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Spreadsheet Math: Two Investments Walk Into A Classroom…

Ok, not the best title but let’s run with it. Let’s start with a question:

You have a choice between two investments of $100,000:

  • Investment #1: Earns a consistent 8% return every year (put aside the fact that an investment like this doesn’t exist at the current time; it’s been a while since you could buy a 30 year Treasury Bond with that kind of return).
  • Investment #2: Has an average return of 8% per year but has “lumpier returns” aka it has more volatile returns but the returns each year are in the top 10% of fund returns. Some years it is up, some years it is down, but overall it averages the same 8% return as Investment #1.

Which investment has a higher balance at the end of the 20 year period?

Web Quest: How Do I Buy A Stock (Or Better Yet, An Index Fund)?

A teacher at our recent FinCamp reminded me that we should not forget about the importance of the mechanics of personal finance transactions. What good is teaching students about the importance of investing if they don’t know how to go about setting up an account to buy/sell investments. While we have a activities on how to select a credit card and a bank account, we don’t answer the basic question that many young investors have which is “How do I buy a stock?”

Rather than answer this question for them, have students do their own online research to discover:

Thirty (30!) Spanish Activities Now Available

In case you missed it in January, NGPF has heard the call, and we’re beginning to translate our original activities and projects into Spanish for use with your English Language Learners. Don’t worry — we’re not relying on my own poor command of the Spanish language (muy malo) — we’ve hired an awesome translator who is working through our resources in batches of 10. With two batches now complete, we’ve got 30 activities/projects across Checking, Saving, Budgeting, Types of Credit, Managing Credit, and Investing, ready for use!

How to access the Spanish translations (3 methods):

  1. Bookmark this directory page for links directly to the Spanish and corresponding English versions of the Google docs
  2. On our website, look for activities and projects with (Sp) following their title — that denotes the resource is available in Spanish  Spanish screenshot
  3. On individual activities or projects, look for the words Spanish Version under the header and click to open the translation.   Spanish version

 

Are Spanish translations going to be a game changer in your classroom? Can you just not wait for us to release more?

What If…You Had Invested With Warren Buffett in 1965?

Interesting thought experiment (wishful thinking!) that demonstrates the power of compound interest and also that getting the market return over a long period of time hasn’t been a bad strategy either.

Warren Buffett is out with his annual letter for 2016  which is a must-read for investors because of the common sense, homespun advice from the best investor of our time. For those not familiar with Mr. Buffett’s investing prowess, check out the first page of his report which has performance data on his holding company Berkshire Hathaway Hone in on the Compounded Annual Gain (CAG) number at the bottom of the first page and check out the middle column, Per-Share Market Value, and you will see that his CAG from 1965 – 2016 has been 20.8%. Let’s have some fun with an investment calculator and pretend that you were Warren’s neighbor in 1965 and decided to invest $1,000 with Warren (equivalent to $7580 in today’s dollars) AND have continued to hold onto that investment.

Care to guess how much that $1,000 investment in 1965 compounded at a 20.8% rate annually for over 50 years amounts to?

By |February 28th, 2017|Activity, Chart of the Week, compound interest, Current Events, Investing|

Implementing “COMPARE: Making Credit Decisions” Amanda Volz-style

NGPF Fellow Amanda Volz took a fairly basic activity from our bank — COMPARE: Making Credit Decisions — and made it her own. Now, she’s sharing the strategy, guaranteed to liven up your classroom, with you. As an added bonus, the activity she’s referring to is now available in Spanish, too, so some of your English Language Learners can participate fully in this discussion-based fun. Read on for Amanda’s guest blog post…

By |February 20th, 2017|Activity, Credit Cards, Lesson Idea, NGPF Fellows|

WebQuest: How To Protect that Credit (and Debit) Card!

I am always amazed when I am searching Google for interesting news stories about credit cards how frequently the articles detail how the “bad guys” manage to steal credit card information. Identity theft can seem like an adult problem to many teens (unless their parents or they have been personally victimized), so I thought this quick WebQuest might bring the topic home to them.  I thought it would be interesting to provide an update to my earlier 2015 post titled (apologies to Paul Simon) “50 Ways to Swipe Your Credit Card (or Debit Card) Number.”

So, here’s the assignment:

Activity Idea (with Spreadsheets): Let’s Make An Index Fund

I awoke this morning thinking “how can you make index funds more tangible for students?” Why do I care about this? Anyone who has heard my rantings before either in this blog or on the NGPF podcast knows that I abhor the Stock Market Game. It teaches all the wrong lessons about investing: the short term nature of it, the “luck” factor, the highest risk strategy wins and so on. At some point, I will create a game to counter these lessons that is focused on index funds. The trick is how to make it appealing to a risk-seeking teen audience who loves the “action” of buying and selling stocks. Unfortunately good investing isn’t really about “action”, my buddy Allan Roth has it right when he says, as investors we should “dare to be dull.”

So, here’s the kernel of the idea: Have students take on the role of an investment manager hired to do the following:

Please Include Student Loans in Your Lessons!!!!

Connecting the dots on a weekend and thinking about recent student loan news. Most standard personal finance courses spend way too little time on this issue of student loans and more broadly paying for college. Why? One major reason is the national standards have not emphasized this issue of college finance (see how many times you find “college” and “student loans” in this 52 page document).

So, what are the dots that I am connecting and why the imperative to include in your curriculum? 1) almost 50% of student loan borrowers are struggling; 2) the fastest growing segment of student loan market is over 60; 3) the largest student loan servicer is being sued for“systematically and illegally failing borrowers at every stage of repayment.” Kinda makes you wonder how much #3 contributes to #1 but I digress: