Session 1: January 13, 2019
Kids were introduced to the basic concepts of savings and were introduced to the following concepts:
1) Ask themselves 3 questions before buying anything:
Do I need it?
Will I use it?
Will I enjoy it?
If the answer to any comes back No - walk away.
2) Even when the above comes yes, try taking a picture of it instead of actually buying it. Normally, we just want to acquire things and taking a picture seems to satisfy that need. If a week later you still look at the picture and want to spend money on it, then you are better placed to buy it.
3) We learnt about the Money Tree and saw the power of interest rates to help our money grow. Ask them to explain to you about the Money Tree.
1) Complete this short assignment online: https://explorerhop.com/pages/mission-save-more
2) Take $5 and go to the store. Before you spend the money ask yourself the 3 questions and do the photo trick. Let me know next week if you still go back to it.
Session 2: January 20, 2019
We learnt the basics of banking. Concepts such as Deposit and Withdraw. We also saw how banks make money by lending out money that has been deposited.
Kids learnt how bank accounts work and who does what in a bank.
They also learnt how to deposit and withdraw money from their account in a bank branch and also at the ATM.
We went through how to keep your money safe and the parts of the debit card.
Finally, all kids are worried that if they keep their money in the bank, it will get "stolen", so we went through the Government of Canada Deposit Insurance and all kids got a copy if that. They saw how USD deposits are not covered but most CAD deposits are.
1) Complete this short assignment online: https://explorerhop.com/pages/mission-keeping-money-safe
2) Open your bank account. Get a debit card.
a) Go to the Teller in the bank and deposit $20
b) Then go to the ATM machine and withdraw $10
Note to parents: Session on January 27 will be rescheduled.
Session 3: February 2, 2019
We have started the stock market challenge. Yay! Be prepared for some very different conversations at home.
Today we learnt a whole bunch of things:
- What is stocks?
- How does the stock market work and the role of the broker
- What are the largest stock markets in the world and why what happens in NYC matters to the world
- How to pick a good stock. (Read news, observe what people are buying/using, understand your risk etc)
We also started to look at specific data for stocks, for example we learnt the following today (and will continue with more next week)
- Ticker Symbol
- Stock Market
- Currency Traded In
- Previous Day Closing Price
- Market Cap (= number of shares x price of share)
They also saw how Amazon and Apple which used to be trillion dollar companies are now $200 billion poorer.
1) Click here to access your portfolio.
2) Here is what you need to do:
a) Find 1 stock (only ONE). Be prepared to tell me why you want to invest your money because $10,000 is a LOT of money.
b) Download the Yahoo Finance App on your phone or ipad. (If your dad gives you a time limit on your ipad - use it wisely to first look up the stock price. )
c) Calculate how many shares you can buy for $10,000. Keep in mind that you can only buy whole shares. If you are not sure as your parents to help here. You simply divide $10,000 by the price of the share = how many shares you can buy. Use the whole number - no decimal points. Makes sense?
d) Every day this week, go in and add the price of your stock. If it goes up google the company you purchased and try to see why it does, if it goes down try and figure out why.
Session 4: February 9, 2019
The class has really got the basic ideas of stocks down so we continued understanding more about Risk. We looked at some more indicators for stocks:
1) Day's Range: The highest and lowest price of the stock during the week
2) 52 Week Range: The highest and lowest price of the stock during the past year
3) Volume: The number of shares traded on that day.
4) Avg. Volume: The average (or usual) number of shares normally traded on a given day.
5) Beta: Beta tells us how risky the stock is compared to the market.
A stock with a BETA=1.7% (like AMZN) is 71% MORE RISKY than the market. This means when the stock market goes up this will go up 71% more than the increase in the stock market, and when the stock market goes down, it will go down about 71%. These stocks are considered more risky.
If BETA =0.50 then when the market goes up, it only goes up 1/2 the amount that the market went up, and when the market goes down, it goes down only half the amount. These stocks are less risky.
1) Click here to access your portfolio.
2) Here's what you need to do:
- Find out the price of the share in your portfolio on Feb 11. Take the highest price on Feb 11 and put it in the table. You will sell your share now, and the spreadsheet will automatically calculate how much money you have now to invest.
- Decide which 2 stocks you are going to invest in and how much you want to invest in these stocks. (It could be 50% in each stock, or 60% and 40% or even 5% and 95% - it's your portfolio, you invest however you want. Ask your parents to help you if it is tricky.
These stocks need to have the following:
Stock #1 - Should have a BETA MORE than 1.70
Stock #2 - Should have a BETA LESS than 0.50
3. Add the number of shares and the price at least 2 times this week. The spreadsheet will automatically calculate the value of these shares.
Session 5: February 23, 2019
We did a review of all the things we have learnt before and I was very happy that the class was on top of everything and could remember it all. These are really smart kids!
Today, we learnt about Dividends and how they work.
Here is what they need to do at home:
1) Sell the existing stocks in their portfolios.
2) Buy 1 stock that gives a dividend and calculate how much they would have made in a week.
Session 6: March 3, 2019
We learnt about Earnings per Share and P/E Ratios today. I have simplified it so that the concepts are easy for the kids to understand.
Earnings per share = Earnings /Number of Shares
Earnings = Total Amount Earned - (Total Expenses + Taxes + Dividends)
To find the EPS take the number you got above for Earnings and divide it by the number of shares.
P/E Ratio is basically the CURRENT PRICE (the one in big black letters on Yahoo Finance) divided by the EPS you calculated earlier.
P/E Ratio = Current Price / EPS
What's a good P/E Ratio?
P/E is basically how much you are paying for every dollar the company earns.
The market tends to like P/E Ratio between 15 and 25. If it's lower, ask yourself is the PE too low and does anyone have confidence in this company? If it's high ask yourself if everyone is just jumping on the bandwagon and if it can live up to the expectations.
1) Sell everything in your portfolio
2) Take the total amount and invest it in 3 companies (you can divide the amount equally or separate them). For each company do the following:
a) What is the EPS?
b) What is the P/E Ratio?
c) Tell me why you think it's a good stock to buy based solely on the P/E Ratio.
Note to Parents: NO CLASS on March 10 and 17. We will have a class on March 24 and March 31.
Jonah - I have added some comments for you. Have a look at them.
Session 7: March 24, 2019
We did a review of everything and then learnt about investing in Gold. We discussed the following:
1) When do you invest in precious metals?
2) What are the 5 different precious metals?
3) How do you invest in precious metals?
4) The Gold Standard.
We also did an exercise where we took $10,000 invested in the year their grandparents were born in and compared it it would be better to invest in Gold or in the Stock Market.
1) Complete the Portfolio work from last week.
2) Re-do the exercise to compare which investment is better - Gold or Stocks. Try it for different years. You can submit multiple entries. Try to see if there is any year when gold would have been better than the stock market. https://explorerhop.com/pages/mission-gold-vs-the-stock-market
Note to parents: Next week is the last class for this semester.