Category Archives: Video Resource

Video Resource: What’s The Catch With These Investing Pitches?

Many students, at some point in their lives, will rely on the services of a financial adviser. CFTC.gov has three short videos (2-3 minutes in length) that allow viewers to make decisions on whether or not to invest after hearing a pitch from an investment “pro.”  Ask your students to jot down the key words or phrases used to entice them to invest.  Thanks to WAPO’s Michelle Singletary for highlighting these in recent column.

The Dinner Party:

http://in.fm/embed/MYkjrA?publisherID=57RbmE

The Graduation: Continue reading

Question: How Do Credit Cards Make It Easier for Us To Overspend?

A good article highlighting the psychological differences between buying with credit vs. cash and three ways that credit cards can lead to overspending:

  • The credit limit is usually a multiple of our monthly income. “With that high credit limit, it is easy to spend too much.”
  • Without the pile of cash in front of you getting smaller with every purchase, it is easy to spend more than you want. Seeing those bills disappear from your wallet hurts.
  • The minimum payment is usually only 2 percent of the balance. “That makes it very easy to make a small payment today to get through the month and worry about the debt tomorrow.”

Here is a great three minute video that demonstrates the third point with a pitcher of water (when I showed this in my personal finance class, students were amazed and didn’t understand how consumers could be so “dumb”):

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Check out this NGPF Activity, Calculate: Paying With Interest

Two NBA Stars Provide Personal Finance Advice: Who Would You Listen To?

Here’s a six minute audio interview with Adrian Foyle from NPR’s All Things Considered.  Here is an excerpt:

I got my master’s in sports psychology, and my thesis was on retirement experiences of NBA players. I went out and spoke to about 10 to 12 different players, and I talked to them about their transition. And one of the things we talked about was: If you were to do it again, what are some of the things that you would do differently? And almost all of them talk about financial literacy and financial education.

One guy said that, you know, “I saw my parents. They didn’t have any money. I grew up poor and then I was given all this money, and then I had no idea what to do with it. And I was so silly I didn’t ask questions because I was afraid that people would think that I wasn’t smart.”

And here’s Antoine Walker (you might recall that he lost $110 million) who has been barnstorming colleges to discuss the painful lessons that he learned with his financial missteps (click to see 2 minute NewsChannel 5 video).

Ask students what lessons they can take from these professional athletes that they can apply to their financial lives…

Classroom Experiment: The Ultimatum Game

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This might be a fun classroom experiment to demonstrate behavioral aspects to finance that prove how irrational we can be.  From PBS NewsHour:

Let’s play the ultimatum game. Here’s how it works: I give your friend $20. He has to share a portion of his $20 with you and can give you as much as he wants. If you accept the offer, you get that amount, and he keeps the rest. If you turn down his offer, both of you get nothing.

Let’s say he offers you $2. Would you take it?

Economics correspondent Paul Solman sat down with Richard Thaler, who’s been called the inventor of behavioral economics, to learn about the ultimatum game. And in the process, he learned quite a bit about behavioral economics. Economic theory assumes that people make rational, selfish, and mathematical economic decisions. Behavioral economics, however, acknowledges that humans aren’t always rational. Enter the ultimatum game.

Here’s an 8 minute video that you may want to show AFTER playing the game in your classroom (you might reduce the stakes to $5 and bring two students to the front of the class so everyone can see the game in action). It is an interview with Richard Thaler, generally considered the father of behavioral finance: Continue reading