Teaching Tip:  This assignment works equally well as a written assignment and as a class discussion.  If used as a class discussion, it works well to show the video from Today Money featuring Suze Orman titled “Financial Mistakes to Avoid Right Now” which is just under 3 minutes long, then opening up the class to a discussion of the video.

The first mistake that people make that Suze points out speaks to Principle 1: The Best Protection is Knowledge.  As she notes, it’s pretty uncomfortable putting your money in a savings or checking account where you don’t earn any interest at all.  As a result, people are drawn into investments they really don’t understand – but as you should know by now, earning a 0% return is much better losing 10 or 15%.  As Suze points out, “It is better to do NOTHING than something you DO NOT UNDERSTAND”.

Suze also talks about how low interest rates draw people in to buying property they might not otherwise buy.  She also mentions TIPS which were discussed in Chapter 14 as reasonable investments.

Class Discussion

1. Watch the video “Financial Mistakes to Avoid Right Now.” Why do you think Suze recommends them?  Write a short paper on TIPS, how they work, and why you think Suze recommends them.
2. One of the popular alternatives to savings accounts among younger Americans is gold.  If you haven’t seen the MPR Planet Money video “Why Gold?” watch it.  Would you consider putting your savings into gold?  Where do you think gold prices are heading and why? Be prepared to share this with your class.