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:

Personal Finance In My Life: Calculator Deflation

Shopping at the Half Moon Bay Ace Hardware (with the most helpful associates ever!), I came across this basic Sharp calculator for $5.99:


By |December 18th, 2016|Budgeting, Current Events, Math, Purchase Decisions, Question of the Day|

Question: How Much Income Does A Household Need To Be In Top 1%?

A good interactive from CNN to stimulate discussion in your classroom and infuse some math too (hat tip to a teacher at JumpStart National Conference who pointed this out to me; sorry that I didn’t catch his name:). As you move the slider bar on the left, the point of the graph moves up to show the percentile ranking:


  • Questions:

Question: How Do Investing Fees Shrink Nest Eggs?


Please, please, please teach this concept to your students. The concept of compound interest makes the “greatest hits” list for most personal finance curricula. What doesn’t make the list is the impact of “compounding fees” which has a dramatic impact on what is left over after a lifetime of investing.

Courtesy of NY Times and Vanguard, we now have a handy chart showing exactly how much of an investor’s returns get eaten up by those ever so subtle fees that have a dramatic impact on what’s left at the end:

First, some quick orientation is in order. The chart was created with these assumptions:

  • $40,000 year starting salary with an annual raise of 1%.
  • Conservative investing return of 4% (historical equity returns are closer to 7-9%)
  • Savings rate of 6% of their salary
  • 30 year savings period

The individual bars in the chart indicate the account balances (in thousands of dollars), after 30 years, based on the assumptions above. Why do the bar heights differ? Yes, you guessed it, it’s the fees! An index fund may carry fees of 0.25% of assets (or lower) while actively managed funds have fees close to 1% on average. One flaw that I see with this analysis is that it assumes the same 4% return for each of the funds before fees. Therefore, this chart wildly understates the impact of fees as the lowest fee funds typically are the best performing funds. Yes, investing is one of those rare instances where the best products are the cheapest!

Questions for students:

Video: How Much Money Have Humans Created?

I thought econ teachers wanting to bring the money supply to life for students would enjoy this video from Visual Capitalist:

“The dollar amounts are so staggering, that simply telling you how much money humans have created probably wouldn’t convey the magnitude. However, by using data visualization in this video, we can relate numbers in the millions, billions, and trillions to create the context to make it more understandable.”


By |October 19th, 2016|Current Events, Math, Payment Types, Video Resource|

Charts: Which Cars Cost the Least To Maintain As They Age?

Here’s a way to infuse some math into your personal finance lessons. Also helps students understand how important maintenance costs should be weighed before purchasing a used car.

For all those students looking to buy a used car, check out this great data set on Priceonomics. Chock full of charts, here are the two that help to answer this question best:

  • Here’s the short-run data (first 75,000 miles of operation):


  • Here’s the long-run data (first 150,000 miles):
By |September 19th, 2016|Chart of the Week, Current Events, Math, Purchase Decisions, Research|

Question of the Day: What’s the Average Annual Cost of A Checking Account?

Since this is the most ubiquitous financial product out there, important for students to understand how to minimize costs (especially since interest rates on checking accounts are almost non-existent!).

Answer (according to $159  

Now, many students will find they are eligible for a no-fee checking account which waives a monthly maintenance fee until…they are no longer students.

The report notes that fees are declining slightly. This could be due to increased competition from the online banks:

By |September 19th, 2016|Article, Checking Accounts, Current Events, Math, Question of the Day|

To Understand the News, You Better Be Able to Interpret Charts!

Big data (“extremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions”) permeates so many elements of our lives today. Companies collect and analyze vast amounts of data to understand our surfing habits and place the right ad in the right place at the right time. Autonomous cars collect data from its many sensors and radar systems to keep its passengers safe. Political campaigns use big data to interpret voter intentions and on and on. 

Now we have evidence that your students better be able to interpret data to understand the world around them. Here’s a chart showing the increased use of charts in news coverage at one paper (courtesy of Pricenomics):