Teachers Who Have Net Worth of $1 million +

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Gardner's Son
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Teachers Who Have Net Worth of $1 million +

Post by Gardner's Son » Thu Aug 16, 2018 12:01 pm

As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
    How did you do it?
      Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
        Thanks!

        SEAworld9
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        Re: Teachers Who Have Net Worth of $1 million +

        Post by SEAworld9 » Thu Aug 16, 2018 6:24 pm

        my parents, both former career teachers, have accomplished this. never made more than $65k/year each.

        formula they used is the same one everyone here preaches: save soon, save often, and live below your means. they weren't ever really aggressive in the stock market (invested but very risk averse), didn't like debt (paid off primary home mortgage early), and have never been big spenders. no side businesses or anything.

        NW now is around $2.3MM. no debt. paid off primary house and paid off winter home in san miguel, mexico. their expenses are $30-32k a year. income last year was $101k. they do whatever they want every day and love it.

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        Nicolas
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        Re: Teachers Who Have Net Worth of $1 million +

        Post by Nicolas » Thu Aug 16, 2018 6:51 pm

        Deleted
        Last edited by Nicolas on Wed Sep 05, 2018 8:04 pm, edited 1 time in total.
        When you haven't got the coin you're always in the way — Geo. M. Cohan

        tesuzuki2002
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        Re: Teachers Who Have Net Worth of $1 million +

        Post by tesuzuki2002 » Thu Aug 16, 2018 7:00 pm

        Gardner's Son wrote:
        Thu Aug 16, 2018 12:01 pm
        As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
          How did you do it?
            Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
              Thanks!
              Nice work All!!! I'd like seeing people chime in here.. I have lots of friends who are teachers and say it is impossible to save ANYTHING!!!

              While it is true.. I went into engineering and have a decent salary job there... I got into teaching on the side, just because I love educating our future...

              Thanks to all the great teachers out there!!

              tesuzuki2002
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by tesuzuki2002 » Thu Aug 16, 2018 7:01 pm

              Nicolas wrote:
              Thu Aug 16, 2018 6:51 pm
              My father-in-law taught high school his whole career and retired in 1989. At death he was worth $1.4 million. He practised boglehead-type investing. He never made more than $36K and his wife never worked. But truth be told they lived way below their means, too low in my opinion.
              wow that's saying a lot on a max income of $36K... I would also say living WAY below their means.

              Jablean
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by Jablean » Thu Aug 16, 2018 7:19 pm

              Teachers wages haven't kept up with other wages, at least in most states, so what a teacher could do then and what a teacher can do now are apples and oranges.

              Mitchell777
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by Mitchell777 » Thu Aug 16, 2018 7:26 pm

              It very much depends on where you live and teach. I know quite a few teachers. Most do not seem to be concerned so much about net worth. Their pensions are, or will be, 87.5% of salary after 35 years (plus SS in my state) and they are now well into middle age making in the $80K to $95K range. Newer teachers' pensions are not as generous so they may look at it differently.

              inbox788
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by inbox788 » Thu Aug 16, 2018 7:59 pm

              Mitchell777 wrote:
              Thu Aug 16, 2018 7:26 pm
              It very much depends on where you live and teach. I know quite a few teachers. Most do not seem to be concerned so much about net worth. Their pensions are, or will be, 87.5% of salary after 35 years (plus SS in my state) and they are now well into middle age making in the $80K to $95K range. Newer teachers' pensions are not as generous so they may look at it differently.
              A pension 87.5% of $90k salary might yield over $80k/year in retirement which is equivalent to a $2M portfolio and 4% SWR.

              ByThePond
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by ByThePond » Thu Aug 16, 2018 8:07 pm

              Retired now with a NW in the low 7 figures. ( Private school teacher, no pensions involved, no large inheritances, HCOL area) How'd that happen?
              We did it by LB(our)M, payroll deductions to the max, not buying too much house etc., using TIAA and Vanguard index funds, 100% equities during the Great Recession, and making like the Energizer Bunny for a few decades. As Jack would say, we stayed the course.
              I credit the wealth of wisdom as displayed here and in our cited references for this success. The "received wisdom" on this site is incredible. A long bull market helped too.
              What can I say? This stuff works.
              Last edited by ByThePond on Thu Aug 16, 2018 8:23 pm, edited 1 time in total.

              masteraleph
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by masteraleph » Thu Aug 16, 2018 8:07 pm

              About halfway there ($430k in retirement accounts and HSA, 510 if you count spouse's IRA- spouse is a perpetual grad student). About to turn 34, entering my 12th year, 11 full time.

