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- [Sal] Hello teachers, Sal here.

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Welcome to the unit on[br]"Investments and Retirement."

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And as always, I encourage you

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to go through the unit yourself.

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If you have limited time, at[br]least go through the exercises

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and the unit test

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to refresh both your own[br]understanding of this material,

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but also to be familiar

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with what students are[br]going to go through.

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Now, this first unit on[br]savings and investing,

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well, it is what it sounds like.

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And here, above and beyond the work

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on this course on Khan Academy,

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we encourage having[br]discussions with the students.

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Run a discussion where[br]you have students to say,

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to talk about why saving might be easier

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or more difficult in[br]certain circumstances.

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How they might set themselves up

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to be in a better position to save.

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Why certain folks are more[br]likely to save than others,

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and what does that do[br]to their future selves

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so they could start to project[br]themselves into the future

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and think about how they[br]wanna set themselves up

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in 5, 10, 15, 20 years,

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which isn't usual for a lot of teenagers

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or fairly young people.

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It's also really important to,

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for students to realize the[br]importance of saving early.

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I've often found as an adult to myself

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that when I tell younger[br]folks about things

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that I wish I had done earlier,

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it seems to resonate with them.

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So if, even if there are even[br]examples from your own life

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or people that you know,

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saying, "Hey, I wish when I[br]was a teenager I knew this

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or I did this,

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or when I was in my early twenties,

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I knew and I did this, I[br]started saving earlier,

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I saved more, I started[br]getting better interest."

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That has a huge impact.

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And speaking of interest,[br]I think this is a good time

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for students to start to appreciate

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how much their savings can compound

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if they invest it appropriately

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and make even reasonable interest,

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make or reasonable return on it.

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Even 3, 4, 5, 6%, as much as 10%

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that over many years can become[br]a really significant return

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on their investment.

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Now the flip side of that[br]is in really in lesson two,

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is thinking about risk and return.

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Because a lot of folks,[br]when they start to invest,

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they start to shoot for the moon

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and they say, "Hey, I wanna[br]double my money by next week.

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Triple my money."

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I think there it's very good for people

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to realize that there are real risks.

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It's good to talk about[br]that when you're investing,

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you're usually buying[br]something from someone.

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Say you're buying a stock.[br]Someone is selling it to you.

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Why are they selling it to you?

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When someone makes

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or loses money in, say the stock market,

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where is that money going or coming from?

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And once again, this is a,[br]this is really good fodder

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for a Socratic conversation[br]about what type

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of investments might be prudent depending

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on different contexts in someone's life.

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And also talking about[br]things that people know

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and through their families[br]or their friend circles

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of investments gone well[br]or investments gone bad

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and what they've learned from it.

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It's also interesting outside once again

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of the Khan Academy course,[br]this could be a good time

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to start setting up mock[br]investment portfolios

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on various investment[br]websites where they can,

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where students can learn[br]to quote, invest fake money

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and see how it moves up and[br]down with the stock market.

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Some of them might build a[br]little bit of false confidence

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if they get a little bit lucky,

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but if they're able to[br]do that long enough,

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they're going to see[br]that it really is hard

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to game the system over time

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and hopefully when they[br]start having real money

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later on in their life,

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they'll be a little bit[br]more prudent with it

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and recognize the risks.

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And last but not least, is[br]planning for retirement.

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This is probably the hardest thing

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for students in their[br]teens to fully appreciate.

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They almost think that, you know,

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retirement is impossibly far away,

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but once again, stories[br]help to reinforce it.

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Talking about family members[br]who didn't plan accordingly.

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And then also talk about

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how even though you might[br]be planning for retirement,

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which could be decades away,

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that saving that money[br]also gives you a cushion

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for other things in your life,

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other major purchases

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or flexibility if there's a[br]health crisis in your family.

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You need to support someone[br]else. You lose a job.

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So saving is always a good thing.

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It's good to think about retirement

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'cause hopefully we're all[br]gonna be retired one day.

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But it also sets us up[br]well for other things.

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But once again, for retirement,

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thinking about what it[br]might cost to retire,

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expenses that they[br]might not fully realize.

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And then think about how at[br]that point all of their savings

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and their investments[br]are what they're going

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to be living off of.