The collapse of common sense

There are a handful of researchers who do not believe financial education should be offered in our schools. I am not going to dignify their research by sharing it, not because I am being obstinate, but because each financial education antagonist has one thing in common - - they do not understand K-12 education. So please pardon my indignant post, but I am sensitive to policymakers suggesting education policy who do not understand education.

The premise of the argument commonly leads with a false narrative, claiming that financial education in our country is widespread. Most commonly, research states that "44 U.S. states included 'personal finance' in their standard high school curriculum, and 34 states required that these standards be implemented." They use data from each of these 44 states for their research.

So what does this really mean?

In only 13 of the 44 states is Personal Finance required to be taken, and even more alarming is of these 13 states only 4 states require it be taken as a stand alone semester long class for graduation. Further, most states do not even require course specific teacher training. So it is analogous to...

Assigning Social Studies teachers to teach Science without any training in Science.

Having Social Studies teachers integrate Science into Social Studies.

Then reporting through research that Science classes are a waste of time because students aren't learning Science effectively.

That point aside, if financial education was being tried, as policymakers believe it should be, and still failing, does that mean we should stop trying?

Just over half the voting age population exercises their right to vote. However, nobody is suggesting we should eliminate Civics from our curriculum. A large percentage of the population is overweight, yet nobody is suggesting we should eliminate health classes from our curriculum. Financial education is a course designed to help students better understand how they can better themselves financially through their own free will. Some students choose not to make wise financial choices, but that shouldn't mean we should stop empowering them with the knowledge to make a wise choice.

There is a great deal of research domestically, and internationally, that crystalizes the case for financial education. I will save sharing it for another time. For right now, I feel compelled to elaborate on questioning the premise of the adversarial position. I fear their position could lead to the slowing of a much needed effort to grow financial education in our schools, all based on research that collapses when you question it with common sense.

Binary v Vanilla: What’s Your Option?

If you’re even remotely interested in trading shares, then you are probably already familiar with the terms ‘binary options’ and ‘vanilla options’. To put it very simply, binary options, also commonly referred to as digital options, offer two results to each transactions, while vanilla options only offer a single result. In the following, we take a closer look at these two different types of options, in order to help potential upcoming traders make up their minds as to which of the two is best suited for their trading style.

All you need to know about binary options

Perhaps the simplest way to define binary options is by their alternative name of ‘all or nothing’ options. One must also bear in mind that several types of binary options exist. The most commonly traded type is the ‘above or below’ option. In the case of these options, the owner receives the whole option value if the binary option expires with an option value either above or below its own strike price. Say you buy a binary option with a $150 payout and an underlying asset price of $70. You stand to receive the payout if that price goes above $70 at expiration. Should the option be priced at $71 at expiration, you receive the $100 in full, without subtracting $71 out of $70, as is the case with vanilla options.

When purchasing binary options, which are typically European-style options, you know right from the get-go what you’re getting yourself into. In other words, the pay-off, which comes at the end of the time-frame selected for trading is known to the buyer from the very beginning. Meanwhile, during said time-frame, the price of the options will move, either upward or downward. When trading such options, you need to think about

a) The asset you are trading - what will its price be, when the contract reaches expiry?

b) How will prices fluctuate? Are they likely to go up or down?

The advantage in trading binary options is that they come with a fixed rate (which is why they are also called FROs, or fixed rate options). This means that the percentage of the rate of return is established from the get-go. The trader is definitely going to earn something, or they will earn nothing at all.

Binary options don’t take the amplitude of price variations into account: the only factor that makes a difference is whether or not prices have moved up or down. In this sense, they are the safer choice, in the binary-vanilla comparison, since they allow for a simplified approach to risk management. That’s because binary options cannot be traded (i.e. executed) before they reach the expiry date. Of course, setting the duration of that contract comes into play, when deciding how to trade binary options. But if you play your card right, the gains can be massive: up to 85 per cent, according to our research.

Choosing binary options over vanilla is largely a matter of trading pattern. If you do decide in favor of trading binary options, you can look at the price pattern of the assets you would be trading in. Take a close look at the producer price, the consumer price and analyze their evolution, especially when trading such options in the United States. The advantage to trading in the United States is that price information for most assets is usually available – yet bear in mind that this is not always the case.

What are vanilla options?