              I'm in a private school in the NYC area, earning about $100,000 (for reference, teachers with roughly equivalent education and my experience would be making 85,000-90,000 in the NYC public schools with free health care and either pension or big DC contributions; in the suburbs they could be much higher). After going through the early years with low employer contributions, they now put in 8.5% of salary into a 401k, and contribute $2000 towards a family HSA, which is also getting used for investment purposes. It's a HCOL area, but if you're willing to live smaller and have some persistence and luck in finding appropriately sized and priced places, you can do very well, too.

              letsgobobby
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by letsgobobby » Thu Aug 16, 2018 8:08 pm

              Isn’t Boglehead and author sschullo a retired teacher?

              https://latebloomerwealth.com/publicati ... lionaires/

              Grt2bOutdoors
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by Grt2bOutdoors » Thu Aug 16, 2018 8:11 pm

              inbox788 wrote:
              Thu Aug 16, 2018 7:59 pm
              Mitchell777 wrote:
              Thu Aug 16, 2018 7:26 pm
              It very much depends on where you live and teach. I know quite a few teachers. Most do not seem to be concerned so much about net worth. Their pensions are, or will be, 87.5% of salary after 35 years (plus SS in my state) and they are now well into middle age making in the $80K to $95K range. Newer teachers' pensions are not as generous so they may look at it differently.
              A pension 87.5% of $90k salary might yield over $80k/year in retirement which is equivalent to a $2M portfolio and 4% SWR.
              Relative retired over a decade ago, has received the equivalent of annual salary at retirement, each and every year since then. The required contribution to pension plan ended after the first ten years of employment at the lower end of the pay scale whilst they retired at a far higher salary (multiples). They hit the proverbial lottery and lifetime paid healthcare. The new crop of pedagogicals not so fortunate- they will be paying into pension from day 1 until retirement and their pension will be much less.
              "One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

              golfCaddy
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by golfCaddy » Thu Aug 16, 2018 8:14 pm

              For this to be meaningful, you would need to know if they got an inheritance and how much and household income, if married.

              John Laurens
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by John Laurens » Thu Aug 16, 2018 8:23 pm

              golfCaddy wrote:
              Thu Aug 16, 2018 8:14 pm
              For this to be meaningful, you would need to know if they got an inheritance and how much and household income, if married.
              Exactly. My wife has taught 1 year (has been a sahm for 16). She’s a multi millionaire.

              Regards,
              John

              ramonsito
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by ramonsito » Thu Aug 16, 2018 8:47 pm

              I have taught at the college level for 30 years, and plan on continuing this noble work for six more years (full retirement age). The private college where I teach pays only modest salaries comparable to what high school teachers make in the area. I will have no pension, only a 401K (with the college providing matching up to 3%). My net worth is about to reach the 1M level, based on the blessing of the current bull market AND the Boglehead philosophy: Save about 15% of your income and invest in low-cost index funds (or relatively similar funds, such as Wellington). I have received no inheritance nor do I play the lottery. Granted, 1M isn't what it used to be, but it should grow sufficiently in the next six years to provide a decent 50K per year. With SS, finances should be OK. Current AA is 60/40.

              Wellfleet
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              Re: Teachers Who Have Net Worth of $1 million +

              Post by Wellfleet » Thu Aug 16, 2018 9:03 pm

              Gardner's Son wrote:
              Thu Aug 16, 2018 12:01 pm
              As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                How did you do it?
                  Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                    Thanks!
                    Family who are this. One house, one spouse, no vacation home, ample vacations, state school for the kids. They do use a financial advisor :!: Saved early and often, now live the good life.

                    e5116
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                    Re: Teachers Who Have Net Worth of $1 million +

                    Post by e5116 » Thu Aug 16, 2018 9:42 pm

                    Mitchell777 wrote:
                    Thu Aug 16, 2018 7:26 pm
                    It very much depends on where you live and teach. I know quite a few teachers. Most do not seem to be concerned so much about net worth. Their pensions are, or will be, 87.5% of salary after 35 years (plus SS in my state) and they are now well into middle age making in the $80K to $95K range. Newer teachers' pensions are not as generous so they may look at it differently.
                    In my state, the average pension after 10 years of retirement is MORE than their highest salary due to 3% COLA that are compounded annually. The average high school teacher in my district (about 35% of students on free/reduced lunch) makes $99.5k. I'm not saying teachers don't work hard or aren't doing good work, but I agree that it's largely location dependent as in my area they're set up very nicely. Teachers who didn't get a paycheck until after 2011 don't have as quite nice of a pension (but it's still solid), but those existing in the system have been grandfathered in and benefits cannot be reduced according to the state constitution (when legislators tried to reduce benefits, the state supreme Court struck it down).

                    I agree that net worth isn't that meaningful to those with strong pensions.

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                    ram
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                    Location: Midwest

                    Re: Teachers Who Have Net Worth of $1 million +

                    Post by ram » Fri Aug 17, 2018 10:41 pm

                    I teach medical students and medical residents and have a NW >1 M but as a physician I make more than the average high school teacher.
                    Ram

                    MikeMak27
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                    Re: Teachers Who Have Net Worth of $1 million +

                    Post by MikeMak27 » Fri Aug 17, 2018 11:30 pm

                    e5116 wrote:
                    Thu Aug 16, 2018 9:42 pm
                    Mitchell777 wrote:
                    Thu Aug 16, 2018 7:26 pm
                    It very much depends on where you live and teach. I know quite a few teachers. Most do not seem to be concerned so much about net worth. Their pensions are, or will be, 87.5% of salary after 35 years (plus SS in my state) and they are now well into middle age making in the $80K to $95K range. Newer teachers' pensions are not as generous so they may look at it differently.
                    In my state, the average pension after 10 years of retirement is MORE than their highest salary due to 3% COLA that are compounded annually. The average high school teacher in my district (about 35% of students on free/reduced lunch) makes $99.5k. I'm not saying teachers don't work hard or aren't doing good work, but I agree that it's largely location dependent as in my area they're set up very nicely. Teachers who didn't get a paycheck until after 2011 don't have as quite nice of a pension (but it's still solid), but those existing in the system have been grandfathered in and benefits cannot be reduced according to the state constitution (when legislators tried to reduce benefits, the state supreme Court struck it down).

