A selection of slides from an 85 page powerpoint created for Hamilton County Schools and Tennessee Valley Federal Credit Union. Copyright 2011 tvfcu.com Target Audience: 11th Grade Highschoolers.
Citation preview
Who Wants to be a
Millionaire?Presented by:
Chattanooga Area Chamber of Commerce Workforce Development Committee
Presenter
Presentation Notes
(Place 1/2 sheet survey/TN Saves enrollment form & Who Want to Be a Millionaire trifold at each desk or seat before they arrive.) Do you think you will be a millionaire? It’s actually easy for someone your age to earn become a millionaire- if you make you good decisions starting now. We know money doesn’t buy happiness, but life is more fun if you aren’t stressed out about having enough money to pay your bills. My name is ___ and I work at ___(describe what you do). My co-presenters will introduce themselves & tell you what they do. (Volunteers introduce self, company & what you do.) Today, we’ll share ways to make your money work for you, as well as some money mistakes that you’ll want to avoid. We’ll also demonstrate why you need math and reading skills to keep from getting ripped off. You need a pencil or pen. If you want to take notes, write on anything except the half sheet of paper, we’ll take that up. Let’s start by finding out how much you know about millionaires by answering 5 true-false questions. (Include the educational message of each question!)
True or False?
More millionaires drive Toyotas than BMW’s.
Presenter
Presentation Notes
More millionaires drive Toyotas than BMW’s. Raise your hand if you think it’s true. Raise your hand if you think it’s false. The answer is true. Most millionaires don’t spend a lot on cars, clothes, homes or other status symbols. Only 23% drive a new model car. 80% of millionaires say they live a middle class lifestyle.
3% of high school basketball players make it to a college team
3% college players make it to an NBA team.
Less than 1% of high schoolplayers make it to NBA
Can you make to the big league?
Presenter
Presentation Notes
Less than 3% of high school basketball players make it to a college team. Less than 3% of those are good enough to play with the NBA. This means that less than 1% of the half-million high school basketball players make it to the NBA. It’s even more difficult for females since there are fewer professional women’s teams.
Presenter
Presentation Notes
Dream about playing in the Super Bowl? Out of the 1.1 million high school football players, only 28,000 play in college. One-half of those players drop out even if they have a full scholarship. Only 100 NFL players make it to the Super Bowl each year. While it’s great to have dreams & hobbies like sports & entertainment, be realistic about earning a living with your athletic skills or singing voice.
True or False?When you have an education, you can earn more during your life.
Dropouts can live paycheck to paycheck but…
Presenter
Presentation Notes
Who wants to go to college or training after high school? It pays to stay in school.
High School Graduates can earn $1.2 MILLION DOLLARSduring their lifetime.
Presenter
Presentation Notes
High school graduates, on average, earn $1.2 million dollars during their working years!
They invest more time and money into their education.
The Dream…
Goal: Buy a $10,000 car
Loan interest rate: 7% Length of loan: 5 years
Presenter
Presentation Notes
I need 3 people to quickly come to the front of the room. All you have to do is hold a sign. (Line them up next to each other.) Let’s say you each want to buy a $10,000 car. You shopped around & found the best deal was for a loan charging 7% interest for a 5-year loan. Let’s say Person #1- what’s your name?- (the person on the left as you face the screen) worked summers and weekends and was able to save $5,000 for a down payment & only has to borrow $5,000 (have that person hold the $5,000 Down sign up so everyone can see it). Person #2 (the middle person-give them the $2,000 Down sign & hold so audience can see it.) didn’t work as many hours & blew their money on food , clothes & going to the movies. He/she was able to save $2,000 for a down payment & has to borrow $8,000. Person #3 (the person on the right- give them the Zero Down sign) did not work or save any birthday or Christmas money & will have to borrow the entire $10,000. Who will get the best deal? All 3 turn your signs around. Person #1 will save pay $10,940 total for the $10,000 car. Person #2 will pay $11,505 for the same car. Person#3 will pay $11,880 for the same car. (Keep them standing.)
• Compare Person #1 to Person #3• Subtract total amounts of the two
• How much did Person #1 save?
