$IC Student Investment Clubs: Real World Experience with Financial Markets

Member 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 Interest

Financial 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 Literacy Income Spending and credit Money management Savings and investment

Consumer Bankruptcies 2006, NL 1,837 2,066 NS 3,043 2,964 PE NB 2,126 2,103 QC21,28220,497 ON26,31324,887 MB 1,720 1,907 SK 1,271 1,523 AB 4,038 4,553 BC 5,589 6,058 NT YU NU 3 2

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 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 Started Start new SICs with 9 th / 10 th 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 Organization Formation Officers Membership Dissolution Constitution Components Procedures Financials Voting Guests/ New Members Banks/ Brokers

Crucial Decision Real Money? Virtual Money?

SIC 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 SIC SIC Leadership Partnership Development Content Coverage SIC Recruitment Communication and Public Relations “Money” Availability

Components 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 $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 Learning Stage I Learning Stage 2 Learning 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 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 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