Teaching Personal Finance next year... what to include?
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Teaching Personal Finance next year... what to include?
It is likely that I'll be teaching a personal finance course next year (Foundations in PF, by Dave Ramsey). I am going to "fudge" the investing portion and will be inserting/brainwashing Boglehead-minded investing philosophy (and facts). It actually counts as a math course towards grad requirements, so that component will be included.
Taylor suggested including 'Little Book of Common Sense Investing' as it is the most accessible by students (and I agree).
What other materials or topics would you suggest. Are there and DR class teachers on this forum who already are doing this??
Taylor suggested including 'Little Book of Common Sense Investing' as it is the most accessible by students (and I agree).
What other materials or topics would you suggest. Are there and DR class teachers on this forum who already are doing this??
Re: Teaching Personal Finance next year... what to include?
Continuously drive home the concept of "spend less than you earn".
What the bold print givith, the fine print taketh away. |
-meowcat
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Re: Teaching Personal Finance next year... what to include?
I used to teach courses in computers and programming at a community college. There is one major distinction to keep in mind: Applied vs. Theoretical. How to vs. why to. I taught both and kept the distinction in mind. The theory course credits were eligible for transfer to a university. The applied course credits were not.gvsucavie03 wrote:It is likely that I'll be teaching a personal finance course next year (Foundations in PF, by Dave Ramsey). I am going to "fudge" the investing portion and will be inserting/brainwashing Boglehead-minded investing philosophy (and facts). It actually counts as a math course towards grad requirements, so that component will be included.
Taylor suggested including 'Little Book of Common Sense Investing' as it is the most accessible by students (and I agree).
What other materials or topics would you suggest. Are there and DR class teachers on this forum who already are doing this??
Since the course is expected to teach math concepts it sounds like you need to focus on theory. Why is the Boglehead philosophy effective? Perhsps go over some studies. Pick a paper or two to study.
But, I also believe that theory is best understood by seeing how it is applied so don't stay too theoretical!
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker (aka S.O.B.), the Cowboy Poet
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Re: Teaching Personal Finance next year... what to include?
It is an elective, and I don't think mathematics needs to be the central focus (although math enters the discussion on most financial topics). I agree on the "why" being a key focus as well as the how. At this stage, the kids need much more "why" than "how" as it applies to their life.
Re: Teaching Personal Finance next year... what to include?
Echoing meowcat, "My other piece of advice, Copperfield," said Mr. Micawber, "you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
Review Taylor's quotes and use them liberally.
Review Taylor's quotes and use them liberally.
Re: Teaching Personal Finance next year... what to include?
Agreed. In other words, save regularly and take full advantage of compounding. A thorough explanation of how compounding works is an effective way to demonstrate the benefits of saving.meowcat wrote:Continuously drive home the concept of "spend less than you earn".
If you have time, I think we would be interested to know how the class went.
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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Re: Teaching Personal Finance next year... what to include?
Daily quotes from Zig Ziglar, Taylor and others on this forum are a MUST!!
I also plan to incorporate some kind of daily warm-up scenario regarding compounding rates (rule of 72's, etc.) and other "slow pitch" questions to get the gears turning.
I also plan to incorporate some kind of daily warm-up scenario regarding compounding rates (rule of 72's, etc.) and other "slow pitch" questions to get the gears turning.
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Re: Teaching Personal Finance next year... what to include?
As a resource, direct them to Boglehead.org.
Best Wishes, |
Joe
Re: Teaching Personal Finance next year... what to include?
Have them read "The Richest Man In Babylon".gvsucavie03 wrote: What other materials or topics would you suggest. Are there and DR class teachers on this forum who already are doing this??
They can read it free online here: http://www.ccsales.com/the_richest_man_in_babylon.pdf
Tell them if they read the book, they will find the secret to wealth.
Slow and steady wins the race.
Re: Teaching Personal Finance next year... what to include?
I think Allan Roth's book, "How a Second Grader Beats Wall Street" would be pretty accessible as well.
Lagom är bäst
Re: Teaching Personal Finance next year... what to include?
