Personal Finance | Three Lessons I Learned From HS Economics Class

Three Lessons I Learned From HS Economics Class

Posted on December 3, 2007 |

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While I was in my senior year of High School I was required to take economics. In this class as part of our curriculum we did two interesting things:

1) We split into teams and competed against each other in computer simulations based on business. We had to figure out the price as well as budget for R&D, advertising, etc… We then wrote a collective group paper detailing what worked for our group and why based on economic principles.

2) We also had our own class-based business for the term. Our class product was little graduation stuffed animals (it was our senior year after all). We all invested a small amount and put the product together and sold it to classmates and family.

Now besides the actual economics text there were three things I learned:

If you’re not the one making decisions someone else might be that isn’t as good as you. As I mentioned we split into different teams that competed against each other and we also wrote a paper together. At first I sat back and let anyone else make decisions. This was my senior year and my mind was elsewhere. Problem with that is our group wasn’t doing well against the others. We also had the paper to write and that wasn’t doing well either. I finally woke up and took a more active part. Our team didn’t finish in first but we ended up doing much better than we started. Our paper also shaped up and we were able to complete it. Not to say I’m some economic genius or something but our team was better once I took an active role. If I didn’t take my destiny in my own hands they would be in the hands of someone else which can be a dangerous thing!

The effort you put in is what you get out. Aside from the issues I had with my group, as a class we were a business selling an item. I gotta admit, I really didn’t sell many stuffed graduation animals. A couple of them maybe (one was bought by my parents). At the end of the term our teacher split the profits evenly among all of the students. We all made more than what we invested. This got me thinking. If I had sold more or helped others sell more I would have made more money. In many ways I was responsible for how much I made.

Add a zero to it. This one is directly from our teacher and probably the one I remember the most. When we started selling many of us didn’t take it seriously since the item we were selling was so cheap (that would be me; I did mention it was senior year right?). What the teacher said was to take the amount we were looking at and add a zero to it. Did that make it worth being serious? Add two zeros. How about now? Ok, add three zeros. Five dollars turns into $5000 after three zeros. As I’ve said I didn’t put as much effort into the class as I should have but this little bit of advice stayed with me long after I left High School. Today if I’m about to buy something and tell myself “it’s only $20″ I’ll stop and throw a zero at the end. Then I think twice about spending the money. When I would look at my savings account years ago it wouldn’t look like much and I would think I would never save a significant amount. Then I would throw a zero or two at the end and feel a little better. See, those little amounts don’t look like much but they add up pretty quickly and adding a zero to those amounts makes them much more serious.

It took some time for all of this to sink into my thick head but it’s all important to me now. I take responsibility for my decisions, which are mine to make. I understand that my success is related to my effort. And I look at the small things as big things to realize their impact.

Tell me what practical advice you retained from High School!

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