Sometimes a simple model or flow chart elucidates a complex question. Here is one example of that principle (from Mr. Zepczynski’s blog):
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:
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:
Here are three cartoons focused on investing and a few questions for your students to ponder:
In this case, the experts are right! Check out this NGPF Activity on Compound Interest. Create an activity to see what happens when parents invest in college saving or 529 plans when their children are born.
I have been thinking a lot about this issue of how to make investing simpler. I hear from teachers that this is a real pain point for them. I can see in the NGPF podcast stats that the most popular guests tend to be conversations about investing (Mike Finley, Jonathan Clements and Vanguard’s Jim Rowley to name a few). Then this weekend the lightbulb went off. I was heading to the coast listening to Charlie Ellis on the Masters In Business podcast (kinda dorky I know). Those of you not familiar with Charlie Ellis, he is probably the best investment management thinker you have never heard of. Charlie has played a role in two of the juggernauts of modern day investing, the Yale endowment and Vanguard Investments (the king of indexers just crossed $4 billion (I mean TRILLION!)). Oh, and he was an early investor in Berkshire Hathaway too (Warren Buffett’s company)!