When we started hosting financial education camps back in 2002, one of the first thing I noticed was how uncomfortable the kids were when they first came into the room on the first day, as well as subsequent days during the week. I realized early on that if we wanted to keep them comfortable and wanting to come back each day, it was critical to engage them from the moment they get into the door.
We started by having our participants (any age) create their own name tags after they registered for the camp or workshop. Regardless of age, the participants started talking and getting to know each other right off the bat. And it gave them the opportunity to be creative because there are always lots of markers and stickers to decorate the name tags with.
We take it one step further in many programs by showing the first one there how to make the name tag and then letting him or her teach the next person and so on. The best way to learn really is to teach, so even though the activity is easy, it’s great practice for the participants to be learn how to teach the next person the ‘name tag’ ropes.
Over the years we’ve added a few activities, like the one you’re going to see and learn here…we just call it the String Activity for lack of anything more creative. The kids always say, “Are you sure this is possible?” We assure them it is.
What you’re seeing in the video is the following:
1) How to tie a slip know because you need one in each end of the string.
2) How to set up the activity with two people (the rules).
3) How to untangle yourself.
4) Adults participating in the activity.
5) Kids participating in the activity.
The thing to remember about any activity, is that there is always metaphorical lessons inherent in the activity. With a little creativity, you can find a way to tie this fun, active game into a lesson for your particular topic. Have fun.
Since compound interest is one of the most important financial education concepts around, I thought it only proper to provide you with this following great Simple vs. Compound Activity Lesson. It’s available for anyone to use with any age group of kids or teens (or adults for that matter…many don’t understand the difference).
I’ve outlined the activity below as well as given you the handout in PDF format. In addition, there are seven cue cards of sorts (8.5 x 11 laminated placards) to use as props so your participants really understand what you’re talking about.
Here’s the activity. Downloadable PDFs are located at the end of the activity.
FINANCIAL FREEDOM PLAYBOOK PAGES USED (from the Camp Millionaire program)
Simple and Compound Interest Pages
Costumes/Props needed:
8.5 x 11 Simple & Compound Interest Signs, students as volunteers. This activity works great with more participants. If possible, put a string on the Sign that says PRINCIPAL so that it can go around the volunteers neck (see below).
Main Objectives:
To show how money grows with interest.
To show how quickly money grows when using compound interest vs. simple interest.
Key Terms, Callbacks:
Simple interest, compound interest, compounding, compound growth, rate of return, return on investment
Principles, Sayings, Declarations:
Interest is only interesting when you’re receiving it.
Suggested Enrolling Questions:
How many of you would like to make money when you’re sleeping? How about when you’re on vacation? Great, you’re going to love this next activity.
Set up/Preparation:
Have the signs ready and ask for one volunteer to start.
Dialogue:
Have one volunteer come up and hand him the sign that says Principal to put around his neck. Ask the participants what they think the word Principal means. Explain that the Principle is the amount of money they invest. It is also referred to as Capital. In this activity, our Principal is $100 which means we’re investing $100.
So we’re going to invest our Principal of $100 at 100% interest using something called SIMPLE INTEREST. Simple interest is when you only earn interest on the initial amount you invest, i.e., the Principle.
Have the Principal hold the sign that says Simple Interest. After the first year, if we invested our principle (i.e., our volunteer) at 100% (and remind them that the initial amount they invested was $100), how many more people do we need up front? Right…One. Can I get one volunteer? (Have the new volunteer stand next to the Principal and hand him the sign that says YEAR 1.) How much money do we have now? Exactly…$200. Let’s keep going.
After the second year, remember, we’re still investing the principal at 100% using SIMPLE INTEREST so, again, we need one more person in front. Can I get another volunteer? (Have him stand next to Year 1 and hand him the sign that says YEAR 2.) How much money do we have now? Right…$300. Our original $100 plus $100 in interest from Year 1 and $100 in interest from Year 2.
After the third year, we invest the principal again at 100% using SIMPLE INTEREST so we need one more person up here. (Get volunteer who now holds Year 3 sign) And after the fourth year, we invest the principal again at 100% using SIMPLE INTEREST so we need one more person. (Get volunteer who holds Year 4 sign).
After four years we have five people total, each worth $100. If you started with $100 (your principal) and each year you EARNED $100, at the end of the fourth year, you have $500. Not bad. Everyone except for the Principal can take a seat.