Presenter
Presentation Notes
I have a prize for the first person to raise their hand & give the correct answer. Don’t yell it out. (Ask team to help you look for 1st & 2nd person to raise their hand- 2nd person is in case the 1st doesn’t have the correct answer.) The question is: How much total money will Person#1 save compared to Person#3 who didn’t have a down payment? Subtract the total amount that each of the 2 people paid for the car. The correct answer is….(Go to next slide) (Keep them standing.)
Presenter
Presentation Notes
(Give prize –candy, pen, etc. to the first to have correct answer) You save $940. This is why you need reading & math skills- to understand contracts and loans so you don’t get ripped off! You can use this money for car insurance, gas and maintenance or save it to help pay for your next car. Thank you car shoppers, you can return to your seat. (Take the signs from them & give them candy.)
12
A‐
B‐
C‐
Presenter
Presentation Notes
Which of these piggy banks illustrates your savings habit? Note: Click on 3 pigs one at a time. A. is a healthy, happy bank. B. could use some first aid. And C. is starving for a deposit. We want you to start saving money. If you are already saving, maybe you can find ways to save more. We want you to become a Tennessee Saver today by setting your own savings goal. On the half-sheet of paper we gave you, complete the side that has Tennessee Saves on the top left corner. Print clearly. Select the most important goal that you want to work on first. Circle or check only one goal. Check “consumer product” if you want to save for the prom, electronics, etc. If you don’t have a specific goal right now, check savings & investing.
Presenter
Presentation Notes
Be sure to write an amount that you would like to save each month on the line that saves “My savings goal is..” Your goal doesn’t have to be large- you can start with any amount- as little as $10-$20 . We’ll give you a magnet that you write the item that you want to save for as well as the amount you plan to save each month. Use an ink pen. Take this home & put in on the refrigerator, carry it in your wallet or other place to help remind you to work on your goal. We’ll show you ways to save money even if you don’t have a job. If you owe money, you can also select a debt reduction amount to pay back the money you owe. We’ll collect these forms at the end of this session. We’ll do a survey in a few months & ask some of you to estimate how much you were able to save. Last year’s Juniors saved an average of $105 a month. For those that participate in the follow-up survey, we’ll have a drawing for a savings bond.
Keep Track of Your Money!
• Avoid fees!
• ATM: $2.50 weekly = $260 a year
• Non-sufficient funds (NSF):
• overdraw once a month = $840 a year
• Debit card overdraft protection
Presenter
Presentation Notes
Using a bank or credit union can help you manage your money- it’s safer than keeping it at home & may help you save some of it. It’s your responsibility to keep track of your spending to avoid costly fees. The amount and types of fees change fairly often. Some debit cards now have a fee. Shop around and ask a lot of questions when you open your account. Read your monthly statement carefully. If you use an ATM once a week that charges a $2.50 fee you’ll pay over $260 a year- to use your money! The average overdraft or non-sufficient fund fee is $35 from the company where you made the purchase & another $35 from your bank or credit union. One overdraft fee a month costs $840 a year. You may choose to sign up for debit card overdraft protection. Your debit card can be declined if you try to use it without enough money in your account. This can help prevent a lot of overdraft fees, but will not allow you to spend more money than you have in case of emergency. Some types of protection services charge a fee, while others are free. Make sure you understand your bank or credit unions services and fees.
Consider using another form of payment or by using your PIN
Presenter
Presentation Notes
Beware when using your debit card. Some companies temporarily withdraw more from your account than you actually spend. It’s called a pre-authorization hold. Typically the hold stays on your account until the funds are transferred to the merchant from your bank or credit union, often 3-4 days. If you look at your account online it may show as a pending transaction. When you slide your debit card at the gas pump, you may get charged $100 for a couple of days even if you only purchase $20. Movie rental stores & kiosk such as the ones at the grocery store charge $15 or the price of the movie until it’s returned. Some credit & debit card companies add 20% tip automatically if you use your card at a restaurant. Hotels, car rental companies & hair salons may temporarily add extra charges. These charges can easily cause you to over draw your account if you don’t have enough money in the account to cover them. Avoid this by using your PIN- Personal Identification Number (if allowed) or use another method of payment.
but when or If your expenses exceed youR INCOME:
Reduce Your Spending!!!!
Increase Your Income
Presenter
Presentation Notes
You can save money by asking yourself- do I need this or do I want this. Is an ipad a need or a want? In most cases it’s a convenience- not a necessity. How many of you have an ipad? Did you buy it yourself?
