STAX: The Newest Game to Teach Investing

|
Oct 31, 2018
|
Index Funds, Investing

Earlier this week, NGPF and McKinney launched STAX, a game that will teach students that sometimes the best investment strategy is the simplest. 

We built STAX after hundreds of conversations with educators, whose top 10 list of features included: 

  • Easy to implement in the classroom: Teachers who beta tested STAX generally spent less than an hour prep time before using with their students. A Teachers Guide provides details on the mechanics of the game as well as helpful teacher tips (video here) for how to use in the classroom. 
  • Help students see longer-term consequences of the investing decisions they make: Students will make investment decisions over a 20 year period, not 10 weeks or a semester or a year.
  • Incorporate behavioral finance concepts and help students understand better their tolerance for risk: Students will receive messages about stocks crashing and rising to try. Let's see how they react. Do they "buy high and sell low" or "buy low and sell high?" Reflection questions force students to assess their emotions while playing the game.  
  • Teach index funds (diversified and low-cost) and their role in an investor's portfolio. We know that many educators are not comfortable teaching the investing unit and this lack of comfort extends to index funds which now make up to 30-40% of investable assets. When students see the Computer (which follows a strict strategy of dollar cost averaging into index funds) win most of the time their next question will be "Why?" leading to a great classroom discussion. 
  • Offer more investment choices to provide a more holistic view of a financial life: In STAX, students select from 7 different investment options, including savings accounts, CDs, index funds and stocks. Each of the investments are unlocked over time to scaffold the learning for students. 
  • Introduce strategies like dollar-cost averaging which students will encounter in 401(k) plans: : Every six months students will have additional funds ("pocket money") to deploy into the various investment options allowing them to change their strategies on the fly based on market conditions.
  • Provide students with multiple opportunities to play allowing them to try different strategies: We have 35 years of market data for a game with a 20 year duration so each time students play they will get a new experience with opportunities for learning. Since the game is "20 minutes of investing in 20 minutes," there are multiple opportunities for replay. 
  • Allow for both competitive and single player modes. We know that class competitions are fun but students will also enjoy playing one on one against the computer too. 
  • Fast-paced game will keep students attention: 20 years of investing in 20 minutes while 11 investment options rise and fall, pocket money coming in every six months and messages flashing across the screen intermittently. You get the message! 
  • Teacher controls to pause the game. Want to stop the game to reinforce a concept. Just hit pause and deliver your message to students. 

Here's what leading financial experts are saying about STAX:

"If market games, which engage students in short-term speculation in individual securities, is the disease, then STAX, which demonstrates the wisdom of long-term passive investing, is the cure. I cannot recommend it highly enough."

William Bernstein, author of Four Pillars of Investing and The Intelligent Asset Allocator

"Want a short, powerful lesson on the virtues of sensible, long-term investing? Call up STAX--and, depending on the choices you make, you can see in just 20 minutes how things might go terribly wrong over the next 20 years, but also how they can go wonderfully right."

Jonathan Clements, former columnist at the Wall Street Journal, author of From Here to Financial Happiness and How to Think About Money

While many students may find “exciting” stock market games an adrenaline rush, they actually teach millions of students more about gambling rather than investing.  That’s why I love the new NGPF investing simulation, STAX, since it tracks investing over decades instead of weeks.   It’s my hope that STAX will be used in every high school in America.

Allan Roth, financial planner and author of How A Second Grader Beats Wall Street

 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.