You will have a line of volunteers that look like this:
Is everyone ready for some fun now? Great. Has anyone ever heard of something called Compound Interest? This is how it works…
We’re now going to invest our Principal of $100 at 100% interest using COMPOUND INTEREST. Hand the Principal the Compound Interest Sign now.
First, let’s learn the difference between Simple and Compound Interest. With Simple Interest, you only earn interest on your Principal. With Compound Interest, you earn interest on your Principal AND the Interest you earn along the way. In essence, your Interest becomes more Principal. After year one, how many more people do we need up here to represent the interest earned on your principal? Right…One. Get one volunteer and have him stand to the right of the Principal and hand him the Year 1 sign.
After year two, using COMPOUND INTEREST, which means we are investing our principal and the INTEREST we earned on the principal the first year, how many more people do we need up here? (Get two volunteers and stack them front to back Hand them the Year 2 sign. See photo on next page.) Right…two. Please stand in a line, Year 2s. Our $100 has become $400 in just two years.
After three years of COMPOUND INTEREST, how many people do we need? Yup…Please stand in a line, Year 3s. (Get four more volunteers and stack them front to back.) Now our $100 has become $800!
After four years of COMPOUND INTEREST, how many people do we need up here? Yes…eight! (Get eight volunteers if available.). Please stand in a line, Year 4s.
And what is your $100 investment worth now? Exactly…$1600!
Your group now looks something like this:
Compound Interest Example With Kids
So, which kind of interest would you rather get on YOUR investments? COMPOUND, of course. Luckily, most investments pay compound interest, but why do you think it’s important to know the difference? Exactly, so you can analyze your rate of return or return on investment and know how well your money is working for you.
Let’s take this one step further, even though we’ve been talking about compound interest, it’s actually the concept of COMPOUND GROWTH that we’re talking about. Not all investments or assets make you money because of interest; some simply grow in value over time like stocks, mutual funds, ETFs (exchange traded funds) while others actually pay you interest because they are using your money for something. It’s referred to as compound growth when the appreciation in value (value going up) is added to the principle so you have more shares of mutual funds for example, and then those shares go up in value also
The simplest example is when you put your money into a bank account. The bank lends your money out to people who need to borrow money. They charge those people more interest than they pay you in interest to borrow it. This is one way banks make money.
REVIEW:
Review by asking your participant to tell you the difference between Simple and Compound Interest.
FOLLOW UP ACTIVITY:
It’s great to follow this activity with The Magic of Compound Growth, available in the Camp Millionaire Curriculum Binder or look for it to be available in your Major League Players Program soon.
So, here’s a great and fun way to expose your participants to budgets. Have a great time! (more…)
I know, I know. The idea of surrendering to life for a lot of people puts them in a state of fear, or panic, or worse. However, the idea, and practice, of surrendering to ‘what is’ can be quite freeing, especially when it comes to money and the stuff money buys.
After spending the past four weeks of July teaching financial principles to adults and kids using The Money Game in our Camp Millionaire and Moving Out! for Teens, I am in a bit of an inquiry trying to answer this question, “How did kids get so they want so much stuff?”
And by stuff I mean stuff they don’t in any way, shape or form, need to enjoy their lives on this planet.
Now don’t get me wrong. I have nothing against ‘wanting’ in general. It’s what motivates us in most areas of our lives.
We want purpose…
We want happiness…
We want love…
We want to set an example and do good in the world…
We want to feel useful…
We want to feel comfortable…
The challenge comes when we think STUFF is going to bring us any or all of these states of being.
The Be – Do – Have Ball Toss
When we start our financial literacy programs, regardless of age, we get in a circle and take turns saying, “When I grow up I want to BE a ______.” We fill in the blank, everyone else says, “And you will.” and then that person tosses the ball to another person in the group.
We repeat this process with, “When I grow up I want to DO… and When I grow up I want to HAVE…” And as we’re doing this process I am always amazed at how many people don’t want purpose, happiness, love, do good in the world, etc. Again, I’m OK with the idea of wanting a bunch of stuff. It just seems like so many human beings aren’t stopping long enough to evaluate what actually does bring them joy and pleasure these days.
What does surrendering have to do with money?