Stress heavily the concepts of variance and expected value. Too often, I see posts in which, because the stock market has a long term real return of 8%, people assume an 8% return for a five year holding period.
Re: Teaching Personal Finance next year... what to include?
Time value of money and discounted cash flow analysis should be central to any introductory course on personal finance. They don't even need financial calculators any more for this. PC spreadsheet software like Excel or even smart phone apps are available to do these calculations. Car loan problems should pique their interest. Most of finance is time value of money problems combined with taking risk into account.
Here is a link to Zvi Bodie's short paper, A Note on Economic Principles and Financial Literacy. The students don't need to understand all of this material (although it isn't that difficult), but you need to understand all of this.
Link - https://papers.ssrn.com/sol3/papers.cfm ... _id=923561
BobK
Here is a link to Zvi Bodie's short paper, A Note on Economic Principles and Financial Literacy. The students don't need to understand all of this material (although it isn't that difficult), but you need to understand all of this.
Link - https://papers.ssrn.com/sol3/papers.cfm ... _id=923561
BobK
Last edited by bobcat2 on Tue Jun 03, 2014 1:52 pm, edited 1 time in total.
In finance risk is defined as uncertainty that is consequential (nontrivial). |
The two main methods of dealing with financial risk are the matching of assets to goals & diversifying.
Re: Teaching Personal Finance next year... what to include?
The Little Book of Behavioral Investing should be the second book they look at (after little book of common sense investing). We know that people know what they *should* do but then don't do it, this book looks into what people do wrong and also why.
Re: Teaching Personal Finance next year... what to include?
Mr Micawber was always miserable. I loved that book. I have in the past year read almost every Dickens novel and am sad to only have 2 left. I just finished The Pickwick Club which I had never previously heard of and loved it.SGM wrote:Echoing meowcat, "My other piece of advice, Copperfield," said Mr. Micawber, "you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."
Review Taylor's quotes and use them liberally.
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Re: Teaching Personal Finance next year... what to include?
For morning exercises you could use some of the examples I've read in books: of someone saving $100 per month from age 20-30 and then stopping and someone else saving $100 per month from 30-65. The first person ends up with more (with ROI of 7% I think it's like $200k vs $180k). You could also give these examples:
Saving $100 per month from age 20 to 65 @ 7% = ~$381,000
or
How much would you have to save from age 20 to 65 to be a millionaire at age 65 - ~$261/month
you can tell them that they need to save early and often until you're blue in the face but helping them come to that conclusion themselves will be more useful.
Saving $100 per month from age 20 to 65 @ 7% = ~$381,000
or
How much would you have to save from age 20 to 65 to be a millionaire at age 65 - ~$261/month
you can tell them that they need to save early and often until you're blue in the face but helping them come to that conclusion themselves will be more useful.
The way I invest my money is not the right way to invest, it's the right way for ME to invest.
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Re: Teaching Personal Finance next year... what to include?
There is an example of this that Dave Ramsey uses (although he uses 12% ROI... ugh). Same principle, thoughswimirvine wrote:For morning exercises you could use some of the examples I've read in books: of someone saving $100 per month from age 20-30 and then stopping and someone else saving $100 per month from 30-65. The first person ends up with more (with ROI of 7% I think it's like $200k vs $180k). You could also give these examples:
Saving $100 per month from age 20 to 65 @ 7% = ~$381,000
or
How much would you have to save from age 20 to 65 to be a millionaire at age 65 - ~$261/month
you can tell them that they need to save early and often until you're blue in the face but helping them come to that conclusion themselves will be more useful.
Re: Teaching Personal Finance next year... what to include?
Not sure what level this is (late high school, community college, etc?) - gvsucavie03 referred to the students in a follow-up as "kids".
If they should by chance be late high school age, I'd say a huge impact could be made by putting proper emphasis on choosing an education/career that is aligned with being personally profitable. Without adequate input (income), it gets really hard to produce adequate output (saving). Parents should take the most blame for this shortcoming ("be whatever it is you want to be, snowflake"), but the school systems don't help in this area either (I'm not sure what "guidance" means to guidance counselors). If I had a chance to teach high school kids an elective course in personal finance, I'd try very much to provide this missing ingredient.
