By Fahzy Abdul Rahman

Family Resource Management Extension Specialist

New Mexico State University

4-H BUILD A MILLION

NM: High School course required to be taken

ECONOMIC EDUCATION - 2011

NM: Not even included in the K-12 Standard

PERSONAL FINANCE- 2011

Surveys on Teachers ….• Teachers recognized the importance of teaching personal

finance but few have had formal preparation (Way & Holden, 2009)• 89% of teachers agreed or strongly agreed: Students should be

required to take a financial literacy course or pass a literacy test for high school graduation

• Few teachers are teaching financial topics (29.7%)• K-12 teachers are acquiring very little formal education

• only 37% of teachers had taken a related college course (ever)• only 18.9% had taken a personal finance workshop (last 3 years)• only 11.6% had taken a workshop on teaching personal finance (last 3

years)

New Economic Reality?

Characteristics of the “New Normal”An extended period of:-

• Slow U.S. economic growth: GDP growth < 2%

• Low single-digit average annual stock returns

• Stubbornly high unemployment levels: 7.8% (14.7%?)• Precarious job security (public and private sector)

• Youth, <25: 53% jobless or underemployed

• College debt --- Next financial crisis wave. Averages at $26,500

• March 2012: College Debt > Auto Loans and Credit Card

• Tightened credit standards

• Declining asset values (e.g., housing)

• Increased precautionary household savings and debt repayment

• Decreased household spending

Introducing the 4-H Build a Million Curriculum

• Youth Investing Education Curriculum • Two Major Components

• Educator/Volunteer Curriculum• Youth Website

•  In the website: Tools, interactive games and activities • to show them how to save money and discover the basics of investing

• Targeted for High School Aged Students• School or Club Based Instruction• Supplement or stand alone program

• Combine with other 4-H program – E.g. Goal-setting; Budgeting

• It’s Free!!!

History of the Project• Funded by FINRA Investor Education Foundation • Started as a grant to University of Kentucky – Dr. Robert

Flashman • In cooperation with Michigan State University, University of

Tennessee and Virginia Tech University

• June of 2010- Grant was awarded to Michigan 4-H Foundation (Erica Tobe, former Program Leader, Michigan State University Extension, hired as consultant for the project)

Curriculum Development Process:Review and Pilot Stages (Educator/Volunteer Guide)

• Original Project Team developed the Curriculum• Reviewed by Dr. Celia Hayhoe (Virginia Tech) and Dr.

Dena Wise (Tennessee) and a team of 4-H educators from MSU Extension

• Piloted with 11 community sites in Michigan (each unit piloted at least three times) • 4-H Clubs• Schools• Financial Professionals

• Material was revised by project consultant and edited by MSU ANR Communications staff

How is the Educators Guide/Volunteer Curriculum laid out? • Made up of six units comprising 16 lessons

• Focus is on Investing education…

• All but Unit 3 are designed to be completed in one hour • It is recommended that the lessons be completed in the

order that they are listed in the curriculum• More advanced groups can skip a lesson if they are

already competent in the material

Units and Lessons• Unit 1: Do You Have What it Takes

to be a Millionaire? … 7• Lesson 1: Picture Your Success• Lesson 2: Making Choices• Lesson 3: Do you Want to be a

Millionaire?

• Unit 2: Learning the Basics … 35• Lesson 4: Budgeting Your Money• Lesson 5: Credit Cards 101• Lesson 6: Investing Your Money• Lesson 7: Saving Early

• Unit 3: Investment Basics … 75• Lesson 8: Cash and Cash Equivalents• Lesson 9: Understanding and Investing in

the Stock Market• Lesson 10: Bonds Basics• Lesson 11: Understanding Mutual Funds

• Unit 4: It’s All About Risk … 121• Lesson 12: Personal and Investment

Risk• Lesson 13: Understanding Business

and Economic Risk

• Unit 5: Economy and Investing … 135• Lesson 14: Investment Allocation

Decisions• Lesson 15: How is Our Economy

Doing?

