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

Learning Outcomes Educurious Partners--All rights reserved UNIT 3 LESSON 10 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 Educurious Partners--All rights reserved UNIT 3 LESSON 10 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? Educurious Partners--All rights reserved UNIT 3 LESSON 10

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 TalkMellody Hobson TED Talk 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10 5

Video: “No One Is Coming” Watch the video and complete the Investing in Your Future Video Questions activity Educurious Partners--All rights reserved UNIT 3 LESSON 10

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? Which one of these investors is diversified? Why is that a good idea? Educurious Partners--All rights reserved UNIT 3 LESSON 10

Investing Terminology Long-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 Educurious Partners--All rights reserved UNIT 3 LESSON 10

Investing Terminology High 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 Educurious Partners--All rights reserved UNIT 3 LESSON 10

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

Additional Investing Tips This table outlines common investments and looks at the risk as well as pros and cons Educurious Partners--All rights reserved UNIT 3 LESSON 10

Investigating Investments Scenario You 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 Educurious Partners--All rights reserved UNIT 3 LESSON 10

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

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

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 Educurious Partners--All rights reserved UNIT 3 LESSON 10

What’s My Interest? Complete the table and questions for the activity Investing in Your Future Interest 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? 2015 Educurious Partners--All rights reserved UNIT 3 LESSON 10 17

Review Answers How can investing early help your money grow over time? Possible answers may include: Possible answers may include: Allows you to invest in multiple assets (diversify) Allows you to invest in multiple assets (diversify) Lets your money accrue interest Lets your money accrue interest You can invest in both long/short-term investments You can invest in both long/short-term investments What are some ways you can diversify your investments? Possible answers may include: Possible answers may include: Long-term and short-term investments Long-term and short-term investments High risk and low risk 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. Based on the different rates, interest types and investment strategies you can maximize your earnings Educurious Partners--All rights reserved UNIT 3 LESSON 10 18

Complete the Lesson… Now complete the Investing in Your Future Reflection Educurious Partners--All rights reserved UNIT 3 LESSON 10 19