Age 3-5
Age 6-10
Age 11-13
Age 14-18
Age 19+
Most N.J. workers anxious about being
able to afford retirement
Nearly all New Jersey residents age 35 and older say they hope to retire
one day, but two-thirds are anxious about saving enough money so they
could afford it, according to a poll released Thursday by AARP.
The Millionaires Characteristics
There’s a difference between people who make millions and people
who have millions.
1. They See Opportunities Instead of Obstacles.
2. They Understand the Power of Investing (Not Just Saving).
3. They Have a High Tolerance for Risk and Failure.
4. They Have a Sense of Self-Discipline
5. They Pursue Their Passions
6. They’re Normal People Who Play to Their Strengths
9
Rules for Improving Your Financial Life
1.
2.
3.
4.
5.
6.
Get a good education.
Work long, hard, and smart.
Learn money-management skills.
Spend less than you could spend.
Save early and often.
Invest in common stocks for the long term.
10
The Millionaires Quiz
• Most millionaires inherited their wealth.
False — About 80 percent of millionaires are first-generation affluent.
• Most millionaires earn more than $500,000 per year.
False — Less than 15 percent of millionaires have income over $500,000 per year.
• College graduates earn about twice what high school graduates earn over a 40year work life.
False — In fact, according to 2007 Census Bureau statistics, the average college
graduate earned 78 percent more than the average high school graduate. People
with professional degrees earned 255 percent more than high school graduates.
• People who are self-employed rarely become millionaires.
False — More than half of the millionaires are self-employed.
11
The Millionaires Quiz
• All millionaires wear expensive clothes.
False — Fifty percent of millionaires have never paid more than $400 for a suit; 90
percent of millionaires have never paid more than $1,000 for a suit.
• Millionaires usually drive new cars.
False — Less than 25 percent of millionaires drive a current-year car and more than
half drive a car that is more than two years old.
• Many millionaires drop out of college to start work.
False — Four of five millionaires are college graduates. Eighteen percent have
master’s degrees, 8 percent law degrees, and 6 percent Ph.D.’s.
• It is impossible to save enough to be a millionaire.
False — For example, if a 22-year-old saves just $50 per week ($2,600 per year)
during his or her entire working life and earn a 9 percent rate of return on the
investments, the saver would have more than $1 million by age 63.
12
Scarcity (n.)
Scarce (adj.)
Wants > Resources  Scarcity
What does it mean to be a resourceful person/employee?
13
Types of Resources
1. Capital resources: Man-made goods that are produced for the purpose of
producing more goods and services.
2. Entrepreneur: A person who takes risk and gathers the resources to
provide a new or improved good or service to the marketplace.
3. Human resources: People performing mental and physical work to
produce goods and services.
4. Natural resources: Resources that occur naturally in and on the earth;
these resources are used to make goods and services.
5. Productive resources: Basic resources used to produce goods and
services: natural resources, human resources, capital resources, and
entrepreneurial abilities.
14
The Economic Way of Thinking
(The Handy Dandy Guide)
1.
2.
3.
4.
People choose because productive resources are limited.
All choices involve costs.
People respond to incentives in predictable ways.
People create economic systems that influence choices and
incentives.
5. People gain when they trade voluntarily.
6. People’s choices have consequences for the future.
15
Opportunity Cost
• An opportunity cost is what you give up in order to do or have
something. If you choose to watch television rather than go for a
walk, your opportunity cost of watching television is walking in your
neighborhood.
• When making a choice from numerous alternatives, the opportunity
cost of the choice is the highest-valued alternative that is forgone as a
result of making the choice. Because everything has a cost, by
considering costs and doing a cost-benefit analysis, you make better
economic decisions – in which the benefit outweighs the cost by the
greatest possible amount.
16
Stay in or Drop out of School
D
• 1. High school dropouts can get a job and thus provide more financial
help for their families than their friends in high school can.
S
• 2. High school graduates will have higher incomes in the future than
the incomes of high school dropouts.
S
• 3. High school graduates are able to go on to college.
D
• 4. High school students must follow school rules, which limit freedom.
17
Stay in or Drop out of School
D
• 5. High school dropouts can work full-time and have a better car,
clothes, and social life than their friends in high school.
S
• 6. Parents are happy when their children graduate from high school.
S
• 7. School activities, such as sports and music, are fun for many
students.
S
• 8. Increased knowledge opens up increased choices and
opportunities.
18
Five-Step Decision-Making Process
1. Problem:
I don’t have enough time to finish two big assignments.
2. Alternatives:
3. Criteria:
I can do my math homework or finish my science project.
I have an A average in math and a C average in science.
The math assignment is worth 10% of my math grade; the
science project is worth 35% of my science grade. I’ve
missed two assignments in math; I haven’t missed any
assignments in science.
Because I’m not doing so well in science, and the science
project is worth more, it’s more important for me to
finish the science project.
4. Evaluate:
5. Decision:
I’ll finish the science project.
19
Five-Step Decision-Making Process
P
A
C
E
D
1.
2.
3.
4.
5.
Define the Problem.