Aside from that, no matter the level, compounding returns need to be demonstrated again and again (as mentioned by everyone else here). That's what motivated me to start investing, while I was in college and working engineering internships. Realizing what the monthly contribution would have to be to reach a given target at age 65, given various ages of starting. (Graphically depict these on top of each other in Excel) It immediately led me away from the idea of buying a "real" (non-college beater) car right out of college like a lot of my friends, and instead putting that enormous time component until retirement (43 years at the time) to work for me. Delaying that inevitability (replacing that beater car) by 3-4 years - when I received my first substantial raise - allowed me to form an extremely solid financial base in my early twenties.
If they should by chance be late high school age, I'd say a huge impact could be made by putting proper emphasis on choosing an education/career that is aligned with being personally profitable. Without adequate input (income), it gets really hard to produce adequate output (saving). Parents should take the most blame for this shortcoming ("be whatever it is you want to be, snowflake"), but the school systems don't help in this area either (I'm not sure what "guidance" means to guidance counselors). If I had a chance to teach high school kids an elective course in personal finance, I'd try very much to provide this missing ingredient.
Aside from that, no matter the level, compounding returns need to be demonstrated again and again (as mentioned by everyone else here). That's what motivated me to start investing, while I was in college and working engineering internships. Realizing what the monthly contribution would have to be to reach a given target at age 65, given various ages of starting. (Graphically depict these on top of each other in Excel) It immediately led me away from the idea of buying a "real" (non-college beater) car right out of college like a lot of my friends, and instead putting that enormous time component until retirement (43 years at the time) to work for me. Delaying that inevitability (replacing that beater car) by 3-4 years - when I received my first substantial raise - allowed me to form an extremely solid financial base in my early twenties.
Re: Teaching Personal Finance next year... what to include?
Assuming this is a basic course, if they remember a few simple concepts, then the class went well.meowcat wrote:Continuously drive home the concept of "spend less than you earn".
Adding details will eventually be helpful, but on a macro level, all one really needs to know about personal finance can be summed up in 10 words:
- Spend less than you earn. Invest the difference. Avoid debt.
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Re: Teaching Personal Finance next year... what to include?
Yes, high school kids. I also love your thoughts on career path.dabretty wrote: Not sure what level this is (late high school, community college, etc?) - gvsucavie03 referred to the students in a follow-up as "kids".
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Re: Teaching Personal Finance next year... what to include?
Dave Ramsey does an excellent job at beating this into their heads over and over.... your "10 word" philosophy is a core principle of the material.CyberBob wrote:Assuming this is a basic course, if they remember a few simple concepts, then the class went well.meowcat wrote:Continuously drive home the concept of "spend less than you earn".
Adding details will eventually be helpful, but on a macro level, all one really needs to know about personal finance can be summed up in 10 words:
Bob
- Spend less than you earn. Invest the difference. Avoid debt.
Re: Teaching Personal Finance next year... what to include?
Awesome! You certainly have a tremendous opportunity to shape young minds when they can (hopefully) still be shaped. The fact that it's an elective course hopefully means you'll have a malleable group.gvsucavie03 wrote:Yes, high school kids. I also love your thoughts on career path.dabretty wrote: Not sure what level this is (late high school, community college, etc?) - gvsucavie03 referred to the students in a follow-up as "kids".
With regards to career/education choices leading to a financially stress-free adult life, a simple (and effective) exercise could be a take-home project to choose and research three different career fields focusing on (1) education needed and financial cost to get there, (2) unemployment rate for that career field ("societal demand"), and (3) starting and mid-career salary ranges. Nowadays with the Internet for research, that should be a very simple task and hopefully get the wheels turning - that maybe it's not just about choosing your biggest enjoyment in life as a career path, but rather your #2 or #3 that might actually pay a comfortable salary and allow you to pursue other enjoyments. I think there are also many parallels with general saving/investment strategy (a general feel for risk/effort/reward ratio).
