TIMMI Curriculum by Adam Chang

Table of Contents I.

Introduction ................................................................................................ 2 Teaching TIMMI Measuring the Impact of TIMMI About Kahoot Using Kahoot

II.

Day One: Budgeting ................................................................................... 6 Introduction to TIMMI and Teachers Pre-Test More about TIMMI The Decision Making Process Opportunity Costs Budgeting Emergency Funds Kahoot

III. Day Two: Credit .........................................................................................15 About Credit Interest Obtaining Credit Paying Off Credit Not Paying Off Credit Kahoot

IV. Day Three: Investing................................................................................. 24 Saving Money Risk Ways to Grow Money Types of Stock Choosing a Stock to Invest In Other Strategies for Investing Funds Kahoot

Day Four: A Game!.................................................................................... 34 The Game Post-Test The End

VI. Appendix ................................................................................................... 38 Budgeting: Decision Making and Making a Budget Scenarios Credit: Sorting the Three Câ&#x20AC;&#x2122;s and Loan Granting Scenarios Day Four: Student Handout Pre- and Post-Assessments Certificates

"An investment in knowledge pays the best interest."

Ben Franklin

“Everybody in America started to define themselves by all these things they had around them. And all of a sudden it came tumbling down. So the old American dream has died, and that is a good thing.” Suze Orman

Written by Adam Chang Contributors: Jay Bhanushali, Christina Cuppari, and Jacob Kaltman created the Kahoots. Kuran Malhotra suggested some edits. J.B., Steven Koerwer, and Justin Patel brainstormed case scenarios. Paul Yang designed some demonstrations. We wish to thank Mrs. Michelle Winter and Mrs. Bronawyn O’Leary for advising our initiative; TIMMI would not be possible without them.

Introduction Preparing for TIMMI TIMMI is a four-day curriculum for middle-schoolers on money management, with each day requiring around 45 minutes. The three central themes are Budgeting, Credit, and Investing, and lesson topics can be found in the Table of Contents. TIMMI includes a diverse range of ways to learn, including many games and collaborative activities. On the same note, you’ll need to prepare to teach TIMMI with both supplies and handouts. On all four days, you’ll need the use of a projector and computer. Incentives and rewards will be appreciated by students, like candy or cool school supplies. You may also want to prepare groups of students who would work together during TIMMI – the classroom teacher can help you with this! Students should have mobile devices (or individual computers) available to them on all four days as well for the Kahoots (but we included an alternative if students don’t have these devices). On the first day, you’ll need: • Printed copy of the pre-assessment for each student (utilizing all three versions) (Appendix) • Pens or pencils to complete the pre-assessment • Printed decision making process case scenarios for each group (Appendix) • Respective supplies for the opportunity cost demonstration • Respective supplies for the budgeting demonstration • Printed budgeting case scenarios for each group (Appendix) • To prepare the “Your TIMMI Teachers” slide with your names and pictures On the second day, you’ll need: • Respective supplies for the convenience of credit demonstration • Respective supplies for the three C’s demonstration • Printed credit factors to sort for each group (Appendix) • Respective supplies for the credit score demonstration • Printed loan granting case scenarios for each group (Appendix) • Respective supplies for the not paying off credit demonstration On the third day, you’ll need: • Respective supplies for the saving-in-bank-account and investing-in-stock demonstrations • Respective supplies for the choosing a stock to invest in demonstration • Respective supplies for the stock scam activity On the final day, you’ll need: • Printed copy of the post-assessment for each student (all three versions) (Appendix) • Pens or pencils to complete the post-assessment • Respective supplies for the game (Appendix) • Printed and completed certificates (Appendix/Online) 2

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How to Read This Curriculum Powerpoint slides in this curriculum are included here and outlined in black. Source files can be found at cdn.timm-i.org. A sample slide is shown. To access cdn.timm-i.org, you’ll need an account. Visit the “Request” link on our website, and our Research team will process your account. Most of our curriculum consists of interactive and engaging activities. Instructions and ideas for these activities are directly written out, and necessary resources (such as sample case scenarios) are typically available in the Appendix. While most of our curriculum consists of engaging and interactive learning, items included as bullet points (in shaded regions) should be explained directly during teaching. They are facts necessary for students to base their learning off of. •

This is an example fact that should explained/read to students

Measuring the Impact of TIMMI TIMMI includes three assessments which serve as pre- and post-assessments. We request that all teachings of this curriculum conduct these tests before and after teaching (on day one and day four, respectively) since it’s a key measure of the impact TIMMI has in students and communities. Our research team will collect these results and integrate them into a comprehensive report for each teaching opportunity. Student responses will be anonymized, and only identified by a random number if they are shared. Items on the assessment that teachers will need to fill out: •

Circle the corresponding NPs for days that students missed (for example, if a student did not attend the lesson on Credit/Day 2, circle NP2 on the respective post-test)

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Circle whether the assessment is a pre- or post-assessment

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Write the Cluster Record assigned to the teaching opportunity (if you’re not teaching this as a TIMMI partner, please contact us at research@timm-i.org to obtain one)

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Do not write anything in the ID section

Once assessments are complete, they should be uploaded through our website or emailed to our team at research@timm-i.org. Our research team will grade and analyze the results. If a student does not complete two assessments, we’d like his/her one assessment anyway. Similarly, if a student knows that he/she will not attend Day Four, see if the post-test can be completed at the end of Day Three. Teaching Investment and Money Management Initiative Curriculum | timm-i.org

About Kahoot Kahoot is a “Playstation for Education” where students use mobile devices or individual computers to answer multiplechoice questions, with real-time, competitive scoring in an exciting atmosphere. Each day of TIMMI ends with a Kahoot game to review the ideas taught. You will project the game at the front of the classroom (with its question/answers/clock/scoreboard). It’s quick to setup and students do not need to create any accounts (but you will need to setup a teacher account beforehand). Image from Kahoot

Using Kahoot To launch the Kahoot, visit the link for the Kahoot and click “Play.” Once loaded, you can click “Launch” with the default settings (or turn on “Randomise order of questions” and “Randomise order of answers in each question” if you wish). Once you launch your Kahoot, you'll see a colored screen with a 6-digit game pin. Instruct students to visit kahoot.it on their computers/mobile devices and enter in this pin. As students join the game, you’ll see their names on your (projected) screen. Once all students have joined, click “Start now” – it’s pretty simple from here! The question will be projected on the screen with four (or two) answer choices, and students simply use their devices to select an answer. When the question is over, students will see on their devices immediately whether they answered correctly or not. Points are awarded automatically based on correctness and speed. Throughout the game, you’ll see a leaderboard of students. After every question, a chart will also display indicating the number of students who selected each answer. At the end of the game, you’ll see the winner’s name and feedback from students, and will be able to download complete results for each student (and they save in your account). If you are able to send the complete results to us (via email at research@timm-i.org), our research team would love to analyze student success in Kahoot!

