Step 1 to Financial Success: Catch a Vision!
Most people lack a vision for their money. Headed nowhere, or pointed in some vague direction called "I need to do better and start saving some money," they plod to work each day and spend their paychecks by the next payday. It's hard to get excited about a vague desire to do better!
Teacher's Hint: Either have students read this opening article for homework (online or print) or have several good readers read it aloud in class. At the end of the article, you'll find some activities, discussions and questions to reinforce this lesson. 
The Power of a Specific Vision
Warren Buffett caught a specific vision and caught it early. He was born in 1930, in the midst of the Great Depression, which stripped his dad of his job and savings. They had food to eat, but that was about all. Perhaps those bleak years built into Warren an early passion to get ahead financially.
His financial vision took hold of him before he was five. (1) Seriously ill at age seven, he prophetically told a nurse, "I don’t have much money now, but someday I will and I’ll have my picture in the paper." In elementary school, he’d tell his classmates that he planned to be rich before his 35th birthday. (2)
Once he caught his vision, he could pursue it in very specific ways.
At age five, he set up a stand in front of his house and sold Chicklets. Then he progressed to lemonade, finding a better location at his friend’s house on a busier street. (3)
On vacation at Lake Okoboji at age 6, he bought a sixpack of Cokes and sold them at a five cent profit per Coke. (4)
Before age 11, he hired neighborhood kids to find golf balls and paid others to sell them, taking his cut. He caddied for golfers at the Omaha Country Club for $3 a day. (5)
But Warren’s vision went beyond merely making money. He thought long and hard about investing money. By age 11, he’d earned enough to begin investing, so he bought 3 shares of Cities Service preferred stock for $114 (that’s $1500 in 2005 dollars! (6)), which he later sold at a profit.
In the 8th grade, a family friend asked Warren about his drive to make money. "It’s not that I want money," he explained. "It’s the fun of making money and watching it grow." (7)
He continued the pattern of working, saving, investing. And he read everything he could get his hands on concerning business and finance. He grew a paper route into a profitable business, so that at the age of 14, he invested $1,200 ($12,800 in today’s money) in forty acres of Nebraska farmland. (8)
From his paper routes, pinball machines and rent from a tenant farmer, he was earning more money than his teachers. (9)
In college, he studied investing under Benjamin Graham, a respected authority on investing who became his mentor. By college graduation, he’d saved $9,800, ($75,000 in 2007 money) which he spent fulltime investing, along with other people’s money. (10)
Warren Buffett speaking to students at Kansas University School of Business. (Source: Mark Hirschey, licensed under "Creative Commons.") 
By age 31, four years ahead of his elementary school goal, he’d multiplied his savings to $1,000,000. (11) He kept multiplying that money with rapidly compounding interest until he was the second wealthiest man in the world, with a net worth in 2006 of $44 Billion.
He never spent the money on extravagant living. His vision was always to give it away. In 2007 he gave most of it away to benefit others. (12)
The Average, Visionless American
Contrast Buffett's vision to the average American, who lives paycheck to paycheck (13), regrets how he's spent his money (14) and hasn't even calculated how much he needs to retire.(15)
Aiming at nothing, the average American hits it every time.
Success with money starts with a specific vision. But many have swallowed the lie that the only way they could ever get a couple of hundred thousand dollars is to win a lottery. (16) They think that average people with average jobs are doomed to financial failure. Think again!
The Vision Starts Here! Grasp The Power of Compounding Interest
According to Wikipedia, the odds of winning a typical jackpot are approximately 1 in 14 million. Think of it this way. If I had bought a lottery ticket each week for the past 60 years, I'd need to purchase them for about 269,000 more years (over a quarter of a million years!) before I should expect to win the jackpot once. (17)
I don't like those odds.
What if instead of buying lottery tickets, I'd taken the same amount of money and invested it each week.
The average lottery player in Rhode Island spends $100 per month on lottery tickets. Let's imagine that all those players decided 50 years ago to forget the lottery and instead invest that money each week into a total stock market index fund, getting the longterm average return of of the stock market: 10%.
