1 00:00:00,510 --> 00:00:02,190 - [Sal] Hello teachers, Sal here. 2 00:00:02,190 --> 00:00:06,148 Welcome to the unit on "Investments and Retirement." 3 00:00:06,148 --> 00:00:09,270 And as always, I encourage you 4 00:00:09,270 --> 00:00:10,650 to go through the unit yourself. 5 00:00:10,650 --> 00:00:13,200 If you have limited time, at least go through the exercises 6 00:00:13,200 --> 00:00:14,940 and the unit test 7 00:00:14,940 --> 00:00:18,975 to refresh both your own understanding of this material, 8 00:00:18,975 --> 00:00:20,670 but also to be familiar 9 00:00:20,670 --> 00:00:22,768 with what students are going to go through. 10 00:00:22,768 --> 00:00:26,310 Now, this first unit on savings and investing, 11 00:00:26,310 --> 00:00:27,695 well, it is what it sounds like. 12 00:00:27,695 --> 00:00:30,210 And here, above and beyond the work 13 00:00:30,210 --> 00:00:32,040 on this course on Khan Academy, 14 00:00:32,040 --> 00:00:34,855 we encourage having discussions with the students. 15 00:00:34,855 --> 00:00:37,470 Run a discussion where you have students to say, 16 00:00:37,470 --> 00:00:41,520 to talk about why saving might be easier 17 00:00:41,520 --> 00:00:44,190 or more difficult in certain circumstances. 18 00:00:44,190 --> 00:00:46,200 How they might set themselves up 19 00:00:46,200 --> 00:00:48,069 to be in a better position to save. 20 00:00:48,069 --> 00:00:51,925 Why certain folks are more likely to save than others, 21 00:00:51,925 --> 00:00:55,166 and what does that do to their future selves 22 00:00:55,166 --> 00:00:58,290 so they could start to project themselves into the future 23 00:00:58,290 --> 00:01:00,840 and think about how they wanna set themselves up 24 00:01:00,840 --> 00:01:03,480 in 5, 10, 15, 20 years, 25 00:01:03,480 --> 00:01:06,600 which isn't usual for a lot of teenagers 26 00:01:06,600 --> 00:01:08,730 or fairly young people. 27 00:01:08,730 --> 00:01:10,320 It's also really important to, 28 00:01:10,320 --> 00:01:13,860 for students to realize the importance of saving early. 29 00:01:13,860 --> 00:01:16,535 I've often found as an adult to myself 30 00:01:16,535 --> 00:01:20,190 that when I tell younger folks about things 31 00:01:20,190 --> 00:01:22,065 that I wish I had done earlier, 32 00:01:22,065 --> 00:01:23,910 it seems to resonate with them. 33 00:01:23,910 --> 00:01:26,400 So if, even if there are even examples from your own life 34 00:01:26,400 --> 00:01:27,420 or people that you know, 35 00:01:27,420 --> 00:01:30,390 saying, "Hey, I wish when I was a teenager I knew this 36 00:01:30,390 --> 00:01:31,223 or I did this, 37 00:01:31,223 --> 00:01:32,250 or when I was in my early twenties, 38 00:01:32,250 --> 00:01:34,620 I knew and I did this, I started saving earlier, 39 00:01:34,620 --> 00:01:37,200 I saved more, I started getting better interest." 40 00:01:37,200 --> 00:01:38,670 That has a huge impact. 41 00:01:38,670 --> 00:01:41,692 And speaking of interest, I think this is a good time 42 00:01:41,692 --> 00:01:43,452 for students to start to appreciate 43 00:01:43,452 --> 00:01:46,146 how much their savings can compound 44 00:01:46,146 --> 00:01:48,060 if they invest it appropriately 45 00:01:48,060 --> 00:01:50,430 and make even reasonable interest, 46 00:01:50,430 --> 00:01:52,470 make or reasonable return on it. 47 00:01:52,470 --> 00:01:56,006 Even 3, 4, 5, 6%, as much as 10% 48 00:01:56,006 --> 00:01:59,451 that over many years can become a really significant return 49 00:01:59,451 --> 00:02:01,260 on their investment. 50 00:02:01,260 --> 00:02:04,005 Now the flip side of that is in really in lesson two, 51 00:02:04,005 --> 00:02:06,420 is thinking about risk and return. 52 00:02:06,420 --> 00:02:08,550 Because a lot of folks, when they start to invest, 53 00:02:08,550 --> 00:02:09,990 they start to shoot for the moon 54 00:02:09,990 --> 00:02:12,570 and they say, "Hey, I wanna double my money by next week. 55 00:02:12,570 --> 00:02:13,478 Triple my money." 56 00:02:13,478 --> 00:02:15,630 I think there it's very good for people 57 00:02:15,630 --> 00:02:17,845 to realize that there are real risks. 