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This is a sample of what you would see on Kahoot, with the left side reflecting what’s on your screen (and projected to the class), and the right side reflecting what’s on students’ screens. If you're unable to use Kahoot, Powerpoint versions of the same questions are available at cdn.timm-i.org. You may wish to print/create colored signs for students to hold up to signal their selected answer, if using the Powerpoint versions.

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Day One: Budgeting Budgeting is the first module of the TIMMI curriculum. It includes introductions to the initiative and teachers, a pre-assessment, and a lesson on the decision making process, budgeting, and emergency funds.

Introduction to TIMMI and Teachers The Powerpoint for this section is “Introduction.pptx” and included on cdn.timm-i.org. Begin by introducing yourselves and our initiative (very briefly). You’ll be introducing more detailed information about TIMMI and its goals after the pre-test. On the following slide, you’ll replace the pictures and captions with your pictures and names. •

TIMMI stands for the Teaching Investment and Money Management Initiative

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Our goal is to teach you how to make smart decisions when dealing with money—that includes budgeting, saving, borrowing, and investing

Pre-Test Please spend no more than 5-10 minutes on this assessment. Detailed information about these assessments is available in the introduction. Three versions of the assessments are available in the Appendix – please randomly distribute these versions to students. Also distribute tests and pens/pencils, and announce the following directions: •

This is a pre-test that is not graded and does not get associated with you in any way; the only purpose of this test is to see how well we teach you

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Ignore the instructions at the very bottom today

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Please try your best to complete each answer, though you might not know some answers

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We cannot help you with this test, but you’ll learn everything on there in TIMMI

Make sure that students write their names on their tests. Do not help students with their tests, but encourage them to try their best.

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More about TIMMI Here, you’ll explain some more about our initiative and its larger goals. •

Financial literacy means knowing about the economics and money that control our lives

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In life, you’ll be faced with all different types of financial challenges, like saving up money for different goals, or finding yourself without any money for daily expenses

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The way to succeed is to save and grow money by making smart decisions

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Money management is important no matter how much money you have – there are always ways to make the best of what you have

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This is especially important in today’s world, where so many people aren’t financially literate

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They don’t make smart decisions with their money, and end up with overwhelming debt and no savings, and really struggle to survive…which is a huge problem that can solved

The reason they’re not financially literate is because they were never taught, which TIMMI is going to change— it doesn’t have to be this way

Show students the large financial problems in today’s world, like foreclosures and student debt. Explain, if necessary, that foreclosures occur when people can’t pay their mortgage and have their house taken from them by the bank.

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Ask if they have heard of these or other types of debt and financial problems burdening society (for example, have they seen commercials on TV about bankruptcy and debt?). Then ask students what they think the median savings in America is (explain, if necessary, that median is the middle of a list of all Americans’ savings). Around $10,000? Around $100,000? More?

Explain that the median American savings is, in fact, $0. Then ask if students know what the American Dream is, and ask what it entails. Student responses should include material factors like owning a home, but if they don’t, suggest them as traditionally important to the American Dream. After this, ask if these possibilities still seem realistic, given the financial conditions of today.

The Decision Making Process The Powerpoint for this section is “Budgeting.pptx” and included on cdn.timm-i.org. Start your teaching on the Decision Making Process by explaining what it is. •

The Decision Making Process is a process to make decisions

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There are 5 major steps in the Decision Making Process, but the steps are fairly simple

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We should use the Decision Making Process because it gives a straightforward and simple way to make good decisions

Now your students will learn the steps of the Decision Making Process by ordering them. Emphasize that these steps are not rigid and what many people naturally do when making decisions. Explain the steps in order after students order them.

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Run through a sample decision making process with students. Make sure to emphasize the steps of the process – that is, the titles of the slides.

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Why do we need to reflect on results once we make the decision?

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Reflecting on results is extremely important for helping you make future decisions, whether they’re in similar situations or use similar ways to analyzing alternatives

Now allow students to apply the decision making process to sample case scenarios in groups, while projecting the “Decision Making Process” slides with steps. These fictitious scenarios can be found in the Appendix. Teachers should walk around and join group discussions on making a decision. Ask students about the problem and the alternatives, helping them recognize the complexity of the alternatives. The scenarios are set up so that each alternative has benefits and drawbacks, and can be correct. After students decide, inform them that they made the correct decision. Why? Because they used the decision making process!

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Opportunity Costs After reviewing the Decision Making Process, discuss opportunity costs. •

The opportunity cost is what you miss from not choosing the next best alternative

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It’s basically the value to you of the second best choice (which you lose, since you chose the first best)

Ask students “Who here wants to make money?” and choose two volunteers. Instruct one to do something non-productive (play/text on phone, just sit there, etc.) and instruct the other one to do something productive (for example, pretend to sweep the floor). Give the productive student a reward (fake money, candy, etc.) and explain that this is the non-productive student’s opportunity cost. •

By choosing to play/text on his/her phone, (Student) is missing out from the alternative

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His/her opportunity cost is the benefit that comes from the alternative!

Briefly go over opportunity costs with two examples.

Have students describe the opportunity cost of the decision they just made in groups. Then, ask for students to give examples of decisions they recently made in real-life, and identify the opportunity costs of those decisions.

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Budgeting Discuss what a budget is.

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A budget is a way to organize expenses and income

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It’s important for achieving financial goals (saving more money) because otherwise it’s easy to spend too much without a plan

Discuss how a budget is created.

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To make a budget, you’ll find out your income and expenses so you can calculate savings towards your financial goals

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Savings = income – expenses, so the more you spend, the less you save!

Explore this relationship by asking for two volunteers. Give both the same amount of money (fake money, candy, etc.), calling this their incomes. State that (one student) knows how to budget while (the other student) does not. Collect all of the budget-unknowledgeable student’s money, but only collect some of the budget-knowledgeable student’s money. Let him/her keep the rest. •

(The budget unknowledgeable student) didn’t budget, so his/her expenses weren’t planned and ended up taking all of his/her income

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(The budget knowledgeable student) did budget, so he/she was able to reduce his/her expenses and leave room for savings at the end

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After learning the steps, students will explore them in depth by applying steps to sample case scenarios (Appendix). These scenarios ask students to calculate the amount of savings each month towards a goal, knowing that Savings = Income – Expenses. After students initially calculate savings, ask them to come up with a solution to reach the goal sooner (i.e. save more money each month by lowering expenses). The case scenarios are designed to have natural ways to cut costs.

Emergency Funds Discuss what emergency funds are.

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Emergency funds are back-up savings account of money needed for unexpected, financially problematic events (like getting fired, having your car break down, or having a family member become ill)

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Emergency funds ensure you’ll be able to get out of the emergency financially

Now, groups should act out emergency situation skits that revolve around disastrous and unexpected circumstances. You may wish to use examples from the Powerpoint, or groups can create their own scenarios if there’s enough time. After each group presents, you should ask them what they would’ve done differently if they were the person undergoing the situation—make an emergency fund!—if they don’t mention it.

