Created By: Texas GEAR UP
Grade Level: 7th/8th
Introduction for Educators: What’s the biggest investment you've ever made? A car? A house? Your students have never made such an investment. But in the future, they'll have to make a very expensive investment in college.
By teaching students the concept of ROI—return on investment—you’ll give them the understanding they need to calculate the investment of college.
Introduction for Students: Perhaps you’ve heard the phrase rule of thumb—a useful idea or phrase that helps to understand a topic. One popular rule of thumb in business is that “you have to spend money to make money." There’s a technical name for this, as well—return on investment (or ROI).
So why should you spend money on college? According to the principle of ROI, you have to spend it now to make it later.
The Activity: Did you know that college graduates earn $1 million more in a lifetime than those with only a high school diploma? Have your students share that fact with a friend and ask them to discuss what they would do with an extra million dollars.
Then, have students get hands-on with ROI. Encourage them to make some money in their neighborhood, perhaps through babysitting, mowing lawns or walking dogs. Direct students to keep track of any investments they make. Then perform the ROI formula:
(Return – Investment)
What was the students’ return on investment?Bonus Features: Ask your students if they think successful people are just lucky that they made wise investments and are getting a return on them.