L E S S O N 1 3 : P E R S O N A L F I N A N C E

Focus Question: How can we ensure our own personal financial success?

Objectives

Students will be able to:

·         Set short- and long-term personal financial goals.

·         Demonstrate an understanding of the importance of the asset allocation process in investing.

·         Compare and contrast major categories of investments.

Standards

NES: 2, 4, 7, 10, 11 ELA: 1,2,3 

Time Frame

One day.

Materials/Instruction

Textbook chapter:   Saving and Investing

Teaching Strategies

I.  Review interview homework assignment from lesson 12

Have students interview five people, asking them this question: “Assume that I have just started my first full-time job. I come to you, asking for the following advice: ‘Suggest some of the steps I should take to best guarantee my long-term personal financial success.’” Among the five people you should interview are two people your own age, two people your parents age, and one who is a personal financial planner (most banks and brokerage firm have such a person on staff). As part of the introductory whole-class discussion about this assignment, have students explain their answers to the following:

·         What were some of the answers you received in response to the interview question? (List the different responses on the board.)

·         What conclusions can you draw from studying the list on the board?

·         What questions does this list raise for discussion?

II.  Financial Goals

Distribute Worksheet 13A, “Financial Goals.” Have students complete the exercise on the worksheet, then have them explain their answers to the following:

·         What did you learn about setting and achieving financial goals from this worksheet?

·         How are short- and long-term goals different? How necessary is it to set both short- and long-term goals?

·         How did you go about prioritizing your goals? Why is this an important step?

·         Why is goal-setting considered an essential step in investing effectively?

III.  Asset Classes and Investment Categories

Divide the classes into two groups. Distribute Worksheet 13B, “Asset Classes,” to one group and Worksheet 13C, “Investment  Categories,” to the other. Have each group complete the exercise on their worksheets.

·         Ask the group that studied Worksheet 13B to explain their answers to the following:

o    What is the asset allocation process?

o    What are the most distinguishing features among the major asset classes (stocks, bonds, and cash) that you read about?

o    Why do financial professionals believe diversifying investments is so important?

o    In which major asset class would you advise a friend to invest most of his or her wealth?

·         Ask the group that studied Worksheet 13C to explain their answers to the following:

o    What did you learn about the different categories of equities? What is the great difference between each of these kinds of stocks?

o    What did you learn about the different categories of bonds?

o    Which kinds of stocks and bonds would you invest in if you had the money to do so today?

 Assessment:

Have the class put together a PowerPoint™ slide show entitled, “The Steps to Financial Independence.” Topics will include: Setting Goals, Classes of Assets, Asset Allocation, and Wise Investment Decisions. This presentation could be given as part of an assembly program or to individual classes.

Homework:

Read chapters for next lesson.

Complete worksheet 14A