If they'd invested instead of gambled, they'd each have $1,323,359 today! (18)
The point? Lots of people think they could never accumulate any money working a regular job at a regular salary. But if you can catch a vision for regularly investing money for the future, even average folks can accumulate well over $1,000,000. But it all starts with catching a vision.
Activities, Discussions and Questions
Visualizing Compound Interest: The Checkerboard
It's difficult for students to grasp the power of compounding interest. If they don't, it's doubtful that they'll ever catch a vision as to how quickly they can multiply their money. Without a strong vision, movies and video games will always win out over saving and investing. Sometimes a visual can help get this concept across.
Draw a checkerboard on the blackboard or an overhead. Eight squares across and eight squares down. (You may want to bring an actual checker board and grain.)
Ask the students to imagine that you're placing a grain of wheat in the first square and doubling it with each square. Ask them to guess how many grains of wheat will be in the final square.
The answer? Enough grain to cover the entire country of India fifty feet deep!
You've just come face to face with the most powerful, awesome principle in personal finance: the power of multiplication, or compounding interest. If you truly grasp and utilize its power, you'll be one of a few.
Calculating Compound Interest: The Laws of 10's and 7's
The people I know who "get" the power of compound interest say things like, "I can't buy that $500 item! If invested at 10% for 49 years, that $500 would be, let's see, $64,000 in 49 years!" WarrenBuffett could see as clearly as anybody what that money in his pocket could be, if compounded over the years. His clear vision of of future money motivated him to save and invest his present money, rather than spend it on some tempting trinket.
To catch a vision for investing and to gain the power to resist spending every earned dime on games and movies, students need an easy way to calculate future money (what that money could be if invested). The best way I know is to introduce them to "The Laws of 10's and 7's," and to practice them every day so that it becomes second nature to them.
I'm truly astounded at how few people know this invaluable trick! No student should graduate from high school without knowing it. Here's how it goes:
 Money invested at 10% interest doubles every 7 years.
 Money invested at 7% interest doubles every 10 years.
It's extremely convenient that the average return for stocks over the longhaul has been just over 10% per year. Some say that the return on long term government bonds in the future may be close to 7% per year. (19) Of course, we can't know future returns of either stocks or bonds with any degree of certainty.
So, let's practice!
Let's say you're considering purchasing a new video game system for $500 bucks. You wonder what that money could become if you invested it over 50 years in a total stock market index fund, gaining about 10% in value each year. According to the laws of 10's and 7's it should double in value every how many years? (7). Let's try it!
(List on the board or overhead, "Year 1, Year 7, etc." Fill in the new total for each year as they say it.
Let's calculate it out loud as a class. Remember, we're just doubling the amount every seven years:
 Beginning Investment = $500
 Year 7= $1000
 Year 14 = $2000
 Year 21 = $4000
 Year 28 = $8000
 Year 35 = $16,000
 Year 42 = $32,000
 Year 49 = $64,000
So now we know that if you put that $500 into an investment at 10% interest for 50 years, it would have grown to about $64,000!
Now let's see what $20 would become in 50 years:
 Beginning Investment = $20
 Year 7= $40
 Year 14 = $80
 Year 21 = $160
 Year 28 = $320
 Year 35 = $640
 Year 42 = $1,280
 Year 49 = $2,560
So that $20 bill, that might buy you a decent pizza meal at a decent restaurant, could become $2,560 if invested!
(The computation isn't exact, but it's pretty darn close. We don't need an exact figure for computation, since the exact interest we receive won't be exactly 10% or 7% anyway.)
Calculating Compound Interest: The Rule of 72
But what if you're wanting to figure compound interest on rates other than 7% and 10%? Use the Rule of 72. Here's how it goes:
If you invest $100 at 9% per year, divide 72 (the magic number!) by 9 (the percent increase) to get the number of years it will take to double your investment. The answer is 8 years.
(Again, the computation isn't exact, but it's awfully close. The exact number of years would be 8.0432 years.)
Now, try it again with $100 invested at 6% per year.
