Educator Toolkit: Learning to Invest

Why This Matters Now

Investing plays an important role in the world of financial literacy for high school students. Since investing is about growing money over time, the sooner you start, the more money you could potentially have as an adult. Many financial advisors advocate for starting stock investing early – in your 20s or even sooner if you’re curious. The first reason is that you can take on more risk when you’re younger because you still have years of earning ahead. More risk often yields better investment returns. The second reason is compounding, which is the ability to grow an investment by reinvesting the earnings. Time is a key component of compounding. A single $10,000 investment at age 20 would grow to more than $70,000 by the time an investor was 60 years old (based on a 5% interest rate). That same $10,000 investment made at age 30 would yield about $43,000 by age 60, and made at age 40 would yield only $26,000. The longer money is put to work, the more wealth it can generate in the future.

Ari Berke, 16 and a junior at Yavneh Academy of Dallas in Texas, believes that many of his peers are missing the potential impact that the stock market could have in their lives. In an essay for KWHS, Ari writes: “As teens, we actually have some inherent advantages over adults when it comes to investing. Unlike many adults, we may have disposable income that isn’t being maximized; it either sits in the bank or is spent on a new video game. Additionally, when compared to adults, teens do not have many financial obligations, so investment decisions during teenage years aren’t nearly as risky. What if more teens invested their birthday or babysitting money into the stock market? These funds are not required to pay a mortgage or cover the month’s grocery expenses, but they could help us do just that in the future!”

Resources

Article
Investing 101: The Prospect of Growing Your Money
What is investing and how does it differ from savings? Why do people invest? This KWHS video featuring an expert in the asset management business will introduce students to the very basics of investing their money, as well as what it means to pursue a career in asset management. From there, students can begin to explore other KWHS articles that address key aspects of investing, such as different investment choices, risk and return and what it means to manage a portfolio. Visit our KWHS Investment Competition site for a full online library of KWHS investment resources.

Lesson Plan
The Puzzling Practice of Investing in Stocks and Bonds
Teenagers may not realize that they are consumers and spend a lot of money on branded merchandise. What if you took some of that money you spend on Nike shoes or a Starbucks coffee, or skip the movies and actually invest in the company, Sony? Teens can become stockholders of a company and hold an asset (stock shares) that could well grow into an asset that they sell for profit. Students start out this lesson playing the “puzzle piece game” and then dig deeper into investing concepts through reading and discussion. This is one of many KWHS lesson plans introducing all aspects of investing. Visit our KWHS Investment Competition site for a full online library of KWHS investment resources.

Hands-on Learning
The annual KWHS Investment Competition is a fun, free and engaging way to build learning about investing into the classroom (or wherever the high school students in your life gather). Since it began as a Philadelphia pilot project in 2012, our competition has grown to include more than 2,000 teams of high school students (4 to 7 in each), three regional competitions in the U.S., India and China, and a global competition at Wharton in Philadelphia. Students can be new to investing, and will also learn valuable communication and teamwork skills. Sid Muralidhar, team leader of the 2018 regional and global winning team All You Can Eat Buffett from Virginia, had this to say about his competition experience: “Each member of our team was assigned a specific role, but more importantly, we had to find ways to support one another and compromise when we had disagreements. Each member brought a unique perspective and skill set to the table. Today, students are under pressure to outperform their peers to be admitted to college, but this competition taught us that everyone that is a team player, and shares and learns, is a winner.” While the 2018-2019 competition is already underway, it’s never too early to start learning the concepts that could help your students make it to the finals. Be sure to visit our KWHS Investment Competition website for all the information you need.

Educators play the advisor role in the KWHS Investment Competition, and are responsible for the following:

• Providing educational guidance to your team(s), especially for those students who have had little-to-no exposure to investing. The Resources tab on the KWHS Investment Competition website provides pages of learning materials, including lesson plans, discussion questions, learning outcomes and articles, to help you build knowledge into every aspect of this competition. Financial literacy is a key competition objective.
• Motivating your student teams to follow through and hand in the two main deliverables.
• Checking in on their portfolios. As an advisor, you will be able to log into the OTIS Online Trading and Investment Simulator and review team portfolios to make sure your students are engaged and building a strategy.
• Providing structure. We have thousands of students competing each year, and clearly only a small group will make it to the regional finals. We encourage advisors and teachers to find creative ways to build the competition out in the classroom, providing incentives and prizes for your top teams and even inviting judges to hear and evaluate final strategies.
• Total follow-through. If one or more of your teams are among the finalists, we hope you will support their final presentations and even accompany them to the regional/global finals.

Video Glossary
Provide an extra layer of learning for your students with our video glossary. Here, Wharton professors define terms: Bond, Dividend, Initial Public Offering, Mutual Fund, Shareholder, Stock and Treasury Notes.

KWHS Quote of the Month
“Only half of all adults in the U.S. invest in the stock market, according to a Federal Reserve study. As we gain knowledge and confidence with the financial markets, our generation will become that much more involved in the stock market.” – Ari Berke, high school junior, Yavneh Academy of Dallas in Texas