When he started falling down a personal finance rabbit hole a little over five years ago, Shaun Morgan, 31, realized that a lot of the classic advice didn’t apply to him.
Morgan, at the time a 7th grade world history teacher, couldn’t relate to podcasts telling him to negotiate a raise or to pick up overtime, as teachers typically have union-negotiated salaries. Getting a 401(k) match, often an early step in financial frameworks, doesn’t apply to public school teachers who have a 403(b) instead.
“There just weren’t many people talking to teachers about personal finance,” he says.
So, in addition to his full-time job as an educator, Morgan began talking to his peers about money, at first by blogging and doing virtual summits, and now by hosting “The Teacher Money Show,” a podcast focused on helping teachers build wealth. He currently works as an administrator and personal finance teacher at an online public charter school.
In a profession largely seen as undercompensated, Morgan says the much of the work teachers have to do around money comes down to mindset.
“I think the most important thing is for teachers to get over this ‘I’m a teacher, therefore I’m poor’ mentality,” he says.
Here are his top tips for educators hoping to build wealth.
1. Don’t take ‘the teacher vow of poverty’
Morgan has a name for the notion among teachers that they’re not supposed to get rich: “the teacher vow of poverty.”
Many educators “become a teacher, and they go to the lunch room and they hear, ‘Oh, I’m poor. I’m never gonna make enough money,'” Morgan says. “They just hear it again and again and again. They don’t get a chance to believe it’s possible to be rich as a teacher.”
But Morgan says it is possible. He points to a study of 10,000 millionaires by Ramsey Solutions indicating that teaching is one of the most common professions among those with seven-figure net worths.
Part of that comes down to how common teaching is as a profession, Morgan says. But part of it has to do with savvy money management — even on a nominally low salary.
“It’s not about how much you make. It’s about how much you keep,” Morgan says. “And you have a lot more control over that than you think.”
2. Be smart about how you save
One way teachers can build long-term wealth is by investing in a 403(b) — a workplace retirement plan offered to many public sector employees.
It can be tempting for educators to follow blanket advice for more common 401(k) plans, but 403(b) plans come with an important distinction, Morgan says. While 401(k) plans are subject to ERISA laws, which require plans to meet minimum standards for investor protection, many 403(b) plans are not. That means 403(b) plans can be full of providers selling funds with high fees or products, such as annuities, that might not be appropriate for some teachers, Morgan says.
What’s more, many schools’ plans have dozens of vendors to choose from. “Who has the time to sort through and find the right one?” Morgan says
Research has shown that high investment fees are a huge drag on long-term returns. Plus, without certain investor protections, plan sponsors may be incentivized to sell you products that are inappropriate for your financial situation.
For teachers looking to save for retirement, finding a good, low-cost provider — and not just going with the one who brings donuts to school one morning — is an important consideration, Morgan says.
His recommendation: Head to 403bwise, a nonprofit which helps inform teachers about what plans are on offer in their district. “Their whole mission is to educate people on the 403(b) and to help them choose the right one,” Morgan says.
While teachers may not make as much money as those in other professions with comparable levels of education, they do enjoy some unique financial advantages.
Public school teachers, for instance, typically earn a pension — a benefit that has all but disappeared from the private sector, and one that can be worth more than you think, Morgan says.
“If you’re getting $40,000 a year in a pension, that’s the equivalent-ish of having $1 million in a retirement account and withdrawing 4% a year,” Morgan says, referencing a common retirement income strategy. “That’s a big deal.”
Teachers looking to boost their income have some unique tools, too. Public salary transparency means that educators can generally see how much more they’d make if they moved to a different district, Morgan says. And having a couple of months off in the summer presents opportunities to bolster your income with a side hustle.
Ultimately, though, “money doesn’t matter as much as your freedom and your happiness,” Morgan says.
Teachers, like any professional, can use their money as a tool to buy themselves comfort and flexibility. Saving prodigiously, he says, gives educators the freedom to take time off, approach their profession on their own terms or even retire early.
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