For Financial Success, What is More Important: Habits or Goals?
I think this may be my new mantra: You better have a plan to develop new habits if you are trying to achieve goals that have eluded you for years. Willpower may simply not be enough.
So, just down the road from our offices, a Stanford professor has focused his research on understanding how we can form habits. He provides a simple three step approach in this article from Quartz:
According to B.J. Fogg, a psychologist and researcher at Stanford University who has studied behavior...
Question: Can Language Really Impact Savings Rates?
This post created by new NGPF team member, Christian Sherrill:
If you’re a rabid TED Talks fan, as I am, you’ll probably remember Yale Economist Keith Chen’s fascinating talk about the impact of grammar on savings behavior.
Now famously, Chen concluded that - well, I’ll let you learn about it on your own terms:
Video summary (5:53)
Full text of study: The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement...
Question of the Day: Why Can't We Give Up Writing Checks?
By Tim Ranzetta
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Aug 08, 2017
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Checking Accounts, Current Events, Question of the Day, Payment Types
For those educators out there still teaching students how to write checks, you have been vindicated!
From Bloomberg:
In an era of smartphones, online banking, and Venmo transfers, the U.S. still can’t seem to wean itself off paper checks. In most countries, they’ve gone the way of the fax machine and the rotary telephone. But their demise isn’t coming to America any time soon.
Americans still reach for their checkbooks more than anybody else. In 2015, they each made 38...
Interactive: What Happens To Risk When Your Investing Period Lengthens?
From Of Dollars and Data:
Over 1 year periods, markets can be very chaotic for both U.S. bonds and U.S. stocks. This is also true over shorter time horizons (i.e. monthly, daily, intra-day, etc.). However, the chaos fades as the time horizon increases. Below is an animation I created that shows the S&P 500 and U.S. 10-year Bond returns as they vary from a 1-year horizon to a 30-year horizon.
Here are two charts from his animation (it changes before your eyes if you cilck on the link above):...
Infographic: How Do Americans Get Health Insurance?
From Visual Capitalist:
Questions:
How do most people get their health insurance? Indicate the percentage of people that fit into that category?
What percentage of the population is currently uninsured?
What do you think are the risks of being uninsured?
Do a quick Google search and explain what Medicaid and Medicare are.
Do you think that people who receive their health insurance through their employer have to pay any money out-of-pocket for their medical expenses?
_________________...
Article: How Is Venmo Changing The Nature of Friendships?
Hat tip to Jessica for this fascinating article about how the payment app Venmo is affecting friendships. Watch your students squirm as they discuss how they use Venmo with their friends.
From NY Times:
Margaret Pennoyer, an elementary school teacher in Manhattan, had just returned from a bachelorette party in Napa Valley when she received an email that had been sent to all the guests. The two organizers had itemized each woman’s individual expenses, which they had covered, and requested...
Question: Are College Costs Rising?
By Tim Ranzetta
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Jul 23, 2017
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Chart of the Week, Paying for College, Question of the Day, Research, Current Events, Math, Economics
From WSJ (Subscription required):
Questions for students:
Create a one sentence description for the trends seen in each of the two graphs.
A friend says, “What a bummer that college costs keep rising at an incredible rate!” Using the data from the graph on the left, provide a response to her assertion.
Since 1990, all consumer prices (aka the rate of inflation) have basically doubled. Using the rule of 72, make an estimate as to what the inflation rate has averaged from 1990-2016....
Question: How Does America Pay for College?
By Tim Ranzetta
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Jul 20, 2017
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Current Events, Question of the Day, Research, Student Loans, Teaching Strategies, Chart of the Week
Good bell ringer to get the conversation started about paying for college. Can start the class by asking your students how they think families will pay for college:
What are the sources that families tap into?
What are 3 most important categories?
Once they have given their answers, you can move on to the chart below.
Sallie Mae out with their tenth annual study showing how families are covering the cost of college. Lots of interesting graphs, charts, infographics that I will be sharing over...
Question: How Risky Is The Stock Market?