Good luck, we're all counting on you!
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Re: Teaching Personal Finance next year... what to include?
When we taught Consumer Economics to College students, we found that "unlearning" was as important as learning. IIRC The 7 pillars of wisdom were:
1) debt for consumption is the worst enemy
2) Cars are consumption not investments
3) You have to save at least what is deducted for social security
4) "Home equity" is a charade crated by real estate sales people.
5) You have no friends in the financial industry
6) pay cash
7) keep records
1) debt for consumption is the worst enemy
2) Cars are consumption not investments
3) You have to save at least what is deducted for social security
4) "Home equity" is a charade crated by real estate sales people.
5) You have no friends in the financial industry
6) pay cash
7) keep records
Re: Teaching Personal Finance next year... what to include?
How Pollan-esque. Love it.CyberBob wrote:Bob
- Spend less than you earn. Invest the difference. Avoid debt.
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Re: Teaching Personal Finance next year... what to include?
One more thing. You need to address the "total cost" of financial decisions.
For example, the local Honda dealer is offering a 2014 Honda Civic for $199/mo on a lease. The teenage mind thinks that they can afford to spend a $200 a month on a vehicle. HOWEVER, everyone knows that the total cost of owning and operating the vehicle will probably be closer to $600 factoring in the insurance, taxes, license fees, gas, repairs, and maintenance.
Also, while MOST people address the positive effects of compound interest on SAVING money, few really go into how compound interest will kill you if you have high interest credit card debt. That can be a real eye opener.
========================================
I have always wondered how parents respond to this type of class when they are financially irresponsible themselves? It could make some parents very uncomfortable.
For example, the local Honda dealer is offering a 2014 Honda Civic for $199/mo on a lease. The teenage mind thinks that they can afford to spend a $200 a month on a vehicle. HOWEVER, everyone knows that the total cost of owning and operating the vehicle will probably be closer to $600 factoring in the insurance, taxes, license fees, gas, repairs, and maintenance.
Also, while MOST people address the positive effects of compound interest on SAVING money, few really go into how compound interest will kill you if you have high interest credit card debt. That can be a real eye opener.
========================================
I have always wondered how parents respond to this type of class when they are financially irresponsible themselves? It could make some parents very uncomfortable.
Re: Teaching Personal Finance next year... what to include?
I would go so far to a simple class in middle school (not much investing), just how much a cell phone really cost with a data plan would be helpful And a required more in depth high school class!gvsucavie03 wrote:Yes, high school kids. I also love your thoughts on career path.dabretty wrote: Not sure what level this is (late high school, community college, etc?) - gvsucavie03 referred to the students in a follow-up as "kids".
"Out of clutter, find simplicity” Albert Einstein
Re: Teaching Personal Finance next year... what to include?
Taxes.
Not the details (you'd lose them), but just the importance of knowing how taxes factor into your financial decisions. If there has been one thing I've learned from being a part of this forum, it's the importance of always been mindful of the tax impact - whether it's income, property, sales, etc.
Not the details (you'd lose them), but just the importance of knowing how taxes factor into your financial decisions. If there has been one thing I've learned from being a part of this forum, it's the importance of always been mindful of the tax impact - whether it's income, property, sales, etc.
Re: Teaching Personal Finance next year... what to include?
Since they are in high school, perhaps cover student loans with broad strokes. This way you could go over:gvsucavie03 wrote:Yes, high school kids. I also love your thoughts on career path.dabretty wrote: Not sure what level this is (late high school, community college, etc?) - gvsucavie03 referred to the students in a follow-up as "kids".
1. compounding
2. interest rates and their effects
3. debt and how evil it is
4. amortization tables (if you feel it is necessary)
Re: Teaching Personal Finance next year... what to include?
Since they are so young, I think you should focus on teaching them how to know where their money is going, understand why they should save, and how they can get started.
Basically, I think you should teach them how to control their cashflow and setup an emergency fund. From there they can start investing, so they should understand their IRA options and how to get started investing within one.
