Category Chapter_13

May 6 2015

How This Couple Retired in Their 30s to Travel the World

This is a very interesting interview that describes how one young couple decided to take charge of their finances, pay off their debts, and accumulate a nest egg to fund an early retirement.    

When Jeremy graduated from college, he started working for Motorola and earned $40,000 a year.  But his desire to keep up with his friends, family, and co-workers led him to buy a new car and a three-bedroom home.  He was quickly in debt, but fortunately he realized he wanted to live debt free.

Using an interview format, this article describes the steps Jeremy (38) and Winnie (33) took to save enough money to retire while they were in their 30s.  It also describes their current lifestyle and how they spend their money and time since they retired.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Explore why people often feel the need to keep up with friends, family, and co-workers.
  • Discuss the specific steps that Jeremy and Winnie took to take control of their finances.

Discussion Questions

  1. What steps did Jeremy and Winnie take to get out of debt? Would you be willing to take these steps in order to live debt free?
  2. Once Jeremy and Winnie were debt free, what techniques did they use to save and invest their money?
  3. Jeremy and Winnie retired in their 30s. Does the idea of retiring in your 30s or 40s, or 50s appeal to you?  Explain your answer.
Apr 25 2015

Inside Warren Buffett’s Childhood Home

“Within these hallowed halls live the memories of Buffett buying his first stock–six shares of Cities Service.” 

Warren Buffett is known for being frugal.  His conservative, frugal nature may have started in his childhood home.  This article provides a link to a video that provides a bit of history about Warren Buffett and allows you to tour the home where Buffett bought his first stock–six shares of Cities Service.  It’s also the place where he cooked up one of his first business plans to buy a six-pack of Coca-Cola for a quarter and sell sodas for a nickel each.  Take a look and enjoy a bit of history about the second-richest man in America.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Explore some of the reasons why Warren Buffett has been successful not only in investing, but also in life.

Discussion Questions

  1. Warren Buffett started investing when he was very young. He purchased six shares of Cities Service stock.  From that first investment, he went on to build an empire.  What advice do you think Mr. Buffett would give a beginning investor today?
  2. Mr. Buffett is so rich that he could buy just about anything in the world. And yet, he is still known for being frugal.  How do you think this frugal nature affects his investment philosophy and his lifestyle?
Apr 15 2015

3 Ways to Diversify Retirement Savings Beyond Stocks

“Reluctant to put more of your hard-earned money aboard the roller coaster known as the stock market?  Then it may be a good idea to diversify your retirement savings with other assets, which can reduce your overall risk.”

In this article, Cliff Goldstein suggests three different alternatives that could help you increase the diversification in your investment portfolio.  Of course each investment alternative–real estate, peer-to-peer lending, and precious metals–comes with risks that should be carefully considered before making any decisions.  Along with the potential risks for each investment, the advantages of each investment  alternative are described in this article.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Reinforce why investors should use asset allocation to diversify their investments.
  • Point out the reasons why some people choose real estate, peer-to-peer lending, and precious metals in place of or in addition to more traditional investment alternatives.

Discussion Questions

  1. Pick one of the investment alternatives in this article–real estate, peer-to-peer lending, or precious metals. What are the advantages of the investment you chose?  What are the disadvantages of the same investment?

2.  Assuming you had $75,000 to invest.  Would you use one of the three investment alternatives described in this article or would you prefer a more traditional investment in stocks, bonds, or mutual funds?  Explain your answer.

Feb 18 2015

The Seven Baby Steps (Dave Ramsey)

“Get out of debt the same way you learned to walk–one step at a time.”

This article describes Dave Ramsey’s seven steps that anyone can take to get out of debt and begin to manage their personal finances.  These seven basic principles have been taught by Mr. Ramsey via radio, books, Financial Peace University, live events, and online.  Listed below are the seven steps discussed in this article.  Note:  You can get more information about each step by clicking on the “Learn More” tab.

  1. Begin by creating a $1,000 emergency fund.
  2. Pay off all debt using the debt snowball .
  3. Save 3 to 6 months of expenses in a savings account.
  4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement accounts.
  5. Create a college funding plan for your children.
  6. Pay off your home mortgage early.
  7. Build wealth and give.