• Unit 6: Putting it All Together and Next Steps … 153• Lesson 16: As You Start Your

Journey

Core Components of the Program• Instructor key concepts• Quick overview handouts • Icebreakers • Discussion questions• Web resources

Core Components of the Program

Each unit begins by providing the following information:• Learning objectives • Time • Materials needed • Lesson plan overview

Unit One: Do you have what it takes to be a Millionaire?

• Lesson 1: Picture Your Success• Explore the concept of goals. • Differentiate between short, intermediate and long-term goals. • Outline the various types of goals. • Practice goal-setting techniques.

Unit One: Do you have what it takes to be a Millionaire?

• Lesson 2: Making Choices• Review the decision-making process. • Illustrate the concept of opportunity cost. • Help youth distinguish between wants and needs.

• Lesson 3: Do You Want to be a Millionaire?• Familiarize youth with the characteristics of American millionaires.• Demonstrate the advantages of making wise financial decisions.

Unit Two: Learning the Basics• Lesson 4: Budgeting Your Money

• Familiarize youth with key concepts such as budgeting and saving.• Provide youth with an opportunity to complete a budget utilizing the

“Spartan Dollar$ and Cents” simulation.

• Lesson 5: Credit Cards 101• Familiarize youth with credit card terminology. • Provide basic information about credit card usage. • Discuss using credit responsibly.• Explain how to read and understand credit card statements and

agreements.

Unit Two: Learning the Basics• Lesson 6: Investing Your Money

• Familiarize youth with key concepts such as: • Investments and Investing• Return on investments• Compounding

• Lesson 7: Saving Early• Introduce youth to the benefits of beginning to invest early.• Demonstrate the value of compound interest.

Unit Three: Investment Basics• Lesson 8: Cash and Cash Equivalents

• Familiarize youth with various cash and cash equivalent accounts available at local financial institutions.

• Provide youth with practice calculating returns and making investment choices based on goals and timelines.

• Lesson 9: Understanding and Investigating the Stock Market • Provide youth with a basic understanding of the stock market. • Familiarize youth with the general terminology associated with

stocks, types of stocks, and the stock market. • Familiarize youth with the process of buying and selling stocks.

Unit Three: Investment Basics• Lesson 10: Bond Basics

• Provide youth with a basic understanding of bonds. • Provide youth with an understanding of how market interest rates

affect the selling price of bonds.• Illustrate to youth a simple method of calculating the yield (rate of

return) of bonds and the relationship between selling price and yield.

• Lesson 11: Understanding Mutual Funds• Provide youth with a basic understanding of mutual funds.• Educate youth on how to evaluate and select a mutual fund.• Educate youth on how to compare mutual funds.

Unit Four: It’s All About Risk… • Lesson 12: Personal and Investment Risk

• Introduce youth to the concept of risk. • Have youth consider their personal risk tolerance. • Provide youth with an understanding of the risks associated with

various investment vehicles.

• Lesson 13: Understanding Business and Economic Risk• Provide youth with an understanding of the risks of investing• Provide youth with the ability to distinguish between business and

economic risks.

Unit Five: Economy and Investing

• Lesson 14: Investment Allocation Decisions• Encourage youth to think about how to allocate their investments.• Familiarize youth with the concepts of time and the importance of

goals in the decision-making process.

Unit Five: Economy and Investing

• Lesson 15: How is Our Economy Doing?• Teach youth to identify and think about key factors in our economy.• Explain that these factors should influence investment allocation

decisions and investment choices.

Unit Six: Putting It All Together and Next Steps

• Lesson 16: As You Start Your Journey...• Review with youth the “Picture Your Success” activity from Unit 1.• Have the youth explore their investing plans for the future.• Review the overall curriculum and discuss next steps for continuing

education.

Let’s Explore…

Where to Access the Materials? :::

• http://campus.extension.org/file.php/498/Millionaires%20Final/Index.html

OR• Internet Search: “4-H Build a Million”

• http://www.extension.org/pages/61531/4-h-build-a-million

4-H BUILD A MILLIONBy Fahzy Abdul Rahman

Family Resource Management Extension Specialist

New Mexico State University

fahzy@nmsu.edu; 575-646-2253