They were involved in a forward thinking and real world exercise to teach them the benefits of saving and investing versus spending, aka “delaying gratification”, one of the critical life issues people eventually deal with. The lesson was created and taught by Ryan Fause, Partner at Withum Wealth Management.
First the students were given a financial glossary of about 20 financial concepts and terms so they could understand what they were about to discuss. This list included ideas such as “ticker, points, dividend, shares, growth, loss, business, risk, portfolio, correction, bank, brokerage firm” etc. These were discussed and explained in simple terms by Mr. Fause. Next, they were given a list of “recognizable” stocks, such as Apple, Starbucks, Disney, Netflix, Chipotle, Facebook, Amazon etc., so they could then choose 3 names to build and monitor their own little investment “portfolio”. Each portfolio added up to about $3000. They did not have to buy stocks, there was a cash alternative like a savings account if they wanted. About once a month Mr. Fause came in to discuss the progress or decline of their investment choices versus the overall stock market or a cash alternative. The children were beyond engaged, asked amazing questions and discussed and compared concepts of big business to an easy to understand kids business like a lemonade stand. Lastly they were given a list of more advanced terms to discuss relating to business or the economy. Terms like “taxes, debt, GDP, 401k, US Treasury, inflation” etc.
By no means were they expected to absorb all concepts, just think twice when they hear familiar terms in their future. However, they were expected to get excited about how their investments performed, as they knew the top 3 best performing investment portfolios would walk away with amazon gift cards.
In summation, From 12/6/2018 thru 6/3/2019 the stock market was barely positive, the DOW was negative by .50% and the S&P 500 was up about 2%. The top 3 students “diversified investment portfolios” (yes I know, diversified with 3 names not 500) were all up more than 14% each and earned more than $400. As a matter of fact, the median return for the entire class was 8.68% with 11 students having a portfolio return of 10% or more.
All in all, it was a great way to introduce the kids to saving and investing versus wasteful spending. Time will tell if it pays off but we do have to start somewhere. Hopefully we can raise a new generation (and yes, they also know how to define all the different generations-X,Y,Z) of responsible and entrepreneurial thinkers.
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