Monthly Archives: December 2015

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A New Spending Philosophy: Buy What You Love!

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You can always count on Carl Richards, NYT columnist, to provide advice contrary to popular opinion. In this column, he he eschews advice to find the cheapest and describes the tortuous process he went through before buying a “very expensive” bike:

“Following weeks of buyer’s remorse that more closely resembled terror, I came to realize something that is going to sound crazy. Buying this incredibly expensive bike was one of the best financial decisions I’ve ever made. I understand that writing $5,000 and the words “bike” and “smart financial decision” all in the same sentence sounds absurd, but it’s not.

This was a fantastic, rational, smart financial decision. And I know that goes against everything you’ve heard from every personal finance adviser out there. They’re always telling you how to save money, how to reduce expenses, how to buy cheaper. Right? Cheaper, cheaper, cheaper. What I’m saying is, that’s a shortsighted message that we need to change.”

He goes on to enumerate five reasons that buying what you love (even if the purchase price is more expensive) pays off in the long run:

By |December 23rd, 2015|Audio Resource, Behavioral Finance, Purchase Decisions|

Video Resource: Can You Trust A Financial Advisor?

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Incentives are a key part of understanding any financial transaction. What are the incentives of the person sitting on the other side of the table? Does the financial advisor recommending an investment that he/she earns a large commission on really care about the long-term performance of that investment? Students may be interested to learn that advisors today do not have a responsibility to their clients first. But that may be changing…

 

The NewsHour (5 minute video) reports on the fight over new regulations to ensure that financial advisors put the interests of their customers first (are you surprised that this is not a requirement already?):

Question: What is One Question You Should Ask Before You Take Any Job?

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Answer: What is the culture of the organization?

From NY Times:

When it comes to landing a good job, many people focus on the role. Although finding the right title, position and salary is important, there’s another consideration that matters just as much: culture. The culture of a workplace — an organization’s values, norms and practices — has a huge impact on our happiness and success.

So, how do you get at this concept of culture? The Op-Ed writer has a simple way of getting at this issue:

Ask people to tell you a story about something that happened at their organization but wouldn’t elsewhere.

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Check out this NGPF Activity: Creating a Resume and Cover Letter

 

 

By |December 23rd, 2015|Career, Question of the Day|

These Stories Will Inspire You…

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Quick scan of stories to put you in that Holiday spirit:

  • Secret Santa hits Detroit area for eighth straight year and hands out $14,000 to strangers (USA Today)
  • This company lets employees choose which local charities to support (Quartz)
By |December 23rd, 2015|Behavioral Finance, Generosity|

Most Popular NGPF Blog Posts of 2015

Looking for new ideas for your classroom for 2016? The NGPF Blog can be a useful place to find charts for your students to analyze, questions of the day to use as bell ringers to get class off to a good start or current events to stay atop trends in personal finance.

Here were the top 10 NGPF blog posts for 2015 (as of December 23rd)…drumroll please:

  1. Question of the Day: How Much Does the Average Meal Plan Cost?
  2. Chart: How Much Is That College Major Worth?
  3. Question of the Day:  What Fraction of U.S. Millionaires are Professional Athletes?
  4. Activity Idea: How To Make Credit Scores Engaging
  5. Question of the Day: What’s the Average Number of Times a Customer Overdraws Their Checking Account?
  6. Simulation: How Does Online Banking Work?
  7. Activity Idea: Student Loan Repayment
  8. Looking for Great Hands-On Budgeting Activity?
  9. Video: Why Are Teenagers So Brand Conscious?
  10. Simulation: Think You Can Time the Market?

 

NGPF’s Year in Review

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Thank you to all the personal finance educators striving on a daily basis to improve the financial capability of our students. We thank you for your efforts and for your support this year. Your ideas for new offerings, your words of encouragement, and your suggestions are always appreciated. We are here to serve your needs so please keep that feedback coming. As I reflect back on our year, I marvel at what our team accomplished in both meeting your needs for new content as well as developing new professional development opportunities.

Our 2015 Year in Review:

Writing Assignment: Write A Letter To A Friend/Sibling/Parent To Give Financial Advice

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I got this activity idea from this Kiplinger article.  In the article, the writer describes a letter he wrote to his 20-something son to explain investing.  His son found it helpful so the writer decided to share it with a broader audience.  Here is an excerpt:

Build a solid base. For longer-term money, such as money in your 401(k) plan or IRA, you can afford to take risks in the stock market. Stick with mutual funds, which let you diversify or spread your risk.

The best funds to start out with, in my opinion, are index funds, which try to match a particular benchmark, such as Standard & Poor’s 500-stock index or a total stock market index. Another benefit of index funds: They have very low fees.

An exchange-traded fund, or ETF, is a kind of index fund. ETFs are popular because their fees are even lower than those of index mutual funds, and you can trade them throughout the day like stocks. We’ve compiled our favorite ETFs into the Kiplinger ETF 20.

The Powers of Persuasion: Lessons in Advertising

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I saw this US News and World Report article titled “7 Tricks Advertisers Use to Make You Spend Money” and immediately thought it would be fun to pair with a series of advertisements. The assignment is simple:

  • Students review the advertisements (see below) and indicate which of the 7 tricks the advertiser uses (several of the ads may use multiple tricks):
    • Appealing to greed or other vices
    • Exciting our emotions
    • Suggesting that everyone else is doing it
    • Using attractive people in advertising
    • Employing repetition
    • Glossing over cost
    • Making you laugh
  • Students indicate which of the 7 tricks they believe are most effective for them and their peers and discuss the reasons why.

Here are some commercials to get you started: