Leading By Example: The Stock Market Program at Big Shoulders Fund
Good investors are like farmers. They plant seeds into assets that they hope will grow and pay back more than the cost of the seed and overhead.
Good teachers are the same way. They plant seeds of knowledge in their students that when cultivated, can change the course of a person’s life.
Just like farming, both teaching and investing can be stressful endeavors. In 2008- 2009, the global stock market was suffering a historical decline due to the “Global Financial Crisis”.
In the midst of this chaos, two Chicago investment professionals, Charlie Bobrinskoy and Jim Hoeg, took it upon themselves to start something truly wonderful.
Seeing a need for financial literacy in Chicago schools, Charlie and Jim created a program to teach 8th graders the basics of financial literacy and the stock market.
Investors fearless enough to put money to work during 2008 and 2009 were rewarded handsomely if they held on long enough. (Fearless being the key word, as “things” did NOT look good at the time.)
Just like the stock market has grown considerably since 2008 and 2009, Charlie and Jim’s investment in their community has grown too. The program started with 3 schools the first year, but has grown to be taught in 64 schools, reaching over 1,000 students and includes over 130 teachers in the neediest areas of Chicago. It has been such a successful program for 8th graders that it is starting to spread to the high school level, with three high schools now involved.
The program was able to grow thanks to help from Big Shoulders Fund, a local charity that supports schools in Chicago. Big Shoulders Fund provides over $25 million in annual support to Chicago schools through a wide range of scholarships, programs and initiatives. The Stock Market Program teaches the basics of the stock market and investing while giving a peek inside potential financial industry careers.
While the investing is simulated, the program is unique in that it provides real-life incentives for kids based on portfolio performance. Each class chooses stocks to invest in a $3,000 in play money portfolio as part of a competition against other area schools. The class decides on what stocks they want to buy or sell during class, then makes their “trades” via an email to the coordinators at Big Shoulders. The coordinators keep track of all the trades and results via an Excel spreadsheet.
Each student also individually chooses a stock they think will perform the best over the course of the semester and must present their reasoning to their classmates.
Each class receives a donation of $3,000 from Big Shoulders Fund in real money that is earmarked for several things, among them, paying each student a 2% management fee (in real money) based on the ending balance in the class’s virtual portfolio. The donation also covers the cost of a tablet for the winner of each class’s individual stock picking contest, a fieldtrip, and even leaves enough left over for the class to donate $1,000 to $1,500 to their school.
The program has been a great success and continues to touch lives in a meaningful way.
Teachers are able to show students how all those years of math and social studies lessons apply to the real world. Students are shown worlds they might not see or understand otherwise. They are shown that they have a reason to work hard and stay in school and perhaps to dream bigger dreams.
There is little debate that financial literacy is an important and life changing skill, yet it isn’t one that is taught everywhere. “Only 17 states require students to take a course in personal finance” according to the most recent survey of the states.
Numbers suggest it isn’t being taught at home either.
According to this survey from Quicken Loans, “When adults with children were asked what financial lessons they wish their parents taught them when they were kids, 31% ranked investing in the number one spot on their wish list…but only 11% said they were teaching their own kids about investing.
Why isn’t financial literacy being taught? Part of the answer could be that not every parent or teacher feels equipped to teach the lessons. That’s why programs like this one are so important. Often it takes teachers and administrations that are willing to step outside the normal curriculum to bring this type of education to students.
It takes leaders with the vision of Jim and Charlie as well as the good people at Big Shoulders Fund. It all started with two business professionals who decided to go back to school. Their leadership is an inspiration as well as a model for the rest of us!
You can learn more, as well as see a great video about the program at the link below.