Study Skills Toolbox

One of the most important classes you can take BEFORE going to school is a study skills class. However, since most of you are currently enrolled in the most important class of your life, Financial Literacy, I want to provide a list of important study skills.
  • Make Each Class Your Priority: Whatever class your in, act like its your favorite subject in the whole-wide world. This has two purposes, one, mental blocks that you have will be eliminated, which will make it easier to learn the subject. Second, the class is probably your teachers favorite subject. Treating their favorite subject like its your favorite subject will encourage the instructor to be more helpful with your struggles in the class. (How to Win Friends and Influence People)
  • The "Magic T": this is a seating choice (were provided or requested) that has you sitting on the front two rows and/or the middle two columns of a class room. The "T" shape of seats that is created tend to have higher scores than the students in the back two corners of the room. 
  • Learning Takes Effort: You know that kid in class who seams to know everything already and the A comes easily. Well, every class is going to have a few. But its not going to be the same kid in every class and its probably not going to be you. While some kids are simply "smarter," nothing is better than simple, honest to goodness, hard work. You will have to read, re-read, and highlight the information. It will take time and effort, but, in this case brawn can beat brains, you just have to beat the course into submission.
  • Ask your teacher to explain how the course is organized: When are assignments due, how to turn them in, how the tests factor into your grade, tips on studying for tests, and the best resources for vocabulary lists that will be on the tests. Understand the "mechanics" of how the course is designed.
  • Your cell phone? You know, that little black box of failure. TURN IT OFF!!! Distractions have always been a part of school. Playing with sticks, passing notes, beepers, cell phones, texting, smart phones. Guess what else has always been a part of school, Failing. Maybe their is a correlation here?
  • Preview the material before coming to class: Know what your are going to learn before you learn it.
  • Participate in class discussions and activities: This reinforces the first concept of treating each class as your favorite. 
  • Come to school to be at school: One company famously stated on a sign above the employee entrance "welcome to work, leave your issues at the door." While this is a rather callous statement the underlying concept is true. Life can be hard, we often make choices that make it harder. Welcome to school, leave your outside worries at the door and enjoy the time afforded to you to learn.
  • Outside of Class: Plan time each evening for homework/study: Make it a dedicated part of your day. Don't overload your study time with eight different classes. Complete homework/study a little bit every day. Try and complete work during the week so you can take the weekends off. You need this time to recharge and prepare to hit it hard the next week. (Remember: school is prep for real-life. Do you really intend to work on work during the weekends? You will be working some late-nights, putting in 60 hours a week, but try to keep your weekends free.)

Sample Budget for 60, 20, 10, 10 plan

I have created a budget file as a google sheet with a simplified list of expenses. It also shows how your budget items contribute to your 60, 20, 10, 10 outline and how your budget of 60% for housing, transportation, food, and insurance compares to the guidelines.

Click the link for the google sheets online file and download it to your own device.

Spending Plan Budget  Please copy to your own google drive.

Insurance Options

Insurance, you can't live with it and you can’t live without it. It is perhaps one of the most frustrating expenses in your budget. You pay good money for this “thing” that you don't want to use. And worse still, after a few years of paying for it, you start thinking that you could have saved enough money to just cover any expense yourself. And with a good amount of luck, you might just be right.

You see, with life’s risks, you have four choices:
  1. Accept – Pay for all of the costs associated with all of the losses.
  2. Avoid – Foresee and fix all possible causes for all possible losses.
  3. Mitigate – Foresee and reduce some possible causes for some possible losses.
  4. Transfer – Pay someone else to pay for all of the costs associated with all of the losses.
The first three (Accept, Avoid, & Mitigate) require that you financially/materially prepare in some way for all possible risks. The problem is that we cannot foresee the future and as a result cannot prepare for all types of risk. Eventually, a customer, employee, or mother-nature is going to do something that we didn’t expect and cause some type of loss that we didn’t foresee.

Transferring the risk, through insurance, is the best way we can cover ourselves; after doing all that we can do to eliminate risks.

