Journal Write: Ashton Kutcher Acceptance Speech

After watching Ashton Kutchers acceptance speech for the Teen Choice Award, discuss the following:

1. What is his view of hard work and opportunities?  How does his view compare to yours?
2. What is his opinion about what is "sexy"?  How does his view compare to yours?  
3. What is his view of what the world is?  How does his view compare to yours?
4. If you were given a platform like this and had a chance to give a huge crowd of teens advice about something you are passionate about, what would you tell them?

Young Entrepreneurs & Inventors

 

 

Payday Lending

Recollections of Pine Gulch: A retelling of the Goldsmith's Tale

You will receive a packet with the story titled, "Recollections of Pine Gulch".  Please read the story and answer the questions at the end of the packet on a separate piece of paper.   Remember to use full sentences.

If you prefer, you can read the story online here:
http://pinegulch.blogspot.com/2011/02/recollections-of-pine-gulch-story.html

The Beginning of Money

Before we dive into Economic Theory, I think we need to think about where we started in Economics in the first place.  How were the first economies formed?

Barter	The first people didn't buy goods from other people with money. They used barter. Barter is the exchange of personal possessions of value for other goods that you want. This kind of exchange started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock was often used as a unit of exchange. Later, as agriculture developed, people used crops for barter. For example, I could ask another farmer to trade a pound of apples for a pound of bananas.
Shells	At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The cowry has served as money throughout history even to the middle of this century.
First Metal Money	China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be thought of as the original development of metal currency. In addition, tools made of metal, like knives and spades, were also used in China as money.  From these models, we developed today's round coins that we use daily. The Chinese coins were usually made out of base metals which had holes in them so that you could put the coins together to make a chain.
Silver	At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the appearance of today and were imprinted with numerous gods and emperors to mark their value. These coins were first shown in Lydia, or Turkey, during this time, but the methods were used over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman empires. Not like Chinese coins, which relied on base metals, these new coins were composed from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.
Leather Currency	In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the beginning of a kind of paper money.
Noses	During the ninth century A.D., the Danes in Ireland had an expression "To pay through the nose." It comes from the practice of cutting the noses of those who were careless in paying the Danish poll tax.
Paper Currency	From the ninth century to the fifteenth century A.D., in China, the first actual paper currency was used as money. Through this period the amount of currency skyrocketed causing severe inflation. Unfortunately, in 1455 the use of the currency vanished from China. European civilization still would not have paper currency for many years.
Potlach	In 1500, North American Indians engaged in potlach, a term that describes the exchange of gifts at banquets, dances, and various rituals. Since the trading of gifts was so important in figuring the leaders’ community status, potlach went out of control as the gifts became more extravagant in an effort to surpass others' gifts.
Wampum	In 1535, though likely well before this earliest recorded date, strings of beads made from clam shells, calledwampum, are used by North American Indians as money. Wampum means white, the color of the clam shells and the beads.
Gold Standard	In 1816, England made gold a benchmark of value. This meant that the value of currency was pegged to a certain number of ounces of gold. This would help to prevent inflation of currency. The U.S. went on the gold standard in 1900.
Depression	Because of the depression of the 1930's, the U.S. began a world wide movement to end tying currency to gold. Today, few nations tie the value of their currency to the price of gold. Other government and financial institutions now try to control inflation.
Today	At present, nations continue to change their currencies. For example, the U.S. has already changed its $100 and $20 banknotes. More changes are in the works.
Tomorrow	Tomorrow is already here. Electronic money (or digital cash) is already being exchanged over the Internet.

*Based on NOVA Online's the Secrets of Making Money, "The History of Money."  See also Glyn Davies' History of Money from Ancient Times to the Present Day.

You will get a story packet today called, "Recollections of Pine Gulch".  Read the story and answer the questions at the end of the story.  There's an online version of the story here:  http://pinegulch.blogspot.com/  This is a retelling of the classic "Goldsmiths Tale" which we will explore next.

There is a video on YouTube which does a fair job of describing how banking was started, although it is very Euro-centric.  You can find it here: http://www.youtube.com/watch?v=D0IJCGuNtqk

Another cute cartoon of how money came about can be found here -- although it rushes through some of the important changes: http://www.youtube.com/watch?v=TLVoV6gK8mE

Finally, this is another animation discussing how "money" started.  See the similarities?