                    I agree that net worth isn't that meaningful to those with strong pensions.
                    Your state (Illinois) has an absolute incredible pension for teachers who are tier 1 (2010 and before). My high school baseball coach and PE teacher makes 130k a year from his pension and it goes up every year by 3% at least. It’s truly an incredible benefit, that unfortunately is killing the state’s finances at the same time.
                    Mak 3 fund portfolio: 50% US small cap value & US Small cap (IJS, IJR), 40% Emerging Markets (IEMG, VWO, FPADX), 10% US REIT (VNQ)

                    gwrvmd
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                    Re: Teachers Who Have Net Worth of $1 million +

                    Post by gwrvmd » Sat Aug 18, 2018 12:24 am

                    Its not that hard recently
                    Start saving and investing early, take advantage of tax deferred investing (401k,403b, IRA, spouse IRA)
                    invest 100% equities, one house, one spouse.
                    The 1990s were a 10 year bull market, the past 9 years have been a 9 year bull market, since 1990
                    we have had a bull market for 19 of the past 28 years.
                    Anybody should have been able to do it in the past 30 years. I doubt if the next 30 years will be that favorable......Gordon
                    Disciple of John Neff

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                    munemaker
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                    Re: Teachers Who Have Net Worth of $1 million +

                    Post by munemaker » Sat Aug 18, 2018 10:07 am

                    My understanding is that in some states, many teachers have million dollar pensions (I am not a teacher).

                    indexonlyplease
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                    Re: Teachers Who Have Net Worth of $1 million +

                    Post by indexonlyplease » Sat Aug 18, 2018 10:13 am

                    Gardner's Son wrote:
                    Thu Aug 16, 2018 12:01 pm
                    As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                      How did you do it?
                        Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                          Thanks!
                          I asked this question to my wife who is a teacher. She told me it was easy. She is married to someone who make 4 times her salary.

                          User avatar
                          CardinalRule
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                          Re: Teachers Who Have Net Worth of $1 million +

                          Post by CardinalRule » Sat Aug 18, 2018 10:23 am

                          Wow. That's crazy. :o
                          MikeMak27 wrote:
                          Fri Aug 17, 2018 11:30 pm

                          Your state (Illinois) has an absolute incredible pension for teachers who are tier 1 (2010 and before). My high school baseball coach and PE teacher makes 130k a year from his pension and it goes up every year by 3% at least. It’s truly an incredible benefit, that unfortunately is killing the state’s finances at the same time.

                          dknightd
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                          Re: Teachers Who Have Net Worth of $1 million +

                          Post by dknightd » Sat Aug 18, 2018 10:24 am

                          Gardner's Son wrote:
                          Thu Aug 16, 2018 12:01 pm
                          As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                            How did you do it?
                              Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                Thanks!
                                I'd like to hear your story. Pensions are not as good as they used to be. What would you recommend. I don't like to read about teachers who have to take a second job for the summer. But the reality is a 9 month job sounds like a good deal for many folks. I guess the answer is to spend less than you earn. Rinse and repeat.
                                If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.

                                dknightd
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                                Re: Teachers Who Have Net Worth of $1 million +

                                Post by dknightd » Sat Aug 18, 2018 10:31 am

                                indexonlyplease wrote:
                                Sat Aug 18, 2018 10:13 am
                                Gardner's Son wrote:
                                Thu Aug 16, 2018 12:01 pm
                                As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                                  How did you do it?
                                    Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                      Thanks!
                                      I asked this question to my wife who is a teacher. She told me it was easy. She is married to someone who make 4 times her salary.
                                      Perhaps I need a new wife ;)
                                      If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.

                                      stoptothink
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by stoptothink » Sat Aug 18, 2018 11:23 am

                                      CardinalRule wrote:
                                      Sat Aug 18, 2018 10:23 am
                                      Wow. That's crazy. :o
                                      MikeMak27 wrote:
                                      Fri Aug 17, 2018 11:30 pm

                                      Your state (Illinois) has an absolute incredible pension for teachers who are tier 1 (2010 and before). My high school baseball coach and PE teacher makes 130k a year from his pension and it goes up every year by 3% at least. It’s truly an incredible benefit, that unfortunately is killing the state’s finances at the same time.
                                      And very true. There is a reason teacher's pensions are being severely cut-back everywhere, in more than just Illinois they are completely unsustainable. It's crazy to examine the numbers of some of these pension plans.

