1. Theme #1 Goals and Decision Making
Read the introduction
Summarize the unit in a 4-5 sentence paragraph
Create a KWL Chart in your binder (3 columns)
Complete columns 1 and 2 only
Column 1 – What do I KNOW about the Economic Way of Thinking
Column 2 – What do I WANT to learn about the Economic Way of Thinking
Column 3 – What did I LEARN about the Economics Way of Thinking

2. Lesson 1.1 - How to Really Be a Millionaire
- Characteristics of Successful People
Federal Reserve Bank of Philadelphia

3. Lesson 1.1 Objectives and Concepts (COPY)
Students will be able to:
Describe the characteristics of financially successful people.
Explain how sound financial decision-making can increase wealth and a person’s standard of living.
Concepts
Decision-making
Wealth building

4. LESSON 1.1 OPENER – ANSWER QUESTIONS IN BINDER – BE PREPARED TO SHARE YOUR RESPONSES WITH CLASS
Why is it important for you, as teenagers, to learn about personal finance concepts?
Who has a part-time job?
What are you saving for?
Where do you save your money?
What is the interest rate your savings are earning?
Could you earn a higher interest rate by saving your money somewhere else?
Why is it important that you and people, in general, be financially literate?

5. The Millionaire Game
Each group will be given True/False cards and a score keeping sheet. The group will work together to determine if a statement is true or false and hold up the appropriate card for you answer. DO NOT HOLD UP CARD UNTIL INSTRUCTED TO DO SO. WORK QUIETLY WITHIN YOUR GROUP. Follow all classroom and group expectations
Roles:
Group Leader – Keep group focused and on task
Score keep – keep track of score and number of times the group used the millionaire card
Card holder – hold up appropriate card when instructed to do so
The group is to determine if the statement read is True or False. Hold up the appropriate card.
Correct Answer= +5pts; Incorrect Answer= -5pts
Millionaire card can only be used 3 times during the game
Correct Answer= +10; Incorrect Answer= -10

6. Statement #1 “True” or “False”
Most millionaires are college graduates.

7. Statement #1 - Answer “True”
4 out of 5 millionaires are college graduates.
18 % Master’s Degrees
8 % Law Degrees
6 % Medical Degrees
6 % Ph.D.s.

8. Statement #2 “True” or “False”
Most millionaires work fewer than 40 hours a week.

9. Statement #2 - Answer “False”
About 2/3 of millionaires work hours a week.

10. Statement #3 “True” or “False”
More than half of all millionaires never inherited money.

11. Statement #3 - Answer “True”
Only 19 % of millionaires received any income or wealth of any kind from a trust fund or an estate.
Fewer than 10 % of millionaires inherited 10 % or more of their wealth.

12. Statement #4 “True” or “False”
Most millionaires attended private schools.

13. Statement #4 - Answer “False”
Most millionaires attended public schools.
Fewer than 20% of female millionaires attended private schools.

14. Statement #5 “True” or “False”
Most millionaires drive expensive new cars.

15. Statement #5 - Answer “False”
Most millionaires spend under $30,000 for a car.
Only 23 % of millionaires drive a current-year (new model) car.

16. Statement #6 “True” or “False”
Most millionaires work in glamorous jobs, such as sports, entertainment, or high-tech.

17. Statement #6 - Answer “False”
Most millionaires work in ordinary industries and jobs.
They become wealthy because they make good uses of market opportunities.

18. Statement #7 “True” or “False”
Most millionaires work for very large public companies.

19. Statement #7 - Answer “False”
About 3 out of 4 millionaires are self employed and consider themselves to be entrepreneurs.
Most of the others are professionals, such as doctors, accountants, and lawyers.

20. Statement #8 “True” or “False”
Many poor people become millionaires by winning the lottery.

21. Statement #8 - Answer “False” Few people get rich by luck.
If you play the lottery, the chances of winning are worse than one in 12 million.
The average person that plays the lottery every day would have to live about 33,000 years to win once.
In contrast, you have a one in 1.9 million chance of being struck by lightning.
How many people do you know that have been hit by lightning?

