68 customizable lessons, aligned with National Standards, exams and more.
Read NGPF's school-by-school analysis of financial education in America today
Activities
Advocacy
Behavioral Economics
Best Of
Budgeting
Buying a Car
Career
Checking
Consumer Skills
Credit
Cryptocurrencies
Current Events
Curriculum Announcements
Economics
Entrepreneurship
Edpuzzle
ELL Resources
FinCap Friday
Gambling and Sports Betting
Insurance
Interactive
Investing
Math
Paying for College
Philanthropy
Podcasts
Press Releases
Professional Development
Question of the Day
Savings
So Expensive Series
Taxes
Teacher Talk
Investing is hard to teach. Talk to personal finance teachers and ask them what concept they find most challenging to teach to high school students and many will tell you it is investing. How can you possibly cover a landscape that encompasses thousands of stocks, thousand of mutual funds, not to mention that other staple, bonds? There are so many choices for you to teach (but also for investors to choose from), that it is easy to feel overwhelmed. No surprise that the market for financial advisors is thriving in this sea of complexity. Can’t we just teach our students “Don’t try this at home?”
But what if there was a simple solution? One that didn’t require evaluating thousands of options but was elegant in its simplicity without sacrificing investment returns. Having been an investor for over 25 years now and bought a few “can’t miss companies” and “mutual funds of the year” and “low priced stocks that couldn’t go lower,” I have personally experienced so many of the psychological misjudgments that afflict investors (check out this Charlie Munger speech laying them all out). When I saw this article a year ago, I thought what a great way to teach our students about investing.
So, what’s an investor to do? Think more simply and stay away from owning individual stocks (from WSJ article):
“With well over 8,000 mutual funds and exchange-traded funds at their fingertips, individual investors have never had more investment options from which to choose. But with all of that choice comes the potential for overload, and overwhelmed investors can make bad decisions or give in to impulses to chase returns from previously high-performing funds.
That is why some experts are pushing a back-to-basics approach to investing. As drastic as it may sound, they say it’s possible—even at times desirable—to construct a very well-diversified portfolio using just three low-cost mutual funds or ETFs.”
So, how can you get a diversified portfolio from just three mutual funds or ETFs?
“Many “Bogleheads”—a group of investors who favor index investing as inspired by Vanguard Group founder John Bogle —suggest a three-fund portfolio consisting of the U.S.-focusedVanguard Total Stock Market Index fund,Vanguard Total International Stock Index, and Vanguard Total Bond Market Index. Together, the three mutual funds, which also offer ETF shares, track more than 15,000 global securities.”
So, how to make this exciting for students? How about tossing in a little math and a little competition? Assume that 15 years ago, you were faced with a decision about investing a $1,000 gift from your aunt. You only had one decision to make;
Once they have selected that mix of funds, students commit to not change it over the 15 year period. I have created a spreadsheet which students can complete for this activity: InvestingActivity_NGPF
For example, they might have chosen 50% Stock Market Index, 30% International Stock and 20% Total Bond Index.
So, how can they figure out how much they would have made. Here is the five step process:
As students are working on the spreadsheet, the teacher can check their work to ensure they understand what data to input into the spreadsheet and what it means. Put student’s asset allocations on the board and their FINAL VALUES which will lead to interesting discussions.
Enjoy!
For example, if they said 40% to go in the Total Stock Market Fund, that would be a $400 investment (40% X $1,000).
What’s the Catch? Identity Theft Monitoring Services
Question of the Day: What’s The Highest Interest Rate I Can Earn on a Standard Savings Account?
Question of the Day: What percent of 18-41 year olds get financial advice from social media?
A-G Course Approval Templates
Quiz: PISA Financial Literacy Sample Test Questions
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.
Join the more than 12,000 teachers who get the NGPF daily blog delivered to their inbox:
MOST POPULAR POSTS
1
Question of the Day: How much did Taylor Swift's Eras Tour gross during its two-year, 149 concert run?
2
Get Festive with NGPF Resources and Activities
3
Useful Personal Finance Movies and Documentaries with Worksheets
4
NEW Holiday Personal Finance Posters
5
NEW NGPF Review Materials Released
Before your subscription to our newsletter is active, you need to confirm your email address by clicking the link in the email we just sent you. It may take a couple minutes to arrive, and we suggest checking your spam folders just in case!
Great! Success message here
New to NGPF?
Save time, increase engagement, and teach life-changing financial skills with NGPF’s free curriculum
1.Register for a free TeacherAccount
2.ExploreSemester Course
3.Findstudent favorites
4.LeverageNGPF Academy
Your new account will provide you with access to NGPF Assessments and Answer Keys. It may take up to 1 business day for your Teacher Account to be activated; we will notify you once the process is complete.
Thanks for joining our community!
The NGPF Team
Complete the form below to access exclusive resources for teachers. Our team will review your account and send you a follow up email within 24 hours.
To speed up your verification process, please submit proof of status to gain access to answer keys & assessments.
Acceptable information includes:
Acceptable file types: .png, .jpg, .pdf.
Once you submit this form, our team will review your account and send you a follow up email within 24 hours. We may need additional information to verify your teacher status before you have full access to NGPF.
Take the quiz to quickly find the best resources for you!