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Student Investment Clubs: Real World Experience with Financial Markets

0. Student Investment Clubs: Real World Experience with Financial Markets. Member Contrinbutions. 15 members $25 contribution per month Total contributions per month = $375 Contributions for 10 months/year = $3,750 Contributions for 4 years = $15000. The Magic of Compound Interest.

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Student Investment Clubs: Real World Experience with Financial Markets

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  1. 0 Student Investment Clubs: Real World Experience with Financial Markets

  2. Member Contrinbutions • 15 members • $25 contribution per month • Total contributions per month = $375 • Contributions for 10 months/year = $3,750 • Contributions for 4 years = $15000

  3. The Magic of Compound Interest • http://www.moneytoys.com/future-value-calculator.php

  4. 0 Financial Literacy Facts • National consequences will result from a continued lack of financial literacy. • Distribution of information is vital. • Being financially literate is a lifelong process. • Reaching youth is critical. • Educational materials should be used at teachable moments. • Establishing goals is the first step to a financial future. • Storytelling is a highly effective teaching strategy. (From National Endowment for Financial Education, Financial Literacy in America: Individual Choices, National Consequences, October 2002.)

  5. Financial Literacy Income Spending and credit Money management Savings and investment

  6. Consumer Bankruptcies 2006, 2007 2007 2006 NL 1,837 2,066 NS 3,043 2,964 PE 259 281 NB 2,126 2,103 QC 21,282 20,497 ON 26,313 24,887 MB 1,720 1,907 SK 1,271 1,523 AB 4,038 4,553 BC 5,589 6,058 NT 26 36 YU 17 20 NU 3 2

  7. 0 Why a Student Investment Club? • Provides skills for future financial literacy. • Emphasizes values of regular savings, financial analysis, and group decision making. • Recognizes the value of long-term investing. • Recognizes the power of compound interest. • Provides a realistic environment to develop investment goals and skills. • Connects economics, personal finance, business math and entrepreneurship concepts to real world experience.

  8. $IC Definition A Student Investment Club is: • made up of 12 to 15 students who, • over their four years of high school, • learn the values of regular savings, financial analysis, social learning and group decision making. • Through the development of a real investment portfolio, which includes short and long term investments, the Student Investment Club gives its members an opportunity to become financially literate.

  9. 0 Getting Started Start new SICs with 9th/ 10th graders • SIC will remain intact throughout high school • Membership • 12 to 15 students • Officers • Chair, Vice-Chair, Secretary, Treasurer, & Education chair • Constitution • Based on adult investment club

  10. 0 SIC Organization Procedures Financials Membership Officers Constitution Components Voting Formation Guests/ New Members Banks/Brokers Dissolution

  11. 0 Crucial Decision Real Money? Virtual Money?

  12. 0 SIC Activities Focus on Financial Literacy Make appropriate investment decisions Share info about investments & market sectors Learn about investments, economics & financial liquidity Review & analyze financial statements

  13. 0 Components of a Successful SIC • SIC Leadership • Partnership Development • Content Coverage • SIC Recruitment • Communication and Public Relations • “Money” Availability

  14. 0 Components of a Successful $IC • SIC Leadership • Chair, vice chair, secretary, treasurer, education chair • Student mentors • Teacher-advisor • Partnership Development • Stockbrokers, financial planner, adult investment club • Content Coverage

  15. Components of a Successful $IC • SIC Recruitment • Recruit junior high/middle school students • Clone clubs as needed • Communication and Public Relations • Web site • Invite community/school to educational activities • “Money” Availability • Virtual versus real money • Fundraising activities similar to other organizations

  16. 0 $IC Content Learning Stage I Learning Stage 2 Learning Stage 3 • Work Group Skills • Parliamentary Law • Team Work Skills • Economics/Financial Skills • Market Operation • Economic Concepts • Financial Statements • Financial Planning • Continuing Ed • Specialized Financial Topics • New Sector Investment Opportunities • Adv. Financial Concepts • Business Statement Analysis • Conducting Market Research • Sophisticated Invest- ment Opportunities (such as index funds) • Understanding risk

  17. First Year Educational Content • Teamwork and Group Skills • Groupnorm development • Group development cycle • Conflict resolution • Active listening • Goal and timeline setting • Group work ethics • Presentation skills Parliamentary Procedures • Agenda & Report development • Discussion mgt. • Constitution development • Rules & procedures establishment • Committee development

  18. First Year Educational Content • Financial Concepts • Personal financial “agenda” • Financial opportunities • Personal saving concepts • Stock market basics Economic Concepts • Scarcity • Opportunity cost • Supply & Demand • Comparative advantage • Economic indicators

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