March 28, 2024

13-year-old Emily Ryder’s Investing Advice Makes Her National Winner of SIFMA Foundation’s Spring 2016 InvestWrite® Competition

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Smarter than a seventh grader? Think again!
Ryder’s Winning Investment Advice Astonishes

Rumford, RI, June 20, 2016– Developing a winning investment strategy has earned a 13-year-old from Rumford Rhode Island more than a bright future. It has also made her the national winner of the SIFMA Foundation’s Spring 2016 InvestWrite® competition. Emily Ryder, a 7th-grader at St. Margaret School, won fifth place nationally in the middle school division of InvestWrite. The program challenges students to consider an investing scenario and make recommendations that incorporate short- and long-term financial goals.

“Emily’s excellent advice for long-term investing earned her the SIFMA Foundation’s ‘InvestWrite Genius’ title this semester,” said Melanie Mortimer, President of the SIFMA Foundation. “We commend Emily and praise her teacher, Laura Doliber, for bringing personal finance into the classroom with The Stock Market Game and InvestWrite. Studies have shown these programs raise students’ scores significantly on math, economics and personal finance tests and prepare them for life’s financial decisions.”

InvestWrite serves as a culminating activity for 600,000 4th-12th graders nationwide who compete each year in the SIFMA Foundation’s Stock Market Game™, an online simulation of the global capital markets that reinforces STEM learning, 21st Century skills, economics, investing and personal finance. Since InvestWrite’s inception in 2004, almost 188,000 students have submitted essays. Emily Ryder is among 20,000 students this school year taking the InvestWrite challenge, which bridges classroom learning in mathematics, social studies, and language arts with the practical research and knowledge required for long-term personal financial planning.

The Spring 2016 InvestWrite essay challenged students with a long-term investment scenario and asked them to consider potential risks and recommend the best way to invest and save over the course of the next seven years. The students were asked to compare interest rates on savings accounts with expected rates of returns on stocks, bonds or mutual funds. Ryder said in her essay, “…Consider investing in an index fund, or an ETF, Exchange Traded Fund. These funds look to match the performance of an individual market," writes Ryder. "They are a group of stocks that are carefully chosen by professionals, for their performance over time, and their growth potential. Index funds or ETFs are low-risk but can perform well over time.”

InvestWrite enables students like Ryder to develop the personal financial savvy needed to make practical financial decisions with confidence and gain a deeper understanding of economic opportunities, consequences, and benefits. Students consider real-world events and news, conduct research online, and develop investment recommendations. They work in groups during the Stock Market Game program and then write their InvestWrite essays individually to reflect their critical thinking, analysis and creative talents.

In addition to writing an award-winning essay, Emily plays softball, participates in fencing, won first place for her National History Day display, and was recently cast in the school production of “Willy Wonka." Her teacher Laura Doliber is the Math Club coach, student council advisor, and was named Behring Teacher of the Year in 2012.

Winning InvestWrite essays are chosen through rigorous judging by thousands of teachers and industry professionals who evaluate students’ understanding of long-term investing, diversification, the capital markets, and factors that drive investments as well as their expression of investment ideas in essay form.

An independent study by Learning Point Associates found that students who participated in the SIFMA Foundation’s Stock Market Game scored significantly higher on mathematics and financial literacy tests than their peers who did not participate. They also found that teachers who taught The Stock Market Game reported that the program motivated them to better plan for their own financial futures. The Stock Market Game has been named the only program that successfully increased scores on the Jumpstart Coalition’s test of high school students’ financial literacy.

Ryder and Doliber will be honored at an event to be held at St. Margaret School, 42 Bishop Avenue, Rumford, RI at 11:00 AM ET on June 20, 2016.

Winning Essay by Emily Ryder: Billy’s Investments

Billy's aunt has offered to give Billy her 2007 Ford Mustang Shelby GT500 convertible as an early college gift, if he can save $2,000 in seven years. Billy is in seventh grade now.
Billy has a lawn mowing business now. Let's say he has three customers and each of them needs their lawn cut twice per month and he charges $15 per cut. His business is only open for two months in the summer. That means that over the course of a month, Billy makes $90 per month, $180 per year. Over seven years, Billy will only make $1,260. Which is $740 short of his goal.
Billy could put his money into a savings account, but, according to the rate at TD Bank North, .00041 yearly’s that will only increase his total by $2.07. A savings account is not going to help Billy's money grow to $2,000. He should consider investing his money.
I think that Billy should consider investing in an index fund, or an ETF, Exchange Traded Fund. These funds look to match the performance of an individual market. They are a group of stocks that are carefully chosen by professionals, for their performance over time, and their growth potential. Index funds or ETFs are low-risk but can perform well over time. They are popular for their tax efficiency (no capital gains taxes because it’s not traded often) and low fees. They are referred to as passive funds, they are not actively traded, but watched. This means they are low cost and most of the interest earned will go to Billy.
Billy can use a brokerage, like E*Trade, Schwab, Ameritrade, Zecco or Scottrade. This is a very easy way of investing - you can sign up online, provide checking account information and start buying. The down side to using a brokerage is each time you buy or sell a stock, you have to pay a transaction fee. A transaction fee is when you pay the brokerage's fees and you also have to pay the fees for the company that sets up the mutual fund. Almost every brokerage does this, except Zecco.
To buy shares of an index fund, Billy is going to need the help of his parents, and a computer. He can visit Scottrade with his parents and set up a Custodial Account. This is necessary because Billy is not able to do this on his own because of his age. He needs his parents’ permission and their check to pay the Scottrade agent.
Scottrade sells a Vanguard S&P 500 Growth Index Fund ETF (VOOG). Over the last five years this fund has grown steadily. On April 1, 2011 VOOG traded at $60.92. On April 1, 2016 the same share was trading at $99.44. This is growth of $38.52 per share. Or, to put it another way, the shares have over time increased their value by 63.23%. The average growth over five years for this fund is 12.64%.
In a savings account Billy's $1260 earned $2.07, or $.29 per year. In this Vanguard fund, VOOG, Billy's first $100 invested would earn him an average of $12.64 in its first year. As long as Billy continues to work, and invests his earnings regularly his same contributions could earn $826.29 in seven years’ time. The $1260 he earns, plus $826.29 in interest would give him $2086.29 in seven years (based on receiving 12.64% interest annually). Billy would then have the $2,000 for his aunt. The remaining money will probably cover the taxes he has to pay on his profits when he sells the shares. He might even have enough money to put a full tank of gas in his car!
Of course, this strategy depends on the performance of the fund I selected. To meet his investment goals, Billy should think of how he can insure that he gets the results he is looking for by earning more money. I think Billy should look to expand his business. He needs to find more ways of earning extra money. He could look to find more business by putting up fliers and ask his customers to spread the good word of the job he has done. He could also offer lawn clean up to make his business season longer. The more money Billy earns, and the more he contributes to his fund, the more he will make over time. It's important that he start investing TODAY with the money he has and to have a plan for the money he earns.

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