1. Financial Literacy 10 th - How to really be a Millionaire Choices we can make

2. Objectives for today Define Financial Literacy and understand its importance in reaching your financial goals. Evaluate choices that you can make now for a successful financial future.

3. What is Financial Literacy? Understanding how to manage money effectively Acquiring knowledge and skills to make informed decisions regarding money matters Helping an individual fulfill personal, family, social and governmental responsibilities

4. Why do I need to be financially Savvy? People who are financially literate are more likely to achieve their lifetime goals. Being financially savvy can: ◦ Help you buy something you need or want (car, computer, etc.) ◦ Save money for emergencies ◦ Afford college tuition ◦ Start a business ◦ Live comfortably in retirement ◦ Lead to financial independence

5. What can you buy with a million dollars?

6. What does a million dollars look like? How many bills would it take to equal $1 million? ◦ It would take 50,000 $20 bills to reach the one million mark, or 10,000 $100 bills. Stuffing $20 bills into a sack wouldn’t add up to a million dollars. How much space would $1 million take up? ◦ Imagine a packet of 100 $100 bills – about half an inch high. Arrange 10 of those packets flat on the ground and stack another nine layers on top and then you’ll have $1 million. The pile would be approximately a foot wide by a foot deep and over four inches high. Using $20 bills, a million dollar pile would be five times bigger. How much would $1 million weigh? ◦ It depends on the number of bills, but even paper money gets heavy in large quantities. A lone thief would need at least one cohort to carry a bag containing $1 million in $20 bills because it would weigh about 110 pounds.

7. How to Really Be a Millionaire Work in groups for the next 5 minutes and answer the T/F questions on the Millionaire Game to see how financially savvy you are.

8. Millionaire Game A. Most millionaires are college graduates. True Four out of Five millionaires are college graduate. 18% have master’s degrees, 8% have law degrees, 6% have medical degrees, and 6% are PhD.s. B. Most millionaires work fewer than 40 hours a week. False About 2/3 of millionaires work 45-55 hours a week

9. Millionaire Game C. More than half of all millionaires never inherited money. True. Only 19 percent of millionaires received any income or wealth of any kind from a trust fund or an estate. Fewer than 10 percent of millionaires inherited 10 percent or more of their wealth. D. Most millionaires attended private schools. False. Most millionaires attended public schools. Fewer than 20 percent of female millionaires attended private schools.

10. Millionaire Game E. Most millionaires drive expensive new cars. False. Most millionaires spend under $30,000 for a car. Only 23 percent of millionaires drive a current-year [new model] car. F. Most millionaires work in glamorous jobs, such as sports, entertainment, or high tech. False. Most millionaires work in ordinary industries and jobs. They become wealthy because they make good uses of market opportunities.

11. Millionaire Game G. Most millionaires work for very large public companies. False. About three out of four millionaires are self-employed and consider themselves to be entrepreneurs. Most of the others are professionals, such as doctors, accountants, and lawyers. H. Many poor people become millionaires by winning the lottery. False. Few people get rich by luck. If you play the lottery, the chances of winning are worse than one in12 million. The average person who plays the lottery everyday would have to live about 33,000 years to win once. In contrast, you have a one in 1.9 million chance of being struck by lightning. How many people do you know that have been struck by lightning?

12. Millionaire Game I. A college graduate earns almost double the annual income of a high school graduate. True. In recent years the typical college graduate earned a median salary of $54,700, nearly double the median yearly income of the typical high school graduate $33,500. People with professional degrees earned a median income of $79,508, or nearly 240 % more than the typical high school graduate. The typical worker without a high school degree earned $23,608.

13. Millionaire Game J. If you save $2,800 a year from age 22 to age 65 at 8 percent interest, your savings will be over $1,000,000 at age 65. True. Because of a financial concept called compound interest, the earlier you begin saving, the better. Regular saving can make you a millionaire even if your salary is modest. Your money earns money. K. At age 18, you decide not to drink soda from the vending machine and save $1.50 a day. You invest this $1.50 a day at 8 percent interest until you are 67. At age 67, your savings from not buying soda from the vending machine are almost $329,000. If you give up your $4.50 Latte each day, you would save $987,000! True. Because of the power of compound interest, small savings can make a difference. It pays to live below your means. Find a balance between spending now and saving for the future.

14. What can I do now to become financially literate? 1. Get a good education. 2. Work smart. 3. Learn money-management skills. 4. Spend less than you could spend. 5. Save early and often. 6. Gather information before making decisions

15. What can I do now to become financially literate? Make a Bubble Map describing choices you can do now for a successful financial future. Think: What would you do now to save $10.00 a week? My Financia l Future ? Bring my lunch to school ? Save Allowance

16. What can I do now to become financially literate? For more information go to: www.360financialliteracy.org www.macpa.org www.mdfinancialskills.org www.mymoney.gov This information brought to you by the Severna Park High School Business Advisory Board www.sphsbab.org