                                      indexonlyplease
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by indexonlyplease » Sat Aug 18, 2018 11:32 am

                                      stoptothink wrote:
                                      Sat Aug 18, 2018 11:23 am
                                      CardinalRule wrote:
                                      Sat Aug 18, 2018 10:23 am
                                      Wow. That's crazy. :o
                                      MikeMak27 wrote:
                                      Fri Aug 17, 2018 11:30 pm

                                      Your state (Illinois) has an absolute incredible pension for teachers who are tier 1 (2010 and before). My high school baseball coach and PE teacher makes 130k a year from his pension and it goes up every year by 3% at least. It’s truly an incredible benefit, that unfortunately is killing the state’s finances at the same time.
                                      And very true. There is a reason teacher's pensions are being severely cut-back everywhere, in more than just Illinois they are completely unsustainable. It's crazy to examine the numbers of some of these pension plans.
                                      This is not true. It is the politicians that destroy government not the employees. When you have any liabilities pensions, SS, medicare ect.) you must fund the liabilities. Some states, cities have decided not to fund for years. Then they wonder why the pension system is in such bad shape. It is about money management which politicians have no idea about.

                                      States and cities can adjust the pension system but not destroy what was promised to their employees because they mismanaged the tax payers money.

                                      stoptothink
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by stoptothink » Sat Aug 18, 2018 11:43 am

                                      indexonlyplease wrote:
                                      Sat Aug 18, 2018 11:32 am
                                      stoptothink wrote:
                                      Sat Aug 18, 2018 11:23 am
                                      CardinalRule wrote:
                                      Sat Aug 18, 2018 10:23 am
                                      Wow. That's crazy. :o
                                      MikeMak27 wrote:
                                      Fri Aug 17, 2018 11:30 pm

                                      Your state (Illinois) has an absolute incredible pension for teachers who are tier 1 (2010 and before). My high school baseball coach and PE teacher makes 130k a year from his pension and it goes up every year by 3% at least. It’s truly an incredible benefit, that unfortunately is killing the state’s finances at the same time.
                                      And very true. There is a reason teacher's pensions are being severely cut-back everywhere, in more than just Illinois they are completely unsustainable. It's crazy to examine the numbers of some of these pension plans.
                                      This is not true. It is the politicians that destroy government not the employees. When you have any liabilities pensions, SS, medicare ect.) you must fund the liabilities. Some states, cities have decided not to fund for years. Then they wonder why the pension system is in such bad shape. It is about money management which politicians have no idea about.

                                      States and cities can adjust the pension system but not destroy what was promised to their employees because they mismanaged the tax payers money.
                                      I agree with you. I made no judgement nor said it was in any way the problem of the public employees that these pension plans are unsustainable. But it is what it is, public employee pensions are a huge boon on the finances of countless municipalities today and there isn't much that can be done to fix them at this point.
                                      Last edited by stoptothink on Sat Aug 18, 2018 11:49 am, edited 1 time in total.

                                      anonenigma
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by anonenigma » Sat Aug 18, 2018 11:49 am

                                      munemaker wrote:
                                      Sat Aug 18, 2018 10:07 am
                                      My understanding is that in some states, many teachers have million dollar pensions (I am not a teacher).
                                      What do you mean - a million dollars per year or the assets necessary to generate the pension payments during the lifetime of the teacher?

                                      averagedude
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by averagedude » Sat Aug 18, 2018 12:01 pm

                                      Seems to be some gloom and doom in this post on being a teacher in the US. To put it in perspective, if you and your spouse are teachers, you are in the top quartile in wage earnings. If both of you save just 10% of your income when you get out of college and invest it the boglehead way, when you retire at 65, you will have vast amounts of wealth, not including your pension and social security. This will make you the envied 1 percenter in net worth if you look at it globally. As a bonus, you should feel joy for making a difference in so many people's lives. It is a great profession not only for the income, but also for the outcomes.

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                                      bettykayWAAZ
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by bettykayWAAZ » Sat Aug 18, 2018 12:04 pm

                                      I read that a large percent of AirBnB operators are teachers -- supplementing their low income. In Arizona, for 5 years our schools were on 4 days a week schedule, to cut costs. Many teachers were opposed to the change back -- because they had 3 day jobs on weekend to supplement their low incomes. Education in Arizona is near the bottom of all national surveys.

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                                      munemaker
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by munemaker » Sat Aug 18, 2018 12:49 pm

                                      anonenigma wrote:
                                      Sat Aug 18, 2018 11:49 am
                                      munemaker wrote:
                                      Sat Aug 18, 2018 10:07 am
                                      My understanding is that in some states, many teachers have million dollar pensions (I am not a teacher).
                                      What do you mean - a million dollars per year or the assets necessary to generate the pension payments during the lifetime of the teacher?
                                      It is pretty obvious I don't mean $1 million/year. I mean a pension that has a net present value of $1 million. OP is asking about net worth, not income. A $1 million pension means one would have a net worth of at least $1 million, which is what the OP is asking about.
                                      Last edited by munemaker on Sat Aug 18, 2018 12:57 pm, edited 2 times in total.

