Did you know teachers are more likely to become millionaires than attorneys or doctors? In this episode, PAGE Talks host Craig Harper, PAGE executive director, presents a conversation with Dr. Steve Frandsen about his book “The Millionaire and Me: A Teacher’s Guide to Becoming a Millionaire.” Steve is a career educator and administrator in a metro Atlanta school district. He presents five levers that increase your chances of retiring as a millionaire.
Dr. Steve Frandsen’s career in education has spanned three decades. Throughout his career, he has held many positions in a large urban school district in Atlanta. He has worked as a high school teacher for Spanish and English as a Second Language (ESOL), an assistant principal at the elementary and middle school levels, and a principal at the elementary and high school levels. He has also worked as an adjunct college professor teaching graduate courses in education for the past 15 years.
Dr. Frandsen holds degrees from Brigham Young University, Brigham Young University-Idaho, Piedmont University, and Nova Southeastern University. He also earned his Leadership Add-On Credentials from the University of Georgia.
Apart from spending time teaching and learning, he loves spending time with his wife and his five children.
Contact Dr. Frandsen: email@example.com
The Millionaire and Me – Buy the book from the website
The Millionaire and Me - Amazon
Are you interested in the millionaire research by Ramsey Solutions? National Study on Millionaires
Music for PAGE Talks is Inspirational Outlook by Scott Holmes
Podcast cover art by Dolly Purvis with PAGE Communications
(Timestamped notes are summarized from comments and are not intended as a verbatim transcript)
02:10 - For the past 20 years, I've been in the hiring business trying to recruit and retain teachers which led to the book.
02:29 – Recruitment to the profession is an issue because of the belief that as a teacher you're going to be on the short end of the stick when it comes to financial stability and well-being.
02:55 - When considering to be a teacher my mother questioned whether it was a good idea.
03:09 – Received the messages that you're not going to become a millionaire. You're not going to be rich. You're going to teach. You're going to fulfill your passion. You're going to impact the community. You'll sacrifice wealth and riches for the altruistic, wonderful aspects that the profession provides.
03:47 – Noticed that department head and husband had a beautiful home and lifestyle as well as most of retirees recognized by the district at the end of the year.
04:21 - They were relatively young people retiring and going off to this next chapter and they were all doing very well. And I started to think, how is this possible? How are they figuring out how to make this profession pay?
04:42 - I wanted to pass this knowledge on to new hires. They would look at me like “Why are you talking to me about investing? I’m 22. I just started teaching.”
05:15 – Assignment to learn about saving, investing, and compound interest.
05:55 – Encourage teachers to stay in the profession because they are walking away from a lot of money.
06:12 – I talk to them about how retirement works and what they are giving up.
07:00 – Three different conversations that I would have with teachers at three different times. With beginning teachers, you talk a little bit about finances and budgeting. At five years, it’s about the next steps with your career, getting the next degree. And then frustrated teachers who are about to leave, it’s “No, don't leave because of this incredible pension that we have.”
07:49 – From all of these conversations, I decided that I was going to write a book and put it all in one spot so that we can hand it to the beginning teacher.
09:22 - Most people would never believe that teachers are No. 3 on the list of millionaires behind engineers and accountants.
10:29 - That tells you that the College of Education produces more millionaires than the law school, than medical school, than tech, than computer and technology, than a lot of other professions, and it's surprising.
11:21 – A contributing factor to success is that teachers are planners. We make lesson plans every day. We know how to create a plan, and we know how to execute a plan. And we do a good job of adjusting.
11:42 – If teachers grasp the plan of how they can retire 10 years before the national average of 65, teachers retire much earlier than that in good health with lots of energy. They can put the components together and be worth a considerable amount of money at age 55 and really set themselves up for a great second chapter in their career or in their life.
13:44 - A millionaire, or a true millionaire, is just someone who has a million dollars’ worth of net worth. You add up everything they own and then you subtract everything they owe and you have a million dollars left over.
14:16 - A millionaire equivalent is a term I made up for the book. It’s that with our pension, we can have the equivalent of a million dollars of streaming money coming to us very easily.
15:39 – According to TRS (Teachers Retirement) in the state of Georgia, the average payout might be like $41,000. That means that TRS retirement is worth a million dollars. It is the equivalent of a million dollars sitting in a 401(k) that's kicking out $40,000 per year.
