There’s no doubt that reading about money can be pretty boring. Writing about money can be equally as boring. I don’t always enjoy it, so why do I still attempt to crank out blog posts every now and again? Here are a few reasons that I still write:
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#1: To Change the Narrative
Okay, I’m going to be brutally honest here. I can’t stand the personal finance nonsense oozing out of the teachers’ lounge. From day one in my teaching career, I’ve heard the same old tired lines:
“Teachers ought to be paid more because teaching is such an important job. Teachers have such a difficult job, but they are grossly underappreciated and underpaid.”
Raise your hand if you’ve heard that before. In order to avoid being ostracized by my peers, I usually just nod my head in agreement whenever the woe-is-us pity party starts up. Early in my career, I would have agreed with that mantra, but over time my financial views on a teaching career mutated. For example, once I learned more about our TRS pension, I realized what a sweet deal it was for us. While teachers complained about their 6% contributions, most were totally unaware that their districts contributed another 14% to their pensions! In the days of disappearing defined benefit plans, many teachers (including the former, studlier me) simply don’t understand the value of their pension. (FYI Georgia teachers, you’re vested in your pension plan after “only” 10 years of service. At that point, you’ll be able to draw a pension at age 60.)
Another attitude shift occurred when I learned that most school districts offered two “401k” plans: the 403b and 457 plans. You know that $18,000 a year 401k contribution limit? It doesn’t apply to teachers; it’s double that ($36,000) if they have access to 403b and 457 plans. If you’re over 50, you also get to double your catch-up contributions ($6k * 2 = $12k). While most employees in the private sector are limited to one 401k plan and an IRA, teachers usually have access to four retirement plans: pension, 403b, 457, and IRA. Wow, you talk about an unreal ability to sock away some money! In 2012 my wife and I took full advantage of this information by fully funding 10 retirement accounts (yes, we had an extra one) in addition to our HSA and ESA plans. These days I openly use the term “goldmine” to describe my previous teaching jobs.
I know what you’re thinking–“Great Ed, but what good are two “401k” plans when you’re an underpaid teacher living paycheck to paycheck?” Great question! While it’s true that starting teachers’ salaries are lower than those of other fields, there are ways for teachers to increase their salaries. In Georgia teachers can: 1.) earn a graduate degree for a $6,000 a year raise, 2.) teach “extended day” for a pay increase of 10-25%, and/or 3.) coach a sport or sponsor a club for an extra $500 to $5,000. Since my wife and I both earned our master’s degrees and our educational specialist degrees, we earned $24,000 more a year ($6,000 per graduate degree) than teachers with only an undergraduate degree. Over the years we both coached sports or sponsored clubs, and I worked extended day for seven straight years at LaGrange High School. Many years my wife earned extra pay via an extended-year contract (for example, a 200-day contract vs. the standard 190-day contract).
In 1992 I earned $18,500 as a new teacher on a provisional teaching certificate. Since our return to the U.S. in 2002, my wife has earned as much as $65,000 in a year while I have earned as much as $72,000. Our combined income is usually in the $125,000 to $132,00 range. Keep in mind that these salaries are from teaching, not working as administrators. Without a doubt, these salary hacks helped us maximize our earning potential. So, when my friends and co-workers start yammering on about how underpaid teachers are, I have to suppress the urge to yell out “hogwash.” Ideally, I hope my writing helps people understand that teaching doesn’t require taking a vow of poverty and that teachers can truly build wealth on “just” a teacher’s salary. (Check out the 2016-17 Georgia teacher salary schedule, base pay excluding local district supplement.)
#2: To Show the PossibilitiesMaybe my goal of changing the narrative is too ambitious because, let’s face it, most people stay set in their ways. However, by writing I can at least give my readers a peak at our world of near endless possibilities resulting from our improved financial position. On our journey to financial independence, we have developed a wealth-building formula that has yielded unimaginable results. Here are some of the areas I’ll continue to write about:
- Hardcore Savings * Since 2003 we have saved from $30,000 to $106, 250 a year with an average annual savings of $66,300. While highlighting our savings prowess might look like bragging, my hope is that our financial numbers will inspire other to supercharge their retirement savings. In the future, my dream scenario is to get lots of reader emails thanking me for improving their financial lives; nothing would make me happier. (See the examples below.)
