Credit Cards, Banks, and the Maxed Out Documentary

Today we will begin watching part of an award-winning documentary called, "Maxed Out". We will be pausing the movie every few minutes to discuss various aspects of the movie as they relate to this class, our experiences, and our future. Please feel free to comment, ask questions, or ask for clarification.

An interesting juxtaposition from the opening scene in Maxed Out is this video about the economic collapse of Las Vegas and the drying up of the housing market there.

Bank Mergers in One Easy Chart:

MORE STUFF

Some have asked about the music in the Maxed Out movie -- no, it's not Vanilla Ice.

Last Guillotine Use During Star Wars Premiere?

http://mentalfloss.com/uk/law/31897/france-stopped-using-guillotine-as-star-wars-premiered

Dave Ramsey: The Dangers of Debt

Today we will be starting Dave Ramsey's video series on the Dangers of Debt.

Before we begin, answer the following questions:

1. In what ways is it easier, safer, or more convenient to use a credit card instead of cash?
2. What kinds of "rewards" do credit card companies offer customers for using their cards?
3. Why is it important to "Build your credit?"
4. Why are teenagers the number one target of credit card companies?

During [or after] the video (4.1), answer the following questions:

1. About how many credit card applications does the average college student receive their first year of college?
2. What does "living paycheck to paycheck" mean?  (70% of Americans are doing it)
3. What is a "paradigm shift"?
4. How has the perception of debt changed since the early 1900's?  (Beginning with the 1910 Sears Catalog example)  How do our great grandparents, grandparents, and parents see debt differently?
5. How did credit cards begin in the 1950's?
6. Approximately how many credit card offers went out last year?  (According to this movie from a few years ago)

And something to think about:

pred·a·tor  

/ˈpredətər/

Noun

1. An animal that naturally preys on others.
2. A rapacious, exploitative person or group.

Dave Ramsey: Wealth Building

Watch Dave Ramsey: Chapter 3, Part 4 (Social Security) and answer the following with Microsoft Word:

1. Why should you plan for retirement and NOT rely on Social Security? (1 paragraph)
2. Baby Step 1 is _______________ in the bank. 
3. Baby Step 2 is ___________  ____________.
4. Baby Step 3 is ________________ months of expenses in an emergency fund.
5. Baby Step 4 is investing ____% of your household income in both ____ ____'s and pre-tax __________ plans.

Watch Dave Ramsey: Chapter 3, Part 5 (Save for College) and answer the following with Microsoft Word:

1. Baby Step 5 is: ________________________________________________.
2. Never save for college using ______________________________________.
3. Never save for college using _____________________ bonds.  (Only earns 5-6%)
4. Never save for college using _________________ tuition.
5. Save for college by first using Education Savings Accounts (ESA), nicknamed "Education _________."
6. You may save $________ (after tax) per year, per child, that grows tax free.  So if you start when your child is born and save $2,000 a year for 18 years, you would only invest a total of $________, but at 12% growth your child would have $___________ for college.  TAX FREE!

Advance video to 8:00.

1. Never save for college using _________________.
2. Never save for college using ______________ bonds.  (Only earns 5-6%)
3. Never save for college using _____________ tuition.

Bonus Video:

1. _____________ tuition is cheaper than going to a school _______________.
2. What are some ways someone could go to college if they don't have a savings account to pay for school?  (1 paragraph)

Dave Ramsey: Saving and Investing

For the next few days we will discuss savings and investment strategies:

• Complete the worksheets as we watch the movies.
• There will be a quiz on this material next week.
• You will need to know about emergency funds, mutual funds, compound interest, liquidity, single stock investing, pinnacle point, risk/return ratio, etc.

I know savings and investing is not something everybody wants to learn, but it can literally make THE difference in your future.  Imagine never having to have a car payment or not panicking if you had to buy medicine for your children or worrying if you got laid off for a month or two.  That's why Dave Ramsey refers to his program as "Financial Peace". 

Please give it a chance and I think you'll actually learn some important lessons.

Candynomics: The Economics of Halloween

If you‘re like most Americans, you snatch up those giant bags of candy the week before Halloween to appease trick or treaters.

So many people do this that the few days before Halloween account for $2 billion in candy sales.  What else are we spending our billions on during Halloween?

Questions:

1. List annual Halloween sales in order (largest to smallest) based on the pie chart.
2. How much does the average U.S. household spend on candy per year?
3. The average American consumes how much candy per year?
4. In your opinion, at what age is a person too old to Trick or Treat?
5. Why do you think Halloween is so popular in the U.S.?
6. What is your favorite Halloween candy?
7. What does your family (or you) do for Halloween?

Saving for the Long Haul

You may remember Dave Ramsey's story of Ben & Arthur and my spreadsheet showing you how important it was to start investing early.  This is a similar example.

• Read pages PF16-PF19
• Explain Compound Interest in your own words
• Answer the "Are You Ready?" questions on the bottom of page PF17
• #1: A paragraph
• #2: A basic list
• Answer the "Are You Ready?" questions on the bottom of page PF19
• Give me an example of something that COULD happen where you would need an emergency fund to keep going -- without borrowing or using a credit card.