I'd probably want to cover the follow topics to accomplish that:
Budgeting/Cashflow Control
The importance of having an emergency fund
Assets vs Liabilities
Why debt is bad
Spend less than you earn, invest the rest
Taxes - Income vs SSI vs Medicare
Traditional vs Roth
Diversification and Asset Allocation
The importance of keeping costs low
Basically, I think you should teach them how to control their cashflow and setup an emergency fund. From there they can start investing, so they should understand their IRA options and how to get started investing within one.
I'd probably want to cover the follow topics to accomplish that:
Budgeting/Cashflow Control
The importance of having an emergency fund
Assets vs Liabilities
Why debt is bad
Spend less than you earn, invest the rest
Taxes - Income vs SSI vs Medicare
Traditional vs Roth
Diversification and Asset Allocation
The importance of keeping costs low
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Re: Teaching Personal Finance next year... what to include?
Besides indexing, the one thing that I wish I would've learned is invest early and often. I didn't realize how important it would be 30 years down the road.
Felix is a wonderful, wonderful cat.
Re: Teaching Personal Finance next year... what to include?
I like showing this to others:
http://investingcaffeine.com/2009/10/16 ... ns-earned/
Also do research on Benjamin Franklin and Albert Einstein on their understanding of compounding interest.
http://investingcaffeine.com/2009/10/16 ... ns-earned/
Also do research on Benjamin Franklin and Albert Einstein on their understanding of compounding interest.
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Re: Teaching Personal Finance next year... what to include?
The magic of compounding and what a dollar (or $100 or $1000) may turn into if invested and not touched for a good, long while. A comparison of investing the money at various ages might be useful as well. All too often, people don't realize how powerful time is until much of its compounding power is largely diminished because of waiting too long to get started.
Re: Teaching Personal Finance next year... what to include?
The magic figure of 72
How it works for you when investing: Money invested at 8% doubles every 9 years.
How it works against you when borrowing: When using a credit card at 18% interest you pay the value of your borrowing every 4
years just in interest.
How it works for you when investing: Money invested at 8% doubles every 9 years.
How it works against you when borrowing: When using a credit card at 18% interest you pay the value of your borrowing every 4
years just in interest.
Disciple of John Neff
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Re: Teaching Personal Finance next year... what to include?
The OP might also want to check out the wiki article Bogleheads® financial literacy project - Bogleheads, although the Students section is currently empty. There is a forum topic that is used for discussion/brainstorming, see Help create a Financial Presentation: Calling all Bogleheads
Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
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Re: Teaching Personal Finance next year... what to include?
Everything You Need to Know about Personal Investing by Scott Adams
* Make a will.
* Payoff your credit card balance.
* Get term life insurance if you have a family to support.
* Fund your company 401K to the maximum.
* Fund your IRA to the maximum.
* Buy a house if you want to live in a house and can afford it.
* Put six months' expenses in a money market account.
* Take whatever money is left over and invest 70 percent in a stock index fund and 30 percent in a bond fund through any discount brokerage company and never touch it until retirement.
* If any of this confuses you, or you have something special going on (retirement, college planning, tax issue), hire a fee-based financial planner, not one who charges a percentage of your portfolio.
Everything else you might want to do with your money is a bad idea compared to what's on my one-page summary.
Re: Teaching Personal Finance next year... what to include?
Professor Emeritus wrote:When we taught Consumer Economics to College students, we found that "unlearning" was as important as learning. IIRC The 7 pillars of wisdom were:
1) debt for consumption is the worst enemy
2) Cars are consumption not investments
3) You have to save at least what is deducted for social security
4) "Home equity" is a charade crated by real estate sales people.
5) You have no friends in the financial industry
6) pay cash
7) keep records
All the Best, |
Joe
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Re: Teaching Personal Finance next year... what to include?
Balancing a checkbook.
Understanding an apartment lease including the security deposit - not all the students will be going off to dorm rooms right after high school.
Knowing what a payday loan is and why it is vital that they never take one out (do the math).
