Mike Raymer Program Manager I nvestor E ducation Financial Fitness for Life and

Georgia Council on Economic Education w w w. g c e e. o r g The Mission To help teachers teach those students, K-12, in the public and independent schools of Georgia

Georgia Council on Economic Education w w w. g c e e. o r g The Vision Productive Workers Informed Consumers Involved Citizens Prudent Savers Wise Investors Sound lifelong decision makers in a globally interdependent world Students leaving school prepared for their roles as:

Georgia Council on Economic Education w w w. g c e e. o r g The Problem of Economic and Financial Literacy…

Georgia Council on Economic Education w w w. g c e e. o r g Saving is a very fine thing. Especially when your parents do it for you. --Sir Winston Churchill

Georgia Council on Economic Education w w w. g c e e. o r g About 8 of 10 Americans are comfortable with the level of financial planning they are currently doing. Source: Federal Reserve Bank, St. Louis

Georgia Council on Economic Education w w w. g c e e. o r g 34% have not begun to prepare for retirement. 23% save nothing for long term goals. 25% do not know how much they are saving.

Georgia Council on Economic Education w w w. g c e e. o r g On average, Americans expect to retire at age 61 and live to 83.

Georgia Council on Economic Education w w w. g c e e. o r g Overall levels of economic understanding are low. (Average score of out of 40 in recent national tests.) Many young people and their teachers hold stereotypes about the wealthy.

Georgia Council on Economic Education w w w. g c e e. o r g (Failed to plan for his financial future)

Georgia Council on Economic Education w w w. g c e e. o r g Source: Federal Reserve Bank, St. Louis Personal Bankruptcies

Bankruptcy Rates, 2009

Georgia Bankruptcy Rates by County, 2009

Personal Bankruptcy Filings, 2009 StateRate (# of households in state per bankruptcy) % Change (over 2008) 1 – Nevada35.261% 2 – Tennessee48.515% 3 – Georgia50.322% 4 – Alabama56.720% 5 – Indiana57.222% 6 – Utah62.057% 7 – Michigan62.526% 8 – California66.059% 9 – Ohio70.522% 10 – Illinois71.932% Georgia Council on Economic Education w w w. g c e e. o r g

Georgia Council on Economic Education w w w. g c e e. o r g Foreclosure Rates are Way Up Georgia is 6 th in the Nation

National Foreclosure Rates, 2009

Mortgage Delinquency Rate

Mortgage Delinquency Rates

Georgia Council on Economic Education w w w. g c e e. o r g Source: Federal Reserve Bank, St. Louis Consumer Debt

Georgia Council on Economic Education w w w. g c e e. o r g Source: Federal Reserve Bank, St. Louis Credit Card Use

Georgia Council on Economic Education w w w. g c e e. o r g Source: Federal Reserve Bank, St. Louis Credit Card Use in Atlanta Average Atlanta – 3 open credit cards (down from 4 in 2007), but total balance on cards is higher Across 20 metro areas – –Atlanta is #1 with avg balance at $6,753 –In 2007 it was $7,114 –Credit Scores in Georgia below the national average

Georgia Council on Economic Education w w w. g c e e. o r g Credit card companies have been marketing aggressively to young people % of teens have a credit card. (JA, 2005) High School Students and Credit Cards

Georgia Council on Economic Education w w w. g c e e. o r g College students report having an average of 4.6 credit cards. Half have four or more. Seniors graduate with more than $4,100 in credit card debt, up from $2,900 in Only 17% said they regularly paid off all the cards each month. The remaining 82% carried balances and incurred finance charges each month. 84% said they need more education on financial management topics. College Students and Credit Cards (Sallie Mae, 2009)

Georgia Council on Economic Education w w w. g c e e. o r g Unbanked Households (Federal Reserve Bank of Chicago) About 10 million households are unbanked. Over 57% of unbanked households are minority households.

Georgia Council on Economic Education w w w. g c e e. o r g What Does It Mean to be “Unbanked?”

Georgia Council on Economic Education w w w. g c e e. o r g Where Do the Unbanked Go For Financial Services?