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                                      munemaker
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by munemaker » Sat Aug 18, 2018 12:54 pm

                                      bettykayWAAZ wrote:
                                      Sat Aug 18, 2018 12:04 pm
                                      In Arizona, for 5 years our schools were on 4 days a week schedule, to cut costs. Many teachers were opposed to the change back --
                                      Who wouldn't like a 4 day work week? I am sure the students loved it too. However, when you think about the mission of public schools, it would seem their education would suffer. If the teachers could accomplish 5 days of teaching in 4 days, that would be something! I wonder if standardized tests showed lower scores and maybe that is why the switch back?

                                      masonstone
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                                      Re: Teachers Who Have Net Worth of $1 million +

                                      Post by masonstone » Sat Aug 18, 2018 12:55 pm

                                      Gardner's Son wrote:
                                      Thu Aug 16, 2018 12:01 pm
                                      As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                                        How did you do it?
                                          Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                            Thanks!
                                            1 million dollars net worth isn’t the same as what it was a couple of decades ago. You almost need at least 7 figures to have a comfortable retirement.

                                            anonenigma
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                                            Re: Teachers Who Have Net Worth of $1 million +

                                            Post by anonenigma » Sat Aug 18, 2018 1:02 pm

                                            munemaker wrote:
                                            Sat Aug 18, 2018 12:49 pm
                                            anonenigma wrote:
                                            Sat Aug 18, 2018 11:49 am
                                            munemaker wrote:
                                            Sat Aug 18, 2018 10:07 am
                                            My understanding is that in some states, many teachers have million dollar pensions (I am not a teacher).
                                            What do you mean - a million dollars per year or the assets necessary to generate the pension payments during the lifetime of the teacher?
                                            It is pretty obvious I don't mean $1 million/year. I mean a pension that has a net present value of $1 million. OP is asking about net worth, not income. A $1 million pension means one would have a net worth of at least $1 million, which is what the OP is asking about.
                                            Pension funds assume around a 7% annual return, so a $50,000 annual pension (close to average new retiree pension in CalSTRS) would have a net present value of >$714,000, depending on how the 2% noncumulative annual increase is valued. To the recipient of the pension, who might think in terms of a 4% SWR, the pension would have a net present value of >$1,250,000, depending again on how the 2% noncumulative annual increase is valued. Of course, the pension can't be passed on to the next generation - the assets are used to support future retirees.

                                            anonenigma
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                                            Re: Teachers Who Have Net Worth of $1 million +

                                            Post by anonenigma » Sat Aug 18, 2018 1:04 pm

                                            munemaker wrote:
                                            Sat Aug 18, 2018 12:54 pm
                                            bettykayWAAZ wrote:
                                            Sat Aug 18, 2018 12:04 pm
                                            In Arizona, for 5 years our schools were on 4 days a week schedule, to cut costs. Many teachers were opposed to the change back --
                                            Who wouldn't like a 4 day work week? I am sure the students loved it too. However, when you think about the mission of public schools, it would seem their education would suffer. If the teachers could accomplish 5 days of teaching in 4 days, that would be something! I wonder if standardized tests showed lower scores and maybe that is why the switch back?
                                            How do parents think about this? Imposes quite a child care burden.

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                                            munemaker
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                                            Re: Teachers Who Have Net Worth of $1 million +

                                            Post by munemaker » Sat Aug 18, 2018 1:16 pm

                                            anonenigma wrote:
                                            Sat Aug 18, 2018 1:02 pm
                                            munemaker wrote:
                                            Sat Aug 18, 2018 12:49 pm
                                            anonenigma wrote:
                                            Sat Aug 18, 2018 11:49 am
                                            munemaker wrote:
                                            Sat Aug 18, 2018 10:07 am
                                            My understanding is that in some states, many teachers have million dollar pensions (I am not a teacher).
                                            What do you mean - a million dollars per year or the assets necessary to generate the pension payments during the lifetime of the teacher?
                                            It is pretty obvious I don't mean $1 million/year. I mean a pension that has a net present value of $1 million. OP is asking about net worth, not income. A $1 million pension means one would have a net worth of at least $1 million, which is what the OP is asking about.
                                            Pension funds assume around a 7% annual return, so a $50,000 annual pension (close to average new retiree pension in CalSTRS) would have a net present value of >$714,000, depending on how the 2% noncumulative annual increase is valued. To the recipient of the pension, who might think in terms of a 4% SWR, the pension would have a net present value of >$1,250,000, depending again on how the 2% noncumulative annual increase is valued. Of course, the pension can't be passed on to the next generation - the assets are used to support future retirees.
                                            I don't get the point of your post. The pension is a financial asset that, in the example cited, would be worth $1 million. It doesn't really matter if the asset is a $1 million mansion, a $1 million portfolio of financial assets, or a $1 million art collection. It is still worth a million dollars. Maybe taking a lump sum is an option if that would be more satisfactory, I don't know.

                                            As far as heirs, it is indeed possible to take reduced forms of pension that provide for a surviving spouse.