Creating a budget! Work a real live example with wages, taxes withheld, rent, cell phones, etc. Introduce the idea of saving at this point - saving for an emergency fund, saving for the car you want (while buying a used one you can afford now), the whole idea of saving for something instead of putting it on a charge card to be paid off later with interest, saving for retirement.
The average cost of a wedding. Assignment - how to create a wedding within a limited budget.
As Bogleheads, saving and investing is near and dear to our hearts. But for many high school students you have to get them past the point of living from paycheck to paycheck. To many of them, retirement is too far in the future to even think about. But if you can get them thinking about saving for things in the near term, it's easier for them to transition to saving for things farther out. You want to create a habit of saving.
Understanding an apartment lease including the security deposit - not all the students will be going off to dorm rooms right after high school.
Knowing what a payday loan is and why it is vital that they never take one out (do the math).
Creating a budget! Work a real live example with wages, taxes withheld, rent, cell phones, etc. Introduce the idea of saving at this point - saving for an emergency fund, saving for the car you want (while buying a used one you can afford now), the whole idea of saving for something instead of putting it on a charge card to be paid off later with interest, saving for retirement.
The average cost of a wedding. Assignment - how to create a wedding within a limited budget.
As Bogleheads, saving and investing is near and dear to our hearts. But for many high school students you have to get them past the point of living from paycheck to paycheck. To many of them, retirement is too far in the future to even think about. But if you can get them thinking about saving for things in the near term, it's easier for them to transition to saving for things farther out. You want to create a habit of saving.
The key to success - Save early, save often, invest well.
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Re: Teaching Personal Finance next year... what to include?
I am teaching the same curriculum and the kids love it.gvsucavie03 wrote:It is likely that I'll be teaching a personal finance course next year (Foundations in PF, by Dave Ramsey). I am going to "fudge" the investing portion and will be inserting/brainwashing Boglehead-minded investing philosophy (and facts). It actually counts as a math course towards grad requirements, so that component will be included.
Taylor suggested including 'Little Book of Common Sense Investing' as it is the most accessible by students (and I agree).
What other materials or topics would you suggest. Are there and DR class teachers on this forum who already are doing this??
This may help with some advice: http://www.bogleheads.org/forum/viewtop ... =2&t=51655
I'd be more than happy to exchange ideas/resources if you are interested.
You can message me with your email.
I do most the videos online and do the activities in class.
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Re: Teaching Personal Finance next year... what to include?
Love these.Professor Emeritus wrote:When we taught Consumer Economics to College students, we found that "unlearning" was as important as learning. IIRC The 7 pillars of wisdom were:
1) debt for consumption is the worst enemy
2) Cars are consumption not investments
3) You have to save at least what is deducted for social security
4) "Home equity" is a charade crated by real estate sales people.
5) You have no friends in the financial industry
6) pay cash
7) keep records
Going to use in my Economics class.
Re: Teaching Personal Finance next year... what to include?
You would be doing them a disservice not to at least touch on managing student loan debt. Current interest rates, repayment options, examples of what monthly payments would be depending on how much in loans you take out and if you take five years to graduate instead of four ect. Don't scare them too badly though or none of them will want to peruse higher education.
I’d trade it all for a little more |
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Re: Teaching Personal Finance next year... what to include?
Live Beneath Your Means
Don't be the Jonses
Pay Yourself First - right off the top and invest it in a low-cost index based 3 fund Portfolio, don't spend it on ice cream, a new sofa, that new sports car you've been eyeing in Motor Trend magazine.
Buy on Sale - don't get upset when the market tanks, get giddy - say "oh, goody! now I can buy at 20-40% off, but the sale won't last forever, I'd better jump on it now.
Avoid Carrying a balance on a credit card - those usurious rates can bury you in debt. If you can't afford to pay off the bill each month, then you can't afford to buy it, period.
Don't be the Jonses
Pay Yourself First - right off the top and invest it in a low-cost index based 3 fund Portfolio, don't spend it on ice cream, a new sofa, that new sports car you've been eyeing in Motor Trend magazine.