Calculating Compound Interest: Online Calculators
So maybe you don't have $100 or $500 to invest. Instead, you think you could come up with $20 per week to invest. It doesn't seem like much, but wow, how it adds up over time!
What's an easy way to figure that return over the years? The answer? Online calculators!
Just Google "online calculators" to find one that will tell you how much you'll make investing monthly. (I found one today at www.math.com . Click the "savings" calculator. Put in "50" for the number of years, "10" for the percent yield, "0" for the initial balance, and 80 for the monthly contribution.
The answer? $1,385,951.26
(Let this sink in. This amount is astounding! Jump up and down. Drop a trash can on the floor to wake everyone up. Here's the average Joe's way to millions! Just start early enough and invest something every week.)
People Story: Oseola Enjoys Life and Saves a Fortune
Students relate to people stories and will likely remember them long after your other teaching has disappeared from their minds forever. Chris King, editor/author of “Powerful Presentations,” wrote an article telling the difference between a good presenter and a great one. One of her five points is:
"Great presenters have and tell great stories. Become an excellent storyteller, and you will be ‘Great.’"
This story reinforces the idea that "if she could do it, I can do it." Make sure to generate discussion afterwards to allow the impact of the story to sink in.
Some of us might fear that we'll never have enough money to make ends meet and enjoy life. What if your job doesn't pay well and you can't seem to get ahead? I want to introduce you to Oseola, who has a lot to teach us. She didn't have the advantages of most of us, yet she enjoyed life and saved a ton.
Oseola grew up in a simple house with her grandmother, mother, and an aunt. As an eightyearold she would wash clothes after school to help make ends meet. Her school education ended at age 12, when she dropped out to care for her sick aunt and work full time at washing.
So far, she's not on anyone’s "most likely to succeed" list.
Her work was hard, but she enjoyed work. She washed the oldfashioned way: building a fire under her wash pot, then soaking, washing, and boiling a bundle of clothes. Rub. Wrench. Rub again. Starch. Hang out to dry. She worked Monday through Saturday, for 75 years, until arthritis forced her into retirement at age 86. She never got to finish school, never had a car, and owned few possessions. Her TV received only one station. But that didn't bother her, because she never watched it very much anyway.
I can hear you thinking, ''Get a life, woman!'' But, you see, Oseola did have a life, a great life. She didn't desire travel or possessions. She loved her God, her family and her work. Singing and storytelling filled her days with joy and laughter.
She never bought on credit, so that she was financially free. And since she didn't need money for a lot of possessions or travel, she invested it, a little each month. By July 1995, a half year after her retirement, she had saved  get this, $280,000  over a quarter of a million dollars! Then, she stunned the world by giving away almost half of it, $150,000, to establish a college scholarship for needy students, offering others the education she never had.
Until recently, Oseola McCarty referred to herself as a ''poor little old colored woman who walked everywhere.'' No one paid her much attention when she was out. But when the word leaked out about her donation, the world took notice.
She has since received numerous awards, been interviewed on ABC, CNN, NBC, BET and MTV. She's been featured in Newsweek, The New York Times, People, Life, Ebony, Essence, and Jet. But all that recognition never changed her simple life. You see, she didn't need all the recognition. In her own words, ''I think my secret was contentment. I was happy with what I had.'' (20)
Now compare Oseola to most Americans. Many with huge salaries in America today haven't managed to save a cent. Many are worth less than nothing, worrying constantly about their debts. But Oseola shows me that if she can save over a quarter of a million dollars by washing people's clothes in boiling water over a fire, I can save money as a schoolteacher.
Debriefing
 Do you think she lived a miserable life, or a good life?
 In what ways was she radically different than most Americans?
 What can we learn from Oseola to help us with our own finances?
Goal Sheet
I'm not here to tell you what to do with your money. That's your choice. I'm here to help you figure out how to reach your financial goals.
Why set goals? Because if you aim at nothing, you'll hit it every time.
How big should I dream? Dream big. "It's better to shoot for a star and hit a mountain peak than to aim for a mud puddle and hit it every time."
Take a blank sheet of paper and write out some financial goals, short term, medium term and long term.