List Your Alternatives.
State Your Criteria.
Evaluate Your Alternatives.
Make a Decision.
20
Choosing a Career
Would you rather have a job or a career?
• A job provides you with the basics—cash and
something to do to earn it.
• A career is your chosen occupation. It too
provides an income and an activity. But it also
provides challenges, opportunities for
advancement, and real satisfaction with what
you do.
21
Get to Know Yourself
• Describe life and work values that you hold.
• Identify interests, aptitudes and personality
traits that might influence your career choice.
22
Life and Work Values
 Income and wealth
 Security
 Independence
 Physical risk
 Recognition
 Creativity
 Personal growth
 Family
 Community
 Location
23
Life and Work Values
Key Question
Why is understanding your values important
to career planning?
To be a good choice, a career must closely
fit with your life and work values. When
your career matches your values you are
likely to be happier in your work.
24
Interests, Aptitudes & Personality
Interests
 Personal interests are activities you find
rewarding over an extended period of time.
 What is the best way to determine your
interests?
 To identify things you do that hold your
attention
Aptitudes
 An aptitude is a natural talent for learning some
skills over others.
25
Interests, Aptitudes & Personality
Turning Aptitudes into Skills
 A skill is an aptitude developed through
training and experience.
Example: Mrs. Whelan
 Example : Jodi Piccoult
Aptitude
Interest
Skill
Career
Verbal
Reading & writing
Years of education
English degree
Author
26
Interests, Aptitudes & Personality
Transferable Skills
 A transferable skill is a set of qualities that
can be applied to any field or career,
regardless of where they were first learned.
 Example:





good communication skills
Organizational skills
time management
working under pressure
problem solving
What transferable skills do you gain as a student?
27
Interests, Aptitudes & Personality
Personality
 Your personality is the blend of qualities that
defines you as an individual based on what
you think, feel and believe.
28
Invest in Your Human Capital
Human Capital: the stock of knowledge, skills,
experience, habits, social and personality
attributes, including creativity, embodied in the
ability to perform labor so as to produce
economic value
Investing in human capital through education
and training can make students more
marketable in the workplace.
29
The Job Application Process
1.
2.
3.
4.
5.
6.
Looking for Job Openings.
The Letter of Application.
The Resume.
The Application.
The Interview.
The Thank-You Letter
30
7 Ways to Identify Possible Careers
1.
2.
3.
4.
5.
6.
7.
Federal Government Sources of Information
Private Sources of Career Information
States’ Career Clusters
Private Employment Agencies
Make a Career Connection
Be an Intern
Volunteer
31
Occupational Information Network (O*NET)
32
Occupational Outlook Handbook
33
CareerOneStop
34
Private Sources of Career Information
Internet Options:
http://www.careeroverview.com/
http://www.monster.com/
http://www.careerbuilder.com/
http://www.careercast.com/
https://www.linkedin.com/
https://plus.google.com/
Private Sources of Career Information
Non-Internet Options:
1.
2.
3.
4.
Guidance Counselors/Career Placement
Librarian/Libraries (professional/trade journal)
Local Bookstores
Local newspapers classified “Help Wanted”
“Want ads”
Interviewing for Jobs
Before the Interview
• Learn about the employer and the job.
• List the materials to take with you.
• Make a list of questions to ask, such as work schedules, benefits,
and pay.
• Be prepared to answer questions.
• Polish your appearance (Be neat and clean. Dress modestly and
conservatively with minimal makeup, jewelry or fragrance.)
• Practice for the interview (mock interview).
• Know where to go for the interview.
• Do not smoke or chew gum.
Goodheart-Willcox Publisher
During the Interview -1
• Arrive on time or a little (5-10 min) early. Never be late. Go
alone.
• The attitude and appearance you display during the interview
may be critical in getting the job
• Greet the interviewer with a firm handshake. Establish eye
contact.
• Be poised and confident. Be positive, upbeat, and enthusiastic.
• It is normal to be nervous, but try your best to appear relaxed.
Do not appear overconfident or arrogant.
• As the interviewer asks you questions, respond positively and
honestly.
During the Interview -2
• Be ready for some open-ended questions. "Tell me about
your qualifications for this job.”
• Keep your answers brief and to the point. Speak clearly.
Avoid slang or improper language.
• Listen carefully. Don't interrupt. Be responsive and truthful.
• Have your questions ready to ask when invited to do so.
• It is appropriate to ask when a hiring decision will be made
and whether you will contacted.
Typical Interview Questions
• Please tell me about yourself. What are your qualifications
for this position?
• Why do you want to work for this company? Why are you
applying for this job?
• What were your best subjects (strengths) in school?
• What were your toughest subjects (weaknesses) in school?
What did you do to make good grades?
• Describe a stressful or high pressure situation you have
been in, how you handled it, and the outcome.
Typical Interview Questions
• What experiences do you have that will be helpful to you in
this job?
• What would you like to be doing five years from now, and
how do you think this job can help you get there? What do
you see yourself doing in five years?
• Is there anything else I should know about you in
considering you for this position?