Buy on Sale - don't get upset when the market tanks, get giddy - say "oh, goody! now I can buy at 20-40% off, but the sale won't last forever, I'd better jump on it now.
Avoid Carrying a balance on a credit card - those usurious rates can bury you in debt. If you can't afford to pay off the bill each month, then you can't afford to buy it, period.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Teaching Personal Finance next year... what to include?
Teaching is great!
At the graduate level I would include the viewing of:
(1) PBS Documentaries (Frontline) of "Money, Power and Wall Street" (four parts, one hour each).
(2) PBS Documentaries (Frontline) "The Untouchables" (one part, one hour).
Two good subjects to involve the whole class in interesting and fun discussions, both are found online, easy to find by doing a search under those titles. The transcript is also available online, in case anyone need to prepare presentations.
Thanks for reading.
At the graduate level I would include the viewing of:
(1) PBS Documentaries (Frontline) of "Money, Power and Wall Street" (four parts, one hour each).
(2) PBS Documentaries (Frontline) "The Untouchables" (one part, one hour).
Two good subjects to involve the whole class in interesting and fun discussions, both are found online, easy to find by doing a search under those titles. The transcript is also available online, in case anyone need to prepare presentations.
Thanks for reading.
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Re: Teaching Personal Finance next year... what to include?
I've always thought it would be interesting to do a project throughout a financial course on budgeting. Perhaps the students get assigned jobs with salaries. (Randomly? picked by the student? Maybe some get hourly jobs instead? Then maybe they have to draw out of a hat each week for how many hours they got schedule for.) They have make decisions about their housing, utilities, fun money, savings, etc. They can get randomly drawn "event" cards as the project goes on (Oh, sorry, you car broke down. That'll be $800 to fix so you can get to work. Are they prepared to handle it?) Savers get rewarded with interest payments, get to take advantage of opportunities that pop up for fun or something they are interested in, etc.
Admittedly, it would take a fair bit of planning on the instructor's part beforehand to get enough moving parts to make it interesting for them and to keep track of it all.
Admittedly, it would take a fair bit of planning on the instructor's part beforehand to get enough moving parts to make it interesting for them and to keep track of it all.
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Re: Teaching Personal Finance next year... what to include?
When talking about investing, I'm sure you'll talk about realistic expectations vs. pie-in-the-sky hopes. Please caution them about the scam artists who promise huge returns. Tell the students what a Ponzi scheme is. Most will have heard of Madoff. Make it real to them by talking about the folks like their parents and grandparents getting sucked in.
The key to success - Save early, save often, invest well.
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Re: Teaching Personal Finance next year... what to include?
- Multilevel marketing and pyramid schemes -- to show how they are not sustainable.
- Does it make sense to play the lottery?
- A live example of filling a tax return, and opening a Roth IRA
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Re: Teaching Personal Finance next year... what to include?
I had a teacher that did something like this in both a high school and college class that I took (different teacher in two different classes).eschaef wrote:I've always thought it would be interesting to do a project throughout a financial course on budgeting. Perhaps the students get assigned jobs with salaries. (Randomly? picked by the student? Maybe some get hourly jobs instead? Then maybe they have to draw out of a hat each week for how many hours they got schedule for.) They have make decisions about their housing, utilities, fun money, savings, etc. They can get randomly drawn "event" cards as the project goes on (Oh, sorry, you car broke down. That'll be $800 to fix so you can get to work. Are they prepared to handle it?) Savers get rewarded with interest payments, get to take advantage of opportunities that pop up for fun or something they are interested in, etc.
Admittedly, it would take a fair bit of planning on the instructor's part beforehand to get enough moving parts to make it interesting for them and to keep track of it all.
For both exercises, the students had to pick a career and come up with a monthly budget based on what they thought they would earn. For both exercises, I picked a high-paying job (for college, I picked the job that I was intending to get based upon the degree that I was earning).
In high school, what surprised me was that a lot of students either picked jobs that they had absolutely no chance of getting (Pro sports player, or a job in medicine when the student could barely spell anatomy), and so the budget exercise was pretty much a waste. But everyone tended to pick jobs that they thought paid well, but they didn't really have any idea what the real going-rate of pay was. Plus, the budgets were pretty simplistic....