22. Statement #9 “True” or “False”
A college graduate earns almost double the annual income of a high school graduate.

23. Statement #9 - Answer “True”
In recent years the typical college graduate earned a median salary of $53,000, nearly double the median yearly income of the typical high school graduate - $32,552.
People with professional degrees earned a median income of $79,508, or nearly 240% more than the typical high school graduate.
The typical worker without a high school degree earned $23,608.
2009 Bureau of Labor Statistics figures.

24. Statement #10 “True” or “False”
If a high school graduate invests the difference between his or her earnings and the earnings of a high school dropout, from age 18 until age 67, at 8% interest, the high school graduate would have $5.5 million more than the high school dropout at age 67.

25. Statement #10 - Answer “True”
This is a dramatic illustration of how valuable a high school diploma is.
Assume the difference in earnings between a high school graduate and a high school dropout is $8,000 at age 18.
The illustration assumes that the difference increases by 1.5% each year and that the difference is invested at 8% interest each year.

26. Statement #11 “True” or “False”
Investors who buy and hold stocks for the long- term have better long-term stock returns than those who buy and sell stocks more frequently.

27. Statement #11 - Answer “True”
Studies show that individuals who buy and hold stock versus turning stock over more quickly have a greater net gains.
The costs related to hypertrading (buying and selling stock with great frequency) in terms of time and money can reduce gains of even the luckiest investor.

28. Statement #12 “True” or “False”
Millionaires tend to avoid the stock market.

29. Statement #12 - Answer “False”
In the long-run, (starting in 1926 and including the Great Depression), the Standard & Poor’s 500 Stock Index has increased at about an 10 % compound annual rate of return, exceeding the return on any other investment. Of course, there is a risk. The stock market has down years, and there is no guarantee of an 10 % return in the future, especially in the short run. In contrast, the long-term return on U.S. government securities during the same time period ranged from 5 – 6%.
$1.00 invested in the S&P 500 in 1927 was worth $3,286 by the end of 2007, while one dollar invested in government bonds during the same time period was worth $76 on 12/31/07.
For most investors it probably paid to take the additional risk of buying stocks.

30. Statement #12 “True” or “False”
Millionaires tend to avoid the stock market.

31. Statement #12 - Answer “False”
In the long-run, (starting in 1926 and including the Great Depression), the Standard & Poor’s 500 Stock Index has increased at about an 10 % compound annual rate of return, exceeding the return on any other investment. Of course, there is a risk. The stock market has down years, and there is no guarantee of an 10 % return in the future, especially in the short run. In contrast, the long-term return on U.S. government securities during the same time period ranged from 5 – 6%.
$1.00 invested in the S&P 500 in 1927 was worth $3,286 by the end of 2007, while one dollar invested in government bonds during the same time period was worth $76 on 12/31/07.
For most investors it probably paid to take the additional risk of buying stocks.

32. Statement #13 “True” or “False”
At age 18, you decide not to drink soda from the vending machine and save $1.50 a day. You invest this $1.50 a day at 8% interest until you are 67. At age 67, your savings from not buying soda from the vending machine are almost $300,000.

33. Statement #13 - Answer “True”
Because of the power of compound interest, small savings can make a difference.
It pays to live below your means.
Find a balance between spending now and saving for the future.

34. Statement #14 “True” or “False”
If you save $2,000 a year from age 22 to age 65 at 8 % interest, your savings will be over $700,000 at age 65.

35. Statement #14 - Answer “True”
Because of the power of compound interest, the earlier you begin saving the better.
Regular saving will make you a millionaire, even if your salary is modest.

36. Statement #15 “True” or “False”
Millionaires tend to be single rather than married.

37. Statement #15 - Answer “False”
Most millionaires are married and stay married.
By contrast, divorce is expensive; it is potentially a gateway to poverty, especially for women.
Financially speaking, divorce is something you want to avoid, particularly after you have children.
It is important to choose a marriage partner carefully.
It is important to make sound decisions.