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Ask students visit the Dave Ramsey website.
  • Discuss some or all of the seven baby steps described in this article. Reminder:  Students can get more information by clicking on the “Learn More” tab.

Discussion Questions

  1. How can the seven baby steps help you manage your personal finances?
  2. Do the steps in this article make you want to change your priorities and what’s important in your life? Justify your answer.
Feb 14 2015

Newly Married with $52,000 of Debt

My Wife and I Never Discussed Money Before Getting Married–and Ended Up with $52,000 of Debt

Prior to tallying up our debt, we’d talked about traveling internationally, starting a family, and, some day retiring comfortably. There was so much we wanted out of life, but . . .”

This is an excellent article that describes what can happen when a soon-to-be-married couple doesn’t talk about finances.  Fortunately, the two people in this article–Deacon and Kim Hayes–realized they had a problem and then took steps to get their finances back on track.

Specific steps this couple took can make a big difference over time.  Among the suggestions included in this article are:

  • Writing down all your assets, debts, income, and expenses.
  • Prepare a budget and review each item for opportunities to save money.
  • Replacing a newer, expensive car with an older car.
  • Selling unwanted or unneeded items online.
  • Using any extra money to repay debt.
  • Establishing an emergency fund.
  • Saving and investing a specific amount each month.

Consider This:  Deacon Hayes–the author of this article–became a financial planner and now shares his story with his clients.

For more information, Click Here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss why engaged couples need to discuss their finances before they get married.
  • Stress how easy it is to get in debt and how hard and how much time it takes to get out of debt.

Discussion Questions

  1. Assume you are dating someone who seems to spend more than they make. In this situation, would you continue to date this person?  Explain your answer.
  2. One of the suggestions included in this article is that people write down their assets, debts, income, and expenses. How can this suggestion help a young-married couple plan their financial future?
  3. Assume you have credit card debts and an automobile loan that total $75,000. What specific steps can you take to reduce or eliminate your debt?
Jan 14 2015

Raise a Glass and Toast the U.S. Economy in 2015

According to Mark Hamrick, Washington Bureau Chief, at Bankrate.com, “We go into 2015 and put the very bitter memory of 2007, 2008 behind us.”

With the national unemployment rate down to 5.8 percent, 2015 should be a good year for the economy.  According to Hamrick, “The economy has really done a great job of damage repair, with acceleration here recently with the quality of jobs being added.”  This trend will continue as employers are expected to continue adding workers in 2015 at a monthly pace of about 200,000 each month.

In addition to a lower unemployment rate, projected U.S. economic growth of nearly 3 percent over the next 12 months and stock prices near record highs should continue to fuel the nation’s economy.  On the down side, expect the Federal Reserve to raise interest rates around June 2015.  Also, there is the unknown factors of political and social unrest around the world and the typical global economic problems that could be a drag on the economy.

For more information, click here.

Teaching Suggestions

Note:  There is a 2 minute video that accompanies this article that you may to use as part of your classroom presentation.

You may want to use the information in this blog post and the original article to

  • Discuss the current state of the economy.
  • Explain why unemployment rates, interest rates, political and social unrest, and global economic problems can affect the U.S. economy.

Discussion Questions

  1. Although many economists and investors are enjoying the economic recovery over the last few years, many individuals do not share the same optimism. How do you feel about the nation’s economy?
  2. Are you optimistic about your own economic future? What specific steps can you take to improve your personal economic future?
Jan 10 2015

5 Questions to Help You Get Your Financial Life in Order

“Rather than making resolutions . . . try answering the following five questions today, with a plan to answer them again when 2015 comes to a close.”

In this MarketWatch article, Chuck Jaffe poses the following 5 questions to help people gauge their financial health.

  1. What’s your net worth?
  2. How many times your current (or last) salary do you have in retirement savings?
  3. What’s your debt-payment burden?
  4. If you don’t see the next New Year, what would happen to your family financially?
  5. When reviewing your finances, what is the single thing that makes you feel the best? The worst?

In addition to the questions, Mr. Jaffe also provides information that can be used to improve a person’s answers  to each question with the goal of helping people manage their personal finances and improve their financial life.

For more information, click here.

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Discuss each question with your students and explain how their answers can impact their personal financial decision making and financial security?
  • Ask students to answer one or more of the questions in this article as an assignment.