Kahoot The Kahoot can be found at timm-i.org/d1/kahoot. 1. What is opportunity cost? a) The value you miss from the next best alternative b) A way to organize your expenses and your income c) The cost of a new wallet d) A way to minimize expenses

2. What is the first step in the decision making process? a) Decide b) Brainstorm alternatives c) Identify the problem d) Evaluate/Analyze alternatives

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3. What is step two of the decision making process? a) Reflect on results b) Brainstorm alternatives c) Identify the problem d) Evaluate/Analyze alternatives

8. What’s one main goal for creating a budget? a) Make sure you save enough money b) Figure out how much more money you can spend on food c) Increase your income d) Make sure you spend all of your income

4. What is step three of the decision making process? a) Decide b) Brainstorm alternatives c) Reflect on results d) Evaluate/Analyze alternatives

9. What is the opportunity cost of Caitlin going to college instead of getting a job? a) College tuition b) Salary of the job c) Textbook costs d) Knowledge he learns from going to college

5. What is step four of the decision making process? a) Decide b) Brainstorm alternatives c) Identify the problem d) Evaluate/Analyze alternatives

10. If Monica goes to the movies instead of studying, what is her opportunity cost? a) Going to the movies b) The cost it takes to drive to the movies c) Studying d) There is no opportunity cost

6. What is step five of the in the decision making process? a) Decide b) Brainstorm alternatives c) Identify the problem d) Reflect on results

11. What are the three main things to consider when making a budget? a) Rent, food, and utilities b) Insurance, gas, and cell phone bill c) Income, expenses, and savings d) Your favorite three places to shop

7. What does an emergency fund assure? a) That you’ll be in less debt b) That you won’t be able to afford your mortgage c) That your parents will always be able to help you out in financial situations d) You’ll be able to securely get out of poor financial situations

12. Rachel’s has a good monthly income and fully uses it to pay all of her bills. Why is this a problem? a) It’s not a problem b) There’s no chance of something bad happening c) She doesn’t have an emergency fund d) She can’t to handle her expenses

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13. What is not part of a budget? a) Amount of income b) Amount of expenses c) Amount of savings d) Amount in bank account

14. Most of the time there is no alternative in making a decision. a) True b) False 15. Savings = Income â&#x20AC;&#x201C; Expenses a) True b) False

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Day Two: Credit Credit is the second module of TIMMI. Topics in the lesson include credit’s benefits, credit’s drawbacks, how to obtain credit, and how to use credit (wisely). About Credit The Powerpoint for this section is “Credit.pptx” and included on cdn.timm-i.org. Begin this section by discussing what credit is. •

Credit is the ability of a person to borrow money by receiving loans

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Loans are just an amount of money you borrow and pay back over time

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Credit is important for buying things you can’t buy if you didn’t have all of the money available first

Ask the students to name some examples of very expensive things that people need to borrow money to buy. Use the slideshow to show some things credit is needed (in most cases) to afford.

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With all of these things, you don’t have thousands (or hundreds of thousands) at first

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To purchase these things, you would borrow money and pay it back over time

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Now ask for two student volunteer. Give one a big pile of change, and ask him/her to count out a specific sum of change (say, $1.47). Give the other one a makeshift credit card (e.g., a hotel key card, an index card) and simply ask him/her to swipe the card. Use this to demonstrate that an important benefit of credit cards is that they are convenient! •

Credit cards are convenient, since you don’t need to bring out cash every time you buy something

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You “borrow” the money every time and just pay back all expenses together at the end of the month

Interest Begin by demonstrating an example applicable to students’ daily lives in school. Ask for four student volunteers. Call one the “lender,” the second a “friend,” the third an “untrustworthy person,” and the last a “person who always does things late.” Show the following example:

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(The friend) borrows $5 from you in lunch money. If the friends pays (lender) back in a day, (lender) would probably just want $5 back.

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But what would happen if (lender) couldn’t trust (untrustworthy person)? He/she took a risk here…wouldn’t (lender) want extra?

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And what would happen if (person who always does things late) borrowed the money? (Lender) would probably want a little extra since he/she would get back the money late.

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Discuss interest, one cost of credit. •

This extra charge to borrow money is interest!

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After all, credit doesn’t just help the borrower – the lender benefits too!

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The lender benefits because of interest – an extra charge for you to borrow the money in the first place

Show how expensive interest can be by calculating the cost of a mortgage. Visit realtor.com (or a similar website) to find a home to buy in your community. Then, visit a mortgage payment calculator (we recommend the Bankrate.com one, found at timm-i.org/d2/calc), type in the home price for 30 years and keep the interest rate in line with current rates. •

Buying a home by borrowing money (and using a mortgage) costs almost twice as much as buying the home upfront

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This is because of interest—the lender is charging you to borrow money for so long

Make sure students understand that credit cards don’t necessarily have interest.

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Credit cards, while they are credit, don’t have interest if you pay the full amount back each month

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There’s no interest since you basically pay the “loan” back immediately

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But if you don’t pay credit cards back each month, they have extreme amounts of interest!

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Obtaining Credit Explain important factors in receiving credit by first asking for three student volunteers. Prepare three pieces of paper each with a large “C” on the front, and each with a different picture on the back reflecting one of the three C’s (for example, a picture of a person walking to work for capacity). •

There are three important factors considered about you when you try to obtain credit

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They are the three C’s of character, capacity, and capital

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They help lenders predict how well you’ll pay back the loan (or if you’ll pay back the loan at all)

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Lenders look at these three C’s to determine whether or not you get a loan, and if they’ll charge you high or low interest

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If you have good credit, you’ll be charged a lot lower interest than if you had bad credit

Rip the “C” off of the student with the taped paper about character. •

Character depends on if you’re honest and reliable (and have been in the past, with previous loans)

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Other things can determine your character—for example, a criminal record for theft would hurt your character

Rip the “C” off of the student with the taped paper about capacity.

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Capacity depends on your income and financial ability to pay back the loan

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For example, do you have a good job that pays you enough every month to pay back the loan? Or is it possible you’ll lose your job in the near future

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Rip the “C” off of the student with the taped paper about capital. •

Capital depends on the things you have that the lender can take if you don’t pay

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If you borrow a mortgage to pay for a house, for example, then the house is “capital” since the lender can take it back if you don’t pay back your loan

Help students understand these different factors by giving them a list of possible things to consider when applying for credit, and having them sort them into the three C’s in groups. A printable version of these factors (that you can cut) is available in the Appendix.

