Your Money: Finance Class on the Web, for Students of All Ages

After all, there are few entirely conflict-free places where investors can educate themselves on the topic, and there’s little to no money-related guidance offered within the public school system, which is where the financial groundwork should really be laid.

Joshua Rauh, a finance professor at the Stanford Graduate School of Business, is acutely aware of that. And it’s why he felt compelled to open his graduate-level course on the finance of retirement and pensions to the masses. “My goal is to try to empower people to make better decisions about their finances with an eye toward retirement and for retirees who are thinking about managing their money,” Professor Rauh said, “whether it is buying an annuity or having a spending rule.”

The course, which is offered free online, begins on Monday. I sat for nearly half of his online video lectures — on topics like “saving for retirement” and “making smart decisions as a stock market investor” — earlier this week. Watching remotely means you won’t be party to the discussion that will emerge from the Socratic method Professor Rauh uses in his traditional classroom on campus. And there are already 13,000 students, so it’s hard to expect any personal attention.

But there’s plenty that students will take away from his lessons, which you can watch anytime after the lecture is released, much as you might watch any series on your DVR. “A person that would really benefit is someone who is 40 and realizing they really need to start putting together a plan for retirement and haven’t thought much about it,” he said, though he says he believes that it will be equally helpful for people of all ages.

There aren’t many other places to turn, particularly where it costs nothing but your time. When I informally polled financial literacy advocates, financial planners and other experts if they knew of any other comprehensive retirement courses, they couldn’t come up with any, though one person mentioned the instructional videos at Khan Academy. (If you know of any classes, please share them in the comments section online).

Without any instruction manual, “people have to be their own chief financial officer,” said Annamaria Lusardi, a financial literacy advocate and economics professor at the George Washington University School of Business, who teaches a class on personal finance. “The large majority of the population lacks the knowledge of basic but fundamental concepts, from the power of interest compounding, to the effects of inflation, to the workings of risk diversification.”

This course may be a good place to start. Each of the 10 video lectures are about 45 minutes long, but they’re broken into bite-size segments, all of which were well produced and relatively engaging. As Professor Rauh explains each concept, animated visuals and colorful graphs appear alongside him, which helps make the concepts easier to grasp.

Each lecture includes a mix of financial theory and prescriptive advice, some of which people with a reasonable base of investment knowledge may already know: actively managed mutual funds aren’t worth the money, so buy index funds. Don’t time the market. Stocks don’t become less risky the longer you hold them.

But the illustrations that accompany the advice — how retiring in 2009, for instance, would have resulted in a nest egg 28 percent smaller than one resulting by retiring in 2012 — are instructive. “It’s not a rocket science idea, but people don’t see it without having it illustrated for them,” Professor Rauh said.

All of the lessons are rooted in what he calls “the economist’s view” of personal finance, which is built on the idea that there are no free lunches in financial markets, and that you can generate potentially higher returns only if you take substantial risk as well. It’s a message woven through his lectures. At times, it almost seems as if there should be a red blinking sign behind Professor Rauh that reads, “Proceed with caution. Stocks ahead!”

He clearly wants the lesson to linger long after you leave his virtual classroom and find yourself in a commission-based stockbroker’s office. “Too often, people just budget on the basis of an ‘expected return’ on their assets without thinking about the range of possible outcomes,” he explained.

He also explains why economists also believe that more people — not all, but more — should buy annuities. Not the high-priced complex contraptions sold to unwitting seniors, but the plain-vanilla immediate annuities, where you pay a giant pile of cash to an insurance company in exchange for a guaranteed stream of income for life.

Advertising: Air Force Asks Students to Solve Real-World Problems

THE Air Force, as part of its recruitment efforts, is approaching young people for help in solving real-world technological problems using a collaborative online platform.

The initiative, which will be introduced on Thursday, will create a digital program called the Air Force Collaboratory, in which young people will be challenged to develop technologies for search-and-rescue operations in collapsed structures; to create software code for a quadrotor, a type of unmanned, aerial vehicle; and to determine where to place the newest GPS satellite.

The Air Force hopes the program will attract students in so-called STEM subjects — science, technology, engineering and mathematics — to work with its airmen on developing solutions for the three challenges, and, ideally, consider enlisting.

The initiative — which the Air Force will promote through digital advertising, social media and partnerships with groups like Discovery Education — is the latest recruiting effort created for the Air Force by GSD&M, an agency based in Austin, Tex., that is part of the Omnicom Group.

GSD&M has been the Air Force’s agency since 2001, developing campaigns to help it attract the over 28,000 recruits it needs annually; the agency said its work had helped the Air Force meet its recruiting goals each year.

GSD&M’s recruiting strategy for the Air Force — which has always sought tech-savvy candidates — previously featured an “Airman Challenge” online video game. A separate campaign included television spots whose theme was, “It’s not science fiction.”

Col. Marcus Johnson, chief of the strategic marketing division of the Air Force Recruiting Service, said the Air Force focused on “going after the best and brightest young men and women, with an emphasis on the STEM subjects. Whether they’re in high school or college, those topics translate into what we do in the Air Force.”