- Frugal Living * In July of 2015, we moved into a 2/1.5 apartment that rented for $500 a month. The apartment was close to our job sites, had reasonable utility expenses, a pool, and no lawn duties. Not only did we enjoy living there, but it was also dirt cheap. One day I jotted down our normal living expenses and realized that most months we were living on about $1,500 to $2,000. (I’m terrible at budgeting; I promise to do better starting in 2017.) Even though we were living frugally, we all enjoyed our living arrangement. The bottom line is that it is possible to pare your costs considerably and maintain an awesome lifestyle.
- Travel and Adventure * Now that we are FIRE’d, we are time rich with enough money to maintain our preferred lifestyle. In 2014 we became travel hackers (thanks to #1, #2, #3, #4) and began amassing a cache of 3 million hotel and airline points. Our new hobby means that we can pick exciting locales to practice our frugal living. In November, we’ll travel to Cancun, Mexico where we’ll stay indefinitely. After Mexico, we plan on slow traveling through various sweet-spots around the globe. How exciting is that?!
#3: To Satisfy My Readers
Every blogger probably starts blogging with a nagging sense of doubt. Is anyone reading my posts? If so, do they like my ideas? Do they think I’m an idiot? Eventually, I began to feel the love from my readers. My first memorable experience happened at FinCon15 in Charlotte when a guy approached me and said, “Hey, you’re Ed Mills of the Millionaire Educator, right?” I answered yes thinking he was going to give me his list of top ten reasons why my blog sucked. To my amazement he said, “I love your stuff” and walked off in a hurry. I honestly wish I had gotten a picture with my first fan; it was so flattering.
Over time I have received a steady stream of emails and comments from readers telling why and how much they like my posts and ideas. I always read the encouraging comments to my wife because the positive energy they provide is exhilarating. Check some of my favorite comments below (the names have been changed to protect the anonymity of my millionaire readers).
Natasha and Roel from Florida: “Hi Ed, I first heard your story on the Mad Fientist podcast and was impressed. I played it again at home with my wife listening and could see the wheels turning, so thank you for that.”
Carlitos: I habitually listen to your interview with the MadFientist…I just wanted to thank you for being such an inspiration!
Carolina: I wanted to thank you for spreading your message. Because of your story, I became aware of my eligibility for the 457b, the idea of maxing out these accounts, better understood the fees associated with my retirement plans, and gotten the courage to implement these ideas. In the past ten months, my husband and I have been able to save $97,663 primarily in retirement accounts. (Ed: It looks there is a female version of me out there saving like a crazy fool…kudos to you, financial soulmate!)
Pedro: “… your website…helped me nail down the teacher-specific nuances of investing…There are now 3 teachers in my department that are doing net worth tracking together, setting yearly goals, and working towards FI. Your site has been one of the major catalysts for that. Keep posting and adding concrete information for people. You are not just sending these posts into the abyss, people are reading them and getting great value from it.”
Teodoro: “Ed, as I posted on MF, I like what you do. Press on.”
Gee Bee: “From one teacher/coach/runner to another, you’re an inspiration.”
Felipe: “Love what you are doing. I am impressed with your savings and investing habits. Very Nice. Congrats on obtaining a 1M Net Worth.”
Marta: “I heard you interviewed on a podcast today, right after I spoke to a potential financial planner. I was crying on the phone because I have raised three children who are very happy and successful and I am 66 y.o. and was told today that there is no way I will be able to ever retire… Your story is impressive and I’d like to know if you can help me get on track.” ( Ed: This email almost made me cry!)
Andy: “Keep doing a good job and getting the word out about investing…”
Daniel: “I find your story inspiring and would be interested in learning more.”
Rawsty Swayne: “Thanks for your contribution to the Financial Blog / Podcast realm…your style really clicked with me…Thanks for sharing your story and journey on the path to $1 million, and eagerly anticipate reading your future updates!”
Marie: “I really enjoyed hearing about your life and I think your attitude rocks! 🙂 Very inspiring interview, that I will recommend to my friends that are teachers…You and your family are welcome to stay at our condo for a couple days…” (Ed: An offer to stay with a French-speaking family in Canada!)