Vanilla options pay out the difference between the price of the underlying asset and the options’ strike price. This means that, for stocks with a strike price of $50 and an expiry date within a month, options owners start seeing profits from the moment stock prices go over the strike price threshold, to which one also needs to add the premium price that was paid out when buying said vanilla options. When strike prices are lower than $50, the call for these options is underwater, or, in other words, the buyer is ‘out-of-the-money’. Reaching the mark of $50 plus premium is called the ‘break even’ point and going past that point is a ‘in-the-money’ situation. One alleged advantage of vanilla options is that they can be traded at any point (unlike binary options, which depend on the contract’s expiry date). For instance, if the buyer feels that the value of his option has increased enough, they can choose to sell for profit at any point.

Whether you opt for binary or vanilla largely depends on your selected model of trading. One model, for instance, takes into account the possibility of hedging a set of binary options whose expiry date is approaching. This would make for a complicated situation, as, under said model, it would be difficult to estimate the actual movement of the prices – and in this scenario, vanilla options are usually preferred. The main difference between binary and vanilla is that, while the former offer fixed returns, the latter are dynamic in terms of potential gain. Of course, losses also need to be considered under a different frame, as with binary you would know right from the start how much you stand to lose. With vanilla options, this becomes an uncertainty. That’s because vanilla options come with a strike price. In ‘in-the-money’ trading situations, vanilla options take the magnitude of price movement into account, in order to determine the pay-out. The trader will be receiving more than the strike price, but the actual amount depends on the difference between said strike price and the assets’ underlying price.

When trading in an ‘out-of-the-money’ situation, traders may choose to purchase binary options and then exit the out-of-the-money with vanilla options, because in such scenarios they offer the cheaper price. But such scenarios also require an increased degree of attention, as the strike price and contract expiration date must be the same on both types of options. As a matter of fact, when it comes to transitioning from out-of-the-money to in-the-money, things tend to move rather swiftly for binary options, but precisely in the reverse way for vanilla options. Another important aspect to bear in mind with respect to vanilla options is that they can be turned into stocks, if they expire in-the-money.

List Building - The Best IM Scheme

I was the most skeptical person that I know. I doubt too much, questions a lot and apprehend matters 'til analysis-paralysis devours me. But I don't blame myself for this, it's such that I don't want to be lied for that would really be a shame being a sucker. Sorry for the word.


Internet Marketing is like blue waters under the cliff. It looks so nice. You wanna jump and experience the thrill. The adrenaline rush that you feel when airborne and the moment your toe touches the waters is breathtaking.

But the problem is this: You never know what lies under the waters. Could it be a sharp concealed rock or a sea monster with mouth opened? Nobody knows. But one thing's for sure - It is truly rewarding!

Recently I signed up for a List Building campaign on 5FigureDay and I got so excited. Of all the many ways to Make Money Online, I simple chose List Building as my first income stream for solid reasons.

1. Building a list is for Long-Term.

Having a list of email addresses interested on online marketing niche is the best, by far. The list that you build provides monthly recurring income for unlimited time unlike any other MMO schemes.

2. List Building is building relationships.

When someone signed up under you, there is a responsibility to take good care of your list since this will become your long-time customer. As soon as trust is built between you and your customers, chances are they will always buy everything that you offer for them. Now that sounds really really great.

3. Easy promotion.

When you are building a list, the best way to promote to them is through Email Marketing. Simply put, it is sending emails to your subscribers every time you have some products to offer. So when your subscribers trust you enough, there is nothing to worry about. Every month there will always be buyers of any product that you promote, and that means massive affiliate income on your part. Does that make sense?

P.S. Want to try List Building for FREE - no cost, no commitment, back-out-anytime-you-want offer? Join here and I will walk with you hand in hand.

Staying Motivated

Source: Wikimedia

I've tried to create a habit where I have a 20-minute exercise everyday. It worked. For a week. It was no different with money. So, I've kind of automated myself by spending on it immediately. Spend to save and invest. My money move immediately when it comes on payday. Then, I reward myself.

I spend on things like soda, strawberry smoothie ice cream and indulge after I do something for my financial well-being. The little things I love become rewards for myself. If you've seen animal trainers giving snacks as reward for the animals after they do something, this is basically using that technique.

The final two steps is about staying motivated, moving forward, and the importance of creating a healthy habit. And so, we have finally crossed the finished line, 30 steps to a better financial future. Let's go!

