Teaching Personal Finance & the Stock Market Challenge

1. Teaching Personal Finance & the Stock Market Challenge

2. Today Introduction (Scary details) Part I:  Introduction to Stock Market Challenge  (Brett)  4:30 to 5:15 Part II:  What is Financial Literacy  (Bill)  5:15 to 5:30 Part III:  Learning, Earning, Investing (Earning)  (Bill)  5:30 to 5:50 Dinner Part III: Learning, Earning, Investing (Building Wealth) 6: 10to 6:40 Part IV: Watch out for Resources 6:40 to 7:00 (Bill) Part IV:  More Resources (Brett)  7:00 to 7:45 Part V:  Learning, Earning, Investing (Research)  (Bill)  7:45 to 8:10 Part VI:  Conclusion

3. Current Situation FINRA Investor Education Foundation, 2013 National survey of adults INTRODUCTION

4. Current Situation Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? (More than $102) Nation: 75% Correct, 13% Incorrect, 11% Did Not Know Florida: 72% Correct, 15% Incorrect, 11% Did Not Know INTRODUCTION

5. Current Situation Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account? (Less than today) Nation: 61% Correct, 17% Incorrect, 20% Did Not Know Florida: 57% Correct, 21% Incorrect, 20% Did Not Know INTRODUCTION

6. Current Situation Buying a single company's stock usually provides a safer return than a stock mutual fund. (False) Nation: 48% Correct, 9% Incorrect, 42% Did Not Know Florida: 46% Correct, 9% Incorrect, 43% Did Not Know INTRODUCTION

7. Financial Literacy Important • FINRA: Do you think financial education should be taught in schools? • 89% said yes • 5% said no • 6% did not know /no answer INTRODUCTION

8. Council for Economic Education Undertook project of writing standards STANDARDS

9. Why Were They Written? • To connect personal finance to basic economics • uses choice, trade-offs, incentives, markets and other economic concepts to discuss personal finance • To focus on economic decision-making for personal finance not simple recommendations • To use examples of financial decisions people face in their daily lives. STANDARDS

10. What Are the Standards? • A concise document that explains what students in the schools should know about personal finance and how to use that knowledge • The content is organized and described in the form of standards, which are important topics in personal finance. STANDARDS

11. Financial Literacy Standards 1. Earning an Income 2. Buying Goods and Services 3. Saving 4. Using Credit 5. Financial Investing 6. Protecting and Insuring STANDARDS

12. Guide STANDARDS

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15. Guide STANDARDS

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17. Guide STANDARDS

18. 1. Earning an Income Income for most people is determined by the market value of their labor, paid as wages and salaries. People can increase their income and job opportunities by choosing to acquire more education, work experience, and job skills. The decision to undertake an activity that increases income or job opportunities is affected by the expected benefits and costs of such an activity. Income also is obtained from other sources such as interest, rents, capital gains, dividends and profits. STANDARDS

19. 1. Earning an Income Income for most people is determined by the market value of their labor, paid as wages and salaries. People can increase their income and job opportunities by choosing to acquire more education, work experience, and job skills. The decision to undertake an activity that increases income or job opportunities is affected by the expected benefits and costs of such an activity. Income also is obtained from other sources such as interest, rents, capital gains, dividends and profits. STANDARDS

20. 2. Buying Goods and Services People cannot buy or make all the goods and services they want; as a result, people choose to buy some goods and services and not buy others. People can improve their economic well-being by making informed decisions, which entails collecting information, planning, and budgeting. STANDARDS

21. 2. Buying Goods and Services People cannot buy or make all the goods and services they want; as a result, people choose to buy some goods and services and not buy others. People can improve their economic well-being by making informed decisions, which entails collecting information, planning, and budgeting. STANDARDS

22. 3. Saving Saving is the part of income not spent on goods or services today or paid in taxes. People save for different reasons during the course of their lives. People make different choices about how they save and how much they save. Time, interest rates and inflation affect the value of savings. STANDARDS

23. 3. Saving Saving is the part of income not spent on goods or services today or paid in taxes. People save for different reasons during the course of their lives. People make different choices about how they save and how much they save. Time, interest rates and inflation affect the value of savings. STANDARDS

24. 4. Using Credit Credit allows people to purchase goods and services that they can use today and pay for those goods and services in the future with interest. People choose among different credit options that have different costs. Lenders approve or deny applications for loans based on an evaluation of the borrower’s past credit history and expected ability to pay in the future. Higher-risk borrowers are charged higher interest rates; lower risk borrowers are charged lower interest rates. STANDARDS