However, insurance companies will only cover those risks that we specifically pay them to cover. This results in us still accepting some risk. We must then choose to Accept, Avoid, or Mitigate any remaining risks. Of course, we can always look to another insurance company to cover these other risks and Transfer them as well.

But Transferring risk is not necessarily always possible. Waiting periods or the cost of COBRA & GAP insurances can make Transferring risk impossible. During these situations we still need to be financially prepared to pay for some costs ourselves. In other words, you still need to “self-insure.”

Self-insurance is an idea were you take some personal responsibility for the risks of life and prepare to handle them yourself. Such as:
  • Avoid obvious risks (Don’t participate in inherently dangerous activities).
  • Mitigate possible risks (Use snow tires during the winter months).
  • Transfer large cost risks (Buy Home Owners/Renter, Auto, Health, and Term Life insurance to cover the cost of items ten-thousand dollars or more in value).
  • Accept smaller unforeseen costs (Have a Savings account of at least $1,000 to $10,000 to pay for “life” expenses not covered by insurance).
While its not fun to see money spent month after month on something you don't want to use, ultimately, the financial safety and security is worth the costs. Then again, if you feel like you are paying too much, it's time to shop around for better rates. 

Stock Market Game

Set-up for Playing the Stock Market Game
  1. Sections
    1. Games
  2. Find A Game
    1. Search for "Westlake Stock War"
    2. Password "thunder" or speak to your instructor.
  3. Complete Profile
    1. First Name field "Teacher Initial, Class Period, Space, Students First Name" - OA1 Pat
    2. Real email address (not school district email address)
    3. Make up the rest of the information - Company info etc.
  4. Verify your email and contact
  5. From the Welcome Page - Click on the "Trading" tab

Instructions for the weekly stock journals
  1. Find a company by using a search engine to look for the Stock Symbol for a company
  2. Copy/Type that stock symbol into the search field of the game
  3. Click on the Stock Symbol for the company
  4. Inline image 1 
  5. On the Company Info page read an article, from the past week, about the company.
  6. Change the chart view to 5 days
  8. Write a short paragraph that connect the information from the article to the effect of the stock price.
  9. REPEAT this two times (three company's) each week. 
  10. Then, go the the MarketWatch home page, find an article from the past week regarding the Stock Market as a whole.
  11. Read and summarize the article. 
  12. Submit all four paragraphs to your teacher. 
Trouble Shooting:  If you are unable to log into the game go to the 'My Profile' page and log in there.

Taxable (Roth) VS Tax Deferred (IRA & 401k) Explanation

Using the Taxable (Roth) VS Tax Deferred (IRA & 401k) Graphic as a visual aid, here is a simple explanation of the difference between the two types of Retirement Accounts.

Taxable: You receive your paycheck the same way as usual. You pay taxes on your Gross Pay (B3) and this gives you your Net Pay (B12). Your 10% retirement fund is then calculated from your Net Pay (B5) and then the rest of your budget is paid from the discretionary income.

Tax Deferred: There are two options for tax differed accounts.
     Option 1 increases your monthly Cash Flow (you feel richer)
     Option 2 increases your retirement accounts (you have the same cash flow as a taxable account)

Tax Deferred - Cash Flow: You save the same 10% of Gross Income as you would have if you were using the Taxable account (Red Arrow to E19). However, since you aren't saving 10% of your gross income you have an increase in disposable income each month of $69 (Purple Arrow to E12). Ultimately you will have same amount saved up as the Taxable route, however you will still have to pay taxes (as much as 35%) during retirement. You will have a better life now but your retirement won't be quite as nice.

Tax Deferred - Maximize Retirement: You save 10% of your Gross Pay (Blue Arrow to H15). This would be a full $400 per month.  While your Disposable income is the same as the Taxable option (Green Arrow to H17) your are saving an extra $88 per month. With compounding interest this extra $88 each month could mean an extra $130,000 after 30 years at 8%. Again, you will still have to pay taxes on this amount during retirement.