Age 3-5 Age 6-10 Age 11-13 Age 14-18 Age 19+

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.

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-Discipline5. They Pursue Their Passions6. They’re Normal People Who Play to Their Strengths

9

The Millionaires Characteristics

1. Get a good education.2. Work long, hard, and smart.3. Learn money-management skills.4. Spend less than you could spend.5. Save early and often.6. Invest in common stocks for the long term.

10

Rules for Improving Your Financial Life

• 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 40-year 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

The Millionaires Quiz

Wants > Resources Scarcity

Scarcity (n.)

13

What does it mean to be a resourceful person/employee?

Scarce (adj.)

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

Types of Resources

1. People choose because productive resources are limited.2. All choices involve costs.3. People respond to incentives in predictable ways.4. 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

The Economic Way of Thinking(The Handy Dandy Guide)

• 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

Opportunity Cost

• 1. High school dropouts can get a job and thus provide more financial help for their families than their friends in high school can.

• 2. High school graduates will have higher incomes in the future than the incomes of high school dropouts.

• 3. High school graduates are able to go on to college.

• 4. High school students must follow school rules, which limit freedom.

17

Stay in or Drop out of School

D

D

S

S

• 5. High school dropouts can work full-time and have a better car, clothes, and social life than their friends in high school.

• 6. Parents are happy when their children graduate from high school.

• 7. School activities, such as sports and music, are fun for many students.

• 8. Increased knowledge opens up increased choices and opportunities.

18

Stay in or Drop out of School

D

S

S

S

1. Problem: I don’t have enough time to finish two big assignments.

2. Alternatives: I can do my math homework or finish my science project.3. Criteria: 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.

4. Evaluate: 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.

5. Decision: I’ll finish the science project.

Five-Step Decision-Making Process

19

1. Define the Problem.2. List Your Alternatives.3. State Your Criteria.4. Evaluate Your Alternatives.5. Make a Decision.

Five-Step Decision-Making Process

20

PACED

Choosing a Career

21

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.

Get to Know Yourself

22

• Describe life and work values that you hold.

• Identify interests, aptitudes and personality traits that might influence your career choice.

Life and Work Values

23

Income and wealth Security Independence Physical risk Recognition Creativity Personal growth Family Community Location

Life and Work Values

24

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.

Interests, Aptitudes & Personality

25

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

attentionAptitudes An aptitude is a natural talent for learning some

skills over others.

Interests, Aptitudes & Personality

26

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

Interests, Aptitudes & Personality

27

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?

Interests, Aptitudes & Personality

28

Personality Your personality is the blend of qualities that

defines you as an individual based on what you think, feel and believe.

Invest in Your Human Capital

29

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.

The Job Application Process

30

1. Looking for Job Openings.2. The Letter of Application.3. The Resume.4. The Application.5. The Interview.6. The Thank-You Letter

7 Ways to Identify Possible Careers

31

1. Federal Government Sources of Information2. Private Sources of Career Information3. States’ Career Clusters4. Private Employment Agencies5. Make a Career Connection6. Be an Intern7. Volunteer

Occupational Information Network (O*NET)

32

Occupational Outlook Handbook

33

CareerOneStop

34

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. Guidance Counselors/Career Placement2. Librarian/Libraries (professional/trade journal) 3. Local Bookstores4. Local newspapers classified “Help Wanted”

“Want ads”

Private Sources of Career Information

Interviewing for Jobs

Before the Interview

Goodheart-Willcox Publisher

• 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.

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

45Note: 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?

47

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

Is education a good investment?

48

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.

Baby Boomers Face a Shocking Retirement Savings Shortfall

49

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.

Incomes & Taxes

50

The total amount of money a worker earns before any deductions are made.

Include mandatory and optional deductions

Also called take-home pay or disposable income= Net Income (Pay)

Gross Income (Pay)Deductions_

Required (Mandatory) Deductions

51

1. Social Security tax *2. Medicare tax *3. Federal income tax4. State income tax

* Paid by both employers and employees

FICA – Federal Insurance Contributions Act

} FICA

A World Without Taxes-1

Optional (Voluntary) Deductions

52

1. Life Insurance2. Medical insurance3. Long-term disability Insurance4. Dental insurance5. Retirement savings plan, e.g., 401 (k)6. …..

Question

• Which of the following is NOT a deduction on a paycheck?

A. Social Security taxB. Medicaid taxC. State income taxD. Medicare tax

Chapter 1: Computers and Digital Basics 53

Question

• Certain deductions are taken from your paycheck because:

A. This money is put away until you turn 65B. Employers get a percentage of what you

earnC. They are required by the governmentD. They fund other programs of the

company

Chapter 1: Computers and Digital Basics 54

W-4

Chapter 1: Computers and Digital Basics 55

Question

Chapter 1: Computers and Digital Basics 56

Paycheck Stub

W-4 & W-2

Chapter 1: Computers and Digital Basics 57

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.

A World Without Taxes-2-W2-W4-1040

Chapter 1: Computers and Digital Basics 58

Chapter 1: Computers and Digital Basics 59

Already paidHas to pay

Chapter 1: Computers and Digital Basics 60

Chapter 1: Computers and Digital Basics 61

Chapter 1: Computers and Digital Basics 62

Chapter 1: Computers and Digital Basics 63

Managing Your Money

64

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)

65

Spend Share Save Invest

Q. How can we tell if somebody is wealthy?”

66

By knowing

where they live?what they wear?what they drive?

where they travel?

Q. How can we tell if somebody is wealthy?”

67

By looking at his/her Balance Sheet.

Assets – Liabilities = Net Worth (Own – Owe = Wealth)

Net Worth = Wealth

SMART Financial Goals

68

Budgeting – Spend Less Than You Earn

69

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?

Q. Are All Expenses the Same?

70

No, there are

1. Fixed expenses.

2. Variable expenses.

3. Periodic expenses

4. Emergency fund

Q. What does it mean “Pay Yourself First?”

71

Include your saving goals in the fixed expenses part of your balanced budget.

Net Income = Expense (incl. Savings)

Q. Are All Expenses the Same?

72

No, there are

1. Fixed expenses.

2. Variable expenses.

3. Periodic expenses

4. Emergency fund

5. Savings

Underwater Loan

73