He said the collaboratory program was meant to appeal to men and women ages 16 to 24, including high school students still determining their future plans.

Ryan Carroll, a creative director at GSD&M, said the Air Force was “very much like the Apples and Googles of the world in recognizing the huge need for scientists and engineers. They reach out to kids at an early age and show them the amazing things they can do with science and technology.” He pointed to initiatives like the Google Science Fair, an online, annual, global science competition for teenagers, as an example.

Similarly, the collaboratory program aims to “inspire the next generation of scientists, engineers, technologists and mathematicians, and to show them all the amazing, science-related things the Air Force does,” Mr. Carroll said. The program will also allow students to “participate and solve real problems the Air Force solves every day,” he added.

Young people will be able to learn more about the initiative’s challenges at the Web site airforce.com/collaboratory, which will act as a forum. Challenge participants will be able to use custom-built tools to share ideas and work with airmen and other experts to develop solutions.

Not surprisingly, digital media will primarily be used to promote the program. Custom editorial content is being developed for the STEM hub of Good.com, a global community of “pragmatic idealists,” while custom videos are being filmed for DNews, an online video series from Discovery Communications; the videos will feature the DNews hosts Trace Dominguez and Anthony Carboni. The technology network Technorati is asking bloggers to create custom posts on the collaboratory and related subjects, while the Air Force will pay to place videos on Web sites like YouTube, Blip and Machinima. In addition, the Air Force will promote the initiative on Facebook and Twitter.

Digital banner advertising will run on the Web sites of Scientific American, Popular Science and The Verge. One set of ads depicts an Air Force helicopter approaching a scene of destruction after a 7.0-magnitude earthquake that has trapped dozens of survivors. The copy reads, “Your idea could save them. The Air Force Collaboratory. Search and rescue 2.0 is now open. Start collaborating.”

The Air Force also is working with Discovery Education, a division of Discovery Communications, on an outreach program for high school science and math teachers.

Colonel Johnson said that although the collaboratory would run through November, new challenges could be created after that. In addition, he said the Web site would carry no overt recruiting messages, nor would the Air Force actively recruit challenge participants, since the initiative was meant to raise interest in the Air Force and possibly encourage participants to seek out more information about opportunities there.

The budget for the campaign is $3.7 million.

Diane H. Mazur, a former Air Force officer, professor emeritus of law at the University of Florida and author of “A More Perfect Military: How the Constitution Can Make Our Military Stronger,” said that although the collaboratory concept was “good, it’s not sophisticated to the degree it needs to be to attract the people they think they want to get.” She added, “This is a good direction if you do it well.”

David R. Segal, a professor of sociology at the University of Maryland who specializes in military sociology, said that while recruiting high school students to “work in military laboratories on military problems” was not new, “what seems new is having interns work online with Air Force scientists.”

“I think they will certainly recruit a good number of high school students interested in science, engineering, technology and math to work on the problems identified. That part is easy,” he said. “Recruiting the same people then to come into the Air Force as enlisted men and women might be more difficult. They are likely to want to go to college.”

As a result, he said, the collaboratory would probably be more successful recruiting Air Force Reserve Officers Training Corps students than airmen.

The Judiciary Is Afloat in Stormy Seas, Circuit Judge Tells Law Students

The judiciary is often referred to as the "third branch" of the federal government. But U.S. Court of Appeals Judge D. Brooks Smith of the Third Circuit, in a speech to Penn Law students this week, retold a joke told by one newly elected member of the House that would have given the federal courts a demotion.

Law School Offers A Second Chance to Rejected Students

One law school is giving applicants who don't make the initial admissions cut a second chance to prove they have what it takes. And it's doing it for free.

Economic View: Students Ponder the Economics of Everyday Life

WHY do tickets to popular Broadway shows command premium prices, while movie theaters charge the same price for popular films as for clunkers? Things in high demand generally command higher prices, so why not blockbuster films?

This question came from Peter Hlawitschka in an “Economic Naturalist” writing assignment for my economics course at Cornell’s Johnson Graduate School of Management. For years now, I’ve asked students like Mr. Hlawitschka to pose an interesting question based on something they have observed or experienced, and then employ basic economic principles in an attempt to answer it. Don’t try to submit a finished research study, I tell them. Just look around for something that seems puzzling and try to construct a plausible explanation suitable for future testing.

Mr. Hlawitschka began by noting an important difference in the cost of delivering movies and plays. Once a film has been produced, the cost of each additional showing is relatively low — basically, just the theater rental and wages for the box office clerk, projectionist and ushers. For a play, there are not only those costs, but also the entire cost of staging the production — cast, crew and others — for each performance.

Charging the same price as for less popular plays would make it impossible to accommodate everyone who wants to see a big hit. Far better would be to ration scarce seating by charging a premium price. With a popular movie, by contrast, additional copies can be made at minimal cost, and large audiences can be accommodated by showing it many times a day on multiple screens. By keeping prices low, theater owners can fill many more seats and generate far more revenue than they could by charging premium prices at a more limited number of screenings.

