INVESTING IN YOUR FUTURE 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10 1

INVESTING IN YOUR FUTURE

2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10

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Learning Outcomes

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Students will learn how their money can make money with time and a good interest rate.

Students will understand that their money can grow through investments.

Students will investigate the major components of investing.

Lesson Tasks

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Discuss investing early and how their money can grow over time

Discuss diversification and its benefits

Watch the Mellody Hobson TED Talk and complete the questions

Review investing terminology and apply it to a scenario

Learn about simple and compound interest and apply it to investments and scenarios

Investing Early

Examine the infographic about investing

What do you notice?

What questions do you have?

What terms do you need to know?

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Video: “No One Is Coming”

You will watch the TED Talk video by Mellody Hobson, addressing the issue of investing and why you should do it sooner than later.

Link: Mellody Hobson TED Talk 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10

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https://drive.google.com/file/d/0B__-qL9mJTz0U0d1RTVWQU04SjQ/view?usp=sharing

Video: “No One Is Coming”

Watch the video and complete the Investing in Your Future Video Questions activity.

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Investing Terminology

Diversification: Having your money in more than one place or investing in more than one asset.

For example, think about the risk faced by two investors. Both of them own two businesses on a beach. One investor owns a sunglasses stand and a rain umbrella business. The other investor owns two sunglasses stands.

Which one of these investors is diversified? Why is that a good idea?

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Investing TerminologyLong-term and short-term investments: typically longer-term investments can face greater highs and lows than short-term investments.

Long-term investments are important for retirement and any investments held for a long period of time, stocks, bonds, real estate or cash.

Short-term investments will most likely be sold and include stocks or bonds that can be liquidated quickly. You should be in a “strong cash position,” meaning you have plenty of extra cash to invest, before investing short term.

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Investing TerminologyHigh risk and low risk investments: High-risk investments are those with great risk but also the potential for great reward.

Examples include a company’s first sale of its stock to the public or IPO (Initial Public Offering) or investing in real estate funds such as flipping houses.

Low risk investments are those that are a safer investment option, and are better for short-term investments or as you near retirement.

Examples include mutual funds or corporate bonds.

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Investigating Investments

Think about the Investing Terminology as you read the following scenario and answer the question with a partner, small group, or discuss as a class.

How would you go about investing the $10,000, knowing you will not plan to touch it until you’re 65?

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Additional Investing Tips

This table outlines common investments and looks at the risk as well as pros and cons.

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https://www.practicalmoneyskills.com/foreducators/lesson_plans/lev9-12/SA_Lesson18.pdf 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10

https://www.practicalmoneyskills.com/foreducators/lesson_plans/lev9-12/SA_Lesson18.pdf


Investigating Investments ScenarioYou have worked hard for the last 10 years to stay out of debt, to build up your savings, and to stay within your budget. You have a healthy emergency savings account and are putting back money for a down payment. You have a good job and you have decided to continue renting instead of buying at this time in your life. As a result, you now have over $10,000 saved (in addition to your down payment and emergency savings) at the age of 35. Way to go! You want your money to make you money, though, so you look into investing.

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Investigating Investments

Now answer the question with a partner, small group, or discuss as a class based on the scenario.

How would you go about investing the $10,000, knowing you will not plan to touch it until you’re 65?

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Simple vs. Compound Interest

Simple Interest is money you can earn by initially investing some money (the principal). A percentage (the interest) of the principal is added to the principal, making your initial investment grow!http://www.webmath.com/simpinterest.html

Compound Interest is interest added to the principal of a deposit or loan so that the added interest also earns interest from then on. This addition of interest to the principal is called compounding.https://en.wikipedia.org/wiki/Compound_interest

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http://www.webmath.com/simpinterest.html

http://www.webmath.com/simpinterest.html

https://en.wikipedia.org/wiki/Compound_interest

https://en.wikipedia.org/wiki/Compound_interest

What’s My Interest?

If you could earn $100 or $10 for doing the same job, which would you take? Chances are, you’d take the $100. While that seems like an easy choice, understanding how you can earn $100 versus $10 when investing money means mastering interest and rate of return. Learn how different rates, interest types, and investment strategies can impact and maximize your earnings.

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What’s My Interest?

Complete the table and questions for the activity Investing in Your Future Interest.

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https://www.practicalmoneyskills.com/foreducators/lesson_plans/lev9-12/SA_Lesson18.pdf 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10



Review

How can investing early help your money grow over time?

What are some ways you can diversify your investments?

How can simple and compound interest help you earn money?


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Review AnswersHow can investing early help your money grow over time?• Possible answers may include:• Allows you to invest in multiple assets (diversify)• Lets your money accrue interest• You can invest in both long/short-term investments

What are some ways you can diversify your investments?• Possible answers may include:• Long-term and short-term investments• High risk and low risk investments

How can simple and compound interest help you earn money?• Based on the different rates, interest types and investment strategies you can

maximize your earnings. 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10

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Complete the Lesson…

Now complete the Investing in Your Future Reflection.


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Documents

INVESTING IN YOUR FUTURE 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10 1