- [Sal] Hello teachers, Sal here.

Welcome to the unit on
"Investments and Retirement."

And as always, I encourage you

to go through the unit yourself.

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

and the unit test

to refresh both your own
understanding of this material,

but also to be familiar

with what students are
going to go through.

Now, this first unit on
savings and investing,

well, it is what it sounds like.

And here, above and beyond the work

on this course on Khan Academy,

we encourage having
discussions with the students.

Run a discussion where
you have students to say,

to talk about why saving might be easier

or more difficult in
certain circumstances.

How they might set themselves up

to be in a better position to save.

Why certain folks are more
likely to save than others,

and what does that do
to their future selves

so they could start to project
themselves into the future

and think about how they
wanna set themselves up

in 5, 10, 15, 20 years,

which isn't usual for a lot of teenagers

or fairly young people.

It's also really important to,

for students to realize the
importance of saving early.

I've often found as an adult to myself

that when I tell younger
folks about things

that I wish I had done earlier,

it seems to resonate with them.

So if, even if there are even
examples from your own life

or people that you know,

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

or I did this,

or when I was in my early twenties,

I knew and I did this, I
started saving earlier,

I saved more, I started
getting better interest."

That has a huge impact.

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

for students to start to appreciate

how much their savings can compound

if they invest it appropriately

and make even reasonable interest,

make or reasonable return on it.

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

that over many years can become
a really significant return

on their investment.

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

is thinking about risk and return.

Because a lot of folks,
when they start to invest,

they start to shoot for the moon

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

Triple my money."

I think there it's very good for people

to realize that there are real risks.

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

you're usually buying
something from someone.

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

Why are they selling it to you?

When someone makes

or loses money in, say the stock market,

where is that money going or coming from?

And once again, this is a,
this is really good fodder

for a Socratic conversation
about what type

of investments might be prudent depending

on different contexts in someone's life.

And also talking about
things that people know

and through their families
or their friend circles

of investments gone well
or investments gone bad

and what they've learned from it.

It's also interesting outside once again

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

to start setting up mock
investment portfolios

on various investment
websites where they can,

where students can learn
to quote, invest fake money

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

Some of them might build a
little bit of false confidence

if they get a little bit lucky,

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

they're going to see
that it really is hard

to game the system over time

and hopefully when they
start having real money

later on in their life,

they'll be a little bit
more prudent with it

and recognize the risks.

And last but not least, is
planning for retirement.

This is probably the hardest thing

for students in their
teens to fully appreciate.

They almost think that, you know,

retirement is impossibly far away,

but once again, stories
help to reinforce it.

Talking about family members
who didn't plan accordingly.

And then also talk about

how even though you might
be planning for retirement,

which could be decades away,

that saving that money
also gives you a cushion

for other things in your life,

other major purchases

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

You need to support someone
else. You lose a job.

So saving is always a good thing.

It's good to think about retirement

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

But it also sets us up
well for other things.

But once again, for retirement,

thinking about what it
might cost to retire,

expenses that they
might not fully realize.

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

and their investments
are what they're going

to be living off of.