Discussion Questions

  1. Why is your net worth, salary, savings, and debt-payment burden important?
  2. What implications does the question “If you don’t see the next New Year, what would happen to your family financially?” have on your financial planning activities?
  3. When you look at your finances, what makes you feel good and what makes you feel bad? Based on your answer, what can you do to change your answers to this question?
Jan 7 2015

52-Week Money Challenge

Do you want to take the 52-Week Money Challenge? 

Before saying no, consider it is a simple way to accumulate $1,378 over the next year.  Before saying yes, realize that while it is easy to save small amounts at the beginning of the year, it becomes increasingly harder to save larger amounts at the end of the year on a weekly basis.   Take a look at the table below to see how your money accumulates each week.

 

image source

 

For more information, click here. 

Teaching Suggestions

You may want to use the information in this blog post and the original article to:

  • Stress that even small amounts of money over time can increase the amount available for savings or investing.
  • Discuss how monitoring your spending habits can “find” the money that can be used for savings and investing.
  • Talk about the need for financial discipline when managing, saving, and investing your money.

Discussion Questions

  1. In the above table, you begin by depositing $1 the first week, then each week, the amount you save increases. Where can you find the money needed to fund this type of savings program–especially toward the end of the year?
  2. Assuming you achieved the 52-week challenge and you now have $1,378 dollars in the bank. Would you leave it in the bank, pay your bills, or invest the money?  Justify your choice.
  3. After completing one 52-week challenge, would you take another money challenge? Why or Why Not?
Dec 13 2014

Great Ways to Save

“Can running shoes save you money?  Yes – and we have six more ideas to help you save.”

Let’s begin with the answer to the above question.  As the article points out, buying running shoes can save you money because running reduces the risk of heart disease and stroke, lowers blood pressure, and can help prevent other health problems that can cause huge medical bills and even loss of employment or your life.

The above is just one of the suggestions in this article that describes ways to increase savings and provide additional money for investments by taking simple steps that you can make in your everyday life.  Additional suggestions (and the reasons behind the suggestions) include maxing out your savings, saving spare change, choice of gasoline for your car, getting the best value when choosing a hotel, encouraging your kids to save, and bundling communication bills.

For more information go to http://money.cnn.com/2005/06/02/pf/smartest_saving_0507/index.htm

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the fact that savings can be easier than you think by taking advantage of everyday opportunities to increase the amount of money you save and invest.
  • Use the example in the article about how increasing the amount of money contributed to your 401(k) retirement account can significantly increase the amount available when you retire.
  • Note: This article is just one of a series of articles in the Money series “50 Smartest Things to Do With Your Money.”  You may want to (or have your students) visit this web site for other articles on money management.

Discussion Questions

  1. Some people say that saving small amounts of money doesn’t really help accomplish their long-term financial goals. Do you agree or disagree?
  2. How can one of the suggestions in this article help you increase the amount you save or invest?
Nov 19 2014

10 Things Rich People Know that You Don’t

“People don’t become wealthy by accident, here’s how they do it’

This article describes 10 habits that anyone can develop that will improve their financial management skills—regardless if they want to be the world’s next millionaire or if they just want to live comfortably.  For more information about each of the 10 items below, please see the original article.

  1. Start saving and investing early in life
  2. Automate savings and investments so deposits are made automatically on a regular basis
  3. Maximize contributions to retirement and investment accounts
  4. Never carry a credit card balance
  5. Live like you’re poor and adopt a “less is more” attitude
  6. Avoid the temptation to live beyond your means
  7. Be goal oriented and know what you consider to be important
  8. Get educated and learn about investments before investing your money
  9. Diversify your portfolio and avoid the temptation to put all your eggs in one basket
  10. Spend money to make money by hiring a qualified and experienced financial adviser, accountant, and, if needed, an estate planner

For more information go to http://www.marketwatch.com/story/10-habits-of-high-net-worth-women-2014-07-02?page=1

Teaching Suggestions

You may want to use the information in this blog post and the original article to

  • Stress the importance of making smart decisions as opposed to foolish decisions.
  • Tie the suggestions in this article to material in the text.

Discussion Questions

  1. Which of the ten habits described in this article can you use now to help manage your personal finances?
  2. The first suggestion, “start saving and investing early” is a basic principle we stress in the text. What are the advantages of starting early?