Georgia Council on Economic Education w w w. g c e e. o r g Unemployment

Georgia Council on Economic Education w w w. g c e e. o r g So What Can We Do About All of This? Option #1

Georgia Council on Economic Education w w w. g c e e. o r g Option #2

Georgia Council on Economic Education w w w. g c e e. o r g Financial Fitness for Life Table of Contents Theme 1 Why There is No Such Thing as a Free Lunch? 1. How to Really Be a Millionaire 2. An Economic Way of Thinking 3. Decision-Making Theme 2 Why Education Pays Off: Learn Something Learn Something 4. Job Application Process 5. Making a Job 6. Why Some Jobs Pay More than Others 7. Uncle Sam Takes a Bite

Georgia Council on Economic Education w w w. g c e e. o r g Financial Fitness for Life Table of Contents Theme 3 Getting to the End of the Rainbow 8. What’s the Cost of Spending and Saving?* 9. There is No Free Lunch in Investing 10. Investment Bingo

Georgia Council on Economic Education w w w. g c e e. o r g Financial Fitness for Life Table of Contents Theme 4 Spending and Saving are Serious Business 11. What is Credit? 12. Making Credit Choices 13. Applying for Credit 14. All About Interest 15. Shopping for a Credit Card 16. Shopping for a Mortgage 17. Shopping for an Auto Loan 18. Consumer Credit Protection 19. Scams and Schemes

Georgia Council on Economic Education w w w. g c e e. o r g Financial Fitness for Life Table of Contents Theme 5 Get a Plan: Get a Grip on Life 20. Managing Your Money 21. Banking Basics 22. The Good News About Insurance

Georgia Council on Economic Education w w w. g c e e. o r g Lesson Components 1. Fitness Focus Lesson Description Objectives Time Required 2. Equipment Visuals Student Exercises 3. Workout Warm Up (Purpose) Warm Up (Purpose) Exercise (Instruction) Exercise (Instruction) Cool Down (Closure) Cool Down (Closure) 4. Parent Connection Connection

Georgia Council on Economic Education w w w. g c e e. o r g How to Really Be a Millionaire (lesson 1)

Georgia Council on Economic Education w w w. g c e e. o r g The Millionaire Game 1. Most millionaires are college graduates. T 2. A majority of millionaires work fewer than 40 hours a week. F 3. More than half of all millionaires never received money from a trust fund or estate. T 4. More millionaires have American Express Gold Cards than Sears credit cards. F 5. More millionaires drive Fords than Cadillacs. T

Georgia Council on Economic Education w w w. g c e e. o r g The Millionaire Game 6. Most millionaires work in glamorous jobs such as sports, entertainment, or high tech. F 7. Most millionaires work for big Fortune 500 companies. F 8. Many poor people become millionaires by winning the lottery. F

Georgia Council on Economic Education w w w. g c e e. o r g The Millionaire Game 9. College graduates earn about 65% more than high school graduates. T 10. If an average 18-year-old high school graduate spends as much …his or her earnings at 8% annual interest, the high school graduate would have $5,500,000. T 11. Day traders usually beat the stock market and many become millionaires. F

Georgia Council on Economic Education w w w. g c e e. o r g Rules for Improving Your Financial Life Get a good education Work long, hard, and smart Learn money- management skills Live below your means Buy a home (you can afford) Save early and oftenSave early and often Invest in commonInvest in common stocks for the stocks for the long term long term Gather informationGather information before making before making decisions decisions Get married and stayGet married and stay married married

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Georgia Council on Economic Education w w w. g c e e. o r g Begins- January 31, 2011 Ends- April 8, 2011

Georgia Council on Economic Education w w w. g c e e. o r g The Basics Stock- An ownership share, or shares of ownership, in a corporation.

Georgia Council on Economic Education w w w. g c e e. o r g Can You Buy Stock in or

Georgia Council on Economic Education w w w. g c e e. o r g Key Terms Common Stock A security that represents ownership in a corporation. Common stockholders are on the bottom of the priority ladder for ownership structure.

Georgia Council on Economic Education w w w. g c e e. o r g Preferred Stock A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights.

Georgia Council on Economic Education w w w. g c e e. o r g Buying on the Margin Borrowed money that is used to purchase securities. This practice is referred to as "buying on margin".

Georgia Council on Economic Education w w w. g c e e. o r g The Different Markets New York Stock Exchange The oldest stock exchange in the United States, founded in 1792 and stocks are still traded on the floor. Traditionally for large corporations with large volumes of shares.

Georgia Council on Economic Education w w w. g c e e. o r g NASDAQ An electronic marketplace enabling buyers and sellers to get together via computer to trade stocks. Traditionally high-tech firms that are very active. Created in 1971.

Georgia Council on Economic Education w w w. g c e e. o r g American Stock Exchange (AMEX) Located in New York, handles about 10% of all securities exchange. Has mostly small-cap stocks, exchange-traded funds and derivatives.

