Catching up on my reading this week perusing personal finance articles, blogs, newsletters. Here’s what looks interesting:

• I enjoyed contributing to this story by Kathleen Lynn (Bright) whose title “Teaching Personal Finance In The Age of Venmo” highlights the need to update how we teach young people about money.

• Dan Kadlec in Right About Money uses the recent ransomware hack to make the point (confirmed by research) that the financially astute are often more prone to falling for financial scams.

• Another argument for index funds based on recent academic paper from ASU finance professor (hat tip to Jonathan Clements at Humble Dollar) that found that: “Over the 90 years, the U.S. stock market’s entire gain, over and above T-bills, can be attributed to less than 4% of stocks. The other 96% collectively matched T-bills.”

• Why is it always a bad idea to use your credit card to take cash from an ATM? How about an average interest rate of 24% for starters (from NY Times)

• Something I had long suspected..we have a grade inflation problem on the internet with ratings (from WSJ; 2 minute video)

• Loyal readers of the blog know that indexing is all the craze. So, who exactly gets to pick what companies are selected for an index. Here’s a profile of this low-profile stock picker behind the S&P500 (from WSJ; subscription)

• We have a lot of cognitive biases! This infographic from GeekWrapped (?) lays out all the decision-making, social and memory biases inherent in the human condition. What’s helpful is that they also provide some ideas on how you can overcome these biases. Might be an interesting activity for your students to take one of the three types of biases (decision-making, social or memory) and provide examples in their lives.

• Soon there will only be ONE company servicing federal student loans; watch out for transition issues and of course, customer service issues, when this is ultimately implemented in 2019 given the complexity of the system today (repayment plans, nine servicers, etc. (from Washington Post)

• A few Planet Money podcasts that I recently enjoyed:
  • Ben Bernanke reminiscing how it felt to be in the throes of the Great Recession
  • Spreadsheets! takes a nostalgic view on how the spreadsheet came about and how it has impacted the world of finance (we love spreadsheets too; develop your students critical spreadsheet skills with these NGPF activities)
  • Small Change is a discussion with Robert Gordon, author of Rise and Fall of American Growth, who takes the contrarian view that our current pace of innovation doesn’t match what occurred throughout the 20th Century.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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