A bit of a review…

We’ve had a long week discussing the fact that taxes (boo) are not fun, cash flow needs to be there, and we must attend to our income to expense ratio. There are only two ways to come out ahead–make more money or spend less. We’ll examine two schools of thought on this. One school says save your cash. A penny saved is a penny earned. The second school of thought says this: “A penny’s not much. You need to make more money.”

We’ll discuss both.

Meanwhile, please check your knowledge of this week’s material by taking this short assessment.

Hand Over Your Money…It’s College Time

YOU NEED TO RESEARCH COLLEGE BEFORE YOU GO!

I’m sorry. I don’t like to shout at you. It’s not very polite. One trend I’m seeing in our economics classes is of the people who intend to go to college 80% of you have no idea where or why. It’s like someone said you had to do something after high school but you were never sure what. The first week of class was dedicated to setting SMART goals.

College is one of the most expensive purchases you will make. Yes, that’s right. Purchases. Investments. Emptying of your wallet, depending on your perspective.

The jury’s out on this one, folks. Many economists are conflicted. Some say you should go to college right away because you will have increased earning potential. Others say the thousand plus percent increase in the cost of college over the last decade cancels out that benefit, and entrepreneurship is the way–find a mentor, network, and research to get into your field.

I’m going to stand in the middle on this one. For some of you, college is a must. I don’t want my neurosurgeon apprenticing and googling the answers. Sorry. But then again, there are, in fact, some degrees that are worth more than others. Take a look at this graph. This shows there are many more people than jobs for mathematics and computer science degrees. Sadly, it shows my field as the one with very few jobs and a surplus of degrees.

What does this mean?

1. Research your colleges. In order to do this, you should have a spreadsheet. I made one for you. You can cut and paste this into a working spreadsheet in your google drive, this one’s read-only. Feel free to add or subtract columns for things you value, like clubs or athletics.

2. Know the deadlines. They come up quick. You should be reviewing your spreadsheet for deadlines.

3. Narrow down colleges to a “yes,no,maybe” column. If possible, visit colleges on the likely list.

4. Look at the $$$$ column. Pay attention to scholarships and deadlines for scholarships. There are a ton of scholarships in areas you might not think about–corporate, ethnic, religious, gender, or experience-based scholarships. This requires research, application time, and hard work. It’s a part time job.

5. Fill out your FAFSA. This is the form that goes to colleges telling how much financial need your family has. Do this immediately after your family files their taxes. Some aid is first-come-first served. Being early helps here.

6. Don’t decide based on one factor. You have to be able to pay for the college once all the aid comes in. Sure, I’d like to own a Ferrari, but it doesn’t make sense. I’m broke, and my neighborhood gets snow. Potholes alone rule out the Ferrari. college is not an emotion based decision. IT’S AN ECONOMIC ONE. Sorry. I’m screaming again.

7. Think outside the box. I can’t recommend the Reserve Officer’s Training Corps program enough. The military, if you qualify, will pay for your degree(s) and give you a commission as an officer. In an economy where many qualified people are in debt and underemployed, it’s a reassuring thing to get out of college loan free with a guaranteed job. Again, you’ll need to attend to every detail in the application process, which is coming up quick.

But where does my money go?

You can’t get where you’re going if you don’t have a roadmap. We’ve talked about setting SMART goals (Specific, Measurable, Achievable, Realistic, and Time-oriented) in order to succeed in the future, both financially and in life. 

“This is hard!” you said. Yup. Supposed to be. And it’s supposed to be annoying enough that it sticks in your brain and makes you continue to think, when you make social or economic choices, “Does this help me achieve my goals?” 

Things fall into two categories: productive and not productive. By cutting down on the not productive, you will become amazing. It’s a subtle thing, but it’ll happen. One morning you’ll wake up and realize you’ve reached your destination. 

What then? Touchdown dance perhaps? Nope. Time to set new goals and get there, too. 

Now that you’ve set your goals, you might think, “OMG, these things are expensive.” Yup. 

That’s where the budget comes in. 