Georgia Council on Economic Education w w w. g c e e. o r g Teaching “Stuff” $7.00 per team fee No fee if you are a Title 1 school No fee for any school in Atlanta City, Decatur City, Fulton County, DeKalb County Teams of 3-5 students (suggested)

Georgia Council on Economic Education w w w. g c e e. o r g National Rules $100,000 to Invest for 10 Weeks –NYSE –AMEX –NASDAQ Must Purchase Minimum of 100 Shares Minimum Share Price of $5 4 pm Closing Price (not real-time)

Georgia Council on Economic Education w w w. g c e e. o r g National Rules Hardest thing to do? Get teams to spend the $100,000! 2% Interest Earned on Unspent Cash 2% Transaction Fee (all transactions) 7% Interest Charged on Margin Loans

Georgia Council on Economic Education w w w. g c e e. o r g Georgia 3x3x3 Rules Must purchase a stock before end of third week Must purchase at least three stocks Must hold three stocks for 3 weeks

Georgia Council on Economic Education w w w. g c e e. o r g Teaching “Stuff” Grading Rankings released once a week Do not liquidate portfolio on the last day Awards by region and state – luncheon for all winners in May

Georgia Council on Economic Education w w w. g c e e. o r g Teaching “Stuff” Student- “What stock should I buy?” Me- “If I knew the answer to that I would not be in this classroom with you. I would be living here and paying someone to count my money.”

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Georgia Council on Economic Education w w w. g c e e. o r g How to Win Select stock kids are familiar with; NIKE Buy at $100/share 1000 shares with $100,000 Price rises to $102/share Account increases by $2,000 Select stock with a lot of volatility; XYZ Buy at $10/share 10,000 shares with with 100,000 Price rises to $12/share Account increases by $20,000

Georgia Council on Economic Education w w w. g c e e. o r g SMG Buy ↑ Sell [Long position] Short Sell ↓ Short Cover [Short position]

Short Selling Georgia Council on Economic Education w w w. g c e e. o r g

Georgia Council on Economic Education w w w. g c e e. o r g Your friend loans you this-

Georgia Council on Economic Education w w w. g c e e. o r g You immediately turn around and sell the thing for $ (the $ goes in your pocket)

Georgia Council on Economic Education w w w. g c e e. o r g What do you owe your friend at this point?

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Georgia Council on Economic Education w w w. g c e e. o r g Next week you see that iPhone’s are on sale at the Electronica Barn for $150.00

Georgia Council on Economic Education w w w. g c e e. o r g You buy your friend a new iPhone for $ She gets her phone back and you just made $50.00!

Georgia Council on Economic Education w w w. g c e e. o r g Your broker loans you this-

Georgia Council on Economic Education w w w. g c e e. o r g You immediately turn around and sell it for $ (the $50.00 goes in your pocket)

Georgia Council on Economic Education w w w. g c e e. o r g What do you owe your broker at this point?

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Georgia Council on Economic Education w w w. g c e e. o r g You expect the CDC to announce that Coke causes cancer… bacon car battery …so you wait.

Georgia Council on Economic Education w w w. g c e e. o r g Instead, the CDC announces that Coke cures cancer! What happens to the price of Coke stock?

Georgia Council on Economic Education w w w. g c e e. o r g The Risk of Short Selling? If the price of the stock goes up before you return the stock to your broker, you will loose money.

Georgia Council on Economic Education w w w. g c e e. o r g Questions?

Georgia Council on Economic Education w w w. g c e e. o r g Teaching “Stuff” Student- “What stock should I buy?” Me- “If I knew the answer to that I would not be in this classroom with you. I would be living here and paying someone to count my money.”

Georgia Council on Economic Education w w w. g c e e. o r g

Georgia Council on Economic Education w w w. g c e e. o r g Teaching “Stuff” Teams of 3-5 (recommend friends) Buying on the margin Interest on money before the game starts Do not liquidate portfolio on the last day Awards by region and state – luncheon for all winners in May

Georgia Council on Economic Education w w w. g c e e. o r g Questions?

Georgia Council on Economic Education w w w. g c e e. o r g How to Play-

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Georgia Council on Economic Education w w w. g c e e. o r g SIA_80_A26

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Georgia Council on Economic Education w w w. g c e e. o r g Teacher Registration Page

Georgia Council on Economic Education w w w. g c e e. o r g

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Georgia Council on Economic Education w w w. g c e e. o r g Add number of classes Add number of teams within classes

Georgia Council on Economic Education w w w. g c e e. o r g Questions?