The Dangers of Debt

This time of year is notorious for the growth of personal debt -- mostly due to purchasing Christmas presents with credit cards.  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, 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.

Debt: Debunking the Myths

Answer the following questions you watch the videos by Dave Ramsey on the myths about Debt:

Myth 1

• Myth: If I ____________ money to a friend or relative, I will be helping them.
• Truth: The relationship will be strained or ________ .

Myth 2

• Myth: By ______________ a loan, I am helping out a friend or relative.
• Truth: The bank requires a cosigner because the person isn't likely to ___________.  Be ready to pay the loan and have your credit damaged.

Myth 3

• Myth: ___________ ____________, rent-to-own, title pawning, and tote-the-note lots are needed _______________ for lower income people to help them get ahead.
• Truth: These are horrible, greedy rip-offs that aren't needed and benefit no one but the owners of these companies.

Myth 4

• Myth: The ___________ and other forms of gambling will make me ____________.
• Truth: The lottery is a _______ on the poor and on the people who can't do math.

Note:  Texas Tech University did a study on the Texas Lottery and found that people without a high school diploma spent an average of _________ a month playing the lottery.  College graduates spent _________ a month on average.  When studies are done on the lottery, it's always the lower-income ZIP codes that generate the highest revenue on sales.

Myth 5:

• Myth: ____________ payments are a way of life and you'll always have one.
• Truth: Staying away from car payments by driving reliable used cars is what the typical ____________ does.  That is how they became millionaires.

Myth 6:

• Myth: ____________ your car is what sophisticated financial people do.  You should always lease things that go down in value.  There are tax advantages.
• Truth: Consumer Reports, Smart Money magazine and a good calculator will tell you that the car _______ is the most ________ way to finance and operate a vehicle.

Myth 7:

• Myth: You can get a good deal on a _____________ car.
• Truth: A new car loses _________ of its value in the first four years.  This is the largest purchase most consumers make that goes down in value.

On average, a $28,000 car will be worth $8,400 in four years.

Myth 8:

• Myth: I'll take out a 30-year mortgage and pay ______________.
• Truth: Life happens and something else will always seem more important.  Never take out more than a _________ year fixed-rate mortgage.

Myth 9:

• Myth: It's wise to take out an ________ or a ___________ mortgage if "I know I'll be moving."
• Truth: You will be moving when they _______________.

The adjustable-rate mortgage is here to keep the _____________ from losing money.  It transfers the ____________ of higher interest rates to you.

Myth 10: 

• Myth: You need a __________  __________ to rent a car or make ____________ online or by phone.
• Truth: A __________ card does all of that.

Myth 11:

• Myth: I pay my __________ _______ off every month with no annual payment or fee.  I get brownie points, air miles and a free hat.
• Truth: When you use cash instead of plastic, you spend ___________ less because spending cash hurts.

According to carddata.com, U.S. consumers racked up an estimated $51 billion worth of fast food on their personal credit and debit cards in 2006, compared to $33.2 billion one year ago.

Myth 12:

• Myth: I'll make sure my ___________ gets a credit card so he or she can learn to be responsible with money.
• Truth: Teens are a huge ___________ of credit card companies today.

As soon as you get to college, you will receive offers from credit card companies.  About 80% of college graduates have credit card debt before they even get a job.

Myth 13:

• Myth: The home equity loan is good for __________ and is a substitute for the emergency fund.
• Truth: You don't go into ____________ for emergencies.

Myth 14:

• Myth: Debt _____________ saves interest and you get a smaller ________________.
• Truth: Debt consolidation is a _______________.

Debt consolidation saves little or no _______________ because you will throw your low interest loans into the deal.
You cannot ____________ your way out of debt!  _____________ payments equal more _________ in debt.

Myth 15:

• Myth: Debt is a _________________.  It should be used to create prosperity.
• Truth: The _______________ is slave to the lender.

When surveyed, the Forbes 400 were asked, "What is the most important key to building wealth?"  _____________ replied that becoming and staying ________ free was the number one key to wealth building.