Grade 7 Social Studies Chapter 3 Personal Capital Pages 54-57

1. What is “personal capital”? “personal capital” is anything that you have that can help you improve your economic situation.

2. What might “personal capital” include? Examples Savings in the bank

Personal capital…. Tools

Personal capital…. A particular skill talent Education and training

Personal capital….. Property

Personal capital….. A truck A bike

An idea for a product or business Personal capital…. An idea for a product or business “entrepreneur”

Personal capital….. Willingness to work hard

Personal capital….. Many others things can be personal capital

USING MONEY WISELY 3. Describe how having a little more income can help increase personal capital and create more opportunities to make money.

You can take advantage of buying things you need on sale You can save for a down payment for a house You can create “economic security” – having extra money for emergencies Etc.

4. What is usually a family’s biggest capital investment? Usually buying a house is the largest capital investment for most families.

5. Describe how a mortgage works to build personal capital for families. You need a “down payment”, which is a portion of the total cost of the house Example: If a house costs $200,000, you might need a down payment of 10%, which is $20,000.

You apply to a bank to get a “mortgage” which is a special kind of bank loan specifically for buying a house. Ex: Down payment $20,000 Mortgage loan $180,000

The family owns a portion of the house, the bank owns the rest Each month the family pays their “mortgage” payment to the bank, and over time, the family “pays off” the mortgage, and owns the house.

When the mortgage is paid off, (this usually takes about 20 years), the family owns the house This is personal capital for the family because the money they pay comes back to them when they want to sell the house.

6. Why is it hard to break the poverty cycle? Its very hard to save for a down payment when you are in poverty or just getting by Always pay rent instead of having the chance to own a house and build personal capital

Other reasons: Poor health Not enough education to get a better job Can’t afford child care – can’t work Many other reasons

7. What are some ways that can make it possible for people to break out of a poverty cycle? Get good grades in school – qualify for scholarships Government programs for financial help Help from community organizations Ex: Habitat for Humanity Help from friends and family

8. What is “Habitat for Humanity”? Habitat for Humanity is a volunteer (not government) organization that helps deserving families be able to buy a house

A “deserving family” would be a family that is hard working but low income.

Many families that are “just getting by” will never be able to save enough money for a down payment on a house They have to pay rent, missing the opportunity to build personal capital by buying a house

9. How does it get capital to build houses Cash donations Volunteer workers Donated materials from businesses

10. Who builds the houses? Volunteers Churches Service clubs Community groups Individual volunteers

11. What does a person have to invest in order to be eligible for a “Habitat for Humanity” home? A $500 down payment 500 “sweat equity” hours working on the house

12. What are some of the challenges that Ana Nan overcame in order to get her house for herself and her son? Came to Canada from Romania Had only a suitcase and $100 with her Had to learn English Took nurses courses so she could work

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