                                            However, teachers in PA retire after 30 years of service. If you graduate at age 21, start working at age 22, you would be drawing this pension (i.e. annuity valued at $1 million) at age 52, the monthly payment would be $4,305/month. Add in SS at age 62 (PA teachers are in SS system), and you have a pretty decent lifetime income at a relatively young age. And maybe the teacher put some aside in the 403b tax deferred retirement program to supplement the pension and SS.

                                            reference: https://www.newretirement.com/annuity-c ... ontent-mid
                                            Last edited by munemaker on Sat Aug 18, 2018 1:24 pm, edited 2 times in total.

                                            cusetownusa
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                                            Re: Teachers Who Have Net Worth of $1 million +

                                            Post by cusetownusa » Sat Aug 18, 2018 1:18 pm

                                            Gardner's Son wrote:
                                            Thu Aug 16, 2018 12:01 pm
                                            As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                                              How did you do it?
                                                Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                                  Thanks!
                                                  Are you counting pensions in net worth? If so I know a lot of retired teachers that have multi million met worths.

                                                  Dottie57
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                                                  Re: Teachers Who Have Net Worth of $1 million +

                                                  Post by Dottie57 » Sat Aug 18, 2018 1:31 pm

                                                  munemaker wrote:
                                                  Sat Aug 18, 2018 12:54 pm
                                                  bettykayWAAZ wrote:
                                                  Sat Aug 18, 2018 12:04 pm
                                                  In Arizona, for 5 years our schools were on 4 days a week schedule, to cut costs. Many teachers were opposed to the change back --
                                                  Who wouldn't like a 4 day work week? I am sure the students loved it too. However, when you think about the mission of public schools, it would seem their education would suffer. If the teachers could accomplish 5 days of teaching in 4 days, that would be something! I wonder if standardized tests showed lower scores and maybe that is why the switch back?
                                                  No time left for after school sports.

                                                  Pigeon
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                                                  Re: Teachers Who Have Net Worth of $1 million +

                                                  Post by Pigeon » Sat Aug 18, 2018 1:44 pm

                                                  We're a teacher and a librarian. There was nothing magic about our saving, it's basically following the Millionaire Next Door principles. It was a second career for dh. While he'll get a decent pension, it won't be anything close to his salary. We both worked full time, automated our savings and lived fairly frugally. The house is paid off. We're hoping to retire in a few years when the kids are out of college and we are 62 or so.

                                                  One big factor in our savings is that neither of us had college or grad school debt. Comparing us to younger teachers is apples to oranges. Pension systems are much less generous than they used to be, most people have college debt, and salary increases for teachers in our area have been almost non-existent in the past 10 years.

                                                  shell921
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                                                  Re: Teachers Who Have Net Worth of $1 million +

                                                  Post by shell921 » Sat Aug 18, 2018 1:49 pm

                                                  Gardner's Son wrote:
                                                  Thu Aug 16, 2018 12:01 pm
                                                  As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                                                    How did you do it?
                                                      Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                                        Thanks!
                                                        By "over one million net" do you mean investments/savings NOT including value of the home a teacher may own?

                                                        spammagnet
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                                                        Re: Teachers Who Have Net Worth of $1 million +

                                                        Post by spammagnet » Sat Aug 18, 2018 2:03 pm

                                                        cusetownusa wrote:
                                                        Sat Aug 18, 2018 1:18 pm
                                                        ... Are you counting pensions in net worth? ...
                                                        Valuation methods may vary but that seems like a reasonable way to compare the value of a pension to the value of accumulated assets held by someone without a pension.

                                                        Ron Ronnerson
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                                                        Re: Teachers Who Have Net Worth of $1 million +

                                                        Post by Ron Ronnerson » Sat Aug 18, 2018 2:05 pm

                                                        I’m a 43 year old teacher with a wife and kid and our net worth is approaching $1M (it’s $900k-something). Ten years ago, at age 33, our net worth was $25k. Our combined gross income has been between $100k-$150k per year during that time with an average of around $120k/year. No inheritances are involved.

                                                        The main reasons for the growth of our net worth have been frugality and luck. We live in a VHCOL area and enjoy a nice life but do it inexpensively. We’ve been saving and investing a third of our income over the last few years. Luck has helped our assets grow. We were 100% in equities until recently (and are now at 80%). The market has been generous since we’ve been investing. The value of the Bay Area home we bought in 2009 has appreciated quite a bit too.

                                                        My CalSTRS pension around age 60 (which my wife would continue to get if I predecease her) should be around $90k/year in 2018 dollars. Our retirement expenses should be covered by pension and social security.

                                                        I teach at a school that is rated in the top 1% of public schools in CA (based on test scores). The parents are supportive, the principal is wonderful, and the kids are highly motivated. Teachers earn six-figures after about 10 years. The pension is obviously nice. 180 days off a year doesn’t hurt either. Despite that, there is a huge shortage of teachers where I work. No health benefits are provided and homes cost seven figures. Very few people are signing up for the deal because, while the pension and time off are great and salaries eventually go up, a new teacher can’t survive in the present moment on $60k/year in Silicon Valley. Over 10% of salary goes toward the pension, no health benefits are offered, and rent is sort of insane.