$50/month x 12 months = $600.00 a year$80/month x 12 months = $960.00 a year
CELL PHONE USAGE
Presenter
Presentation Notes
How many of you pay for your own cell phone? If you pay $50 a month for your phone plan, that adds up to $600 a year. If peer pressure or advertising makes you think you need access to internet 24-hrs a day, you may pay $80 a month. That adds up to $960 a year.
Downloading five apps at $2 a piece each month adds up to $120 a year.
Presenter
Presentation Notes
Even small things like phone apps or itunes can add up fast. Downloading five apps at $2 a piece each month adds up to $120 a year.
How many of you drink at least one soft drink or bottled water a day? If you only spend a dollar that adds up to $365 a year! You may spend less by buying in quantity or spend more by buying from vending machines or in convenience store or restaurant. What do you pay for drinks in school machines? (Note: most schools only sell diet drinks & water to promote good nutrition & they charge $1.25- $1.50. Act shocked when they tell you what they pay.)
Presenter
Presentation Notes
Food is a need, but eating out usually costs more than eating at home & isn’t very healthy. How many times a week do you eat out including breakfast, lunch & supper? How much do you spend?
$7 a meal X 3 meals a week=
$1,092 a year
Presenter
Presentation Notes
If you spend an average of $7 a meal & eat out 3 times a week, you’ll spend over $1,000 a year on just a few meals..
If you smoke a pack a day (20 cigarettes or 1 every 3 hours):
Day- $5Week- $35Month- $1401 Year- $1,825.00
(That is enough to buy a used car!!!)
Presenter
Presentation Notes
Smoking is bad for your health as well as your wallet. This is a real photo of the teeth & gums of a smoker. If you smoke a half a pack a day, it will cost you $1825.00 a year at $5.00 a pack! You might as well be burning dollar bills. At $5.00/pack that is 25 cents a cigarette!
Guess the total amount spent on these 8 habits in a year?
Presenter
Presentation Notes
Do you have any of these habits? Anyone want to guess how much money would be spent on these 8 habits in a year? Raise your hand if you want to guess. We have a prize for the closest guess. (Ask 3 or so people before you go to next slide.)
College loansBanks & Credit Unions
Retail StoresFinance Companies
Friends & FamilyCredit CardsPayDay LoanRent to Own
Presenter
Presentation Notes
Using credit effectively can help you achieve goals. Unfortunately, credit is too easy to obtain & makes it too easy to overspend. You’re probably familiar with many of these types of credit. Let’s look at a few of them.
• College debt is higher than credit card debt in the USA.• College debt will surpass 1 trillion in 2012• “For‐Profit” Colleges have higher tuition
Presenter
Presentation Notes
We hope many of you are already saving money for college. Education can be expensive, but it’s a good investment because of higher pay typically earned by college graduates. Many of you may choose to borrow money to help pay tuition & other expenses. Americans now owe more on student loans than they do on credit cards. College debt will pass one-trillion dollars in 2012. Students attending for-profit colleges borrow more than students attending state supported schools like Chattanooga State or UTC. Can you name some for-profit colleges? Let them name some: Phoenix, Chattanooga College, ITT, Virginia College.
33% U.S. students have loansAt UTC 49% of students have loans
Average U.S graduate debt is $22,900At UTC : $29,000
25% Chatt State students couldn’t pay 3 yrs after
leaving school
Presenter
Presentation Notes
Two-thirds of U.S. college students borrow money while 49% of UTC students do. UTC graduates owe an average of $29,000 in loans- that’s about $6,000 more than the national average. What happens if you drop out? You still have to repay the loan plus interest- even if you declare bankruptcy. One-fourth of Chatt State students have not paid on their loan after 3 years from leaving school. Defaulting (or not paying) can prevent you from getting a job, buying a house, renting an apartment and even trying to re-enter college later. Students who don’t finish their degree are at higher risk of default because they don’t have the training to get a better paying job. Don’t borrow more money than you can expect to pay back in a few years. Being in debt also adds additional stress making it harder to concentrate on studying. More students leave college for financial reasons than poor performance.
Presenter
Presentation Notes
Talk to family members, teachers & guidance counselors about your options after high school. Upromise.com (pronounced you promise.com) is a web-based loyalty program that deposits rebates when you spend money with specific companies. You can register yourself or other people can deposit their rebates into your account- you don’t even have to be related. Find more information in the brochure you have. You may be surprised at the scholarships available. Anyone want to guess why these students won scholarships? They made their prom outfits out of duct tape. (Ask guidance counselor to say a few words about scholarships.)