38. Rules for Improving Your Financial Life (COPY IN BINDER)
Get a good education.
Work long, hard, and smart.
Learn money-management skills.
Spend less than you could spend.
Save early and often.
Invest in common stocks for the long term.
Gather information before making decisions.

39. Closure – Complete in BINDER
What are some generalizations about the characteristics of a millionaire?
Assessment: (TURN INTO BIN)
Write a 5 sentence paragraph on the topic of “How to Really Become a Millionaire.”

40. HOMEWORK
STUDY CONCEPTS FROM CLASS
WORK ON BINDER

41. Lesson 1.2: The Economic Way of Thinking
Objectives (COPY)
Students will be able to:
List and explain the basic principles of economic reasoning.
Apply the principles of economic reasoning to solve a problem.
Concepts (COPY)
Economic reasoning
Economic way of thinking
TODAY – ALL ABOUT HOW TO USE ECONOMIC REASONING IN YOUR LIVES

42. Visual 2.1 - The Handy Dandy Guide (COPY)
People choose.
All choices involve costs.
People respond to incentives in predictable ways.
People create economic systems that influence choices and incentives.
People gain when they trade voluntarily.
People’s choices have consequences for the future.

43. DO NOW – Exercise 2.1 Read the exercise and answer the questions at the end in COMPLETE SENTECES.

44. Exercise 2.1 Discussion Questions
What is opportunity cost?
Best alternative that a person gives up to get something
Why is opportunity cost important when you make choices?
Everything has a cost. By considering costs you make better economic decisions
Why do people want to be wealthy?
Buy more; gain more freedom of choice; gain economic security
Why do the choices we make now matter in the future?
Can improve your life; can increase/decrease future wealth
What incentives encourage people to save money?
Earning interest, providing for future needs
Why are the Robinsons wealthier than the Murrays?
Made better decisions

45. Closure
If school is so boring, why do most students stay in school?
How does The Handy Dandy Guide help you answer this question?
Assessment
Median Income of:
A High School Dropout: $23,608
A High School Graduate: $32,552
A College Graduate: $53,300
Use The Handy Dandy Guide to explain why median incomes vary by the level of education attainment, as shown in the list above.

46. Homework Exercise 2.2 - “Boring School Mystery”
STUDY CONCEPTS FROM CLASS
WORK ON BINDER

47. Lesson 1.3: Making Decisions
Objectives
Students will be able to:
Define scarcity.
Identify the five-step decision-making model.
Apply the decision
Concepts
Decision-making
Scarcity

48. THERE IS NO SUCH THING AS A FREE LUNCH?
COPY HEADING AND ANSWER QUESTIONS IN BINDER
WHAT DO YOU THINK THIS STATEMENT MEANS?
HOW COULD THIS STATEMENT BE TRUE? IF SOMEBOYD TAKES YOU OUT AND BUYS YOU LUNCH, THAT’S A FREE LUNCH, ISN’T IT?
BUT WHAT ABOUT OTHER FREEBIES – THE FREE SAMES THAT ARE SOMETIMES HANDED OUT AT GROCERY STORES? THOSE ITEMS ARE FREE AREN’T THEY?
WHAT DO THESE TWO EXAMPLES – LUNCH AND FREE SAMPLES – HAVE IN COMMON?

49. Where should I go for spring break?

50. Who wants a candy bar?

51. Who wants a candy bar? What problem do we have now?
What economic concept are we discussing?
Scarcity
What does it mean?
Unlimited wants but limited resources
How can we come to a decision to figure out who gets the candy bars?
DO NOW – EXERCISE 3.1 DECISION MAKING

52. EXERCISE 3.1 QUESTIONS WHY IS THERE NO SUCH THING AS A FREE LUNCH?
Scarcity and Opportunity Cost
Give some examples of natural resources, human resources and capital resources.
Natural – water, oil, minerals
Human resources – physical strength, intelligence, agility
Capital resources – machinery, equipment, tools
What is capital?
Goods and services used to produce other goods and services
Why do economists NOT view money as capital?
Money is not a productive resource; it’s used to make the exchange of goods and services easier; printing more money = inflation
What is an opportunity cost?
Next-best alternative a person gives up when making a decision

