Investing has become a hot topic recently due to January’s Gamestop controversy, in which investors on Reddit drove up the value of Gamestop shares, a seemingly unremarkable video game retailer. This newfound interest in investing has also spread to younger demographics— a writer for The Union even wrote an article about his experience making tens of thousands of dollars from Gamestop stocks.
However, Mr. Michael Cummins, an AP government and psychology teacher at MHS, has been actively educating his students on investing and helping them begin their first investments for three years now, starting first with the Class of 2018.
“I was thinking that the Econ that is in the book … is just not applicable to real life. There are kids that have never had a bank account, don’t know anything about credit cards, mortgages, stocks,” Cummins said in a Zoom interview. “So, I said, ‘Students, let’s see if you can live on less money than you’re living on now. If you trust me, I would like you to hand me 10% of the money in your pocket, I will lock it up, and then I’ll give it back to you in a month. … That was the first step to prove that it’s not that difficult to put money aside and live off the rest.”
Then, he asked if students were willing to pool the money they gave him, along with his money, to buy a mutual fund, and on a spreadsheet, students could track their investment and decide to sell at any time, Cummins said. The first year, his classes invested about a total of a little over $1,000 dollars, but the next year, they invested a little over $3,300, and the class of 2020 invested $4,100, Cummins added.
“Each class has an account that I’m in charge of that they have access to, and in case I die, other teachers have this spreadsheet also. So every weekend, I log in to the spreadsheet, and I update them in a Facebook group on how much the dollar is they gave me what it’s worth now,” Cummins said. “One of them from 2018, for every dollar they gave, it’s worth $2.13; they have doubled their money since 2018. … And if they want to sell, they can sell.”
The next year, he asked if students wanted to participate in a custodial account, where he was the adult, but they invested their own money and made their own decisions to buy and sell whatever they wanted, Cummins said. About 10 students opted in, and the year after that, about 15 or 20 students participated, Cummins added.
“When they turn 18, they get power over that account, so they get to buy or sell on their own,” Cummins said. “And we still kind of talk about it today; a kid visited today from 2019 to tell me what his investments have been like since he went to college.”
The hardest thing about investing is not the math, or which company you pick, it’s all based on behavior, so being a psychology teacher is important, Cummins said. It’s helped him in his own investing, so he hopes that if students learn habits at the age of 17, they’re going to be at such an advantage at the age of 25 or 28, Cummins added.
“When all their friends are trying to get enough money together to rent an apartment, my guys will already kind of know how to start that process of putting money aside and watching it grow,” Cummins said. “It’s tough. It’s tough behaviorally to do that, especially when you’re young like you guys, why would you bother to save 100 bucks off to the side, or half of your red envelopes?”
Personal finance really should be a graduation requirement because building good money habits early on can change your entire financial future, Cummins said. Students can begin building good habits by living off of 90 percent of their money, then 80 and 70, then 60, and some people can even live off of 40 percent, Cummins added.
“Imagine being able to move to another city because you have money in the bank. Imagine being able to quit a job you hate because you have money in the bank, to leave a boyfriend or girlfriend because you have money in the bank,” Cummins said. “It’s the freedom; it’s not the things you buy, but being able to do what you want with your time that really is worth it.”