1.Creative (and High Tech) Ways To Teach Personal Finance

2. Why Save?
The reward for saving is INTEREST!
Save $4000 a year between age 16 and 20, with a 10% annual return, and have $1,000,000 by age 65.
With a Roth IRA, it is tax free.
3. 4. 5. 6. Its not your salary that makes you rich; its your spending habits
- Charles A. Jaffe
7. With compounding interest, the choiceis not between one car now and one car later.
8. Its One Car Today...or
9. With Compounding @ 8% a year... A car now or In 9 Years ...
10. With Compounding @ 8% a year... A car now or In 18 Years ...
11. With Compounding @ 8% a year... A car now or In 27 Years ...
12. Or a
13. Adding time to investing is like adding fertilizer to a garden: It makes everything grow.
- Meg Green
14. 15. 16. 17. RULE OF 72
Years to Double = 72 / Interest
18. 1$ @ 12% 72/12 = 6 years to double
An example: $1 @ 12%
Now $1After 24 years$16
After 6 years $2After 30 years$32
After 12 years$4After 36 years $64
After 18 years$8After 42 years$128
After 48 years$256
19. So, $4000 saved at 17 makes one a millionaire at age 65!
$4000 X 256 = $1,024,000
20. Jack saves $5,000 at age 38 years old, and earns 8% interest. Approximately how much will he have when he is 65 years old?
Jill saves $5,000 at age 20 years old, and earns 8% interest. Approximately how much will she have when he is 65 years old?
Jack $40,000
Jill $160,000
21. So, $4000 saved at 17 makes one a millionaire at age 65!
$4000 X 256 = $1,024,000
22. 23. 24. 25. Drive-thru banks were established so most of the cars today could see their real owners.
- E. Joseph Grossman
26. There is a crucially important difference about playing the game of investing compared to virtually any other activity.Most of us have no chance of being as good as the average in any pursuit where others practice and hone skills for many, many hours.But we can be as good as the average investor in the stock market with no practice at all
- Jeremy Siegel, Professor of Finance and author of Stocks for the Long Run
27. Investing into an IRA
28. If you decide to save for retirement and put your money in an IRA, the government will give you a tax break
What, the government is going to do you a favor?
There must be a catch!
29. Investing into an IRA
Well there actually is a catch.
You have to keep your money in the IRA until age 59 . Or Else

If you withdraw the money before that, you will be hit with a 10% penalty, plus taxes on everything you withdraw.

Redelsheimers PowerPoints Inc.
30. Investing into an IRA
Richard Miller and Jim Jones each make $50,000 a year.
RedelsheimersPowerPoints Inc.
The Millers
The Joneses
31. Investing into an IRA
Both families are taxed in the 25% bracket.
The Millers put $5,000 into their 401 K
Redelsheimers PowerPoints Inc.
The Millers
The Joneses
$ 50,000
$ 50,000
$ 5,000401 K
- $12,500 Taxes
$ 45,000 Taxable Income
$ 37,500
Disposable Income
- $ 11,250 Taxes
$ 33,750 Disposable Income
32. Now the Joneses want to keep up with the Millers, and invest $5,000, but they do so not in an IRA but a regular taxable saving account
The Millers
The Joneses
$ 50,000
$ 50,000
$ 5,000401 K
- $12,500 Taxes
$ 45,000 Taxable Income
$ 37,500 Disposable
Income
- $ 11,250 Taxes
$ 5,000 Regular Savings
$ 33,750 Disposable Income
$ 32,500 Disposable Income
33. Which family comes out ahead?
Redelsheimers PowerPoints Inc.
The Millers
The Joneses
$ 50,000
$ 50,000
$ 5,000IRA
- $12,500 Taxes
$ 45,000 Taxable Income
$ 37,500 Disposable
Income
- $ 11,250 Taxes
$ 5,000 Regular Savings
$ 33,750 Disposable Income
$ 32,500 Disposable Income
34. The Millers Net Worth is $ 38,750
The Joness Net Worth is $ 37,500
35. Investing into an IRA

How did this happen?

36. The Millers savings into an IRA were before taxes. 37. Why would the Government be so kind and give a tax break to investors? 38. Maybe because they know there will not be enough money in Social Security to pay future retirees?