New teachers are often shackled by student loan debt. Many defined benefit pensions are shriveling. Teacher’s salaries aren’t rising with inflation.
It’s a familiar story, regardless of profession. But many schoolteachers are trying something different. They’re thinking (even moving) way outside the box. Some make extra money selling lesson plans through Teachers Pay Teachers. Others move overseas.
Frugal teaching couples, if they pick the right schools, can save $100,000 USD or more each year. One single friend of mine teaches at Singapore American School. She’s raising a child on her own. Each year, she invests between $55,000 and $60,000 into her portfolio of index funds. To attract new teachers, the school recently increased its starting salaries by more than $11,000 per year. That’s an extra $22,000 for a new teaching couple.
Some teachers become millionaires after just ten years. That describes Eric Baland and Alyssia Hunter. Last year, the married couple saved $70,000. Their net worth is now $1.2 million. They teach at the Qatar Academy in Doha, Qatar. The school lists its available positions online. “This is our third year here,” says Eric. “We saved a similar amount at our previous school. We taught at Seoul Foreign School, in South Korea.”
Eric and Alyssia enjoy traveling and competing in triathlons. “But things slowed down a bit after we had our son,” says Eric. He describes Doha as an easy place to live. “We have access to great western food, it’s safe and there are plenty of recreational activities available.” The downside, he says, is that there’s little integration with the local culture. As with many international schoolteachers in the Middle East, they live on a large compound.
Bob Richards (I’ve changed his name and some personal details) used to work at the International School of Azerbaijan. Azerbaijan is a transcontinental country. Part of it is in Eastern Europe. The other part is in Western Asia.
“Teaching couples can save up to $80,000 a year there,” he says.“The [financial] package is awesome. The school is located in the city of Baku. It’s relatively modern, safe and there are plenty of great, inexpensive restaurants. The people are super-friendly, the work load is not too demanding and students and parents are a pleasure to work with.”
I asked about a downside. “Traffic is chaotic,” he says, “But taxis are cheap so you don’t always have to stress about driving.” Bob also loved the additional perks. They included free, worldwide medical and dental coverage for his entire family. Each May, he received a cash bonus to fly his family home. He also received a separate holiday bonus to fly his family away for “Rest and Recuperation” once a year.
Companies, like Search Associates, can help teachers find such jobs. But most international schools don’t pay well. Other high paying schools exist where you least expect them.
Jenny and Bob Klein (I changed their names to protect their identity) teach elementary school children at Ihsan Dogramaci Bilkent Erbil College, in Erbil, Iraq. It’s not for the feint of heart. But they enjoy living there. “We saved $90,000 USD last year,” says Jenny. “That’s typical at our school. Some couples save more.”
Much of the savings come from the low cost of living. According to Jenny, “Fruit and veggies cost 20 dollars a week or less. A bottle of beer costs a dollar in the store. Wine is sometimes as low as $5 a bottle.” She adds that the locals are friendly towards foreigners.
“We can buy cars cheaply and be independent. The school offers a free Master’s degree program offered by our partner university through video conferencing.” Despite enjoying the culture, she’s aware of the country’s risks. “We are in a war zone,” she says, “The airport can be closed periodically, family and friends back home worry, teachers at the school are of varying backgrounds. Some are effective educators. Others aren’t. It’s also a new school that’s going through some teething pains.”
Other teachers prefer to work where it’s safer than home. In 2013, the World Bank said there were 4 homicides in the United States for every 100,000 people. That number is at its lowest point in years. But it’s three times higher than the murder rate in China and almost four times greater than in Japan or Singapore.
Sarah Donovan is in her second year at Concordia International School, in Shanghai, China. The single teacher saved $40,000 last year. “The school provides housing,” she says. “I have a two-bedroom, two-bathroom apartment about a 15-minute walk from the school. I also have a helper who cooks and cleans for me two days a week.” The school pays well, but says she was also frugal last year. She enjoys traveling cheaply around China. “I also love my coworkers and the school’s administration. The school has great resources and a focus on holistic education.”
The downside, she says, is the poor air quality. It’s much cleaner than Beijing. But Shanghai’s air quality leaves much to be desired.
International schools come in two categories. Most are for-profit. Others aren’t. For-profit schools have shareholders. They limit teachers’ salaries, benefits and school facilities. But some pay well. Frank and Jill Smith (I’ve changed their names) teach at GEMS World Academy in Singapore. It’s their first year at the for-profit school. “We’re saving about $7,000 per month,” says Frank. “We’re on target to save $70,000 during this school year.”
They enjoy vacationing in other countries throughout Southeast Asia. “It doesn’t cost a lot to do that,” says Frank. “We live in a condo that overlooks a golf course. It has a great pool and a handy little gym. We couldn't afford this kind of lifestyle at home.”
Such a savings rate could dramatically boost their wealth. Over the past 23 years, Vanguard’s Balanced Index fund averaged a compound annual return of 8.2 percent per year. If the Smiths invested $70,000 per year at such a rate, for the next 20 years, it would grow to more than $3.5 million dollars.
Eric Baland, however, gives fair warning. Despite the high salaries at his school, in Qatar, most of the teachers don’t save much. “Many teachers live and work in the Middle East to live the high life. They drive Hummers, enjoy weekend 'staycations' at 5 star hotels, and drink copious amounts of expensive liquor.”
It doesn’t matter how much you make. How much you can save is far more important.
*All savings rates above are in U.S. dollars
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller, Millionaire Teacher and The Global Expatriate's Guide to Investing: From Millionaire Teacher to Millionaire Expat.