25. 4. Using Credit Credit allows people to purchase goods and services that they can use today and pay for those goods and services in the future with interest. People choose among different credit options that have different costs. Lenders approve or deny applications for loans based on an evaluation of the borrower’s past credit history and expected ability to pay in the future. Higher-risk borrowers are charged higher interest rates; lower risk borrowers are charged lower interest rates. STANDARDS

26. 5. Financial Investing Financial investment is the purchase of financial assets to increase income or wealth in the future. People who save have many choices when making financial investments because these investments have different risks and expected rates of return. Investments with higher expected rates of return tend to have greater risk. Diversification of investment among a number of choices can lower investment risk. STANDARDS

27. 5. Financial Investing Financial investment is the purchase of financial assets to increase income or wealth in the future. People who save have many choices when making financial investments because these investments have different risks and expected rates of return. Investments with higher expected rates of return tend to have greater risk. Diversification of investment among a number of choices can lower investment risk. STANDARDS

28. 6. Protecting and Insuring People make choices to protect themselves from the financial risk of lost income, assets, health, or identity. They can choose to accept risk, reduce risk, or transfer the risk to others. Insurance allows people to transfer risk by paying a smaller price now to avoid the possibility of a larger loss later. The price of insurance is influenced by an individual’s behavior. STANDARDS

29. 6. Protecting and Insuring People make choices to protect themselves from the financial risk of lost income, assets, health, or identity. They can choose to accept risk, reduce risk, or transfer the risk to others. Insurance allows people to transfer risk by paying a smaller price now to avoid the possibility of a larger loss later. The price of insurance is influenced by an individual’s behavior. STANDARDS

30. Benchmarks • The benchmarks describe in detail what students should know about a standard and how to use or apply that knowledge. • 144 benchmarks (average of 24 a standard) • Within a standard, they are sorted for what should be completed by 4th, 8th, and 12th grades STANDARDS

31. STANDARDS

32. Key Things to Remember • Designed to be evergreen • No factual knowledge • Deposits insured up to $250,000 • Mechanics not specifically addressed • How to buy a stock • How to write a check • Designed to provide deep understanding STANDARDS

33. Conclusions on Standards STANDARDS

34. How do I judge? Oh, my. It would seem that word has gotten out that financial literacy will have to be taught… You will be inundated with materials! (Disclosure: I do workshops with materials.)

35. How do I judge? 1. Consider the Source for Conflicts of Interest and Qualifications • Who is the author(s)? • What are their qualifications as an expert in financial literacy topics? • What are their qualifications as an educator? • Is the author(s) affiliated with any group? • Does the group have inherent biases in how information is presented?

36. How do I judge? 2. Examine the Content for Accuracy, Completeness, as well as Biases • Does the curriculum meet standards? • Is the factual knowledge presented in the materials accurate? • Does the curriculum advocate a particular financial strategy? • Does the material promote independent decision making?

37. How do I judge? 3. Review the Pedagogy • Does the material use a variety of pedagogies? • Address a variety of learning styles? • Is the curriculum designed for the appropriate grade level or audience? • Are the pedagogies age-appropriate? • Does the author make an effort to provide stimulating and real-life examples?

38. How do I judge? 3. Review the Pedagogy • Does the material use a variety of pedagogies? • Address a variety of learning styles? • Is the curriculum designed for the appropriate grade level or audience? • Are the pedagogies age-appropriate? • Does the author make an effort to provide stimulating and real-life examples?

39. How do I judge? 4. Look for Assessment • Does the curriculum come with appropriate assessment mechanisms? • Do the assessment mechanisms test various cognitive levels?

40. How do I judge? 5. Find the Evidence of Effectiveness • Does the curriculum result in a change in student knowledge? • Does the curriculum result in a change in student attitudes? • Does the curriculum result in a change in student behavior? • Does the curriculum increase the teacher’s confidence in delivering content by providing appropriate background?

41. Student Assignment! CCSS.ELA-Literacy.RH.6-8.8 Distinguish among fact, opinion, and reasoned judgment in a text. CCSS.ELA-Literacy.RH.9-10.8 Assess the extent to which the reasoning and evidence in a text support the author’s claims.

42. Thank you!