Note: some of these (like working at the same firm for 15 years) can fit into more than one C! Explain what a credit score is. •

Your credit score is a number that ranks your character – the higher it is, the better

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If you take a loan and don’t pay it back on time, for example, your score might drop by 50 points

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If you have a credit card and pay it back every month, your score might increase by 50 point

Prepare a spinner that looks like the one in the Powerpoint (for example, attaching an arrow to a colored half-plate with a fastener). Ask for one student volunteer, and say aloud certain actions this person hypothetically had done while reflecting the respective credit score change on the spinner. For example, say that this student “borrowed $1000 and never paid it back” and spin the arrow to the left, or say that this student has a “permanent, well-paying job” and spin the arrow to the right. Teaching Investment and Money Management Initiative Curriculum | timm-i.org

Give students sample “credit reports” from loan applications. They’ll become bankers and decide if they want to grant a loan, and if the loan should have low/medium/high interest. Credit reports can be found in the Appendix. While there can be some controversy over these individuals, the best respective answers are: •

Nikki: grant a loan at a low interest rate because she has a high credit score, has good capacity with investments and a job, and has good capital from investments and assets

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Joe: do not grant a loan, because Joe has little capital, little capacity without a job, and evidently does not have good character in paying back loans

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Jack: grant a loan at a high interest rate because Jack has a “reliable” capacity at the restaurant and has some capital, but doesn’t have good credit from missing payments

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Jill: a loan with a low or high interest rate works for this one. Jill’s capacity seems strong from her job and investments, but we know nothing about her capital. We also have no information on her character, as she has never taken out a loan before.

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Nick: do not grant a loan, because Nick has no capital and no credit character. His capacity seems shaky at best, given his large amount of firings.

Paying Off Credit Discuss paying off credit and not paying off credit. •

It’s better to pay off credit earlier— you’ll pay less interest, since interest gets charged on interest (it’s complicated!)

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Always try to pay back as much as you can as soon as you can!

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For larger loans like mortgages and student debt, you can always pay back more than the monthly payment – it’ll be cheaper in the long run!

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For credit cards: many times there will be only a small required minimum payment (like $25), but you should always pay it off in full so you don’t get charged interest

Show how a mortgage can be cheaper if paid off in a shorter amount of time. Using the same situation/house/interest and same calculator, calculate the mortgage for 15 years. Explain how paying the loan off quicker (paying more per month) can greatly reduce the cost of the loan, and emphasize the underlying principle that paying off credit earlier reduces interest.

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Not Paying Off Credit Begin with a demonstration: one teacher (or one extremely brave student volunteer) should serve as the debtor. Say that this borrower owes $1000, and that for every $1000 owed, one person from the bank will come (aggressively) asking for money. Have a student serve as this initial collector. When this collector asks for at the debtor to pay, the debtor should refuse. Every time this happens, explain that the debt will increase from interest—so the amount of students yelling at the debtor to pay will increase (with the debtor always not paying). Eventually and quickly, this will become overwhelming. Instruct that this represents the problems of not paying off credit. Then explain the numerous immediate and long-term consequences of not paying off credit. •

Not paying back loans on time (or at all) results in even more interest

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This makes the total you owe even larger and even more impossible to pay back (just like the number of people yelling before)

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If you don’t pay back loans, the lender can take your capital too

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This may include a car or house (or your jewelry, etc.), especially if the loan was to buy the car or house in the first place

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Not paying back loans on time also destroys your character and a credit score

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Since you’ve proven yourself to be less responsible, it’ll be hard to receive a loan at all—if you get one by luck, you’ll have to pay very high interest

To further demonstrate this, ask for one student to volunteer and bring his/her property (a pencil case or backpack on him/her, for example). Say that this person took out a loan, and never paid it back. Demonstrate repossession by (jokingly) confiscating the student’s items. Demonstrate the inability to obtain credit by offering a prize (candy, a toy car, a printed out picture, etc.) and refusing to give it to the student, citing that he/she has bad credit and can’t borrow money to buy it.

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Kahoot The Kahoot can be found at timm-i.org/d2/kahoot. 1. What is interest? a) The cost of buying a new phone b) The cost of borrowing money c) How financially stable you are in order for a bank to lend you money d) Allowing your interests to be taken into consideration 2. If you needed to borrow money from the bank for a new car, which would you be doing? a) Paying interest b) Earning interest c) Paying off debt d) None of the above 3. How do credit cards benefit you? a) They make you look like you’re wealthy b) Allow you to pay all expenses together at the end of the month c) Assure financial stability d) You make money every time you buy a product

6. What happens if you do not pay the full amount on your credit card bill each month? a) You are no longer trusted by the bank b) You face extreme amounts of interest c) You earn 10% interest d) You are taxed 7. What happens if you DO pay the full amount on your credit card bill each month? a) You don’t have interest b) You have to pay 50% more interest c) You have to cancel the credit card d) You can borrow more money than usual from the bank 8. Which is a way to increase your credit score? a) Buy more b) Lend more money c) Reduce the amount of debt you owe d) Take all your money out of the bank and put it in a new bank

4. What are the three important factors considered when obtaining credit; the three C’s? a) Character, Capacity, Capital b) Character, Collaborative, Credit c) Credit, Capital, Capacity d) Cost, Credit Capital

9. If Kate wanted to buy a house, but the house has a mortgage, what does that mean? a) The previous owners left money for her b) The bank can take away her job if she doesn’t pay off her mortgage c) She has to pay the mortgage in cash d) She’ll pay almost twice as much for the house since interest is expensive

5. How does a lender benefit from interest? a) They get a free pizza party b) Their credit score goes up c) They get a new installment loan d) They get paid interest plus the initial money they loaned out

10. What does one’s capacity depend on? a) The type of bank(s) you have money in b) The amount of interest you already owe c) Your income and financial ability to pay back a loan d) How much credit you’ve recently spent

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11. Why is it better to pay off credit earlier than later? a) You’ll pay less or no interest (interest gets charged on interest) b) You’ll get an extra 15% off your car insurance c) The bank will appreciate your dedication d) You won’t be forced to pay with cash 12. Which option would fall under the category of “character” when trying to obtain a loan? a) Making money on investments b) Having a home as collateral c) Owning expensive jewelry d) Not paying back previous loans

13. Not paying back loans hurts you now and in the future. a) True b) False 14. Which would be considered as being “in debt”? a) Paying your rent b) Working at a local supermarket c) Owing money on credit cards d) Volunteering for a non-profit organization 15. Credit cards will charge you interest even if you pay the minimum payment. a) True b) False

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Day Three: Investing Investing is the third module of TIMMI. Topics in the lesson include saving money, risk and reward, different ways to invest, and strategies for investing in stocks. Saving Money The Powerpoint for this section is “Investing.pptx” and included on cdn.timm-i.org. Explain how saving even a little bit of money goes a long way. •

Just like how debt can significantly increase due to compound interest, so can savings

•

Saving even a little bit of money can go a long way

Demonstrate compound interest, one of the most important principles of money management. Ask for two student volunteers, and give them “$20” in fake money (paper money, candy, etc.). Tell them that every time they count to 10, you’ll give them half of their money as “interest.” The first time, explain to the class that the students earned $10, half of their money. The next time, explain to the class that the students earned $15, half of their new balance. •

This is compound interest – all of your money, including the interest you earned, is counted to determine your new interest

•

You’re earning interest on your interest, which sounds confusing, but just know that you’ll be earning more money than you think by saving!

