Learning, Earning and Investing: Middle School

Table of Contents

  • Front Material
  • Lesson 1 - Why Save?
    Following an introduction that defines saving, the students discuss the idea of "paying yourself first" and the reasons why people save. After reporting on their smallgroup discussions, the students simulate the accumulation of simple interest and compound interest. The lesson concludes with students calculating both simple interest and, using the Rule of 72, the amount of time it takes savings to double when interest is compounded.
  • Lesson 2 - Investors and Investments
    In this lesson the students explore different types of investments, some of which are unconventional, in order to grasp the basic idea that investment involves trading off present benefits for future satisfaction. The students also apply the criteria of risk, return and liquidity to define more precisely the meaning of investing.
  • Lesson 3 - Invest in Yourself
    To explore the concept that people invest in themselves through education, the students work in two groups and participate in a mathematics game. Both groups are assigned mathematics problems to solve. One group is told about a special technique for solving the problems. The other group is not. The game helps the students recognize that improved human capital allows people to produce more in the same amount of time - in this example, more correct answers in the same time or less. Next, the students identify the human capital required for a variety of jobs. Finally, they learn about the connections among investment in human capital, careers and earning potential.
  • Lesson 4 - What Is a Stock?
    The students work in small groups that represent households. Each household answers mathematics and economics questions. For each correct answer, a household earns shares of stock. At the end of the game, the groups that answered all questions correctly receive a certificate good for 150 shares of stock in The Economics and Mathematics Knowledge Company. They also receive dividends based on their shares. Those who answered fewer questions correctly receive fewer shares and smaller dividends. Finally, the students participate in a role play to learn more about stocks.
  • Lesson 5 - Reading the Financial Pages: In Print and Online
    The students learn how to read and understand information presented in the financial pages of newspapers and online sources. Working in pairs, they examine entries for stocks, mutual funds and corporate bonds. They participate in a scavenger hunt for financial information, using a local newspaper. They learn how to follow stocks online.
  • Lesson 6 - What Is a Bond?
    In this lesson the students learn what bonds are and how bonds work. They learn the basic terminology related to bonds and participate in a simulation activity aimed at showing that bonds are certificates of indebtedness, similar to an IOU note. Finally, the students explore credit ratings and calculate average coupon rates for various bond ratings in order to determine the relationship between ratings and bond coupons.
  • Lesson 7 - What Are Mutual Funds?
    The students form class investment clubs that work much in the way mutual funds do. They invest $3,000 (300 shares at $10 a share) in up to six stocks. One year later they revalue their shares and determine whether a share in their class investment clubs has increased or decreased in value. Finally, they read about mutual funds and learn that the concept behind mutual funds is similar to the concept behind their class investment clubs.
  • Lesson 8 - How to Buy and Sell Stocks and Bonds
    In this lesson the students learn about the financial markets in which stocks and bonds are bought and sold. They read about the high transaction costs that individual investors would experience if there were no financial markets. They perform a play that illustrates how an individual stock transaction is made in an organized financial market. Finally, the students discuss the options available for buying and selling stocks and bonds.
  • Lesson 9 - What Is a Stock Market?
    The students are introduced to the key characteristics of a market economy through a brief simulation and a discussion of several examples drawn from their own experiences. Then they learn about differences among the three major stock markets in the United States and place sample stocks in each of the three markets using this knowledge.
  • Lesson 10 - The Language of Financial Markets
    The students work in small groups to make flash cards to display terms commonly used in financial markets. The terms are grouped in five categories: Buying and Selling in the Market; Exchanges and Indexes; People in Financial Markets; Stocks, Bonds and Mutual Funds; Technical Terms. Each group of students begins by learning the terms in one category. Then the students pass their flash cards from group to group until everyone has had an opportunity to learn all the terms. The lesson concludes with a Language of Financial Markets Bee.
  • Lesson 11 - Financial Institutions in the U.S. Economy
    The students participate in a brief trading activity to illustrate the role institutions play in bringing savers and borrowers together, thus channeling savings to investment. The students discuss financial institutions, such as banks and credit unions, and they participate in a simulation activity to help them understand primary and secondary stock markets and bond markets.
  • Lesson 12 - Building Wealth over the Long Term
    The students are introduced to the case of Charlayne, a woman who becomes, accidentally, a millionaire. Charlayne's success, the students learn, was unexpected, but not a miracle. It can be explained by three widely understood rules for building wealth over the long term: saving early, buying and holding, and diversifying. The lesson uses Charlayne's decisions to illustrate each of these rules. It also addresses the risks and rewards associated with different forms of saving and investing.
  • Lesson 13 - Researching Companies
    The students apply an economic way of thinking to gathering information regarding securities. They learn that the cost of acquiring information must be compared to the anticipated benefit the information will provide. The students discuss the example of LeBron James and recognize that there is intense competition to find information about companies. They select companies to research by participating in a classroom drawing and by listing companies they know. They gather fundamental information about each of the companies they select.
  • Lesson 14 - Credit: Your Best Friend or Your Worst Enemy?
    The students do an exercise that shows how credit can be their worst enemy. They learn how quickly credit-card balances can grow and how long it can take to pay off a credit-card debt. They also learn that credit can be their best friend. Working in small groups, they consider seven scenarios and decide in each case whether it would be wise for the people involved to use credit. They discuss their conclusions and develop a list of criteria suitable for use in making decisions about credit.
  • Lesson 15 - Why Don't People Save?
    The students examine risk-oriented behavior, considering why people often engage in behavior that is dangerous or unhealthy. They are introduced to the concept of cost/benefit analysis and asked to apply what they learn to questions about saving. They generate lists of savings goals and categorize those goals as short-term, medium-term and long-term. They learn why long-term goals are more difficult to achieve than short-term goals.
  • Lesson 16 - What We've Learned
    This lesson features a game in which the students review key vocabulary words and concepts presented in earlier lessons. The game is called Flyswatter Review. The teacher divides the class into two teams. Using transparencies, the teacher projects financial terms from the visuals onto a screen or wall. The teams compete to select the correct definition.
  • Glossary
    This document contains the glossary for this publication.


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