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Teach Investing in Two Hours!

Annual Conference on Financial Education

2018

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Investing in Two Hours

Key Principles

  • Focus on outcomes
  • Start early
  • Keep it simple
  • Reflects current trends
  • Make a decision

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Investing in Two Hours

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For an e-copy:

bit.ly/2hUM8a9

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Discussion Prompt

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  • What do you know about investing and where have you learned about it?

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NGPF Activity

ANALYZE: Saving for Retirement

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For an e-copy:

bit.ly/2yHbPW5

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NGPF Reference & Game

Stocks, Bonds, & Mutual Funds

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8-Hour Workshop

6. Crash Course in Investing

Stocks, Bonds, & Mutual Funds

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  • Buying a Stock
    • You buy 1 share of 1.5 billion shares

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  • Value of Your Shares
    • (Current stock price) X (# of shares you buy)

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  • How You Make Money
    • Receive dividends of ~ $1.00 per share per year
    • Sell your share at a higher price than you bought it

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  • Risk
    • Volatility of market
    • Price could plummet & not recover
    • Impossible to know when to sell to maximize earnings

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www.ngpf.org Last updated: 3/2/17

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8-Hour Workshop

6. Crash Course in Investing

Stocks, Bonds, & Mutual Funds

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  • Buying a Bond
    • You lend $1,000 to PepsiCo when they issue a bond

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  • Terms of the Agreement
    • 4.75% interest per year on the amount you lent to them
    • Repay your $1,000 at the end of the term (10 years)

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  • How You Make Money
    • $47.50 per year for 10 years
    • $1,000 at end of term (this was your money in the first place)

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  • Risk
    • Company/govt cannot repay you due to bankruptcy

www.ngpf.org Last updated: 3/2/17

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8-Hour Workshop

6. Crash Course in Investing

Stocks, Bonds, & Mutual Funds

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  • What do you think is riskier: the stock or the bond?
  • What are some ways you could minimize risk?

www.ngpf.org Last updated: 3/2/17

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8-Hour Workshop

6. Crash Course in Investing

Stocks, Bonds, & Mutual Funds

www.ngpf.org Last updated: 3/2/17

Source: Vanguard, 2/28/17

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8-Hour Workshop

6. Crash Course in Investing

Stocks, Bonds, & Mutual Funds

GAME: Let’s Make a Mutual Fund

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  • You are being given a slip of paper with two pieces of information:
    • Name of a company and its ticker
    • The percentage change in the stock price over the past year (“performance”)

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  • Await your teacher’s directions for your next steps

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www.ngpf.org Last updated: 3/2/17

Teachers: Game support document here

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Investing

S&P500

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NGPF Game

Let’s Make a Mutual Fund

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Round 1

  • Individual Round
    • Who had a positive performance?
    • Who had a negative performance?
    • Why would you invest in a company that did so poorly?

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NGPF Game

Let’s Make a Mutual Fund

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Round 2

  • Find 1 person who has a similar company to yours
    • What do you know about each company?
    • Better to own shares in TWO companies rather than one?

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NGPF Game

Let’s Make a Mutual Fund

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Round 3

  • Create a small mutual fund (group of 6 people)
    • What criteria did you use to form your group?
    • Estimate your return had you owned one share of each company
    • Would you describe this as a well diversified portfolio?

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NGPF Game

Let’s Make a Mutual Fund

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Round 4

  • Create an index fund (Dow Jones Industrials)
    • Why might it be better to own shares in Dow Jones Industrials, rather than one stock in Dow Jones?
    • How could an investor create MORE diversification in their portfolio?

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NGPF Game

Let’s Make a Mutual Fund

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  • What were your ahas/takeaways from this experience?

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  • Why might this project be engaging for your students?

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  • What modifications would you make and why?

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Interactive

Vanguard Target Retirement Fund Allocation Tool

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For an e-copy:

vgi.vg/2n7oryf

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NGPF Activity

ROLEPLAY: SIgn Up for a 401(k)

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For an e-copy:

bit.ly/2zHq9y2

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NGPF Activity

Wealthfont Risk Tolerance Assessment

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For an e-copy:

wlth.fr/1UvclcG

(2 x lowercase ‘l’ for lemon)

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Exit Ticket

  • Why is it important to start investing early for your retirement?
  • Explain 2 ways in which an actively managed mutual fund and an index fund differ.
  • What makes a target date fund an “easy” choice for a retirement investment?

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Contact Us

www.ngpf.org

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laura@ngpf.org

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@NextGenPF

Next Gen Personal Finance

@NextGenPF