Demonstrate the power of saving by using an online savings calculator. Ask for a low amount of money to save daily ($1, $5, etc.) and compare this amount to some spending (for example, a bag of chips at lunch). Then, visit a savings calculator (we recommend the Bankrate.com one, found at timm-i.org/d3/save), type in the monthly deposit (daily deposit * 30) along with a $1 initial amount. Use the annual interest given (around 7%), and look at the results through 5 years. Ask if students remember the formula from the class on Budgeting: savings = income – expenses. Remind them that the less they spend, the more they save – so even if they save $1 by not buying a bag of chips every day, it’ll grow in the long term!

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Risk Explain what risk is, and what is has to do with profits. •

Risk is the possibility that something bad will happen (and that you’ll lose money)

•

Let’s pretend that tomorrow’s a snow day (or you think your teacher will be sick), and you decide to watch TV instead of doing work for school

•

Usually, homework takes you 30 minutes and studying for a test takes you 2 hours

Then, discuss the relationship between risk and return.

•

If you don’t do homework, you’re taking a smaller risk since homework counts less than tests—but there’s also a smaller reward since you would only save 30 minutes

•

If you don’t study for the test, you can get a greater reward of saving 2 hours, but you’re taking a much larger risk since the test counts for much more than homework

•

The higher the risk, the higher the reward can be!

•

A large risk can also mean a larger loss, however, so be careful!

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Ways to Grow Money Compare bank accounts, bonds, and stocks on the premise of interest/return and risk. •

Bank accounts have close to zero risk, but that also means they have close to zero interest

•

On average, if you put in $100, you would gain only 5 cents of interest after a year

•

You won’t be able to grow money in a bank account

Demonstrate the interest from bank accounts by asking the class “Who has a bank account?” and choosing one student volunteer. Give this student some “money” (fake money/candy/etc.) and ask him/her to place it in your hands, pretending that the money is now stored in a bank account. Talk to the class as if something exciting is going to happen to the money, keeping them waiting in suspense. After around 30 seconds to a minute of doing nothing (and waiting), explain that this is what happens to money stored in a bank account: nothing.

•

Bonds are loans you make to large companies or governments so they can do large projects, like building a bridge or pioneering a product

•

These are the opposite of when you use credit – you’re the lender now!

•

Since you get charged interest when borrowing money, you can also charge these companies/governments interest

•

The amount of risk depends on how likely the borrower will pay you back, and the interest depends on the risk of course! •

Owing stock is owning a part of a company, so whether you gain or lose money depends on whether the company gains or loses money

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You’ll usually only own a very small part of a company, depending on how much you invest

•

The risk depends on the type of stock…

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Explain stocks with a simulation. Ask for a student volunteer, and give this volunteer fake money (or say that this volunteer has “money”). Have this student “buy stock” in a company.

•

Since (student) bought stock, he/she now owns part of this company (the red section) depending on how many shares he/she bought

•

He/she now gets to receive profit if the company makes money, but also will lose money if the company loses money

•

This profit/loss is based on how much of the company (student) owns

Show a large sum of “money” (with fake money/candy/etc.) and explain that this is the company’s profit. Give part of this to the student, since the investor gets his/her share of the profit.

Types of Stocks Ask students to name some large companies they know (Apple, McDonalds, etc.). Explain that investing in these companies would be a safe investment in a blue-chip stock. •

Blue-chip stocks are from large, wellknown companies that usually do well

•

They’re low risk, and have a good return of around 7-8% a year, which would make you $7-$8 if you invested $100

Explain blue-chip stocks by playing a game to identify logos. On each slide, students must choose one of the two logos to guess. Ask them to choose the one they think they know, and then have them guess what company the logo is from. There are 6 sideby-side games; the answers are listed below. Bolded answers are the blue-chip companies; almost all students should choose and identify them.

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Left Side of Slide Apple Coca-Cola Silicon Graphics Nike Verizon BroadSoft

Right Side of Slide Walter Energy Globalstar Home Depot Millenial Media Service Source McDonald’s

Explain what this logo game represents.

•

In each round, there was one logo that you probably knew – they were of well-known companies like Apple and Nike

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Choosing to guess the one you knew was a safe choice, and kind of like investing in bluechip stocks – you’re choosing a large and well-known company

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•

There are also more risky stocks known as penny stocks

•

Penny stocks are the opposite of bluechip stocks: they’re from small companies and they’re very risky (so they can have very large returns or very large losses)

•

Investing in a penny stock would kind of be like choosing the other logo in each round

•

Those logos were of penny stocks – you’ve probably never heard of them because they’re so small, so choosing them would have been risky

Choosing a Stock to Invest In Explain the most important rule in picking a stock with a game. Ask for one student volunteer, and give this volunteer a choice between a visible prize (candy, for example) and a closed box (filled with nothing, unbeknownst to the student). Say that this closed box may have something even better, but nobody knows for sure. After the student selects one item, show both and explain that choosing the closed box would be a very bad idea since nobody knew anything about it. Continue on to explain the golden rule of picking a stock.

•

The biggest rule is if you don’t understand what the company does, don’t invest in the stock

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In the game before, if you didn’t know what was in the box, choosing it would have resulted in ending up with nothing!

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A key strategy is to look at industries you’re familiar with, and find ones that are performing better than the market, and find good companies in that industry

•

For example, if you know about technology, you’ll should see which technology companies are doing well

Did Apple just release a really popular phone? Is Samsung coming out with a tablet that’s going to be successful? If so, their stock will probably go up!

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Other Strategies for Investing Say that it’s important to decide what type of investor you wish to be.

•

Short-term investors look to base their investments off in less than a year, while long-term investors look for future growth beyond a year

•

Beyond time period, you should decide how risky of an investor you want to be

Since you’re young (and we’re young too), we have time on our side, so we can and should invest for the long-term

Explain some strategies for getting advice about investing.

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There are many radio and TV shows about stocks, such as Mad Money by Jim Cramer on CNBC or Taking Stock on Bloomberg Radio

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You can learn, for example, how certain industries are performing and decide if investing would be a good idea

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While you can get information about stocks from legitimate sources, many people will try to trick you by giving you fake “stock picks”

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They will promise you that you’ll earn money quickly and easily, which is a downright lie

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If you follow their “advice” and buy the stock, it only helps them and will end up losing you lots of money very quickly

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The man in the picture is Timothy Sykes, who offers “stock picks” on the internet—would a honest person need to pose with stacks of cash?

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Demonstrate this by asking for one student volunteer, and giving him/her a sum of fake money to invest. A teacher should then offer to double the student’s money, if the student “invests” with him/her. If the student agrees, take the money and tell the student “You were tricked!” – explain that nobody can double money, and people who say they can will just take it all. If the student doesn’t agree, try to persuade the student using tactics in similar stock scams (e.g. describing previous successes, offering alluring promises, etc.). If the student miraculously doesn’t agree, explain that he/she made the right decision since nobody can double money, and people who say they can will just take it all.