In high school, what surprised me was although the students would (usually) base their budget on their intended career choice, their expected starting salary amounts were way too high ($75K for an elementary education teacher?!?) or their budget numbers were way too low ($125 a month for groceries?!?). Either way, the numbers weren't usually realistic, and either the students didn't know it or they just didn't care.
As for me, my numbers were pretty much spot-on, but I did get a small grade deduction in the college class because the teacher felt that my charity budget was too low (no doubt in an effort to push the "give to your alma mater" mantra). If he felt that it was too low in that budget, I'm sure he thinks that it is abysmally low now....
Re: Teaching Personal Finance next year... what to include?
Budget!
In corporate finance, it's about about balance sheet, income statement, and cash flow. In personal finance, the analogous are net worth, budget and personal cash flow.
http://www.investopedia.com/articles/pf ... tement.asp
In corporate finance, it's about about balance sheet, income statement, and cash flow. In personal finance, the analogous are net worth, budget and personal cash flow.
http://www.investopedia.com/articles/pf ... tement.asp
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Re: Teaching Personal Finance next year... what to include?
You mention that the students will be getting credit as a math course. You could teach personal finance based on Hamlet and The Merchant Of Venice and , but the education department may not be amused.
It's not bad to learn Hamlet, but there may be some constraints.
Do you have an idea of what math is supposed to be covered? Or the current competence of the students? If there's things you need to cover you may need to work, In part, backwards from the math to set the curriculum. Budgeting teaches addition and subtraction. Compound interest teaches exponential functions. Micro economics teaches that your head hurts.
It's not bad to learn Hamlet, but there may be some constraints.
Do you have an idea of what math is supposed to be covered? Or the current competence of the students? If there's things you need to cover you may need to work, In part, backwards from the math to set the curriculum. Budgeting teaches addition and subtraction. Compound interest teaches exponential functions. Micro economics teaches that your head hurts.
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Re: Teaching Personal Finance next year... what to include?
Actually, just got the bad news that my certificate will not allow me to teach the course... which is too bad because I know as much about this as the math department.
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Re: Teaching Personal Finance next year... what to include?
You forgot to include in Corporate Finance, it's all about Net Present Value, lowering cost of capital and generating high internal rates of return. Similarly, in personal finance, it's all about keeping capital outlay and borrowing costs to a minimum, generating rates of return far above inflation commensurate with taking a risk enabling you to sleep comfortably at night.inbox788 wrote:Budget!
In corporate finance, it's about about balance sheet, income statement, and cash flow. In personal finance, the analogous are net worth, budget and personal cash flow.
http://www.investopedia.com/articles/pf ... tement.asp
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Teaching Personal Finance next year... what to include?
I taught PF for several years. The textbooks are fine and Ramsey's process will work. It is easier to teach adults who have experienced life versus young people. Your audience age may direct you on what to focus.
Stress the need to develop a budget and to set and then plan for short, medium and long term goals. It is amazing how little people will know about this simple process.
Of course, you'll talk about debt management but continue to stress the devastating impact it can have
I mixed in teaching people about mortgage types and length. Also, the different types of life insurance. I was fortunate to have students or others who taught people how to buy a new car ( Ramsey of course says to buy used ), I had an insurance agent friend show up one night to talk about homeowners and other insurances.
I would spend less time on investments, not really a PF topic other than the role it plays in goal achievement.
Stress the need to develop a budget and to set and then plan for short, medium and long term goals. It is amazing how little people will know about this simple process.
Of course, you'll talk about debt management but continue to stress the devastating impact it can have
I mixed in teaching people about mortgage types and length. Also, the different types of life insurance. I was fortunate to have students or others who taught people how to buy a new car ( Ramsey of course says to buy used ), I had an insurance agent friend show up one night to talk about homeowners and other insurances.
I would spend less time on investments, not really a PF topic other than the role it plays in goal achievement.