We need 3 more volunteers to help illustrate this example. (Have 3 volunteers line up.) Let’s say you charged $5,400 on your card that’s charging you 24% interest rate. You are only required to pay back 2% of the total balance each month. Is this a good deal? Let's see. What if Person #1 only pays the minimum amount every month. (Give first person the sign $108 facing out.) Our 2nd person stops eating out once a month and pays the minimum amount plus an extra $10 dollars each month. (Give the 2nd person the $118 sign facing audience.) Our last person gives up soft drinks & cable and is able to pay an extra $100 a month. (Give 3rd person the $208 sign showing.) How long do you think it will take the 3rd person to pay off the bill? (Ask 3rd person to flip sign.) It will take 5 years to pay it off & they will pay $2,400 in interest. (Ask 2nd person to flip sign.) It will take the 2nd person 10 years to pay it off and they will pay $9,600 in interest. How long do you think it takes our 1st person who is only paying the minimum each month? (Ask 1st person to flip sign.) It takes them 70 years to pay back the money and they will end up paying $40,500 in interest! Let’s thank our volunteers & let them take a seat.
These companies compile your credit history.
Presenter
Presentation Notes
There are 3 major credit reporting agencies- Equifax, Trans Union, and Experian- who compile your credit history.
Call 1-877-322-8228 or visit
www.annualcreditreport.com(this is the only FREE site)
Check your credit score once a yearto prevent identity theft!
Presenter
Presentation Notes
Call this toll free number or go to annualcreditreport.com to get your free credit report. This info is in the brochure. Check your credit report once a year to make sure the information is accurate- sometimes other people may use your credit history. Contact these agencies if you notice anything incorrect on your report.
With a good credit score it is easier to•Get A Job•Rent an Apartment•Buy a House or Car•Have lower interest rates
Credit Agencies start collectinginformation as soon as you startspending money when you turn 18!
Pay off your bills every month!Pay ON TIME every month!
Presenter
Presentation Notes
If you use credit responsibly, you’ll have a good credit report & find it easier to get a job, rent an apartment, buy a house or car, and get better deals on interest rates. Car insurance companies will charge you much more or even deny you if you have a bad credit report. Only 2% of college age people do not have any credit history. That means these agencies start collecting information about you as soon as you start spending money. You’ll pay for money mistakes for a long time until you pay off bills and pay on time.
MOSTLY A’sYou’re a Spender!
MOSTLY B’sYou’re a Saver!
Presenter
Presentation Notes
If you checked more A’s, you are a spender. If you checked more B’s, you’re a saver. A’s raise your hand. B’s raise your hand. What might happen if an A married a B?
• Savings–Short-term–Postpones
spending–Safe
• Investments–Long-term–Buy hoping for
future profits–Risky
Presenter
Presentation Notes
Most millionaires start saving & investing early. What’s the difference between the two? Saving money is usually done for short term goals. It also keeps us from spending money that we can use to invest. Investing is usually a long-term process to earn money for education, a home or retirement. While savings accounts are guaranteed not to lose money, there are no guarantees with riskier accounts.
Divide 72 by the amount ofinterest you earn.
Presenter
Presentation Notes
The Rule of 72 helps determine how long it will take to double your money. Divide 72 by the amount of interest you’re earning.
• 72 years
• 36 years
• 18 years
• 12 years and your savings double!
Presenter
Presentation Notes
How many of you have a savings account? Do you know what present interest you’re earning? Probably less than 1%, but we’ll use 1% for this example. It will take 72 years to double your money if you left in that account. If your money is earning 2%, it will double in 36 years. If it’s in a certificate of deposit account earning 4%, it will double in 18 years. If your money is invested in an account earning 6% interest, it doubles much faster- 12 years.
A Certificate of Deposit Account:You agree to keep your savings in the account for a specific amountof time, usually 6 months to 3 years, in exchange for higher interest earnings.(Such as the 6% interest example)
Presenter
Presentation Notes
A CD account is a type of savings account where you agree to keep your money for a specific amount of time- usually from 6 months to 3 years in exchange for a guaranteed higher interest rate.
How long will it take to double your money with aninterest rate of 8%?