Well, the art of surrendering has to do with going within and letting a greater knowing figure things out. Letting something other than our convoluted belief-ladened brains try to figure out what’s best or what our next step is and so on.
The idea of financial surrender comes when we stop wanting for a second and take inventory of what is for us at the moment. In terms of our finances, we can ask questions like this…
Where are we financially?
What are we letting drive our motivations and desires and wantings?
What should we stop doing, start doing, do more of, do less of?
And if we have kids, how is what’s driving US shaping what will drive our children when they are adults.
Just for today, stop wanting stuff
This is a personal challenge from me to you and your whole family. Designate a day sometime in the next few days to be a “No Want Zone” and watch how terribly challenging it is for most people to just sit back, relax, accept what is and actually listen to their inner wisdom and guidance when it comes to money.
This process of having a No Want Zone may bring new insight into what you think is right or wrong for you in regard to your money. When you’re successful with one No Want Zone day, try scheduling another one. Pretty soon you may just find that surrendering into your own not wanting zone brings a powerful sense of financial peace to you and yours.
There is one special quality that you can develop that will guarantee you greater success, accomplishment and happiness in life. Of a thousand principles for success developed over the ages, this one quality or practice will do more to assure that you accomplish wonderful things with your life than anything else. This quality is so important that, if you don’t develop it to a high degree, it is impossible for you to ever achieve what you are truly capable of achieving.
The quality that I am talking about is the quality of self-discipline. It is a habit, a practice, a philosophy and a way of living. All successful men and women are highly disciplined in the important work that they do. All unsuccessful men and women are undisciplined and unable to control their behaviors and their appetites. And when you develop the same levels of high, personal discipline possessed by the most successful people in our society, you will very soon begin to achieve the same results that they do.
All great success in life is preceded by long, sustained periods of focused effort on a single goal, the most important goal, with the determination to stay with it until it is complete. Throughout history, we find that every man or woman who achieved anything lasting and worthwhile, had engaged in long, often unappreciated hours, weeks, months and even years of concentrated, disciplined work, in a particular direction.
Fortunately the quality of self-discipline is something that you can learn by continuous practice, over and over, until you master it. Once you have mastered the ability to delay gratification, the ability to discipline yourself to keep your attention focused on the most important task in front of you, there is virtually no goal that you cannot accomplish and no task that you cannot complete.
Successful people engage in activities that are goal-achieving. Unsuccessful people engage in activities that are tension-reliving. Successful people discipline themselves to have dinner before dessert. Unsuccessful people prefer to have dessert most of the time.
Successful people plan their work, and work their plan. They take the time to think through their responsibilities before they begin. They make clear decisions which they then implement immediately. They get a lot more done in a shorter period of time than the average person. And it all has to do with their disciplines.
Perhaps the most important benefit of self-discipline is the personal benefit that you receive. Every act of self-discipline increases your self-esteem. It gives you a feeling of personal power and accomplishment. Each time you discipline yourself to persist in the face of distractions, diversions, and disappointments, you feel better about yourself. As you continue to discipline yourself, you achieve more and more in life. As you achieve more things, you feel more like a winner. Your self-confidence goes up. You feel happier about yourself. You get more done and you have more energy. You earn the respect and esteem of the people around you. You get more rapid promotions and are paid more money. You live in a nicer house, drive a nicer car, and wear nicer clothes. You get a natural high from the thrill of achievement. And the more things that you achieve as the result of employing your personal habits of effectiveness and productivity, the more eager you are to achieve even higher and better tasks. Your life gets onto an upward spiral of success and happiness. You feel great about yourself most of the time.
Every act of self-discipline strengthens every other discipline in your life. Every weakness of self-discipline weakens your other disciplines as well. When you make a habit of disciplining yourself in little things, like flossing your teeth every night, you’ll soon become able to discipline yourself to accomplish even larger things, like working long, long hours to bring a major task to completion.
Your entire life is an on-going battle between the forces of doing what is right and necessary on the one hand and doing what is fun and easy on the other hand. It is a battle between the forces of discipline and the forces of ease or expediency. And when you develop the strength of character that gives you complete self-mastery, self-control and self-discipline, you feel wonderful about yourself. You develop a deep inner sense of strength and confidence. You replace positive thinking with positive knowing. You reach the point inside where you absolutely know that you can do whatever it takes to achieve any goal that you can set for yourself.