You can’t meet your financial goals if your money’s flying out the window. When we discuss budgeting, we’ll talk about two schools of thought–this will be a recurring theme in this course. 

1. The School of Savings. Many leading financial planners will tell you to save. Save money, then you’ll have money. Spend money, and the reverse is true. This is a great strategy, one we’ll work on together. 

2. The School of “Spending money on a coffee today doesn’t matter.” Many leading entrepreneurs say the only way to reach your financial goals is to make money. Saving a dollar on a coffee makes you feel deprived. You should budget your money such that you know what you want out of life (see: our lessons on SMART goals), then enjoy those things and eliminate spending on the junk. 

Challenge: 

During the following week, track all of your spending. You can do this using an app or in your notebook. Keep the information all year. We’ll be working with this to construct budgets next week, though. 

Double Secret Challenge: 

If you choose a budget tracker app, review it for the class. Tell what you used, ease of use, whether it’s free or paid, and whether you felt it gave you more awareness of your budgetary situation. 

 

Resources: 

Best Budget Blogs: Learnist 

How to Set up a Budget: Money for 20’s (this is a sneak preview for next week…bring a calculator!) 

Outline: Chapter 6, text outline 

Know Your Rights

What are your rights as a consumer? We often look at consumer protections in terms of things like the lemon law or product safety, but they go deeper than that.

You will come upon a situation where you need redress. You’ll need to be able to know how to pursue a complaint professionally.  

1. Which agency do I use?

2. What do I really want as far as indemnification (being put back in the position I was in before the situation occurred)?

3. What’s the correct–and kindest–way to get this resolved?

Think of as many situations you know where a product was unsafe, not what you expect, a company didn’t do the right thing, or you found you got the short end of the stick. Sometimes the squeaky wheel gets the grease, but often it’s the smooth operator who gets the job done. 

Research as many government protection agencies as you can, and what they currently handle as far as protecting consumers. Remember, this is what your tax dollars pay for. We’ll discuss their role in society… and oh yeah, taxes, too. You got to pay The Man if you expect to have protections under the government. 

 

Resource: Chapter 1 outline from the official economics book has lists of consumer protection agencies, but these change constantly. Know that you must research to see what divisions and agencies will be handling your complaint. 

 

What’s the Definition of Freedom?

What is your definition of freedom? Freedom of speech? Thought? Privacy? 

Freedom to make a living? 

In order to discuss the law, we need to identify what freedoms you think it should give you. We can trace this all the way back to American constitutional history, where the Founding Fathers nailed down documents that gave you the ideas you now have about freedom. Let’s put this in context, by taking a quick look at the Constitution of the United States.

Critical questions: 

1. What were the original freedoms you see in the Constitution?

2. Who were they for?

3. Were they applied equally?

4. Were they ever intended to be applied equally?

5. When did each oppressed group get it’s freedom? 

6. What are specific freedoms listed in the Constitution?

7. Are there any freedoms you enjoy and take for granted that you can’t find in that document?

8. Are we missing any specific mentions of freedom as you see it? 

Challenge: Find one egregious (really, really big) violation of freedom. This can be an article, video, or simply a mention of a situation in the world today. Mention it in the comments. 

 

 

 

 

 

Game Show: How Dumb Are You When It Comes to Money?

The smartest teens in the world, when it comes to money, are in Shanghai, according to an article posted by Forbes. Take a moment to read the article… I’ll wait…Note where the US scores. It’s pretty ugly, isn’t it. Let’s have someone interpret this graph for us, so we don’t fall at the bottom of the barrel for math and reading, too. This just gets worse as we go along, doesn’t it? What trends are you seeing in world-wide emphasis on financial literacy. Really consider the countries that are scoring high and low.

“A fool and his money will soon be parted.” –Old Proverb. Probably written by the dude who took the fool’s money. 