By Tim Ranzetta
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Jul 20, 2017
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Behavioral Finance, Question of the Day, Research, Index Funds, Investing, Stocks, Chart of the Week
Answer: It depends on your time horizon. Short term, it’s risky. Long-term, not so much.
Great chart here (from Barclays) demonstrates how your probability of making money (“gains”) in the stock market increases the longer your time horizon:
“This chart shows the proportion of gains and losses we observe for the same investment (the MSCI World Developed Equities Index) as we change our monitoring horizon from 1 day to 5 years:”
Let me explain:
First, the MCSI...
Question: How Are Consumers Looking To Improve Credit Scores?
By Tim Ranzetta
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Jul 17, 2017
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Credit Scores, Activity, Question of the Day, Current Events, Chart of the Week, Activities
A great bell ringer to see how many answers your students come up with before you reveal the answers (memories of the Family Feud).
From US News and World Report survey:
___________
Looking for an engaging credit score activity (#1 on Google when you search for “engaging credit score activity”)?
Here are our two favorites that work well together:
Estimating a FICO Score
Use an online FICO credit score estimator to compare the credit scores of three hypothetical college students...
Video: How Can We Overcome Our Behavioral Biases Against Saving?
By Tim Ranzetta
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Jul 12, 2017
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Behavioral Finance, Question of the Day, Savings, Current Events, Video Resource, Retirement
Hat tip to Vikram Parekh of USAA (podcast upcoming) for highlighting the work of one of his favorite behavioral economists, Shlomo Benartzi of UCLA’s Anderson School of Business. In this 17 minute TED video, Shlomo highlights the hurdles to saving and how he designed a savings program (“behavioral economics on steroids”) to overcome these challenges. He provides some good examples that you might use with your students to show how our behavioral biases cause us to fall short of...
Interactive: What Does $1,500 In Monthly Rent Buy You in Different Markets?
By Tim Ranzetta
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Jul 11, 2017
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Interactive, Question of the Day, Research, Budgeting, Chart of the Week
Visual Capitalist provides a great interactive tool for your students to see the wide disparity in the cost of living as seen through rental costs:
With rental prices across the country continuing to rise from this demand, there is one question on the minds of many Americans: how and where can dollars spent on housing be stretched the furthest?
Why is this important to know? Largest cost item for young people living on their own will be that monthly rent check so they better have a realistic...
Interactive: Is The Career That You Are Interested In Likely to Disappear?
By Tim Ranzetta
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Jun 28, 2017
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Career, Question of the Day, Research, Current Events, Chart of the Week, Employment
Lots of insightful and sobering interactive resources on this topic of job automation (see here, here and here for additional NGPF resources on this topic). Here’s another from Bloomberg (hat tip to Hari of NGPF and Big Picture Blog):
Quick orientation:
This chart is static, click on the Bloomberg link to use its interactive features
X axis is the probability that job will be automated in the future
Y axis is the average annual salary for a given job
Size of bubble is number...
Chart: How Are Millennials Investing Their Money?
By Tim Ranzetta
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Jun 27, 2017
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Chart of the Week, Question of the Day, Research, Personal Finance, Investing, Stocks, Current Events, Math, compound interest
Hat tip to The Reformed Broker for this thought-provoking chart which will get your students thinking about the importance of asset allocations:
Questions for students:
Note: Equities are synonymous with stocks, fixed income means bonds, think of cash as a savings/checking account and alternatives would be alternative investments like hedge funds or private equity.
What are the top four assets that millennials are investing in?
Now rank the assets from highest to lowest historical return....
Question: How Much Does Adding A Teen To An Auto Insurance Policy Increase The Premium?
Answer (from NY Times; subscription): 78% or $671!
More from the Times article:
An annual analysis by insuranceQuotes.com, a rate comparison site, found that adding a teenager still increased annual premiums substantially, but the magnitude of the increase has been falling over the past few years.
Adding a single teenager to a policy caused annual premiums to increase an average of 78 percent, or $671. But rate increases have been decreasing since 2013, when the average increase was 85 percent....