• What was the toughest decision you've ever made?
• What do you do when you have trouble solving a problem?
• What types of jobs are you trying to avoid?
After the Interview
• After an interview, immediately send a follow-up letter to thank the
interviewer
• Follow up with a telephone call if you do not hear from the
interviewer
• Do not be discouraged if you do not get a job offer right away
• You may need to interview a number of times to get a job
• Ask what the interviewer seeks in a job candidate
• Ask the interviewer to recommend how you might improve your
interview skills
Unemployment and Median Earning
44
Uneducated = Unemployed
45
Note: Data are 2009 (great recession) annual averages for persons age 25 and over.
Job Markets are Changing
46
Why Some Jobs Pay More Than Others?
In one word: Human Capital
• Education/Skills
• Demand for the occupation
• Natural ability (Talent)
• Hard work
• Getting along with others
• Self-discipline
• Health
Another factor is the supply and demand of the occupation
47
Is education a good investment?
On average, completing high school and earning a
college degree will raise a person's income even
after accounting for the direct costs (e.g., tuition
and books) and the indirect costs (e.g., income that
an individual could otherwise have earned during
time spent in school) of getting an education.
48
Baby Boomers Face a Shocking
Retirement Savings Shortfall
The average Baby Boomer has a goal of
accumulating enough of a nest egg to have
$45,500 a year in retirement income, according to a
new report from BlackRock. The average retirement
portfolio, however, has just $136,200 in it, which
would provide an average estimated income of
$9,129. That would leave the average Boomer
nearly $37,000 per year short of his goal.
49
Incomes & Taxes
total amount of money a worker earns before any
Gross Income (Pay) The
deductions are made.
_ Deductions
Include mandatory and optional deductions
= Net Income (Pay) Also called take-home pay or disposable income
50
Required (Mandatory) Deductions
1.
2.
3.
4.
Social Security tax *
Medicare tax *
Federal income tax
State income tax
} FICA
* Paid by both employers and employees
FICA – Federal Insurance Contributions Act
A World Without Taxes-1
51
Optional (Voluntary) Deductions
1.
2.
3.
4.
5.
6.
Life Insurance
Medical insurance
Long-term disability Insurance
Dental insurance
Retirement savings plan, e.g., 401 (k)
…..
52
Question
• Which of the following is NOT a
deduction on a paycheck?
A.
B.
C.
D.
Chapter 1: Computers and
Digital Basics
Social Security tax
Medicaid tax
State income tax
Medicare tax
53
Question
• Certain deductions are taken from your
paycheck because:
A. This money is put away until you turn 65
B. Employers get a percentage of what you
earn
C. They are required by the government
D. They fund other programs of the
company
Chapter 1: Computers and
Digital Basics
54
W-4
Chapter 1: Computers and
Digital Basics
55
Paycheck
Stub
Question
Chapter 1: Computers and
Digital Basics
56
W-4 & W-2
The W-4 is a tax form used to calculate the correct amount of
federal income tax that should be withheld from an employee’s
pay. This form must be completed whenever an employee starts a
new job.
The W-2 is a tax form that employers give to their employees at
the end of each year. This form includes the total amounts of
wages earned, federal and state taxes withheld, and contributions
to Social Security for a given tax year. After receiving it from his or
her employer, the employee must submit this information when
paying taxes in April with their Form 1040.
Chapter 1: Computers and
Digital Basics
A World Without Taxes-2-W2-W4-1040
57
Chapter 1: Computers and
Digital Basics
58
Already paid
Has to pay
Chapter 1: Computers and
Digital Basics
59
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Digital Basics
60
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Digital Basics
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Digital Basics
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Chapter 1: Computers and
Digital Basics
63
Managing Your Money
Three Principles of Managing Your Money
1. Spend less than you earn (Save).
2. Make your money work for you (Invest).
3. Protect your money (Protect).
Three Principles of Personal Finance (Mint.com's)
64
Spend
Share
Save
Invest
65
Q. How can we tell if somebody is wealthy?”
By knowing
where they live?
what they wear?
what they drive?
where they travel?
66
Q. How can we tell if somebody is wealthy?”
By looking at his/her Balance Sheet.
Assets – Liabilities = Net Worth
(Own – Owe = Wealth)
Net Worth = Wealth
67
SMART Financial Goals
68
Budgeting – Spend Less Than You Earn
1. Get a grip on your spending (expense).
2. Tabulate what you earn (income).
3. Don’t forget to pay yourself first (saving).
In other words, have a budget (a spending plan)!
What is Your (Budget) Type?
69
Q. Are All Expenses the Same?
No, there are
1. Fixed expenses.
2. Variable expenses.
3. Periodic expenses
4. Emergency fund
70
Q. What does it mean “Pay Yourself First?”
Include your saving goals in the fixed
expenses part of your balanced budget.
Net Income = Expense (incl. Savings)
71
Q. Are All Expenses the Same?
No, there are
1. Fixed expenses.
2. Variable expenses.
3. Periodic expenses
4. Emergency fund
5. Savings
72
Underwater Loan
73