17:00 – In addition to TRS, teachers have opportunities to invest in 403(b) or 457 funds, and most contribute to Social Security. Those are three streams of income for retirement. If you add all those up and it equals more than $40,000 a year, that is the equivalent of what a million dollars would produce following the rule of 4 percent. Or, if it's $80,000, it would be following the rule of 8 percent, which is a little bit more aggressive, but still not wildly aggressive, according to finance folks.
18:21 – The Five Levers to become a millionaire or a millionaire equivalent. 1) Maximize your retirement plan (TRS); 2) Make the profession pay you; 3) Tell your money what to do (budgeting); 4) Put your money to work (investment): 5) Expand your options.
19:24 - The first and biggest lever that we have as teachers is TRS.
20:17 - The second lever is make the profession pay you. It didn't take long to figure out that when I started teaching at 25, 26, I was working really hard, and the people next to me were making a lot more than me.
22:37 – An advanced degree pays off in many ways beyond moving up the pay scale.
24:30 – Lever three is tell your money what to do. This one is huge because as teachers, we're used to telling things what to do. We tell kids how to walk into the classroom. We tell kids how to turn things in. We're telling people what to do all day, mostly, or we're being told what to do. We're in the telling things what to do business. And, that should apply to our money, too.
25:31 - We just have to follow basic financial rules. Our incomes, our salary, may not be as big as the next guy, but we're really good when we tell that money what to do. And that's how teachers climbed up that list so much. And that's how teachers are beating the lawyers and the dentists and the computer software guy. It's because of this third lever.
25:56 - If we if we're successful at telling our money what to do, then that leads us to Lever four which is put your money to work, which is just a basic financial principle. Anybody who's going to accrue any money needs to put their money to work. So if we can tell our money what to do, have 10 to 15 percent left over, then we take that 10 to 15 percent and we invest it.
28:15 - Compound interest is so powerful. If we invest early, we will become not only millionaire equivalent, not only a millionaire, but we will be multi-millionaires because it's that powerful. So that's the lever where we kind of dive into some basics of investing.
29:23 – Lever five is expand your options. We are professional, we're trained, and we're educated. Some of us have very specialized talents. We need to expand our options during that time that we aren't on contract to see what we can do to bring in a few extra bucks.
30:50 - Expanding your options is how can you use your skills, your time, your talents to do a little side hustle, to do some things that might help you pay off your cars quicker, increase your rate of contribution from 5 percent to 10 percent to 15 percent. How can you continue to sharpen your professional and personal saw to maximize this time between the ages of 25 and 55 that we're trying to accrue enough to last us for the rest of our lives?
32:35 - There's a pretty consistent theme about being intentional and being steady. And it's not a get rich quick strategy. This is throughout a career, being mindful of what you're doing and how you're doing it with an end goal in mind.
32:53 - I've read “The Tortoise and the Hare” hundreds of times. It's a wonderful story. And every time I read that story, it's pretty great. It's pretty consistent that the tortoise wins. We are definitely the tortoise that this profession can help us retire a full decade before the national average, having accrued a million dollars and a healthy pension. In addition to the million dollars, it is tremendous. And it's the best kept secret in the world.
33:30 - Everybody thinks, “Oh, you're going to be a teacher. You're going to be poor.” It just hasn't been my experience. I'm surrounded by folks and seen folks who retire young and not poor, time and time again. And I just wanted to put it together so it can help us recruit talent into the profession.
33:48 - This can help us when the profession is tough. Teaching is so tough. And when we're there and we're thinking this, this may not be the thing for me. But wait a second, if we understand the financial ramification, that might be enough to help us get through that tough year or that tough administrator or that tough class that's really got me on my last string.
35:01 - Financial planners acknowledge the benefit of teacher retirement.
35:38 – Discussion of varying outcomes from counseling teachers regarding financial well-being throughout their careers.
37:54 – Thank you to entire Spanish language department at South Gwinnett High School from 1998 to 2002. That first group of teachers made it possible for the principal to ask me to come back in year two. Had it not been for them and relying on them, I would have been completely unsuccessful, and I wouldn't have been surprised if they would have said, “Thank you for your service. You need to go do something else.” So that whole department was just instrumental in a young teacher's career to figure out the ropes of the profession, how to manage a classroom, how to set up a grade book and how to make this career pay off.