Catherine: “Yours is the first I heard of someone moving so much to take economic advantages. How interesting!”
I love hearing from my readers, so if you like something I write, please let know. Even better, share my best work with your teacher friends so that they can become millionaires like the rest of us.
#4: To Organize My ThoughtsEveryone that knows me recognizes that I have a manic side. After listening to one of my podcast interviews, a blogging buddy told me that I sounded like a “savant” when I started rattling off 403b-457-IRA-“free money” figures. (I hope he meant that as a “learned person,” not like the guy below.) I like to think that my rapid-fire, scattered thinking is a sign of high intelligence. Unfortunately, many of my greatest thoughts get pushed out by even greater thoughts. The obvious solution is to simply write my ideas down somewhere, anywhere.
Blogging provides me with a a double win. First, by writing my thoughts and ideas down, I am able to capture them before they fly off. Second, once I have my awesome, but disjointed, ideas on cyber-paper, it is easier for me to organize and polish them. Eventually, my ideas get distilled into impressive blog posts like the one you’re reading right now. My end goal is to consolidate what I’ve learned over the last 20 years into a personal finance/FIRE book for teachers and the general public. In order to get such a book published, I need to get my ideas on paper, so that’s why I’ll keep slogging away on this blog.
Okay, those are my main reasons for writing. Going forward I’m planning on a weekly post every Saturday. As I finish off a few on my half-written posts, I’ll start on my WILF series (What I Learned From, not to be confused with…). Finally, I’d like to thank all of the bloggers out there (you know who you are) who constantly cajole, kick and prod me to write more. Sometimes my lazy, FIRE’d butt needs a swift kick…ouch!
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First of all, we can’t complain about our salaries and not saving enough. It is stories like your own that in part motivated us to get our act together to save more.
I think irrespective of the situation, there are common elements that apply to us all. Many folks don’t even know what opportunities are available regarding savings accounts, including HSA’s, and a little bit of digging into benefits information is easy. At the end of the day it is discipline that is required to live a little below your means and let that behavior start to snowball. Like compound interest, not long before the good effects start to appear….
Impressed by your miles account. We have been at travel hacking for about a year and have amassed a few hundred thousand. Not hardcore but enough to do a lot for, well, free!
Mr. Pie, I imagine 99% of the working world thinks they are underpaid. Before I understood the opportunity in the U.S., I know I complained more about “how bad I had it.” As I got older and reflected on some of my travels abroad, it became embarrassing to complain about poverty and lack of opportunity in America. I saw real poverty in: Honduras where people lived in mud huts with thatched roofs, India where mothers pushed their children up to car windows in hope of getting 10 cents, and Saudi Arabia where TCN’s (third country nationals) worked as near slaves in the dessert heat. Those are just three examples that spring to mind; I could probably list 100+ such examples. Over the last ten years I have also picked the brains of many immigrant kids from India and Mexico. It amazes me how well many of these individuals do financially in spite of the fact that they arrive here with virtually nothing other than their desire to succeed.
As crazy as it may sound at first, teachers have MORE savings plans than 99% of the U.S. workforce. Here are 8 potential savings money buckets available to teachers: pension, 457, 403b, 401a (in lieu of social security in some districts), IRA, HSA, ESA, and 529 plans. These savings plans allow for incredible hardcore savings opportunities. However, if you decide to wallow in your pity and accept the social narrative that that all teachers are poor, you will most likely squander your savings opportunities and save nothing. The realization that a teaching job affords tremendous financial opportunities is a revolutionary idea that I’ll continue to push. That realization added to some basic personal financial knowledge and a dollop of self-discipline would lead to hundreds of thousands of millionaire educators, right?
As for our travel hacking points, we look forward to using some of them within the month. Other than a few hotel stays, we’ve haven’t used many of our points, so it will be nice to finally put them to use. Stay tuned for more travel updates and thanks for the comment. Ed
I am going to have to come back to this post and read it 87 more times. But I had to let you know right away that I am so glad that you write. I am trying to so hard to get my investing/saving self in order, and it helps so much to have someone in teaching pave the way for me!
