Stock Market Game

Set-up for Playing the Stock Market Game
marketwatch.com

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.  
5. On the Company Info page read an article, from the past week, about the company.
6. Change the chart view to 5 days
7.  
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.

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

Choosing a Charity

I have noticed an up-tick in the number of ad's for Charitable Contributions lately. It seems as though everyone from Public Television to Primary Children's Hospital is asking for donations and "pledges of support." In addition, there have been a lot of tragedies lately where the family of the victim has created a "go-fund-me" account or they have set-up an account at a local bank or credit union to accept donations.

With that in mind, I thought I would share some things to consider when choosing a charity to donate too. 

1. Give to groups you know.
2. Make sure the charity is the one you think it is:
1. Some charities are based in another State so your donation won’t help your local area.
2. Other charities will use a similar name or a common misspelling in order to get money that was intended for the legitimate organization.
3. Ask if your gift is tax-deductible:
1. Not all charities are non-profits. Many are business and the donation is not a tax-deductible.
4. Make sure you understand the group’s work:
1. Investigate how the charity solves the issue. Sometimes the cure is worse than the disease.
5. Make sure the charity it legitimate:
1. GuideStar website lists charities that have registered with the IRS. It doesn’t rank them.
2. BBB Wise Giving Alliance ranks the charities based on compliance with 20 “accountability” standards.
6. Don’t be afraid to ask questions:
1. Call the charity, make sure you get a real person, and ask a few questions regarding the organizations short and long term goals.
7. Find out about expenses:
1. Charity Navigator evaluates Form 990’s to determine how efficient the charity is and what percentage is spent on administration costs versus actually helping.
2. CharityWatch recommends that at least 60% of your donation goes to the endeavor itself.
8. Think twice before giving to a university or hospital:
1. The old adage that “it takes money to make money” couldn’t be more true than in charity fundraising. Large organizations that you see on T.V. or radio have the money to advertise. Smaller organizations that can’t spend money on advertising may have a greater need and better utilization of those funds.
9. Volunteer:
1. Rather than give an organization your money, give them your time. However, while you're there you can learn about the charity and see if giving them money is the right thing for you.
10. 10-Protect yourself:
1. Look for Red Flags: Charities that involve animals, children, first responders and veterans may use emotional images to generate funds. B-Don’t give charities credit card information or other resources that can be re-billed. Don’t set up charities with auto-draft privileges. These can lead to over-draft fees and other bank-account-draining activities.

Financial Success

So, the other day I was asked the following question:

What savings and/or investment strategy have you applied that has been a success? 

My answer came fast, Pay Yourself First: 

There are three steps to make Pay Yourself First (PYF) work. 

Step 1 is to create a budget to prove what surplus cash COULD be available at the end of the month. For me, this budget is reasonable but should also favor semi-aggressive savings. This is why I don’t like super itemized budgets that cover such things as wrapping paper costs each month. While I am a control freak and generally like lots of detail, I can’t handle that level of budgetary detail in my finances. 

Step 2, once a budget has been created and you know how much money you should have at the end of the month this amount is set up as an auto-draft at the beginning of the month. Again, personalities play a big part in the success of a specific type of financial practice. For example, I don’t like moving money from my savings account back into the checking account. So if there is a purchase above a budgeted amount that has to be transferred back into the checking account.

Step 3, after $1,000 has been accumulated in the savings account any additional funds can be transferred off into higher interest earning accounts to develop wealth.

Do your Grades reflect the average of your five closes friends?

Ask your five closest friends what grades they have (or GPA) - as if that's not an awkward conversation - and divide that by five. Is it pretty close to your own?

The "Law of Averages" states that we are very similar to the five people we spend most of our time with. If your not happy with the results of your five closest friends grades, and your not thrilled with our own grades, to put it bluntly, you may want to look for some better friends.

Personally, I had some less-than-stellar friends my Freshman, Sophomore, and the first half of my Junior years of high school. There is precious little time for homework and class projects when your out pretending to be the next Baja 5,000 Trophy Truck winner. My friends grades were suffering, my grades were suffering and I was barley on track to graduate. Then, I joined a couple of clubs, and that introduced me to a new type of friend. I'm still friends with many of these individuals today. They invited me to things like SAT test prep courses, compared SAT scores when we took the first test, and encouraged me to practice and re-take the test. My grades rose and while there was still a lot of damage to my overall GPA, I made some honor-roll's and such during the remaining semesters. These things saved me money in college and really worked to get me off to a good start as I moved to being an adult.

As adults the "Law of Averages" still plays a role, only now its finances. Take the bank account balance of your five closest friends and average that and it will be very close to the balance in your own account.

- Moral of the Story? If you want a healthy bank account balance, have five close friends with large bank account balances. Want better grades...

Good hunting!

Pure, Driven, Snow

I have been struggling lately with how to communicate this sense of urgency that I have for young adults to value financial education. While I can see the value of "if I knew this when I was your age..." education, students never appreciate the value of learning from other peoples mistakes until they are on the precipice or have already made the mistake themselves.

Roy H. Williams said "A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns from him how to avoid the mistake altogether"



Its a shame that what should be valued most is mostly despised. 

So, for what its worth, here is why I think that this information is so important.

1. You haven't made any financial mistakes that need time to fix.
2. You don't have any bad financial habits that need to be corrected.
3. You have unlimited potential.
• That's precisely why this information is so important.

You want so badly to be an adult, and rightly so, being an adult is awesome. But don't make a hash of it. Don't be average. You have the potential and the access to education to be great. Go Be Great!
You just need to decide.

http://insights.schwab.com/personal-finance/financial-planning-by-decade