- [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.