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WHAT WORKS IN EDUCATION The George Lucas Educational Foundation

Kids Invest in Funds -- and Their Own Future

At Chicago's Ariel Community Academy, students in grades K-8 hone math skills and learn practical, lifelong lessons in finance by managing a $20,000 class stock portfolio. Visit our 2012 package about this school.
Transcript

Kids Invest in Funds -- and Their Own Future (Transcript)

Connie Moran: Our goal today is to figure out if we are going to buy, sell or hold the security that we've already purchased in the portfolio.

Narrator: Many teachers use fictional stock portfolios to help students hone math skills.

Connie Moran: You bought Disney at thirty-five dollars and fourteen cents. Where is it now?

Narrator: But at the Ariel Community Academy on Chicago's South Side, students have a vested interest in learning because they're risking real money.

Connie Moran: What are our options?

Narrator: Lots of it.

Student: I say hold because this one went up a dollar and now it may go up even more in another period of time.

Narrator: Each Ariel class receives an endowment of 20,000 dollars which they begin to actively manage in sixth grade.

James: I'll say hold it because you sell it right now all you're doing is making basically like a dollar profit.

Narrator: When they graduate eighth grade the class donates half of their profits to charity. Each student receives an equal share of the remaining profits, usually just over 100 dollars to invest on their own.

James: The money I make with investments, I will put that towards some the college tuition and all that because I know that's very expensive, laptops, books, classes.

Narrator: This unique public school private business partnership was created by financier John Rogers.

John W. Rogers: What would be the reason to buy a stock after it's going down a lot like that?

Narrator: And Chicago's schools' Chief, Arne Duncan.

Arne Duncan: Ariel was how I got my start in public education. I ran John Rogers' nonprofit the Ariel Foundation for about six years starting in 1992. And in 1995 we were young and dumb enough to think that we could create a great public school.

Student: So let the stock grow and then you can sell it and make more money.

John W. Rogers: We think by exposing our African American boys and girls to the stock market at an early age it's really helping to enhance their math skills.

Narrator: Ariel's test scores have soared over the past five years with 88 percent of the students exceeding state standards in math.

John W. Rogers: If you think about it, if you're picking stocks or having to understand about growth rates and percentage growth rates year over year and quarter by quarter there's just so much math involved. And so I think it's just natural for our kids to be doing so well now that they've been exposed to the markets over a long period of time.

Mariah Sheriff: Can someone tell me what's their decision?

Narrator: Exposure to the financial literacy curriculum starts in kindergarten and echoes across every subject in every grade.

Student: It would have an opportunity cost to go to circusland or buy a new TV.

Mariah Sheriff: Very good, can you say that big, big word you just used again?

Student: Opportunity cost.

Mariah Sheriff: Opportunity cost and that's what we have when we have a decision to make, right?

Teachers always look for the real world application of their curriculum and I don’t ever have to do that. It's never a search for why this is going to apply? It's just a matter of making it so engaging that they will take it home and talk about it.

And what is it called when you put money in your bank?

Everybody: Deposit.

Mariah Sheriff: I'm going to teach personal finance. I'm going to teach investments and in seventh grade we talk about international trade and we talk about foreign exchange market and how that's a thriving market that our kids might be involved in.

Student: One of the negatives is that they probably have some more competition.

Connie Moran: They're just not regurgitating a set of vocabulary words. They actually are looking out into their community and trying to understand their place in it and processing that information.

James: Yeah, plus they global because they got Hong Kong Disney, they got California Disneyland.

Connie Moran: There are some students in the classroom that are saying "You know I want to be an entrepreneur one day."

Humu: Before I took this class I said I wanted to be a doctor. Then I wanted to be a nurse, then I wanted to be this, a brain surgeon, but since, after a while I see that this is my favorite class. I like picking stocks and working for myself so instead of working for somebody else I would like to be an entrepreneur.

Raven: And my business is called Bling Things. I put rhinestones on accessories and electronics.

Narrator: As a culminating activity eighth graders apply what they've learned about marketing, income projections, and other aspects of creating a business by writing and presenting business plans.

Student: My market segment was we target the 70 percent of gamers who request professional aid when gaming. Our target customer was any gamer holding a vested interest in mastering the games they owned.

Teacher: Okay now both plans are pretty good. But the end all of both business plans must be the return on investments.

Judith K. Shelton: This curriculum is not just about investing. It's also about a long-term partnership on the part of a company in the immediate lives of children and families.

Woman: So how was your day today, guys?

Student: Good.

Judith K. Shelton: There are values of that company that children themselves have seen: the idea of honest enterprise, the idea of looking for an opportunity to change and benefit one's self.

Matthew Yale: Ariel is a very unique place to work. We have people who really are committed to more than just their day-to-day jobs. Employees are here at the building tutoring, planning the garden, any type of project that needs to be done so we have between 20 and 25 employees who are helping out in the school.

What stock did you pick? I forgot.

Student: I picked Sony.

Matthew Yale: Yeah, why?

Student: Because I looked at Sony's competitor which was [Inaudible].

Matthew Yale: Okay.

It's an extraordinary opportunity to really be making a difference in the public education system.

John W. Rogers: So you want to walk on through now.

Narrator: At the end of the year Ariel students visited the corporate headquarters of McDonalds to mingle with other shareholders and executives at the company's annual meeting.

John W. Rogers: And without further ado, Don Thompson, President of McDonalds, U.S.A.

Every year we try to have one of the [inaudible] African American executives come in and talk with the kids and hopefully be a role model for the kind of successful business people they can emulate.

Don Thompson: When I was your age, I didn't even know what a stock was. Let alone to be able to get some education and begin to understand business. And so I'm impressed with what you all do. I hope you know that what you are doing is very special. I wanted to take a couple of minutes to open it up, answer any questions you have you could ask me.

Student: Do you pick stocks? If so, what type?

Don Thompson: First of all, I'm jealous, see. I don't have nearly the knowledge you all have about the market. I don't study it the same way you do.

This kind of education sets them up for the business world. It sets them up for international ventures. It helps them become more rounded and they create aspirations within themselves to do something so great that many of us could never even imagine it.

Student: Was it hard to become what you are now?

Don Thompson: Is it hard? It's only as hard as you make it if you're not focused on today. Be focused on being the best you can today. Everything else takes care of itself.

Narrator: For more information on what works in public education go to edutopia.org.

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Credits

Video Credits

Produced, Written, and Directed by

  • Ken Ellis

Associate Producer:

  • Amy Erin Borovoy

Editor:

  • Karen Sutherland

Camera Crew:

  • Rob Weller
  • Bennett Spencer

Narrator:

  • Kris Welch

Original Music:

  • Ed Bogas

Additional Footage Courtesy of

  • Ariel Capital Management

Schools That Work: Financial Literacy

Learn more about Ariel's financial literacy program in the full Schools That Work package where you'll find a 2012 video and article update, free resources, and research findings on the effective strategies used at Ariel.

Editor's Note: Since this video was filmed, Arne Duncan, former CEO of the Chicago Public Schools, has moved on to become the U.S. secretary of education under President Obama. Matthew Yale is now Duncan's deputy chief of staff.

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