Thank you Penny! I’m glad you like some of my ideas. If I didn’t write some of them down, they would rattle around in my head and drive me crazy. The beauty of the internet and blogging is that eventually a few other “crazy” people come across your posts and actually like them. The next thing you know, a few hundred teachers are saving $25k+ a year and planning for their financial independence instead of the 30-year prison sentence. I view FIRE as revolutionary for all people regardless of profession. It’s time for teachers to pick up their financial pitchforks.
First, I love reading your work! It’s incredibly inspirational and I hope you keep blogging as you continue on your incredible adventures.
As a former teacher, I agree with a lot of your assessments – the savings plans and pension available to all teachers are incredible (if underutilized by the vast majority of teachers, unfortunately!). I left the profession, however, to achieve some semblance of work life balance. When I started teaching I was working 80+ hours a week and never less than 60+ even after 5 years of experience. I also taught in North Carolina, where I never earned more than $45,000 per year. If I’d been able to work a normal 40 hour week, I agree that the salary when combined with the benefits would have been an incredible deal. Many of my fellow teachers, however, were unable to achieve this. I think that may account for some of the frustration my former coworkers felt regarding pay.
Perhaps I could have left my beloved Title-I school for a different environment, or looked at a different grade level or specialty, or simply been more restrictive with how much time I was willing to spend on lesson planning and grading. I admire that you’ve been able to be so flexible and driven in your career and have clearly reaped incredible rewards from doing so!
Welcome Casey,
Thanks for your encouraging words. I totally hear you on the work-life balance issues. As all teachers know, teaching bleeds over into all facets of our lives, and it’s often impossible to shut it off. My hope is that if teachers are going expend so much life energy in the profession, they sure is heck had better make it count financially. All the physical, mental and emotional energy that teachers burn should result in some degree of financial stability, and eventual financial independence. (Yes, I’m a dreamer!)
If you ever want to teach again, just remember that it is easy to jump back in and work your plan. I advise against taking a 30-year view of the profession, and instead recommend doing a few years at a time. We’re not working this year nor next, but if we ever wanted to teach again, we could certainly find two jobs in a small town with all the retirement plans we need. The end result would be at least $100,000 of savings in our various accounts. Knowing that we could use of 100% saving “trick” to dramatically grow our net worth makes even difficult jobs seem appealing.
If you would, please send some of my posts to your teacher friends. Tell them they don’t have to be as “hardcore” as we are to improve their finances. I’d love to hear more success stories from teachers. Thanks for visiting and the comment. Ed
Welcome Casey,
Thanks for your encouraging words. I totally hear you on the work-life balance issues. As all teachers know, teaching bleeds over into all facets of our lives, and it’s often impossible to shut it off. My hope is that if teachers are going expend so much life energy in the profession, they sure as heck had better make it count financially. All the physical, mental and emotional energy that teachers burn should result in some degree of financial stability, and eventual financial independence. (Yes, I’m a dreamer!)
If you ever want to teach again, just remember that it is easy to jump back in and work your plan. I advise against taking a 30-year view of the profession, and instead recommend doing a few years at a time. We’re not working this year nor next, but if we ever wanted to teach again, we could certainly find two jobs in a small town with all the retirement plans we need. The end result would be at least $100,000 of savings in our various accounts. Knowing that we could use of 100% saving “trick” to dramatically grow our net worth makes even difficult jobs seem appealing.
If you would, please send some of my posts to your teacher friends. Tell them they don’t have to be as “hardcore” as we are to improve their finances. I’d love to hear more success stories from teachers. Thanks for visiting and the comment. Ed
Hey Ed… Chris here again! Love your stuff. I am also over from Rockstar. We have several things in common. We are both passionate about finance, both teachers (I teach shop) and love to travel and meet new people. If you and your family ever visit the Northwest would love to show you around The Gorge, hang out have a beer and talk finance.
Thx again!
Hola Chris,
Beer and nerdy FIRE talk? Count me in! Even though my beer consumption is at an all-time low, I’ll break my low-carb protocol for you. I’d love to see more of the Northwest, and I’m sure my son would love the region. (I want to see more of the NW because I’m a Squatch aficionado…it’s my guilty obsession.) Thanks for reading and the invitation. Ed
Yea…I can take you to where us locals go…crazy rock hops up beautiful gorges, mountain views, waterfalls etc. I can’t wait to share. Here’s a teaser:
https://www.google.com/search?q=columbia+gorge+images&safe=strict&espv=2&biw=1280&bih=894&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwiXrZGa7dXPAhWLq1QKHSGADnIQ7AkINQ
I listened to your podcast with MadFientist last night….fabulous!
