New Investment Key Terms

NEW INVESTMENT KEY TERM

In discussing how the stock market is performing, we might describe how volatile the market is.

Stock Market Volatility

The frequency and magnitude of stock price movements or whole market movements, up or down. The bigger and more frequent the price swings, the more volatile the market is said to be.

RTSWS SPRING MENTORSHIP COMING SOON!

What is the Spring Mentorship?

You will be paired with a mentor that you will work with for all 5 sessions. You will work on resume writing, interview skills, self-advocacy, LinkedIn and skills for university and beyond. You can utilize your mentor to help you talk through university and career options as well!

Go to the RTSWS App to Enroll!

The Wall Street field trip is a capstone experience where students are given a rare glimpse into corporate office settings, the workplaces and work lives of financiers.

The experience allows the students to shadow female treasury officers, wealth managers, analysts, comptrollers, accountants, entrepreneurs and more. For many of our students, this is their first glimpse into the world of finance, opening their eyes to a new world of possibilities.

Think About It!

What are some of the reasons people choose to attend college?

Many students choose to attend college in order to gain the education they need to get the job they want or to earn a higher salary after college.

However, the financial returns for college vary.

How much money one makes after college can vary based on the college or university the student attends and the subject they choose to study.

How can we measure the profitability of going to college?

NEW INVESTMENT KEY TERM

Return on Investment (ROI)

A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.

To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.

For investing and the financial markets → ROI measures the profitability of an investment relative to its cost.

In analyzing the cost of college → ROI measures the increase in lifetime earnings a student can expect from a given degree, minus the direct and indirect costs of college.

TOOLS TO CALCULATE COLLEGE ROI:

• Georgetown’s Center on Education and the Workforce https://cew.georgetown.edu/ This website allows you to compare schools’ return on investment based upon degree, level, type and more. Georgetown includes a net present value calculation to determine where a school stands at 10, 15, 20, 30 and 40 years after enrollment.

• PayScale https://www.payscale.com/ This website offers a look at what you can expect to get paid for different jobs in various locations. Additionally, PayScale frequently puts out reports about the earnings you might expect, depending on what course of study you choose.

• College Scorecard

https://collegescorecard.ed.gov/ A resource to gather information on a college’s average annual cost (tuition and fees, as well as living expenses), expected salary range after completing, average graduation rate, percentage of students receiving federal loans, typical monthly loan payment and more.

For more information on how to calculate the ROI of your college choice, see the bonus article on page 70.

Why is money called dough? Because we all knead it.

ARTICLE: AAUW: “Deeper in Debt: Women & Student Loans” (2021 Report)

https://www.aauw.org/resources/research/deeper-in-debt/

AAUW’s 2021 Deeper in Debt report finds: • Women hold an average of $31,276 in student debt, leaving them with a monthly loan payment of $307 the year after graduation. Given that women graduating with a bachelor’s degree expect to earn an average of $35,338—only 81% of what men anticipate earning—meeting that loan obligation is challenging at best.

• One year after college, women spend an average of $920 per month on housing, $396 per month on a car loan and, for the 16% of women who are moms, $520 on childcare, the report finds. Adding in that $307 student loan payment makes it difficult—if not downright impossible—to make ends meet.

MORE ON STUDENT LOANS

KEY TERM: Subsidized Loan

A Federal Direct loan offered by the U.S. Department of Education based on financial need as determined by a student's FAFSA. Subsidized loans are only available to undergraduate students, and the government does not usually charge interest while the borrower is in school at least half-time, for the first six months after leaving school.

KEY TERM: Unsubsidized Loan

A type of Federal Direct loan offered by the U.S. Department of Education available to undergraduate or graduate students regardless of income or financial need. The government charges interest from the time the loan is disbursed through the life of the loan, with a few exceptions.