshold. Stop Acting Rich and Start Living Like a Real Millionaire focuses mostly on the decamillionaires, no matter what the title says.

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Re: New book based on Millionaire Next Door

Post by LadyGeek » Wed Jul 25, 2018 6:58 pm

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