Funds Explain active and passive (index) mutual funds. •

Mutual funds are where many investors chip-in to buy many stocks and bonds together

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A manager will usually choose the stocks and bonds in the fund, depending on what type of fund it is—there are high risk and low risk mutual funds, for example

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This manager will take a small fee out of your profit for choosing the investment options

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Mutual funds are usually a good option for beginning investors, and probably better than stocks, since a professional manages your money and spreads it out across many investments

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Mutual funds are safer, since you invest in so many different things; if one stock crashes down, the entire fund doesn’t blow up in flames

Prepare the class for learning about index funds by emphasizing that index funds, out of the options in TIMMI, will probably be the best investment they can make for now.

•

Index funds are mutual funds, but they follow a predetermined market index instead of being managed by a professional

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Since they’re not managed, you’ll pay less fees when investing but still get similar profits

Index funds are probably the best option for you, as young adults beginning to invest

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•

So mutual funds are kind of like buying pizza – where everyone chips in, and you share the final pie

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Active mutual funds are like paying the person who orders the pizza to spend time choosing what they think is really good

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Index funds (which are passive) are like choosing a popular classic, which can work well, and you won’t have to spend extra making sure the choice is really good

•

All mutual funds are like pizza in another way too – they’re probably the best idea for beginning investors like you

Kahoot 1. If an investor wants to take the biggest risk, what should he do? a) Put his money in a bank account b) Buy several bonds c) Invest in penny stocks d) Put his money under his bed

4. Group the following investment vehicles in order of least risky to riskiest. a) Bank Accounts, Penny Stocks, Bonds b) Penny Stocks, Bonds, Bank Accounts c) Bank Accounts, Bonds, Penny Stocks d) Penny Stocks, Bank Accounts, Bonds

2. If Jim puts $1,000,000 in his bank account, approximately how much interest will he get paid after a year? a) $100 b) $10,000 c) $50,000 d) $1,000,000

5. Group the following investment options in order of the average profit, from greatest to least. a) Bank Accounts, Bonds, Stocks b) Bank Accounts, Stocks, Bonds c) Stocks, Bonds, Bank Accounts d) Bonds, Stocks, Bank Accounts

3. What is risk when making an investment? a) The possibility that you’ll lose money b) Profit made through an investment c) How easily you get direct cash from an investment d) A contract made between an investor and a company

6. What should Ally do if she is a very conservative investor and is interested in growing her money by around 8%? a) Invest in penny stocks b) Invest in blue chip stocks c) Invest in stocks with a small market cap d) Put money in his bank account

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7. What’s special about an index fund beyond just a regular mutual fund? a) There’s no active manager, so you’ll pay much less in fees b) It’s much more risky c) The interest is very low, almost like that of a bank account d) You randomly choose stocks by drawing index cards 8. What do all blue chip stocks have? a) A large market cap b) A very low price c) A very risky position d) A graph that jumps around constantly 9. What should you do if someone tells you a stock and promises that it will go up? a) Invest around 20% of your money in it b) Invest all of your money in it c) Charge your friends and tell them the stock d) Know the person is trying to scam you and run 10. What is a general rule for investing? a) If you don’t know what the company does, don’t invest in it b) If the stock went down today, don’t buy it c) Only invest in blue-chip companies d) Quickly buy stocks that went up yesterday

11. What is probably the best investment option for now? a) Bank account b) Penny stocks c) Mutual/index funds d) High-risk bonds 12. What’s one benefit of a mutual fund? a) You become friends with other investors b) You get to choose exactly which stocks you invest in c) They spread out their investment in many different stocks and are safer d) You get pizza as a reward 13. The higher the risk, the higher the interest can be. a) True b) False 14. Saving in a bank account will grow your money with good interest over time. a) True b) False 15. You should closely follow the advice of people with “stock picks” in the mail or on the internet (like Tim Sykes). a) True b) False

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Day Four: A Game! Day Four is the last module of TIMMI. Day Four begins with a game: a makeshift scenario where groups start out with some initial money, and try to save up enough to achieve a financial goal. Each group will start out with $1000 in makeshift money. You can use a projector, whiteboard, or piece of paper to track this money. During the game, students can buy prizes with their money. If a group buys a prize, all of the students in the group receive the prize. Do not let students consume the prizes until the game completely ends, since you’ll probably repossess some! Some suggested prizes and amounts: •

$2500 – small gift card ($3-$5) to a local treats store like ice cream, coffee, etc.

•

$2000 – large candy or snack treat

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$1000 – smaller candy or snack treat

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Feel free to substitute other prizes based on what you have/local sponsors can provide

The game has 5 rounds lasting around 5 minutes each. During each round, groups make a decision about how to manage their money and complete the “transaction” at the end of the round. At the beginning of each round, each group will earn a salary of $100. During the game, students can take out debt, at a cost of 15% per round (calculated at the beginning of every round the students had debt). Students must pay this debt off before the game ends and can do so in any round. At the end of the game, if they do not finish paying off their debt, repossess their prizes to collect! During each round, the following investment options are available: •

Invest in a stock: earn (or lose) based on a die roll after every round – 20% per round if roll a 4/5/6, 10% per round if roll a 2/3, and lose 10% per round if roll a 1.

•

Invest in a fund: earn (or lose) based on a die roll after every round – 15% per round if roll a 2/3/4/5/6, and nothing per round if roll a 1

Preparation:

•

Dice to roll for stock investments

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Paper/whiteboard/projector to keep track of money AND display investment alternatives

•

Prizes

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Calculator or cellphone calculator

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To Start: Announce the following directions about the game: •

Each group will start out with $1000 in money

•

The game has 5 rounds where you make a decision about what to do with your money

•

You’ll also earn a salary of $100 at the beginning of every round

•

During the game, you can also borrow any amount of debt for 15% interest per round, which you can pay back every round or all at once – you’ll have to pay it back at some point

Announce what the prizes are, and what they cost. Announce that prizes can be bought at any time, and yes, with borrowed money which groups will have to pay back over time. Using the slide with information about investment alternatives, explain the following: •

You can invest in blue-chip stocks for any length of time. The return will be determined by a die roll after every round. If you roll a 4, 5, or 6, you’ll earn a 20% return for that round. If you roll a 2 or a 3, you’ll earn a 10% return for that round. If you roll a 1, you’ll lose 10% of the money you invested for that round.

•

You can also invest in a fund for any length of time. The return is determined the same way as the blue-chip stock, except you’ll earn a 15% return if you roll anything but a 1, and nothing if you roll a 1

Display the following slide with these investment possibilities. The Powerpoint for this section is “Game.pptx” and included on cdn.timm-i.org.

