Richard
Super Member
- Joined
- Apr 6, 2000
- Messages
- 5,006
- Location
- Knoxville, TN
- Tractor
- International 1066 Full sized JCB Loader/Backhoe and a John Deere 430 to mow with
One of my bankers was invited to the local high school to participate in a day project. It was designed to give each child a budget sheet.... they would fill it out as they did a round robin setup in the gym. Each station would be one facet of life and the kids would fill out their budget sheet to see how much free cash they'd have at the end of the sheet (month).
I guess it was to open their eyes that there is more to life than their Ipad and Starbucks.
My banker was going to discuss 401K's so she invited me to go along.
I later found out, we were exposed to the entire senior class and perhaps the junior class as well.
What I found interesting (scary) was when the kids got to our table, they didn't know what to do. They were issued a budget, assigned a "job" with an annual income, maybe a couple of children too. They were also issued a calculator so they could do any math.
When they got to us, (our table was 2nd in order so many had not calculated their monthly income by dividing their annual number by 12)
We talked about 401K's. I had created a spreadsheet based on historical numbers so that I could simply input their annual contribution and it would calculate out to age 65.
Side note.... did you know that if you are 18 years old and contribute no more than $100/month, based on some historical numbers, when you are age 65, you could have 1.5 million? (this includes a couple major down years too)
What was amazing is, the student might have had a monthly income of say, $3,500. I'd dare say that 99% of them were stumped when I said we were going to use 10% of this amount as their contribution for simplicity....
I got empty stare after empty stare... "uh... how much is that?"
Not only was the mental concept of simply moving a decimal point over lost on them but.... many (many many) of them actually had to be told to "take .10 times the amount of your monthly income"
My banker has her masters in teaching and quit teaching to get back into banking. She had some of these students in Junior High.
I told her I was speechless at their lack of math skills. She quickly informed me that this school was one of the best schools around....that many of these kids will go on to be doctors, scientists and engineers.
She went on to say that they have simply been coddled in a culture of using their calculator and didn't have the confidence to "know" instinctively that 10% of $3,500 is $350 without using their calculator.
All the while, she was showing me why she was frustrated with teaching. During a break, someone came to her and basically told her that she (me) needed to quicken the pace as we were slowing down the process.
I was trying to talk to each child.... take their annual contribution to their mock 401K and show them how it might grow at age 65. I had quite a few eyes get as big as dinner plates as their light bulbs seemed to go off.
After the "hurry up" admonishment, we spoke to them as a group....and what I noticed is most of them were simply looking for the answer to what goes on that line so they could move on to the next table. They didn't have an eye opening experience of what their savings could do for them. Simply a line on a piece of paper.
That frustrated me so, rather than talking to each child about their respective contributions and what it would grow to at age 65, I simply spoke to the group before us and used the $100/month story equaling $1.5 million at age 65....but if their sheet showed them making $200 or $300 month contributions, they could have 2x or 3x the results.
I had never done anything like this before, so my goal was to try to reach their light switch regarding saving hard and saving early. The kids on the other hand, were more conditioned to simply go through the process so they could get a number for their form and move on to the next.
My banker said that was why she quit teaching......she said she felt she wasn't allowed to teach but rather, she was forced to simply process them through to the next station.
I guess it was to open their eyes that there is more to life than their Ipad and Starbucks.
My banker was going to discuss 401K's so she invited me to go along.
I later found out, we were exposed to the entire senior class and perhaps the junior class as well.
What I found interesting (scary) was when the kids got to our table, they didn't know what to do. They were issued a budget, assigned a "job" with an annual income, maybe a couple of children too. They were also issued a calculator so they could do any math.
When they got to us, (our table was 2nd in order so many had not calculated their monthly income by dividing their annual number by 12)
We talked about 401K's. I had created a spreadsheet based on historical numbers so that I could simply input their annual contribution and it would calculate out to age 65.
Side note.... did you know that if you are 18 years old and contribute no more than $100/month, based on some historical numbers, when you are age 65, you could have 1.5 million? (this includes a couple major down years too)
What was amazing is, the student might have had a monthly income of say, $3,500. I'd dare say that 99% of them were stumped when I said we were going to use 10% of this amount as their contribution for simplicity....
I got empty stare after empty stare... "uh... how much is that?"
Not only was the mental concept of simply moving a decimal point over lost on them but.... many (many many) of them actually had to be told to "take .10 times the amount of your monthly income"
My banker has her masters in teaching and quit teaching to get back into banking. She had some of these students in Junior High.
I told her I was speechless at their lack of math skills. She quickly informed me that this school was one of the best schools around....that many of these kids will go on to be doctors, scientists and engineers.
She went on to say that they have simply been coddled in a culture of using their calculator and didn't have the confidence to "know" instinctively that 10% of $3,500 is $350 without using their calculator.
All the while, she was showing me why she was frustrated with teaching. During a break, someone came to her and basically told her that she (me) needed to quicken the pace as we were slowing down the process.
I was trying to talk to each child.... take their annual contribution to their mock 401K and show them how it might grow at age 65. I had quite a few eyes get as big as dinner plates as their light bulbs seemed to go off.
After the "hurry up" admonishment, we spoke to them as a group....and what I noticed is most of them were simply looking for the answer to what goes on that line so they could move on to the next table. They didn't have an eye opening experience of what their savings could do for them. Simply a line on a piece of paper.
That frustrated me so, rather than talking to each child about their respective contributions and what it would grow to at age 65, I simply spoke to the group before us and used the $100/month story equaling $1.5 million at age 65....but if their sheet showed them making $200 or $300 month contributions, they could have 2x or 3x the results.
I had never done anything like this before, so my goal was to try to reach their light switch regarding saving hard and saving early. The kids on the other hand, were more conditioned to simply go through the process so they could get a number for their form and move on to the next.
My banker said that was why she quit teaching......she said she felt she wasn't allowed to teach but rather, she was forced to simply process them through to the next station.
