Forum Post: How to Cook Financial Meth
Posted 13 years ago on Oct. 3, 2011, 8:33 p.m. EST by desolationpress
(11)
This content is user submitted and not an official statement
After losing my job, my home and my life savings in the wake of the 2008 crash, I had to do something a little more constructive than throwing rocks through the drive-up windows of the local loan sharks (er, mortgage banks). So, I put together something that parents across the country could use to teach their kids about what was going on. It's a free, web-based essay with content for teachers called "How to Cook Financial Meth." It's intended for kids in grades 6-12, and I think it's pretty well done. Help us spread the word about how rotten a deal the banks make these days and maybe we can dry up their market.
See http://www.desolationpress.com
Use the link for "A Primer on the Mortgage Industry"
The "Teacher Resources" link points to the lesson plan, presentation materials and a sample test. It's intended for the public schools, but the home school crowd may find it useful as well. I know it wasn't easy for me to explain to my three daughters and teenage son why our lives had been upended (along with my mother-in-law, who lost the house she had lived in for forty years in the same month).
It's hard to find constructive uses for that kind of anger, but this is a start. Take the long view as well, good people.
Keep it up -- that 1% could use a lot more fear about now.
The comment below presents the lesson plan. If you have kids in 6-12, please consider asking their teacher to consider using the content of the lesson in their classroom. It's too edgy for most, but I think there are a few brave teachers who will see the value of the lesson. No Child Left Behind should have the "ganas" to cover the real fundamentals of life. You know, the stuff that doesn't fit on a scantron. Prepare every child for the economic realities.
"Date
Teacher Name
Grade Level
6-12
Lesson Title
How to Cook Financial Meth
Content Areas
Math, Social Studies, History, Economics
Abstract
Students review what a mortgage loan is, how it works, and the social impact of the recent housing bubble.
The lesson begins with a description of a mortgage loan, associated terms, and a brief history of the role of banks in home ownership.
In the second part, the mechanics of a bubble are examined, and a derivative is defined.
A brief interlude follows, with exercises designed to reveal the financial scope of a home loan. Students are asked to calculate the total payments, principal and interest paid over a six year period, the effect of appreciation, and the fair market value of an average home.
In the final part, students are asked to consider the impacts of a failed mortgage on the lives of a family, the impact of a housing bubble on a homeowner who is forced to sell, and to consider the moral and ethical issues that drive regulation efforts."