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During Each Round: Make each round around 5 minutes, or whatever is necessary for students to make decisions on how to manage their money. At the beginning of the round, add $100 to their money for their salary. At the beginning of the round, also calculate the total debt if the group has debt. At the end of each round, teachers should ask each group what they wish to do with their money. If they wish to invest in stocks or funds, teachers should perform the necessary calculations of return (letting students roll the dice). If they wish to borrow debt, teachers should record this. If the group wishes to pay off debt, subtract the amount paid from the total (after interest was added at the beginning of each round). Calculations: Debt: 1.15 * [previous total debt] Mutual Funds (2/3/4/5/6): 1.15 * [amount invested] Stock: 1.2 (4/5/6) or 1.1 (2/3) or 0.9 (1) * [amount invested] At the end of the game, allow groups to withdraw all their money and buy prizes. If groups owe debt, collect on this debt (and possibly repossess their prizes at face value) – showing that taking out unaffordable debt is very bad is the point of the game.

What This Game Means: Explain the larger implications of this game.

•

Everything you saw in this game is what’s been happening in America for the past decade

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There was always the option of taking out debt to buy a prize, even though you couldn’t really afford the prize in the first place – people did this with cars and houses and TVs

•

Every round, if you had debt, you were always struggling to pay it off because you couldn’t afford it in the first place based on your salary

•

At the end, when the debt needed to be collected and people simply couldn’t pay, the banks had to collect and ended up doing so by taking their cars and houses and TVs, and in the process also took away their “success” and their American Dream

•

All it takes to avoid these problems is what you’ve learned in TIMMI: make smart decisions knowing that debt can be overwhelming and saving/investing can be very rewarding—if you simply invested your money in this game, you came out ahead…you were successful

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Post-Test Please spend no more than 5-10 minutes on this assessment. Detailed information about these assessments is available in the introduction. Three versions of the assessments are available in the Appendix – please randomly distribute these versions to students (don’t regard what version students might have gotten before). Also distribute tests and pens/pencils, and announce the following directions: •

This is a post-test that is not graded and does not get associated with you in any way

•

The purpose of this test is to see how well we taught you

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Please try your best to complete each answer, though you might not know some answers

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On the back, please write one thing you liked about TIMMI, one thing you didn’t like about TIMMI, and one sentence about how TIMMI will help you in the future

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We cannot help you with this test, but you learned everything on here in TIMMI

Make sure that students write their names on their tests. Do not help students with their tests, but encourage them to try their best.

The End You’ve finished the TIMMI curriculum! Congratulate yourselves and the students, and provide students with certificates. A version you can fill out by hand is included at the end; a fillable Word document version of the certificate can be found at cdn.timm-i.org.

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Appendix – Budgeting: Decision Making Scenarios You’re finishing your second year of college and your final is two days away, which counts for most of your grade for the class. You haven’t truly prepared for it and are somewhat nervous. Your friends, who you worry about losing contact with, invite you to dinner and a movie the night before the final – this may be the last chance you get to see them this year. The restaurant you’re a waiter at (you work to pay for college) will also be hosting a special event that same evening and requires that all employees are there. What do you do?

Life is going well for you: you have finally saved enough money to buy a home. There is a house, townhome, and apartment currently on the market that are all in your price range. The house is the largest and has the lowest taxes, but is on the outside of town and suffers loud noise pollution from the highway. The townhome is in a nice residential section of town, but is slightly smaller and has somewhat higher taxes. The apartment is downtown, making it easy to walk to your workplace as well as most of the stores/restaurants/community centers in your city, but has higher taxes than the house or townhome. Where do you choose to live?

You’ve made it big—you’re a singer who’s become famous! Three different records offer you contracts to sign with them. Star Records is run by your Uncle Tom, who you remember as constantly being by your side when you were an aspiring musician. They would only pay you $750,000 per album produced, while Pearl Records and Palace Records both offer $1,000,000 per album produced. Palace Records is also willing to give you a nice signing bonus of $500,000—in the past, they’ve always hit upon the next big thing (even if it meant ditching current artists). Pearl Records doesn’t offer a signing bonus because they feel that a long-term commitment to an artist would result in greater rewards for everyone involved. Which record label do you choose to work with?

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You’re 40. You’ve worked for over a decade in banking, a stressful industry where it was hard to get hired. While your salary is comfortable, you’ve slowly become less and less happy doing your job. A friend hears of your troubles and offers you a job at the nonprofit organization she started a few years ago. She thinks your finance background would be perfect for trying to save the world, but can only pay you around half of your salary at the bank (since it’s a nonprofit). After hearing about her successful nonprofit, you also consider starting a for-profit company with what you think is a good idea. Previously, you dismissed the idea because it seemed risky and your salary would be very low (or zero) starting out, but now you’re reconsidering it after your friend’s success. How do you solve your midlife crisis—stay at the bank, join your friend, or start a company?

You’re in high school, and trying to find a club to dedicate your time to. You really care about finance and economics, and find there are three clubs you could join: TIMMI (hey, that’s us!), LBFA (Leaders Becoming Future Activists), and DPP (Demand Protection Project). TIMMI’s community service-based goal is to bring financial literacy to middle-schoolers, so you would be teaching fun and interesting lessons in that club. LBFA is more focused on large (state and national) competitions testing your knowledge of finance, with awards you can win. LBFA can be expensive, though, because of these competitions. DPP seeks to promote small businesses in your community, so its activities include hosting fun events at shops/restaurants. Even though DPP won’t earn you community service hours, you could get opportunities like jobs at these businesses. What club do you join?

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Appendix â&#x20AC;&#x201C; Budgeting: Making a Budget Scenarios Julia is a single woman who has owned her own restaurant, which specializes in coffee, for many years and also tutors on the weekends. Julia makes $9,000 every month from her restaurant, and another $500 from her tutoring business. Her expenses add up to $4000 monthly, and her daily Starbucks costs an additional $300 monthly. Julia is trying to save up for a Mercedes-Benz for $72,000. Help Julia create a monthly budget that will help her save for her financial goal, and estimate how long it would take Julia to buy the Mercedes. Nick is a seventeen year old student and wants a brand new iPhone because his old iPhone broke when he dropped it in a pool. Nick makes a $160 per month by working at a local pizzeria, where he gets an employee discount. Nickâ&#x20AC;&#x2122;s expenses add up to $60 from gas and $50 from eating out. The iPhone 6 that he wants costs $300. Help Nick create a monthly budget that will help him save for his financial goal, and estimate how long it would take Nick to buy his new iPhone. Caitlin is a teacher and a boxer. She has a passion for working out, and she wants to buy some gym equipment that costs $1,200. She makes $4,600 from teaching and $2,400 from boxing each month. Caitlin has excessive spending habits and has around $6,900 in expenses per month, including $2500 on Mountain Dew to stay hydrated. Help Caitlin create a monthly budget that will help her save for her financial goal, and estimate how long it would take Caitlin to buy the gym equipment. Jessica is an investment banker who works in New York City, and also owns her own clothing store. Her total income is $50,000 per month. Jessica pays $12,000 in expenses each month, and also $2,000 monthly for parking for her car. Jessica wants to buy a new apartment closer to the subway (without taking out a loan) which will cost her $720,000, since she always rides the subway. Help Jessica create a monthly budget that will help her save for her financial goal, and estimate how long it would take Jessica to buy her apartment. Jimmy is in his final year at college, which he likes for all the benefits it offers (like a large library, pool/gym, and fun activities). He wishes to buy a car as a graduation present, which will cost $6000. Jimmy makes his money from a restaurant, being a hairstylist, and cab driver. His total income is $4500 a month. His rent and food add up to $2700 a month, and he also spends $400 a month as a gym member at the club across the street. Help Jimmy create a monthly budget that will help him save for his financial goal, and estimate how long it would take Jimmy to buy his car.