Self-discipline is its own reward. Not only does it pay off in terms of greater self-esteem and a more positive mental attitude, but it pays off throughout your life in terms of the goals that you achieve and the success that you attain in everything you do.
Self-discipline is a skill and a habit that can be learned by practice. Every time you practice a little self-discipline, you become stronger and stronger. Bit by bit, you become more capable of even greater disciplines. As you become a totally self-disciplined individual, your entire future opens up in front of you like a broad highway. Everything becomes possible for you and your future becomes unlimited.
Talk about a hard sell. Trying to persuade a group of 7-year-old children that saving money is fun ranks right up there with trying to make them believe that peas are a dessert food.” — Janet Bodnar, deputy editor of Kiplinger’s Personal Finance magazine, in the foreword to It’s a Habit, Sammy Rabbit!
Check out Sammy Rabbit for great financial education products for your kids!
Here’s a fun video of It’s a Habit’s favorite message…
As with everything in life, things go up and things go down. And then they go up again and down again. You can liken it to a wave which goes up and down, or to a glass of water you set down on a flat surface. If you knock the glass, the water is disturbed but, in time, it will once again level out.
The past two weeks I have been asked about the financial future of this country more than at any time since I started teaching financial literacy. I am NOT a financial advisor in any capacity (nor do I wish to be) but I can say this: some things stay the same and some things change and the more we understand that this ‘situation’ is just a situation and we don’t all go off the deep end, the better off it will be in the long run.
What I mean is, the basic financial principles that govern whether a person ends up financially free have not changed:
Pay Yourself First
Put Your Money To Work For You
Only Borrow Money When It’s Going To Make You Money
If You Can’t Afford It In Cash, You Can’t Afford It At All
Helping Others is Helping Ourselves
and my all-time favorite…
Your Thoughts, Beliefs and Attitudes Determine Your Wealth Potential
Then what changes?
Well, WHERE and HOW to put your money to work. HOW to borrow and FROM WHOM when it IS going to make money for you and HOW not to let what is currently going on influence your long term financial strategies and the systems that you have in place.
Again, I am no financial expert, but it seems to me that it’s just a hiccup; maybe a big hiccup for some but a hiccup just the same. Just like all of the other financial hiccups that have happened since the beginning of time, and the beginning of the stock market. It’s interesting to note the stock market time line of events since it started back in 1792 when 24 men signed an agreement that launched the New York Stock Exchange (NYSE). There have been some pretty major events in its history and yet, over time, it has always gone up. For a little stock market history lesson, click here!
Will some people suffer? Yes.
Will some businesses fail because they made poor business choices? Yes.
Will some people make a lot of money at the expense of others losing a lot? Yes.
Do you have a choice in how you are going to respond to the situation? Yes.
Do you have the opportunity, just like the rest of the people in this country, to take advantage of the situation at hand and make some money? Of course you do.
The question is, WILL you?
So in answer to my simple yet important question “Where do we go from here?”, my advice is as follows:
1) Don’t get too upset about it.
2) Seek professional advice from someone you trust before you make any rash decisions about moving your money.
3) Keep teaching your kids about money and give them every opportunity to practice with it. Don’t know how? Get The Ultimate Allowance.
4) Keep spending less than you make.
5) Keep your eyes open for opportunities.
6) Take care of your health.
7) Watch an inspiring movie or read a great book.
8) Keep a handle on your thoughts because they really do create things.
9) Remember to stay focused on your future. There is a very good reason the front window in your car is bigger than the rear view mirror.
This is the perfect time to make sure your children are getting a clear picture (or as clear a picture as possible) about what is happening. Regardless of how you feel about the situation, the bailout, what will happen to the value of our dollars, etc., this is a great time to talk to your kids about business decisions and how financial decisions can affect an entire country.
Talk to them about how some business decisions may bring you a lot of money in the short term but can turn around and bite you in the tush later on. Talk to them about systems and strategies. Ask them questions instead of giving them your opinions so they will share their own opinions with you. You never know what may come out of their mouths when they are given an opportunity to simply converse instead of defending their positions.
Well, the art of surrendering has to do with going within and letting a greater knowing figure things out. Letting something other than our convoluted belief-ladened brains try to figure out what’s best or what our next step is and so on.