Critical questions: 

1. How did we get to such a sad state of affairs?

2. How can we reverse these trends?

3. What is the BASELINE knowledge you need to survive? Can you beat the kids in Shanghai, or is it hopeless?

4. What’s the graph trying to tell us as far as our place in world-wide financial literacy education?

 

The moment of truth… Take this quiz, located at the Council for Economic Education’s website. Let’s look for the fool whose money will be taken and the smooth operators who will take the cash. If you’re the fool, don’t worry… a year’s worth of economics and financial education will save you. Get ready for your wake up call… begin! 

 

 

Youth & the Law: a.k.a. “How Not to Get (insert word here)”

Generic Protest

The law is a sticky subject. It’s flexible, versatile, and applies to different subjects in different ways. We interpret the law differently depending on different situations. A good lawyer can get a guilty person out of trouble, and a bad attorney could allow Jesus to be sent to jail.

We have conservative judges, liberal judges, and moderate judges. Our cultural shifts change the way we interact with and see the law.

This class will be about how we interact with the law. We’ll interpret, discuss, debate, and research areas of the law that apply to us. Then, we’ll look at constructive ways to make the law work better for us. When it doesn’t, we’ll ask why. Asking why doesn’t change society for the better. We’ll learn appropriate ways to take action using the law.

Remember this: Gandhi was a lawyer.

I don’t know if there was any point in saying that, but it’s something to think about.

By the way, doing the right thing using the law is generally not the easy path. That’s something worth noting. It’s generally the hard road, requiring courage, determination, intestinal fortitude. You can sit and study the law all you want, but it’s hard to stand up to injustice.

I’m not saying you have to. You don’t have to go to Ferguson. You don’t have to crusade for equality. You don’t even have to write an article about things that may need change in your community. But you do have to ask the questions. If you do, you may ask not ask yourself “Why,” but you may ask yourself “Why do I allow this to happen?”

That’s what this course is all about.

 

[Photo Credit: Dr. Heckle. ]

Welcome to Consumer Economics a.k.a. “How Not to Go Broke”

Welcome to Consumer Economics. Let’s think of this class as Financial Literacy and Entrepreneurship.

This class is near and dear to my heart, because, quite honestly, I’ve made every mistake I’m going to teach you not to make. I’m great at messing up. In fact, this class oughta be called “Watch Casey and Do the Opposite.”

Two books I like better than the textbook: 

Book One: 

I Will Teach You to Be Rich by Ramit Sethi.  If you haven’t read his work, Ramit is a successful author/entrepreneur. He’s built his businesses studying effective habits and training others. You can go to his website at iwillteachyoutoberich.com where you’ll get a ton of success habits free. Follow Ramit at @ramit. If you like his work, listen to this podcast with Ramit and author/entrepreneur James Altucher. 

Bonus: Ramit and James are fairly well-known in entrepreneurship circles. Here, they read their hate mail in a four-minute YouTube video that’s worth your time. When you become famous, you’ll want to save your hate mail for something productive.

Book Two: 

The Money Book for the Young, Fabulous, & Broke by Suze Orman. Suze Orman’s a rock star financial advisor. You can see her show on TV where she tells callers who request advice about whether they can make a purchase that they are “DENIED!” This book is interesting and practical. Here’s her website. She’s worth reading and watching.

More Books: The Entrepreneurship Library: 

I have a set of reserve books in the Entrepreneurship Library. Some are hard-core business and others are motivational, relationship-building, career-oriented, or hard-core finance. They would all help you to build success thinking and give yourself the skills you need to succeed after you walk out the doors.

But wait…before you go…

Here’s a lame powerpoint to psych you up. You’re welcome:

Financial Literacy Intro powerpoint

 

 

[Photo credit: Ringling College of Art & Design: Money Matters]

 

 

 

A Day in the Life of the Future

This guest post by future author and present genius Jakob Castro represents what might become of us in the future if we don’t “de-revolutionize.” 

