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Article: How Online Shopping Makes Suckers of Us All

Rather long (about 15 minute read) but intriguing article from The Atlantic that provides great context for trends that I have blogged about the growth of online shopping (here and here). The article describes how in this era of “big data” retailers are harnessing consumer information to price discriminate and obliterate the concept of a fixed price.

Here are a few excerpts:

Writer’s Workshop: Write A Letter To A CEO (And Get A Response)

A recent Ron Lieber column in NY Times got me thinking about a useful skill that all young people should have: how to advocate for oneself in a manner that people in power will respond to.

Here’s the crux of his column:

Question: What Is Your Most Valuable Asset Today?

Answer: You!

To a student with little in the way of financial assets, this is a critical question for them to answer. Why? Because it provides them with the right mindset as they are coming to conclusions about their post-high school life.

From “Of Dollars and Data,” one of my new favorite blogs:

Nearly all articles written about investment and personal finance (mine included) focus heavily on financial assets despite the fact that most of your value (like mine) is likely not contained within financial assets. Most of your financial value is already contained within yourself, waiting to be unlocked over time. What I am talking about is a concept called human capital, or the value of all of your skills and knowledge. Your human capital can be thought of as an asset that you use to earn money. Understanding this concept should provide the motivation behind why you should save and invest.

He goes on to introduce the concept of present value to come up with a dollar value for human capital based on a future income stream discounted to the present using a discount factor. The example he gives is pay of $50,000 over 40 years discounted at a 3% rate yields a present value of $1.1 million. The point he makes is that human capital is an asset that eventually declines over time which explains why saving is so important.

He provides this nifty graph to display this concept:

Question: How Much Cash Does Apple Have in the Bank?

Answer (from WSJ; subscription): About $250 billion!

A truly amazing stat that had to be shared. Here’s how it has grown over time:

By |May 2nd, 2017|Article, Current Events, Investing, Question of the Day, Stocks|

One Strategy to Keep College Costs Down: Graduate In 4 Years

As your seniors are heading out the door this spring to pursue higher education, this would be a valuable required reading.

“Six Reasons You May Not Graduate On Time (And What To Do About It)” From NYT:

Graduating from a four-year college in four years may sound like a fairly straightforward venture, but only 41 percent of students manage to do it.

That matters. The longer it takes, the less likely a student is to make it to graduation: A quarter of students drop out after four years, according to the National Student Clearinghouse Research Center, and most say it’s because of money. Cost, indeed, is a major issue for many families — in-state tuition and fees run $8,940 on average at public institutions, $28,308 at private ones. Many of those who finish in five or six years have either unnecessarily drained their parents’ bank accounts or end up in a lot more debt.

Yes, I know they will look at you and say, “But I plan on being one of the 41%!” But like Lake Wobegon, they can’t all be above average. So, have them identify what they think their risk factors are among these six:

By |May 2nd, 2017|Article, Current Events, Paying for College, Research|

What I’m Reading This Week (April 29th)

The average credit card interest rate has risen to 15.74%, an all-time high, according to CreditCards.com.

That record covers the span that the card comparison website has been conducting its weekly analysis. In the past, long before the internet, credit card rates have been a lot higher. But in recent memory, they haven’t. CreditCards.com calculates its average by looking at the rates on the 100 most popular credit cards in the U.S., in all types of categories. For example, the average rate on credit cards for consumers with bad credit is much higher – 23.20%. But “low interest” credit cards, usually offered to consumers with good or excellent credit, have an average interest rate of 12.50%.

  • Ex-Theater Agent Admits to Tricking Friends Into Investing in Fake Play (NY Times)

By |April 28th, 2017|Article, Uncategorized|

Schools in the News

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  • How Microlending Builds Financial Literacy Skills and Empowers Students (Education Week)

Teachers understand that creating authentic, real-world learning experiences engage students in a way that improves learning and makes it more enjoyable. At Town School for Boys in San Francisco, 6th graders engage in a yearlong study of microfinance using project-based learning that explores what it means to run a business while developing meaningful success skills along the way. While global education initiatives have traditionally focused on humanities and science classes, the boys find many lessons of mathematics complement their journey while partnering with nonprofit Kiva.org, which is headquartered in San Francisco.

First period at Bennett High School was interrupted Monday by a rock concert. At least it started out that way. The Nashville-based, Kansas-bred band GOODING rocked the high school’s auditorium for four or five songs before the band’s lead singer and namesake turned teacher and gave the howling crowd of students a lesson on a subject they don’t often hear about in the classroom:

Chart: Which College Majors Are Hottest (In Employers Eyes)?

From WSJ: