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Junior and Senior level Ag Bus. | |Colorado Agriscience Curriculum

|Section: |Advanced Agribusiness |

|Unit: |Personal Financial Planning |

|Lesson Title: |Personal Investments |

|Colorado Ag Education Standards| |

|and Competencies |AGB11/12.03 - The student will be able to formulate and analyze financial records and use the information for|

| |evaluation and planning. |

| | |

| |Understand credit risks. |

| | |

| |Understand sources of credit. |

| | |

| |Calculate cost of credit. |

| | |

|Colorado Model Content |Math Standard 1: Students develop number sense and use numbers and number relationships in problem-solving |

|Standard(s): |situations and communicate the reasoning used in solving these problems. |

| | |

| |Math Standard 6: Students link concepts and procedures as they develop and use computational techniques, |

| |including estimation, mental arithmetic, paper-and-pencil, calculators, and computers, in problem-solving |

| |situations and communicate the reasoning used in solving these problems. |

| | |

| |English Standard 1: Students read and understand a variety of materials. |

|Student Learning Objectives: |Upon completion of this unit The student will: |

| |1. Identify reasons for savings and investments |

| |Identify investment alternatives |

| |Identify strategies for savings and investing |

| |50 minutes |

|Resource(s): |If at all possible have and investment representative come to your class as a guest speaker |

| |Agribusiness Decisions and Dollars, Elliot 1999 Delmar |

| | |

| |Introduction to Agribusiness, Ricketts and Rawliins 2001 Delmar |

|Instructions, Tools, Equipment,|Italicized words are instructions to the teacher; normal style text is suggested script. |

|and Supplies: |Notebook, pens. Projector, Whiteboard, |

|Interest Approach: |How many of you want to be millionaires? Boy, do I have a deal for you. Each of you is great horse shoer. |

| |I am going to give you a scenario and you will have the next 5 minutes to complete the assignment. Students |

| |should calculate how many horses they would have to shoe to become millionaires. Students will charge 1 cent |

| |for the 1st horseshoe nail and the price of nails doubles every time. We can assume that each horse needs 4 |

| |horseshoes and each horseshoe requires 7 nails. Give students 5 minutes to complete the task then ask one or |

| |2 to put their answers on the board. Now that you have seen how fast money can compound, let’s take a look |

| |at some important reasons for you to start investing now. |

|Objective 1: |IDENTIFY REASONS TO INVEST |

| |There are many reasons for students to think about saving and investing. It is very important that you start |

| |saving and investing at a young age so you can take advantage of the power of compound interest. Who can |

| |think of good reasons to save and invest? Illicit responses from students PowerPoint slide 1 & 2. As you can |

| |see from the slide there are several reasons we should save and invest. Education expenses, down payments on |

| |house, cars, toys , Business start up costs, preparing for retirement and having money for emergencies are |

| |all good reasons to start saving and investing . |

|Objective 2: |Identify investment alternatives |

| |There are many investment alternatives available today. All the investment types have varying levels of risk |

| |return and liquidity. Some of the investment types are as follows: |

| |Savings accounts are very low risk , very low return, very liquid |

| |Certificates of Deposit are very low risk, very low return, somewhat liquid |

| |Money Market Accounts are low risk ,low return, somewhat liquid |

| |Real estate is medium to high risk , not liquid, variable return |

| |Municipal bonds are somewhat low risk, medium potential for return, liquid after maturity |

| |Mutual funds medium risk medium to high potential for return, somewhat liquid |

| |Tax deferred annuities variable risk .and return |

| |Stocks medium to high risk, high potential for return, somewhat liquid |

| | |

|Objective 3 |Identify strategies for investing |

| |Strategy #1 |

| |$2000 a year for 6 year plan |

| |This is a very simple plan to simply invest $2000 a year for 6 years and then let the time value of money |

| |take over. If you invested $2000 a year for 6 years and received 12% your investment would be worth $32,036 |

| |After 10 years; $99,499 After 20 years; $309,028 After 30 years and $1,348,440 at age 65 |

| |Strategy #2 |

| |$25 plus $10 plan starts when you get your first job after college. Begin the first year by investing $25 |

| |dollars a month into a Tax deferred annuity, 401k, or 403b. Every year you are employed you raise your |

| |monthly contribution $10. Year 2 would be $35 every month, year 3 $45 every month year 5 $55 every month etc.|

| |The longer you work generally the more money you make so the increase of 10 per year is easily absorbed. If |

| |this plan is started at age 22 and 12% interest is received for the life of the loan than at age 65 you would|

| |have accumulated $1,830,000!! |

| |Problem #1 |

| |What would happen if we would invest $2000 a year for 6 years and then invest $25 plus ten? |

|Review/Summary: |Eye witness news moment. |

|Application--Extended Classroom|Have students do research on one of the many mutual funds available today. |

|Activity: |Have students write a short research paper on a Mutual fund of their choice. |

|Application--FFA Activity: |Join the Farm and Ranch Management CDE team. |

|Application--SAE Activity: |Have students figure how much they could make if they took 25% of their profits from their SAE and invested |

| |it at 10%. |

|Evaluation: |Students should write a page on The importance of Savings and investments. |

|Evaluation Answer Key: |Teacher discrepancy. |

|Other: | |

Savings and Investments Worksheet

Name ________________________________________ Date__________________________________

1. When and why should you start investing? _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

2. Briefly explain the rule of 72 and give an example. _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________

3. Identify investment alternatives and their liquidity and risk level. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

4. List and describe some strategies to get rich. ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

5. What are 6 keys to investing wisely? ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

6. What would happen if we would invest $2000 a year for 6 years and then invest $25 a month plus $10 for every year you worked after that? _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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