Presenter
Presentation Notes
The 1st person to raise their hand with the correct answer wins. Don’t shout out the answer. (Watch for the 1st person. If more than 1 person raises their hand, have them write their answer down, then ask them to share their answer.) How many years will it take for your money to double if you are earning 8% interest?
IRA Accounts
• Provide tax breaks for workers.
401(K) Accounts• Companies match to a percentage what you contribute to the account.
Buying Stock• You become part‐owner of the company and share in the profits if the company does well.
Savings Bonds• You loan money to a company or government & are paid back withinterest.
Presenter
Presentation Notes
There are many types of investment accounts. Individual Retirement Accounts or IRA’s provide tax breaks for workers. Some employers offer 401(k) retirement accounts- they may match the amount you save. When you buy a stock you become an owner of the company sharing in the profits if the company does well. Your stock looses value if it doesn’t. When you purchase bonds, you loan money to a company or government. They pay you back with interest.
When you invest in a mutual fund, you pool your money with other investors for a combination of stocks and bonds.
That way, if some of the individual stocks and bonds do poorly, the better performing
investments may keep a good average return.*
*Many people hire professional financial consultants for up‐to‐date investment advice
Presenter
Presentation Notes
When you invest in a mutual fund, you pool your money with other investors for a combination of stocks and bonds. If some of the individual stocks and bonds do poorly, the better performing investments may keep a good average return. If you invest wisely, your earnings could be much more than regular savings. Many people hire a professional to help them invest.
Suppose you save $2,000.00 and invest it at 8%
•By Age 28, you have $4,000•By Age 38, $10,000 •At Age 48, you have increased your savings to $22,000.00!
Presenter
Presentation Notes
Suppose you save $2,000 & invest in a mutual fund earning 8% interest. It’s not easy to earn 8% in today’s economy, but we’re assuming this is a long-term investment and interest rates will increase. In this example, you earn $4,000 by the time you’re 28, $10,000 at age 38 and $22,000 at age 48. Remember, you only contributed $2,000- the rest is compounded interest.
“Compound interest is the eighth wonder of the world. He who understands it, earns it ...
Add $50 a month to that account and in 10 years, you earn $53,000. Keep adding $50 a month & you earn $130,000 in another 10 years. By age 48, you earn $300,000!
Presenter
Presentation Notes
Continue to invest $50 each month until you retire at age 65—and you retire a millionaire!!!
$500,000.00 (Half a Mil!)
OR
A penny a day, doubled every day for 1 month?
Presenter
Presentation Notes
Let’s see what you learned about savings & investing. If we offered you $500,000,“half a million dollars” or a penny a day, doubled every day for one month; which would you take? Why?
Day Amount
1 $.01
2 .02
3 .04
4 .08
5 .16
6 .32
7 .64
8 1.28
9 2.56
10 $5.12
Presenter
Presentation Notes
This extreme example of compounded interest earns 100% in interest each day. However, we’re one-third of the way through our month and we only have $5.12. Does anyone want to change their mind & take the $500,000?
Day Amount
11 $10.24
12 20.48
13 40.96
14 81.92
15 163.84
16 327.68
17 655.36
18 1,310.72
19 2,621.44
20 $5,242.88
Presenter
Presentation Notes
We’re two-thirds of the way through our month, but we only earned $5,000. Anyone want the half a million?
Day Amount
21 $10,485.76
22 20,971.52
23 41,943.04
24 83,886.08
25 167,772.16
26 335,544.32
27 671,088.64
28 1,342,177.28
29 2,684,354.56
30 5,368,709.12
31 $10,737,418.24
Presenter
Presentation Notes
At the end the month you earn $10.7 million. This extreme example illustrates some important facts about savings & investing- contribute on a regular basis and be patient. If you had given up the first 10 days and spent the money, you’d have to start all over and wouldn’t be close to this amount.
1 - Make Savings a Habit
2 - Start Saving Early
3 - AVOID Credit
Presenter
Presentation Notes
The key to becoming a millionaire is to make savings a habit, start saving early, avoid credit so that you’ll have money to save and invest.
Presenter
Presentation Notes
You can post tips that you already do or some that you would like to try. It can be oblivious tips like carpooling or riding a bike to save on gasoline costs or more creative like skate boarding to school. Suggest creative AND LEGAL ways to save or earn money.