Picture – Mount Alice,
Seward, Alaska
Love your posts too. For over half of my career I bought into the traditional 30 years till pension time. Then I saw the light and will be able to cut out the last 5 years. I missed the ER boat, but will be FI and under 54 when the last school bell rings.
Alaska 49, thanks for the photo, it looks great on the post. I also had a long-term view on teaching, but I realized that I would never be able to pull it off. Many people talk about teaching as if they were riding out a prison sentence. “I’ve only got 12 more years until I can retire.” That is no way to live, and I don’t want to be taught by a teacher in such a mental state. Your extra five years of “non-work” will be true freedom…enjoy them. Ed
Hey, I submitted my resignation last week and let my staff know as well. These next four months till Freedom may go sloooow. Less than 100 school days. Woot woot! Out at 52, Pension, 403b, and Roth IRA. Fund those IRA’s and 403b’s folks.
Alaska 49,
Beautiful! You’ll probably find the job more enjoyable now that you don’t need it. Be ready for lots of questions on how you did it on “only a teacher’s salary.” Congrats!
It’s been a year of retirement now, wow, life is good. I spent the last two summers as a National Park Ranger and loved it. Thought about subbing just for kicks, this Fall but changed my mind when I stopped by the old school to drop some stuff off today…saw the same three kids sitting in the office waiting to talk to the principal….hmmmmm, been there, done that, no thanks.
While I’m not a teacher, I have learned new concepts and have been encouraged by your website to increase my savings and decrease my taxes. This year I am on track to save 55% of my salary. This year is the first year ever that I have fully funded my 401k. I thank you!!!!!
Ps: I found your website early last year and last year I was able to save 43% of my gross income. Up from around 20%. THANK YOU!!!!!!
ElleX,
Now that’s what I like to hear! Congrats to you on working your plan; many people see the financial light but fail to follow through. Not you! Your savings rate is awesome, keep it up. Thanks for making a great morning even better, Ed
Hi Ed,
You mentioned travel hacking…sounds great. Can you suggest a good place to start to learn the ins and outs?
Thx!
Chris,
That’s the easiest question I’ve had in a while: Travel Miles 101. Brad and Alexi do an awesome job walking a newbie through the Byzantine world of travel hacking. Their free course is delivered via email and consists of a daily article and video over 20 days. It’s amazing how much you’ll learn in 3 weeks. You can’t go wrong with this course. Ed
As a private sector worker, it always annoyed me how supposedly underpaid public sector workers trivialized the value of their pensions. But an equivalent commercial annuity costs hundreds of thousands, possibly a million (especially at today’s interest rates). Not to mention a great hedge against conventional investing.
Yes, our pension is a valuable part of retirement. I should get about $24,000 a year when I turn 60. My wife will get $18,000. Not a ton, but enough to cover a lot of our expenses. Many teachers do not understand how good they have it when it comes to their pension.
Wow…how many years will you have in?
I have almost 17 years and my wife has 13.
Georgia has an amazing retirement plan. In Washington we get 1% per year. At 25 years I will get $1000 a month. Out of that we have to fund our own health insurance leaving us negative until Medicare. Do you get 2% per year?
Our formula is (2% * years worked) * highest 2-year salary average. I agree with you that our pension is really good, but most of my co-workers don’t realize how good they have it. Most complain that they “only” get 60% of their salary after working 30 years. That 40% gap could be reduced via retirement savings, but who in the heck does that? Humans are fun!
In AK, we have three tiers. I am in tier two so that means 2% a year for the first 20 years, anything beyond that is at 2.5% of the average of your three highest years. Not bad…my son in the private sector just got his first job…signing bonus, free grad school, snack room, matching contributions to 401k, and discount stock purchase plan. Of course we set up his IRA years ago.
It sounds like you taught your son well. Way to go Dad!
True! Thanks for continuing to write. We appreciate your perspective !
Hope you blog about homeschooling. I keep reading anecdotes about homeschooled kids being better prepared academically and well adjusted overall. Coincidence?