                                                        The best parts of the job aren’t financial in my opinion. I love my job and look forward to going to work (at least most of the time).

                                                        Slapshot
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                                                        Re: Teachers Who Have Net Worth of $1 million +

                                                        Post by Slapshot » Sat Aug 18, 2018 2:26 pm

                                                        We're there and, even though we got some inherited money, we'd still be there without it. Good fortune and planning went into it. First, we bought our house in 1974, and it's now worth 10 times what we paid for it. Second, we always budgeted on my salary, so whatever my wife made as a secretary was saved. Later we used her pay to send our two kids to college with no borrowing. Third, I put a set amount into a 403b for years. It was taken out of my pay check, and I never missed it because I never saw it. My wife took maximum advantage of a 401k at her job. Vanguard index funds. Finally, we budgeted and lived below our means, never threw away money. But we always drove new cars and didn't feel we were missing out on anything. And last, we made some good investments, especially a rental condo which has appreciated by 50% over what we paid for it 5 years ago.

                                                        Other than our house and condo, we always paid cash for everything, never have had a credit card balance, and now have no debt whatsoever. We can pay all our bills with my pension income; my wife's social security is hers to spend as she wants. Our problem is trying to overcome our natural frugal instincts and spending money while we can enjoy it.
                                                        This time, like all times, is the best of times if we but know what to do with it.

                                                        Grt2bOutdoors
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                                                        Re: Teachers Who Have Net Worth of $1 million +

                                                        Post by Grt2bOutdoors » Sat Aug 18, 2018 2:39 pm

                                                        masonstone wrote:
                                                        Sat Aug 18, 2018 12:55 pm
                                                        Gardner's Son wrote:
                                                        Thu Aug 16, 2018 12:01 pm
                                                        As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                                                          How did you do it?
                                                            Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                                              Thanks!
                                                              1 million dollars net worth isn’t the same as what it was a couple of decades ago. You almost need at least 7 figures to have a comfortable retirement.
                                                              Love these posts. What is the difference between 1 million dollars and 7 figures? Zero, they are worth exactly the same.

                                                              Now, they are worth the same too, however the value provided may be different or not. In any event, if you can save up that amount or some amount that permits you to live, that’s good enough.
                                                              "One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

                                                              tibbitts
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                                                              Re: Teachers Who Have Net Worth of $1 million +

                                                              Post by tibbitts » Sat Aug 18, 2018 3:10 pm

                                                              Gardner's Son wrote:
                                                              Thu Aug 16, 2018 12:01 pm
                                                              As a retired teacher, I'm interested in hearing from my fellow Life-Giving Educators who were able to devote their lives to teaching, invest over time, may have started side businesses, and have amassed over $1 million net.
                                                                How did you do it?
                                                                  Perhaps share your net worth as a testament to other younger educators that teaching and having high net worth is possible.
                                                                    Thanks!
                                                                    I don't agree that, averaged over the entire country, it's necessarily a huge accomplishment to accumulate $1M as a teacher vs. countless other occupations with similar requirements. Also we have all kinds of posts referring to couples, and there again if both people work, I'm not seeing it as a huge accomplishment. In fact my purely anecdotal observation/guess is that it's more likely for two - or often more - people in a family to be employed at the same school as is the case for other businesses, and there may be some structural characteristic that contributes to this. Yes, in a location where teacher salaries are relatively low and benefits limited, with no additional employment opportunities that are teaching-related (some teachers may be paid extra for work during the summer, or school-related duties that aren't included in the regular salary schedule), it would be an accomplishment for a single teacher to accumulate $1M.

                                                                    You do have to account for a pension somehow, since it's typically part of the compensation for a teacher, so the typical teacher with $1M may well have much higher annual income than someone with a pension.

                                                                    hale2
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                                                                    Re: Teachers Who Have Net Worth of $1 million +

                                                                    Post by hale2 » Sat Aug 18, 2018 3:55 pm

                                                                    Ron Ronnerson wrote:
                                                                    Sat Aug 18, 2018 2:05 pm
                                                                    I’m a 43 year old teacher with a wife and kid and our net worth is approaching $1M (it’s $900k-something). Ten years ago, at age 33, our net worth was $25k. Our combined gross income has been between $100k-$150k per year during that time with an average of around $120k/year. No inheritances are involved.

                                                                    The main reasons for the growth of our net worth have been frugality and luck. We live in a VHCOL area and enjoy a nice life but do it inexpensively. We’ve been saving and investing a third of our income over the last few years. Luck has helped our assets grow. We were 100% in equities until recently (and are now at 80%). The market has been generous since we’ve been investing. The value of the Bay Area home we bought in 2009 has appreciated quite a bit too.

                                                                    My CalSTRS pension around age 60 (which my wife would continue to get if I predecease her) should be around $90k/year in 2018 dollars. Our retirement expenses should be covered by pension and social security.