Why financial literacy belongs in our schools

On Friday night I was honored to receive the William A. Forbes Public Awareness Award, made possible by the Calvin K. Kazanjian Economics Foundation to the Council for Economic Education. The award recognizes an individual who have advanced public awareness of the importance of economic and financial education.

I chose to make the most of my opportunity and advocate for the need for financial literacy. Here was my speech...

I am going to be blunt tonight, but truthful. I have mixed feelings about receiving this award. On one hand, I am deeply grateful to CEE, Nan and Mike McDowell of the Kazanjian Foundation for the recognition of my life’s passion and purpose. I am thankful to teach in Reading Community City Schools, a district who shares my passion, while being lucky enough to receive robust professional development support from Dr. Julie Heath and my local Economic Center at the University of Cincinnati. On the other hand, this award only exists because we need champions for a cause that Americans believe should be our educational duty. To be more specific, a recent Harris Survey found that "99% of U.S. Adults Support Personal Finance Teaching in High Schools", yet only four states have required it be taken as a stand-alone semester long high school graduation course. So while countries such as Russia and Great Britain are including it in compulsory education, we continue to pass hallow legislation that is absent many of the recommendations CFPB Director Cordray referenced in his speech on Thursday; that is of course if your state has passed any at all. For a country with our resources, and a culture that derives from a capitalistic spirit, this is unacceptable.

Practically speaking, if Personal Finance is not legislated as a stand-alone semester long graduation requirement taught by a trained teacher, the consistency and quality of the implementation of the course is spotty at best. Legislation should also include the K-12 integration of financial literacy concepts; the addition of personal finance questions into standardized tests; professional development for teachers that stresses learning through hands on experiences; and tools for parents to teach their children about money.

For a moment I’m going to pause and give thanks as a parent to those of you in the crowd who integrate financial literacy in the elementary and middle school grades. I am a father of two elementary children and a middle school child. My children, in particular my oldest two, are drawn to an economic and financial way of thinking. When their teachers integrate financial and economic literacy into their Math and English lessons, they better understand the Math and English content, and are further motivated to learn because it’s relevant to them. And as an educator, I am equally grateful as the concepts you are scaffolding at an early age prepare high school students to better understand the complexities of personal finance; a big thanks to each of you.

For those of you in the crowd who teach high school students, in particular 10th-12th graders, you know first-hand that we are providing a just-in-time financial education. Most of our students are making financial choices, and many have jobs; pay bills, pay taxes, have accounts at financial institutions; make car payments; pay insurance; and most importantly - - are preparing to make a student debt choice. Study after study indicates that the best time to provide financial education is when consumers are closest to making financial choices. For most 10th-12th graders, those opportunities exist now. Not only do we know it’s relevant, they know it’s relevant! For students who are neglected this education, year after year we continue to matriculate them into the University of Hard Knocks.

Before I move on, Mary Blanusa, if you would, please stand and be recognized for the tireless effort you have put into the CEE Advocacy program. 

I began by saying that I had mixed emotions about receiving tonight’s award; and a final reason is because education is a “WE” profession, not a “ME” profession. Our students can only be successful if our efforts are collective, and that includes advocating for financial literacy in our schools. So please use the Advocacy resources on the CEE website to lobby for financial education in your state. Every child deserves a financial education, and by the way, that includes special education children too.

We know young people today are facing financial distress. We know it impacts workers, and is a major factor in divorce. And we know that the 16 million American students currently living in poverty may not have voices yet, but we do. We may not be able to change the financial challenges our students face as children, but we can empower our students to tackle these challenges as adults. We owe it to all children to advocate for their financial education.

Thank you.

Go To Resource for Financial Literacy

I recently updated my comprehensive LiveBinder with a financial literacy research tab, as well as other resource additions. I put the LiveBinder together to generate one free go-to resource to help my fellow K-12 educators who are teaching or integrating financial literacy.

It includes national standards, tools and resources from various content associations and organizations, games, and content experts to follow. Be sure to click on each sub tab.

CEE Presentation 1: Tips and Tricks to Integrate Technology into Personal Finance

I presenting three times at the Council for Economic Education National Conference in Baltimore. The goals of my first presentation were:

• Share technology tips and tricks for a Personal Finance course that can be integrated into pre-existing lessons

• Share technology tips and tricks for a Personal Finance course that nudge student content understanding to appropriate financial behavior

Click here to download an overview of the presentation.