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Appendix â&#x20AC;&#x201C; Credit: Sorting the Three Câ&#x20AC;&#x2122;s

Good grades in school

Homeless

Working at the same firm for 15 years

Tenured teacher

Owes money on credit cards

Putting a home up as collateral

Taken and paid back Criminal record for many loans on time theft and fraud

Owns expensive antiques

Never taken out a loan before

Fired from many short-term jobs

Makes money on investments

Good grades in school

Homeless

Working at the same firm for 15 years

Tenured teacher

Owes money on credit cards

Putting a home up as collateral

Taken and paid back Criminal record for many loans on time theft and fraud Never taken out a loan before

Fired from many short-term jobs

Owns expensive antiques Makes money on investments

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Appendix – Credit: Loan Granting Scenarios Nikki is looking to buy a nice house in your neighborhood. She has almost always paid back her previous loans, and because of this she has a high credit score of 760. She has saved up enough money to pay for the first 10% of her $200,000 house, so she is applying for a loan for $180,000. Nikki has various investments and assets, and she has a regular job that will help her not to default on her payments. Decide based on the three C’s whether or not Nikki should get the loan, and whether it should be at a low or high interest rate. Joe wishes to buy a BMW coupe. He has very little money to pay for the car, and also owns very few assets, so he needs a loan for most of the price. He has already taken a loan out to help pay for his monthly rent payments on his house. Joe is very forgetful, so he often forgets to send in payment for his credit card bills. Joe got fired from his job 3 months ago, and has had no luck in finding a new job. Decide based on the three C’s whether or not Joe should get the loan, and whether it should be at a low or high interest rate. Jack wants to borrow $7000 for his honeymoon trip to Hawaii with his new wife. Jack has loans on his house and his car, and he has only missed a couple payments on his house. Jack is employed as a busboy at a diner and is very reliable in the workplace. Jack does not like to gamble on stocks, so he only owns very stable companies like Apple and Amazon. His credit score is 620, which is decent. Decide based on the three C’s whether or not Jack should get the loan, and whether it should be at a low or high interest rate. Jill wants a new Ford Mustang, which costs about $25,000, and needs a loan. She has never taken out a loan before, so she currently has no credit score or credit history at all. She is employed as an architect in a New York City firm. Jill owns stock in large, fairly consistent tech companies, namely Sony and Microsoft. Decide based on the three C’s whether or not Jill should get the loan, and whether it should be at a low or high interest rate. Nick wants to buy a new house, and he is coming to you for a mortgage loan. He has never bought anything on credit before, so he has no credit history for you to judge his reliability. He is currently employed as a taxi driver, but has lost four of his previous jobs in the last four months, mostly because he tends to get in fights with his boss. He has no assets or known investments. Nick has enough money to pay for 5% of his house up front, so his loan would total $255,000. Decide based on the three C’s whether or not Nick should get the loan, and whether it should be at a low or high interest rate.

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Appendix – Day Four: Student Handout You’re starting with $1000 in the bank, and you’re saving up for something. There are five rounds in this game; each round, you’ll decide what you want to do with your money. You’ll earn a salary of $100 after every round. Each round, you can: • Take out debt • Pay off debt (some or all of it) • Invest (in a stock or fund)

• Buy a prize (yes, you can use money you borrow to buy a prize) Let your teacher know what you want to do during each round. At the end of the round, your teacher will do the requested action and calculate how much money you have. Your debt has 15% interest, calculated at the beginning of every round you have debt. It must be paid back before the end of the game. If you invest in a stock, your return will depend on luck – you’ll roll a die at the end of the round to see what return you get. If you roll a 4, 5, or 6, you’ll earn a 20% profit for that round. If you roll a 2 or 3, you’ll earn a 10% profit for that round. If you roll a 1, you’ll lose 10% for that round. If you invest in a (mutual/index) fund, your return will depend on luck – you’ll roll a die at the end to see what return you get. If you don’t roll a 1, you’ll earn a 15% profit for that round. If you roll a 1, you’ll earn (and lose) nothing for that round.

Teaching Investment and Money Management Initiative Curriculum | timm-i.org

The Teaching Investment and Money Management Initiative | Assessment A Name:

_____________________________________

Instructions: This assessment is not graded. Please try your best to complete each question; you might not know some answers. Your teachers cannot help you with any questions. 1) Think about a recent decision you made. Give and explain what the opportunity cost was.

2) Name one main factor involved in getting credit and explain how you can improve it.

3) How are risk and returns related?

4) Do you currently (plan to) practice smart money management? If so, how and why?

If you are taking this as a post-test, please write 1 thing you liked about TIMMI and 1 thing you disliked about TIMMI on the back. Lastly, write 1 sentence as well about how you think TIMMI might be important for your life and future. Thank you! NP1

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Teaching Investment and Money Management Initiative Curriculum | timm-i.org

The Teaching Investment and Money Management Initiative | Assessment B Name:

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Instructions: This assessment is not graded. Please try your best to complete each question; you might not know some answers. Your teachers cannot help you with any questions. 1) Why is creating a budget important? What does it allow you to do?

2) How do you benefit from having good (or great) credit?

3) Explain the difference between blue-chip and penny stocks. Which do you prefer? Why?

4) Do you currently (plan to) practice smart money management? If so, how and why?

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Teaching Investment and Money Management Initiative Curriculum | timm-i.org

ID:

The Teaching Investment and Money Management Initiative | Assessment C Name:

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Instructions: This assessment is not graded. Please try your best to complete each question; you might not know some answers. Your teachers cannot help you with any questions. 1) What do you think is the most important step of the decision-making process, and why?

2) Who does the system of credit benefit, and how?

3) Whatâ&#x20AC;&#x2122;s the golden rule for choosing a stock to invest in?

4) Do you currently (plan to) practice smart money management? If so, how and why?

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Teaching Investment and Money Management Initiative Curriculum | timm-i.org

, TEACHER

, ADVISOR

GIVEN THIS ____ DAY OF _________________, 20____

AWARD FOR RENEWING THE AMERICAN DREAM

completed the Teaching Investment and Money Management Initiativeâ&#x20AC;&#x2122;s financial literacy program, became a better decision maker and investor, and is recognized with this

THIS CERTIFIES THAT