53. Five Step Decision-Making Process (copy)
Define the Problem.
List Your Alternatives.
State Your Criteria.
Evaluate your Alternatives.
Make a Decision.
P Problem A Alternative C Criteria E Evaluate D Decision

54. The Decision: _________________________________________
A Decision-Making Grid The Problem: _________________________________________
Criteria
Alternatives
The Decision: _________________________________________

55. Candy Bars Problem What is the problem?
What are some possible ways to allocate the candy bars?
First come, first served; pay for it; lottery; contest; teacher decides; auction; share
Select 4 and write in alternatives column
Criteria – standards for judging what is important (fair, equitable, efficient, safe, quick) – write in the Criteria row
Evaluate the Criteria –
use a “+” if the alternative meets the criteria
-use a “-” if the alternative does not meet the criteria
The alternative with the most “+” will be used to allocate the candy bars

56. Candy Bar Problem What allocation method was chosen?
Would this same allocation method have been chosen if the class had voted on which allocation method to use?
Would you use the five-step decision-making model if you had $5 to spend at the convenience store? Why or why not?
When would the five-step decision-making model be useful?

57. My Own Problem FLIP VISUAL 3.2 OVER
Partner up and take 30 seconds to create a list of problems about which you wish to make a decision
Which video game to purchase
Which movie to watch
Which shoes to wear
Which pet to buy
Select a problem and work it through the decision making chart

58. Assessment – Turn In Closure – DO IN BINDER What is scarcity?
What are the five steps to decision making?
What are alternatives? Criteria?
Assessment – Turn In
Write a 5 sentence paragraph identifying a problem you have had in the past and explain how the Five Step Decision-Making Model could have helped you make an informed decision.

59. Homework Exercise 3.3 – Buying a New Computer or Digital Camera
STUDY CONCEPTS FROM CLASS
WORK ON BINDER

60. Review Assignment Themes 1.1, 1.2 & 1.3
With a partner create a Review Sheet:
Fold your paper into 4 Mini posters.
In each box create a poster of the following Keys to Financial Success concepts:
How to be a Millionaire?
SMART Goals
Opportunity Cost
Decision Making Grid
Include both text and drawings.

61. Lesson 1.4: How Can You Decide?
Objectives
Students will be able to:
Apply the five-step decision-making model to make a decision.
Identify factors that can influence a decision.
Explain common decision-making strategies.
Concepts
Decision-making
Scarcity

62. What are the Five Steps to the Decision-Making Process?
P Problem A Alternative C Criteria E Evaluate D Decision
Define the Problem.
List Your Alternatives.
State Your Criteria.
Evaluate your Alternatives.
Make a Decision.

63. factors that can influence a decision
Values
What is important to your family, others in your culture?
Peers
People you know
Pressure for positive or negative behaviors
Habits
You are accustomed to doing it this way
Feelings (love, anger, frustration, ambivalence, rejection)
If you do make a certain decision
If you don’t make a certain decision
E. Family
Your family’s preference
Decisions other family members have made
F. Risks and consequences
What (or how much) you stand to win
What (or how much) you stand to lose
G. Age
Minor
Adult

64. common decision-making strategies
Explain how people make decisions they do
Don’t however lead to best decisions
spontaneity
Choosing the first option that comes to mind; giving little or no consideration to the consequences of the choice.
compliance
Going along with family, school, work, or peer expectations.
procrastination
Postponing thought and action until options are limited.
agonizing
Accumulating so much information that analyzing the options becomes overwhelming.
intention
Choosing an option that will be both intellectually and emotionally satisfying.
desire
Choosing the option that might achieve the best result, regardless of the risk involved.
avoidance
Choosing the option that is most likely to avoid the worst possible result.
security
Choosing the option that will bring some success, offend the fewest people, and pose the least risk.
synthesis
Choosing the option that has a good chance to succeed and which you like the best.