58 00:02:17,845 --> 00:02:21,560 It's good to talk about that when you're investing, 59 00:02:21,560 --> 00:02:24,840 you're usually buying something from someone. 60 00:02:24,840 --> 00:02:28,110 Say you're buying a stock. Someone is selling it to you. 61 00:02:28,110 --> 00:02:29,700 Why are they selling it to you? 62 00:02:29,700 --> 00:02:30,810 When someone makes 63 00:02:30,810 --> 00:02:33,000 or loses money in, say the stock market, 64 00:02:33,000 --> 00:02:35,460 where is that money going or coming from? 65 00:02:35,460 --> 00:02:38,790 And once again, this is a, this is really good fodder 66 00:02:38,790 --> 00:02:41,535 for a Socratic conversation about what type 67 00:02:41,535 --> 00:02:44,070 of investments might be prudent depending 68 00:02:44,070 --> 00:02:48,270 on different contexts in someone's life. 69 00:02:48,270 --> 00:02:50,328 And also talking about things that people know 70 00:02:50,328 --> 00:02:52,620 and through their families or their friend circles 71 00:02:52,620 --> 00:02:56,760 of investments gone well or investments gone bad 72 00:02:56,760 --> 00:02:58,470 and what they've learned from it. 73 00:02:58,470 --> 00:03:00,330 It's also interesting outside once again 74 00:03:00,330 --> 00:03:02,850 of the Khan Academy course, this could be a good time 75 00:03:02,850 --> 00:03:05,445 to start setting up mock investment portfolios 76 00:03:05,445 --> 00:03:10,135 on various investment websites where they can, 77 00:03:10,135 --> 00:03:15,135 where students can learn to quote, invest fake money 78 00:03:15,330 --> 00:03:17,730 and see how it moves up and down with the stock market. 79 00:03:17,730 --> 00:03:19,770 Some of them might build a little bit of false confidence 80 00:03:19,770 --> 00:03:21,120 if they get a little bit lucky, 81 00:03:21,120 --> 00:03:22,920 but if they're able to do that long enough, 82 00:03:22,920 --> 00:03:26,040 they're going to see that it really is hard 83 00:03:26,040 --> 00:03:28,110 to game the system over time 84 00:03:28,110 --> 00:03:30,270 and hopefully when they start having real money 85 00:03:30,270 --> 00:03:31,997 later on in their life, 86 00:03:31,997 --> 00:03:33,448 they'll be a little bit more prudent with it 87 00:03:33,448 --> 00:03:34,281 and recognize the risks. 88 00:03:34,281 --> 00:03:36,730 And last but not least, is planning for retirement. 89 00:03:36,730 --> 00:03:38,830 This is probably the hardest thing 90 00:03:39,917 --> 00:03:42,540 for students in their teens to fully appreciate. 91 00:03:42,540 --> 00:03:44,920 They almost think that, you know, 92 00:03:44,920 --> 00:03:46,410 retirement is impossibly far away, 93 00:03:46,410 --> 00:03:49,560 but once again, stories help to reinforce it. 94 00:03:49,560 --> 00:03:52,440 Talking about family members who didn't plan accordingly. 95 00:03:52,440 --> 00:03:53,700 And then also talk about 96 00:03:53,700 --> 00:03:56,610 how even though you might be planning for retirement, 97 00:03:56,610 --> 00:03:58,068 which could be decades away, 98 00:03:58,068 --> 00:04:00,960 that saving that money also gives you a cushion 99 00:04:00,960 --> 00:04:02,700 for other things in your life, 100 00:04:02,700 --> 00:04:04,382 other major purchases 101 00:04:04,382 --> 00:04:07,980 or flexibility if there's a health crisis in your family. 102 00:04:07,980 --> 00:04:10,736 You need to support someone else. You lose a job. 103 00:04:10,736 --> 00:04:13,110 So saving is always a good thing. 104 00:04:13,110 --> 00:04:14,640 It's good to think about retirement 105 00:04:14,640 --> 00:04:17,125 'cause hopefully we're all gonna be retired one day. 106 00:04:17,125 --> 00:04:21,210 But it also sets us up well for other things. 107 00:04:21,210 --> 00:04:22,680 But once again, for retirement, 108 00:04:22,680 --> 00:04:24,838 thinking about what it might cost to retire, 109 00:04:24,838 --> 00:04:27,750 expenses that they might not fully realize. 110 00:04:27,750 --> 00:04:30,597 And then think about how at that point all of their savings 111 00:04:30,597 --> 00:04:32,760 and their investments are what they're going 112 00:04:32,760 --> 00:04:34,263 to be living off of.