                                                                    I teach at a school that is rated in the top 1% of public schools in CA (based on test scores). The parents are supportive, the principal is wonderful, and the kids are highly motivated. Teachers earn six-figures after about 10 years. The pension is obviously nice. 180 days off a year doesn’t hurt either. Despite that, there is a huge shortage of teachers where I work. No health benefits are provided and homes cost seven figures. Very few people are signing up for the deal because, while the pension and time off are great and salaries eventually go up, a new teacher can’t survive in the present moment on $60k/year in Silicon Valley. Over 10% of salary goes toward the pension, no health benefits are offered, and rent is sort of insane.

                                                                    The best parts of the job aren’t financial in my opinion. I love my job and look forward to going to work (at least most of the time).
                                                                    No health insurance? I'd be curious what school district. I know several teachers in CA. All have health insurance, and some don't even have to pay any premiums. I thought health insurance was a given for CA teachers, even in retirement.

                                                                    Woodshark
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                                                                    Re: Teachers Who Have Net Worth of $1 million +

                                                                    Post by Woodshark » Sat Aug 18, 2018 4:30 pm

                                                                    It's very possible. My wife is a retired school teacher and I'm retired from a small business I owned as a Sub S corp. Her starting salary was under 25K and after 30 years, she never made over 65K. My business averaged me about the same as some years were great and others not. We retired in our 50's as she was able to keep me under her medical insurance in retirement. Through LBOM and frugal living we have over 1 million in investments and over 2 million in net worth. No inheritance, no lottery, no windfall, just a lifetime of saving and investing. She is eligible for a pension but I am not including it in the figures above.

                                                                    Ron Ronnerson
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                                                                    Location: Bay Area

                                                                    Re: Teachers Who Have Net Worth of $1 million +

                                                                    Post by Ron Ronnerson » Sat Aug 18, 2018 5:03 pm

                                                                    hale2 wrote:
                                                                    Sat Aug 18, 2018 3:55 pm
                                                                    Ron Ronnerson wrote:
                                                                    Sat Aug 18, 2018 2:05 pm
                                                                    I’m a 43 year old teacher with a wife and kid and our net worth is approaching $1M (it’s $900k-something). Ten years ago, at age 33, our net worth was $25k. Our combined gross income has been between $100k-$150k per year during that time with an average of around $120k/year. No inheritances are involved.

                                                                    The main reasons for the growth of our net worth have been frugality and luck. We live in a VHCOL area and enjoy a nice life but do it inexpensively. We’ve been saving and investing a third of our income over the last few years. Luck has helped our assets grow. We were 100% in equities until recently (and are now at 80%). The market has been generous since we’ve been investing. The value of the Bay Area home we bought in 2009 has appreciated quite a bit too.

                                                                    My CalSTRS pension around age 60 (which my wife would continue to get if I predecease her) should be around $90k/year in 2018 dollars. Our retirement expenses should be covered by pension and social security.

                                                                    I teach at a school that is rated in the top 1% of public schools in CA (based on test scores). The parents are supportive, the principal is wonderful, and the kids are highly motivated. Teachers earn six-figures after about 10 years. The pension is obviously nice. 180 days off a year doesn’t hurt either. Despite that, there is a huge shortage of teachers where I work. No health benefits are provided and homes cost seven figures. Very few people are signing up for the deal because, while the pension and time off are great and salaries eventually go up, a new teacher can’t survive in the present moment on $60k/year in Silicon Valley. Over 10% of salary goes toward the pension, no health benefits are offered, and rent is sort of insane.

                                                                    The best parts of the job aren’t financial in my opinion. I love my job and look forward to going to work (at least most of the time).
                                                                    No health insurance? I'd be curious what school district. I know several teachers in CA. All have health insurance, and some don't even have to pay any premiums. I thought health insurance was a given for CA teachers, even in retirement.
                                                                    Many are surprised by this but it's true. This is the case for our neighboring districts too. I work for a fairly large school district, by the way. The employer offers health insurance but the employee must pay 100% of the cost of insurance out of their paycheck if they wish to get coverage through the employer. Coverage for a family of my size (3 people) runs $2k/month. Most teachers where I work either have insurance through a spouse or buy it independently. Health benefits were bargained away in the 90s in exchange for a higher salary. It works out nicely for some people but not all that well for others. For example, a teacher who gets insurance through a spouse gets a higher salary and still has coverage. When they go to retire, their pension is also higher since the salary is used for calculating the benefit.

                                                                    The district I work for pays a penalty for anyone who qualifies for a subsidy on the exchange. The penalties are a tiny portion of the district's annual budget so they don't worry about it too much.

                                                                    chipperd
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                                                                    Re: Teachers Who Have Net Worth of $1 million +

                                                                    Post by chipperd » Sat Aug 18, 2018 5:13 pm

                                                                    Jablean wrote:
                                                                    Thu Aug 16, 2018 7:19 pm
                                                                    Teachers wages haven't kept up with other wages, at least in most states, so what a teacher could do then and what a teacher can do now are apples and oranges.
                                                                    A million bucks is a million bucks regardless of wages or inflation

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