65. Factors That Can Influence a Decision
Draw An Example IN BINDER
LABEL CORRECTLY
3 MINUTES PER FACTOR ONLY
Must work with a different partner on each factor
Move only when directed to do so
teens – lesson 1 - slide 1-B

66. Common Decision-Making Strategies
Write an Example IN BINDER
LABEL CORRECTLY
3 MINUTES PER FACTOR ONLY
Must work with a different partner on each factor
Move only when directed to do so
teens – sesson 1 - slide 1-C

67. REVIEW: Five Step Decision-Making Process
Define the Problem.
List Your Alternatives.
State Your Criteria.
Evaluate your Alternatives.
Make a Decision.
P Problem A Alternative C Criteria E Evaluate D Decision

68. The Decision: _________________________________________
A Decision-Making Grid The Problem: _________________________________________
Criteria
Alternatives
The Decision: _________________________________________

69. A College For Maria
Low cost
High Quality Education
Small Class Size
Close Location to Home
The Criteria that concerns me are:
I have narrowed my college search down to three choices:
State U
Local Community College
Private College
Hmmm…What college should I attend…I know I want to major in marketing, but I need to decide what meets my criteria.

70. Can you read over my options and help me make a decision using the 5-Step Decision-Making Process?
You don’t have a choice, help her!
-Mr. Polaski

71. State U Population: 30,000 Students
Undergraduate and Graduate Programs: 4 Year College
Class Size: Large (300 Students)
Tuition: Reasonable
Marketing Program: Available and Highly Ranked
Location: 150 Miles from Home

72. Local Community College
Population: 1,000 Students
Associate Degree: 2 Year College
Class Size: Medium (40 Students)
Tuition: Low
Marketing Program: Some Classes Available
Location: Few Miles From Home

73. Private College Population: 3,000 Students
Undergraduate Degree: 4 Year College
Class Size: Small (A lot of Individual Attention)
Tuition: High
Marketing Program: Marketing Classes Available
Location: 200 Miles From Home

74. Problem Set – Handout 1.5.1
In groups of 3-4 use the 5-Step Decision Making Process to come up with a decision for all of the problems.
Don’t forget P.A.C.E.D.

75. Closure What factors can influence a person’s decisions?
What strategies can a person use to make a decision?
How does the 5-Step Decision Making Process help you make an informed decision?

76. Homework
STUDY CONCEPTS FROM CLASS
WORK ON BINDER

77. Lesson 1.5: How to Set Goals
Objectives
Students will be able to:
Define goals.
Identify personal short-, medium-, and long-term goals.
Prioritize goals.
Explain what steps have to be completed to meet a goal.
Define opportunity cost.
Concepts
Goal setting
Opportunity cost

78. GOAL SETTING VIDEO COPY AND ANSWER IN BINDER BEFORE VIDEO
DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENT –
“IF YOU FAIL TO PLAN, YOU PLAN TO FAIL.”
EXPLAIN YOUR RESPONSE. BE PREPARED TO SHARE WITH CLASS
COPY AND ANSWER IN BINDER DURING VIDEO
LIST AND EXPLAIN THE FIVE STEPS TO GOAL SETTING
USE EXAMPLES FROM THE VIDEO TO SUPPORT YOUR RESPONSE
COPY AND ANSWER IN BINDER AFTER VIDEO
AFTER WATCHING THE VIDEO Do you agree or disagree with the statement – “If you fail to plan, you plan to fail”

79. GOAL SETTING VIDEO ON WEBSITE

80. Visual 1.5.2 Goal Setting Survey of Harvard Graduates
In the book What They Don’t Teach You in the Harvard Business School, Mark McCormack describes a study conducted on students in Harvard’s 1979 MBA Program class. The students were initially asked:
“Have you set clear, written goals for your future and made plans to accomplish them?”
3% had written goals and plans
13% had goals, but they were not in writing
84% had no specific goals at all
Ten years later, the members of the class were surveyed again to see if the differences in the graduates’ goals corresponded with a difference in the levels of success attained in graduates’ careers. The results were as follows:
The 13% who had unwritten goals were earning, on average, 2x as much as the 84% who had no goals at all.
The 3% who wrote down their goals were earning, on average, 10x as much as the 97% who did not write down their goals.