Everything is automated. Getting out of bed, putting on my clothes, brushing my teeth. It’s all automatic. Technology has advanced to the point where it removes the need for a subconscious. Humans are carried throughout the day with the extreme convenience of these devices that do so much for you. It’s sort of depressing. We are no longer able to feel the accomplishment of taking care of ourselves. We’re constantly dependent of these things. It sort of makes me wonder what would happen to society if it all shut down; even for a day. Would we even be able to live? I’m afraid that people are so used to being risen out of bed by a mechanical arm. I’m worried that when someone walks to the kitchen and food isn’t immediately available, they literally won’t know what to do. 

Only the scientists and engineers creating these things use their brains anymore. The rest of the population is just animals under constant control and surveillance.  I’ve strived to try to break away from this technology as much as possible. I study how humans lived in the past and I attempt to embrace it, so that I may be self-sustaining rather than reliant on these materialistic things. I hope that my actions will be passed down to my children. I refuse to let technology take over my life. Convenience has inevitably turned into burden, and I seem to be the only won realizing it. 

We need to de-revolutionize. 

 

 

Wrapping Up Genius Hour…

We’ll be wrapping up Genius Hour in about 3 weeks with PitchFest.  

PitchFest is our first (hopefully annual) contest where you pitch your idea, product, organization, or creation to the world.  Rules will be posted shortly.

Over the next three weeks, you will wrap up your project for the purposes of our class, even if it’s not done. It is my hope that you will continue to work with this project until it is done, however. Whether you’re done soon or still working, you have learned some big-time real-world skills:

You have developed major entrepreneurial skills. You’ve: 

  • Identified a need in society. Identifying opportunities and needs in the market or the world is an entrepreneurial skill.
  • Taken that idea and moved it forward. Some of you are even walking away with an MVP. An MVP is a “minimum viable product.” This is your first draft in entrepreneurial terms. You’ll take that and make it even better.
  • Asked other teams and people for feedback. That’s called market research.
  • Taken the results of the feedback and changed your ideas and products. This is called a pivot.
  • Designed and done preliminary pitches to see what it felt like to sell your ideas and/or products to the world.
  • Swapped out teammates. This is real-world stuff. Sometimes, when you’re not a good fit for a team or idea, you move on and start something new. Recognizing when it’s time to part ways is an advanced skill. Doing it nicely with respect–even more advanced.
  • Asked other teams for help. So, you need an artist, a designer, a writer, someone with a fresh idea? I’ve seen you helping each other. This is real-world stuff. Sometimes, people get paid for this–it’s called consulting. Sometimes you do it for others because it’s been done for you. That’s called helping. Helping’s nice.
  • Networked and built your base of people around you. I see some groups really getting out there into the world, meeting professionals and people that will not only help with this project, but will help in real life. Some of you are making contacts, calling people, asking old teachers and principals, “What do you think?” and even getting out in the world promoting your passions.
  • Created physical products. I see books, apps, platforms, and posters emerging. Remember, if your product is too big to do now, save it in your “someday” file. Bite off what you can chew now.
  • Begun to study and master the art of public speaking. Most people hate this and refuse to do it. When you do it, even if you’re not comfortable, you’re miles ahead of your competition.

This is amazing, and I’m proud of each and every one of you. You have overcome obstacles to advance your causes, and learned in the process.

Everything we’ve done in this project has connected to current events–you’re working with your passions that are in the limelight every day–everything from animal rights, bullying, healthcare, family issues, fundraising, thinking about bettering the economy, filling consumer needs in society–I’ve seen a range, that all connect to our themes. Keep it up!

But… everything we’ve done also connects to your shops and technical areas. Most of the passions and needs you identified solidly connect to your shops–this is no coincidence. Your shops should be areas you feel passionate about.

Critical Questions: 

1. What can you do now that you couldn’t do before this experience?

2. Do you have any skills that you didn’t know were marketable skills? What? How could you use them in real life?

3. How can creating ideas, products, and platforms be a real job for you?

4. What parts of this experience were the most difficult for you? What parts of creating something–a book, company, app, etc–do you suppose are hardest for an adult?

5. How did you grow through this experience? Do you think we should do more (or less) of this type of project in classes?

6. How would you measure your success in this project if you had to give it a grade?