Whether it is a business or an individual’s wallet, students learn that there are many ways to build wealth and invest in the future. The concepts students learn include budgeting, investing in stocks, and bartering. In addition to these basic lessons, students can use a variety of other strategies to improve their finances and learn how to become more financially literate. Listed below are some common ways that students can learn about finance. If you would like to learn more about how to build wealth and invest, please read on.
Students can use a Budgeting as a Finance Lesson to better understand how to manage their money and how to save for the future. The first step is to introduce students to the concept of budgeting, which is a planning tool for individuals and families. The main purpose of a budget is to stretch one’s purchasing power to achieve a higher standard of living. You can start by showing students a Sample Budget, either online or in hard copy. Discuss the various amounts in the budget, and how to allocate these amounts among different sources of income.
There are lessons to be learned from investing. Most investors look at investing from the perspective of how long they plan to live. The average retirement age is 62 years, and at that point their assets will likely be primarily in cash or fixed income investments. While equities have historically helped people maintain their purchasing power, investors should keep in mind that past performance is no guarantee of future results. It is advisable to avoid small cap penny stocks unless you are an expert in them.
One way to introduce students to bartering is by showing them a picture of a stall and asking them to trade items for money. In the past, this is a common way to exchange goods and services. Nowadays, many people use money instead of bartering. However, both systems have advantages and disadvantages. Students can discuss both options and write their ideas on the board. You can also read a book about a young girl who has no money and discusses how the mother took care of the situation.
Investing in stocks
Students should compare the costs of investing in stocks to savings accounts or CDs. They should also compare the time period for stock investments to the savings account. Investing in stocks is the most risky investment option. The purpose of the lesson is to introduce students to financial products and how they can affect their money. They should know that money kept in a safe at home will decrease in value as the price of goods and services go up. On the other hand, money invested in the stock market can increase in value much faster than inflation. Nevertheless, students should consider the risks of investing in new companies.
Investing in real estate
Investing in real estate is not a get-rich-quick scheme. It requires patience and a long-term view to reap rewards. Successful investors learn to wait for the right opportunities to invest in real estate, and to ignore short-term gratification. Instead of getting frustrated over a $500 repair bill, successful investors learn to see the big picture. Lessons in investing in real estate include understanding how the market works, analyzing market data, and navigating the transaction process.