Tim Ranzetta

/Tim Ranzetta
­

About Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

What’s New In Behavioral Economics?

I thought I would highlight some recent behavioral economics resources that caught my eye recently:

  • ArticleHow Behavioral Economics Can Help You Retire Rich (Bloomberg article). Have your students read the article and ask them ONE action they will take based on these findings. Here are some of the interesting experiments described:
    • How to get people to save more with their tax refunds: “In one experiment, a control group of users was sent a simple text after a refund showed up in checking. It asked what percentage of the refund they’d like to save. The answer: an average of 10 percent. The experimental group was messaged before getting any refund check. Its text said that members might get a tax refund and asked what percentage of it they’d want to save. They answered 15 percent.”
    • How the 401(k) structure encourages savings: “A 401(k) plan is a pre-commitment device. “Imagine a world in which you didn’t have 401(k)s and every month you decided how much to save,” Ariely said. “It would be a terrible world, from a savings perspective.” Even better are automated programs that bump up contributions into 401(k)s. Fidelity Investments did some math on that. They used the example of a 25-year-old employee making $40,000 and getting annual raises of 1.5 percent after inflation. If she bumped up the percent of salary going into a 401(k) plan by 1 percent every year for 12 years, she’d have $1,930 more (PDF) in monthly retirement income.
By |March 8th, 2017|Article, Behavioral Finance, Savings, Video Resource|

NGPF Podcast: Tim Talks To NGPF’s Jessica Endlich About How To Teach Investing In 2 Hours

Jessica-Headshot-150x150

We like to try different things at NGPF so this week we decided to take a new tack with the podcast and use it to discuss a recent lesson we created, “Teach Investing in 2 Hours.” The lesson’s title matches its goal to teach students in a compressed time frame enough so that they could confidently make a wise choice for their 401(k) (or other retirement) plan. We have heard time and again from educators that investing is the most difficult topic for them to teach their students. The seemingly innumerable investing options (where do I start and end?), the confusing jargon (how do I explain a P/E ratio to a novice investor?) and the lack of experience (I need to be able to manage my own investments before I can teach others) all hinder their performance. With the world moving away from defined benefit plans (pensions) toward DIY  or defined contribution plans, young people need to understand that their investment choices will impact their options, such as when they will be able to retire. We had fun developing this lesson and hope this podcast piques your interest enough to try

By |March 7th, 2017|Investing, Lesson Idea, Podcasts|

Interactive: What’s the S&P500?

Here’s a great interactive for students who struggle with the concept of the S&P500 or of an index or mutual fund. For a math teacher, this interactive would be percentage heaven! I blogged about this in October 2014 when most of you were NOT reading this blog so definitely worthy of a repeat post. I have added better questions for your students to answer too. From finviz.com comes this great visualization of the S&P500:

Here’s a description of what you are looking at:

Finance in My Life: What If That Savings Bond Was An Index Fund?

I was cleaning out an old drawer and thought this might be be a fun exercise for those who want to bring some math into their classroom and also compare the returns on stocks and bonds:

IMG_8262

I received this savings bond in April, 1980 for winning an essay contest put on by the local Elks Club. The topic: Patriotism in America. This was the time of the Iranian Hostage crisis and I remember writing about how local communities were supporting the hostages and their families in so many ways. This discovery had me wondering about  a few things:

By |March 5th, 2017|Current Events, Index Funds, Investing, Math, Research, Stocks|

Your Weekend Podcasts

Oops. Meant to get this out on Friday. Here’s what I have been listening to the past week (or hope to listen to soon):

  • Bill McNabb, CEO of Vanguard Group (Masters in Business with Barry Ritholtz; over one hour). Vanguard recently crossed $4 trillion in assets under management. McNabb describes why index funds are increasing their market share, how Vanguard’s robo-advising business is growing, and the importance of fees when it comes to investing over the long-term. For those interested in learning more about index investing, this is a great primer! McNabb also shares some valuable career advice that he gained from an unlikely mentor.
By |March 5th, 2017|Audio Resource, Index Funds, Investing, Policy|

The Money Question: Do You Want Overdraft Protection?

Thanks to Mountain View High for inviting me to their AVID class last week (and for the next 7 Thursdays) to teach personal finance. Today’s topic was “How To Manage Your Checking Account.” I started with the Bank role play activity to highlight the questions that students should be prepared to ask PRIOR to opening an account. Asking the right questions has to be the foundational skill we need to develop in any financial education course.

The students responses included the importance of FEES with several discussing the pain that they felt when overdraft fees hit their account. During the role play, I asked the “money question” that all new accountholders will be asked when opening an account: “Would you like overdraft protection?” 

What Percentage of 18-22 Year Old’s Credit Applications Declined?

Answer (from ID Analytics report): 72%

Screen Shot 2017-03-01 at 8.47.22 AM

Questions for students:

Question of the Day: Why Are Car Insurance Rates Going Up?

Answer: More accidents due to “distracted” drivers.

Ok, I know you are not teaching a driver’s ed course, but this is an incredibly important message to get across to new drivers: Don’t Text While You Drive! Here’s the data showing the increase in car-insurance premiums due to more driving and more crashes (from WSJ (subscription)):