Student Investment Clubs: Real World Experience with Financial Markets

$IC

Student Investment Clubs: Real World Experience with Financial Markets

Student Investment Clubs: Real World Experience with Financial Markets

Member ContrinbutionsMember Contrinbutions

• 15 members

• $25 contribution per month

• Total contributions per month = $375

• Contributions for 10 months/year = $3,750

• Contributions for 4 years = $15000

The Magic of Compound InterestThe Magic of Compound Interest• http://www.moneytoys.com/future-value-calculator.php

Financial Literacy FactsFinancial Literacy Facts• National consequences will result from a continued lack

of financial literacy. • Distribution of information is vital. • Being financially literate is a lifelong process. • Reaching youth is critical.• Educational materials should be used at teachable

moments.• Establishing goals is the first step to a financial future.• Storytelling is a highly effective teaching strategy.

(From National Endowment for Financial Education, Financial Literacy in America: Individual Choices, National Consequences, October 2002.)

Financial LiteracyFinancial Literacy

Income

Spending and credit

Money management

Savings and investment

Consumer Bankruptcies 2006, 2007Consumer Bankruptcies 2006, 2007

2007 2006NL 1,837 2,066NS 3,043 2,964 PE 259 281NB 2,126 2,103QC 21,282 20,497 ON 26,313 24,887 MB 1,720 1,907SK 1,271 1,523AB 4,038 4,553BC 5,589 6,058NT 26 36YU 17 20NU 3 2

Why a Student Investment Club?Why a Student Investment Club?• Provides skills for future financial literacy.• Emphasizes values of regular savings, financial

analysis, and group decision making.• Recognizes the value of long-term investing.• Recognizes the power of compound interest.• Provides a realistic environment to develop

investment goals and skills.• Connects economics, personal finance,

business math and entrepreneurship concepts to real world experience.

$IC Definition$IC Definition

A Student Investment Club is:– made up of 12 to 15 students who,– over their four years of high school,– learn the values of regular savings, financial

analysis, social learning and group decision making.

• Through the development of a real investment portfolio, which includes short and long term investments, the Student Investment Club gives its members an opportunity to become financially literate.

Getting StartedGetting Started

Start new SICs with 9th/ 10th graders– SIC will remain intact

throughout high school

Membership– 12 to 15 students

Officers– Chair, Vice-Chair,

Secretary, Treasurer, & Education chair

Constitution– Based on adult

investment club

SIC OrganizationSIC Organization

Formation

Officers

Membership

Dissolution

Constitution ComponentsConstitution Components

Procedures

Financials

Voting

Guests/ New Members

Banks/Brokers

Crucial DecisionCrucial Decision

Real Money?

Virtual Money?

SIC ActivitiesSIC Activities

Focus on Financial Literacy

Learn about investments, economics & financial liquidity

Review & analyze financial statements

Share info about investments & market sectors

Make appropriate investment decisions

Components of a Successful SICComponents of a Successful SIC

• SIC Leadership

• Partnership Development

• Content Coverage

• SIC Recruitment

• Communication and Public Relations

• “Money” Availability

Components of a Successful $ICComponents of a Successful $IC

• SIC Leadership• Chair, vice chair, secretary, treasurer,

education chair• Student mentors• Teacher-advisor

• Partnership Development• Stockbrokers, financial planner, adult

investment club

• Content Coverage

Components of a Successful $ICComponents of a Successful $IC

• SIC Recruitment• Recruit junior high/middle school students• Clone clubs as needed

• Communication and Public Relations• Web site• Invite community/school to educational activities

• “Money” Availability• Virtual versus real money• Fundraising activities similar to other

organizations

$IC Content$IC Content

Learning Stage ILearning Stage I Learning Stage 2Learning Stage 2 Learning Stage 3Learning Stage 3

Work Group Skills

• Parliamentary Law

• Team Work Skills

Economics/Financial Skills

• Market Operation

• Economic Concepts

• Financial Statements

• Financial Planning

Adv. Financial Concepts

• Business Statement Analysis

• Conducting Market Research

• Sophisticated Invest- ment Opportunities (such as index funds)

• Understanding risk

Continuing Ed

• Specialized Financial Topics

• New Sector Investment Opportunities

First Year Educational ContentFirst Year Educational Content

Parliamentary Procedures

• Agenda & Report development

• Discussion mgt.• Constitution

development• Rules & procedures

establishment• Committee

development

Teamwork and Group Skills

• Group norm development

• Group development cycle

• Conflict resolution

• Active listening

• Goal and timeline setting

• Group work ethics

• Presentation skills

First Year Educational ContentFirst Year Educational Content

Economic Concepts

• Scarcity• Opportunity cost• Supply & Demand• Comparative

advantage• Economic

indicators

Financial Concepts

• Personal financial “agenda”

• Financial opportunities

• Personal saving concepts

• Stock market basics