81. Visual – Goal Setting Survey Discussion Questions – work with a partner to answer; copy and answer in binder
What is a goal?
Why is it important to have goals?
How did having goals benefit the Harvard Alumni in the survey?
Why do you think it is important to write your goals down?
What do you think is the difference between short-, medium-, and long- term goals?

82. Types of goals (COPY IN BINDER)
Short-Term Goal
Can be achieved in fewer than 2 months.
Give an example:
Medium-Term Goal
May take from 2 months to 3 years to achieve.
Long-Term Goal
Require 3 years or more to achieve.
Saving for the future means giving up the opportunity to spend in the present.
Give an example
The next-best alternative that is given up when saving for a goal is called - ?????
Opportunity cost

83. Visual – Short, Medium & Long Term Goal Discussion Questions – work with a partner to answer; copy and answer in binder
Why might a short-term goal for one person be a long-term goal for another person?
Why are long-term goals more difficult to achieve?
How do values impact goals?
Why is opportunity cost related to goals?

84. There are five key components to writing a goal.
Goals
There are five key components to writing a goal.

85. S = specific Your goal must be detailed!

86. M = Measurable

87. A = Action

88. R = Realistic

89. T = Time When will it happen?

90. What does that spell?
SMART

91. Goal Card Activity
Let’s think about the Future. How do you envision your life two years out of high school? Five years out of high school? Ten years out? Will you have completed your education? Will you be married? Will you have children? Will you be living in another city, state, or country? Will you be living with your parents, in your own house, in an apartment, or in a townhouse?
Goal setting helps people meet the challenges of today’s world by providing them with targets to reach. People who have definite goals are more likely to get what they want out of life than those who do not set goals. Having goals influences how people make decisions and helps them develop plans of action to achieve their goals?
Directions:
You will be given 40 goals. Read each card in the deck.
Sort the cards into three piles: a. Goals you want to accomplish b. Goals in which you have no interest c. Goals about which you are undecided
If you have more than 14 cards in pile one, re-sort the pile so you do not have more than 14 in pile one. Continue sorting until you are down to your top 14 goals.
Rank order the 14 goals (1 most important to 14 least important) in the pile that you want to accomplish (Pile 1) Place the other piles aside.

92. Goal Card Activity – Handout 1.5.2 – Goal Grid: Soccer Field
5. After you have ranked the goals in Pile 1, complete the chart on Setting My Goals (football field worksheet) by separating your top 14 into: a. Short term goals-between now and 2 years b. Medium- term goals-between 2-5 years after high school c. Long-term goals-5 years and beyond high school
6. Take your top 3 goals in each of these categories and place them on Handout – My Goal Priority Action Plans sheet. Then, list an action plan for each of the goals (there should be a total of nine goals). What will you have to accomplish this goal? Example: Middle-term goal of having your own apartment. a. Obtain a full time job. b. Place money in some savings type account to have money for the first month’s rent, security deposit, and furnishings.
Handout – My Goal Priority Action Plans

93. Final Discussion Questions (COPY AND ANSWER IN BINDER; BE PREPARED TO SHARE WITH CLASS)
What are the three things you learned about goals from this activity?
How will the action plans help you achieve your goals?
What are the next steps you will take?

94. Closure – TURN INTO BIN What is a goal?
Why is it important to have goals?
Why is it important to write goals down?
How can goal setting make you more successful?

95. Homework
Interview a family member about a short-, medium-, long-term goal they have achieved.
How did they achieve it?
What obstacles did they face?
STUDY CONCEPTS FROM CLASS
WORK ON BINDER