By having your goals before you, this class will become very practical in helping you to achieve those goals.
(Give students a moment to write some shortterm goals, then have some people read their goals. Do the same with mediumterm and longterm goals. This crossfertilization should help everyone come up with more and better goals.)
 My ShortTerm Financial Goals (One Year or Less)
Examples: buy a pet gecko, save toward the prom, buy an IPod, save for a car
 My MediumTerm Financial Goals (Up to 10 Years)
Examples: Finance college, redecorate my bedroom so I can live at home the rest of my life, save toward buying a home
 My LongTerm Financial Goals (Life Goals)
Examples: Pay off my house by age 45, Buy a hot car, Give $1,000,000 to a cause I believe in, Retire by age 50
Companion Text
Our book, MONEY: HOW TO MAKE IT, SAVE IT, INVEST IT AND ENJOY IT!, should be out by the Fall of 2008. Over 200 pages long, it teaches personal money management through a story of four students who meet at In School Suspension and decide that they want to do better than their parents with their money. Written in a script format, good readers from your class could play the parts of each student in the book and read it in front of the the class to introduce each topic. (Check on the availability of advance copies if you want to help us test it in class. Email: webmaster@charactereducation.info)
End Notes
 Lowenstein, Buffett: The Making of An American Capitalist, New York: Main Street Books, 1995, pp. 810. The source of his drive to make money? His parents weren’t passionate about it. Perhaps he soaked it up from the Great Depression, or, as his younger sister Roberta surmised, "I think it was in his genes." (Ibid., p. 10)
 Ibid., p. 10.
 Ibid., p. 4.
 Ibid., p. 10.
 Ibid., pp. 4,16.
 "How Much is That Worth Today?" calculator, at http://eh.net/hmit/ppowerusd/
 Buffett, opt. cite., p. 20.
 Ibid., p. 23.
 Ibid., p. 24.
 Simon Reynolds, ed. Thoughts of Chairman Buffett, Harper Business, New York, NY: 1998; Roger Lowenstein, Buffett: The Making of An American Capitalist, New York: Main Street Books, 1995. (Page number?)
 www.forbes.com – Homes of the Billionaires.
 Buffett spreads the wealth, Los Angeles Times. Astonishing $30billion gift could spark a revolution in philanthropy (June 27, 2006)
 Wall Street Journal, as quoted by Dave Ramsey in The Total Money Makeover, p. 11.
 National Survey Reveals Boomers Have Unrealistic Expectations When it Comes to Retirement: They Regret How They've Saved Yet Expect a Comfortable Retirement Lifestyle. Call to Advisors: Think About Boomers' Individual Financial Needs. Oppenheimer Funds' Research Identifies Four "Retirement Savings Profiles" Among Baby Boomers NEW YORK, March 10 /PRNewswire/, survey of 401 retirees, released 3/10/05. Of 600 workers over 45 years of age, 97% said they regretted how they spent their money, seeing how much they could have saved.
 "The Facts on Saving and Investing: Excerpts from recent polls and studies highlighting the need for financial education"  Office of Investor Education and Assistance, Securities and Exchange Commission)
 "In a 1999 survey by the Consumer Federation of America and financial services firm Primerica, 40% of Americans with incomes between $25,000 and $35,000  and nearly onehalf of respondents with income of $15,000 to $25,000  thought winning the lottery would give them their retirement nest egg. Overall, 25% of respondents said that their best chance to gain $500,000 in their lifetime is via a sweepstakes or lottery win, the survey said." (From Survey: 20% say lottery is most practical path to wealth, by Andrea Coombes, MarketWatch, at www.marketwatch.com)
 See "Lottery" in the Wikipedia.
 See online calculators.
 Investment guru John Bogle predicts this in Bogle on Mutual Funds, by John C. Gogle (Dell Publishing, New York, NY: 1994), p. 18.
 Simple Wisdom for Rich Living, Oseola McCarty, Longstreet Press, Atlanta, GA, 1996. Also from Southern Living, ''The Amazing Grace of Miss McCarty,'' by Nancy DormanHickson, Feb., 1998, pp. 33, 34.)