Mr. Hlawitschka’s surmises would need to be empirically proved. But the thought behind them is just what this writing assignment was intended to elicit.

The assignment is my response to the distressing finding that six months after having completed a standard introductory economics course, students are no better able to answer questions about basic economic principles than others who have never even taken economics. In standard courses, hundreds of concepts — many of them embedded in complex equations and graphs — often seem to go by in a blur. In contrast, grappling with questions that students care about appears to be a far more effective learning strategy. And that’s in no small part because the problems they pinpoint are so intriguing.

For example, another student, Chris Kissane, observed that motorists who receive costly speeding tickets are typically granted large fine reductions just for appearing in court, even when they offer no evidence of mitigating circumstances. Why, he wondered, should a brief court appearance cut a speeding fine by two-thirds or more?

He began by suggesting that the challenge of local governments is to devise an incentive system that deters high-income motorists from speeding without imposing crushing economic burdens on drivers with lower incomes. Noting that means-tested fines would probably be unlawful, he proposed that governments may simply be employing the familiar retailer’s strategy of making price discounts available to potential customers who wouldn’t buy without them.

Many sellers, for example, offer substantial price breaks to buyers who mail in a rebate coupon. That strategy works because most buyers who are willing and able to pay high prices won’t bother to jump that hurdle. Having to appear in court, Mr. Kissane argued, is a similarly effective hurdle because the high value of a wealthy motorist’s time would make it irrational to lose several hours in court just to save a few hundred dollars. But those who work for low wages or are retired, unemployed or still in school would regard that same savings as ample compensation for a brief court appearance.

It’s fun to watch the learning process unfold during the semester. The week before their first paper is due at midterm, students often ask whether the questions they have in mind are sufficiently interesting. Frequently, I tell them they’ve still got several more days and might want to think a little longer. But when students come by late in the term, before the second paper is due, they’re more likely to be having trouble choosing among several interesting options. A common query is: “Professor Frank, can I do a medley?” Between midterm and term’s end, their brains have somehow become rewired to see the world differently.

HERE’S a final example, this one by Justin Barclay: “Why do airlines now offer deep discounts to travelers who are willing to let someone else choose their destination?” Travelers who visit GetGoing.com and choose the dates they want to travel to either of two cities are offered discounts of up to 40 percent off published fares. Once they’ve paid, GetGoing chooses one of the cities at random, and the deal is done.

This practice, Mr. Barclay argued, is an effective way of targeting discounts to leisure travelers, who are more price-sensitive than business travelers. If you’re traveling on business, you can hardly allow your destination to be determined by a coin flip.

Studying biology enables people to observe and marvel at many details of natural environments that otherwise would have escaped notice. In much the same way, mastering a few basic economic principles can cast the mundane details of ordinary existence in a sharp new light.

On the basis of e-mails from former students over the years, I’ve concluded that the Economic Naturalist assignment was an effective response to my concern about the ineffectiveness of traditional introductory courses. Once students discover how costs and benefits shape everyday experience, their mastery of economic principles doesn’t decay over time; it grows stronger.

Robert H. Frank is an economics professor at the Johnson Graduate School of Management at Cornell University.

Some Schools Urge Students to Bring Their Own Technology

Officials at the schools say the students’ own devices are the simplest way to use a new generation of learning apps that can, for example, teach them math, test them with quizzes and enable them to share and comment on each other’s essays.

Advocates of this new trend, called B.Y.O.T. for bring your own technology, say there is another advantage: it saves money for schools short of cash.

Some large school districts in Central Florida and near Houston and Atlanta have already signed on, and they are fielding calls and providing tours to administrators from hundreds of other districts that are considering whether to follow their lead.

But B.Y.O.T. has many skeptics, even among people who otherwise see benefits of using more technology in classrooms.

“The schools are hoping, hoping there’s going to be a for-free solution because they don’t have any money,” said Elliot Soloway, a computer science professor at the University of Michigan who consults with many school districts about the use of computers to promote learning.

“If you look at initiatives in public education, this has the momentum.”

But Mr. Soloway also said he was “frightened” by the notion of schools using B.Y.O.T. as a quick budget fix because there was no evidence that a classroom full of students using different personal devices would enhance learning. Roy Pea, a professor of learning sciences at Stanford University, also has doubts. He is the co-author of a White House-backed National Educational Technology Plan published in 2011 that advocates for technology-centric classrooms.

But he said the B.Y.O.T. approach could be counterproductive if teachers were forced to build lessons around different devices — in effect, subverting curriculum to technology.

“Why are they so happy to have these devices when just a few years ago they didn’t want them in the classroom?” Dr. Pea asked about school administrators.

The Volusia County School District in Central Florida, bordering Daytona Beach, is one of the places that used to have signs around its schools that admonished students: no cellphones allowed. But the signs have been replaced over the last two years with new ones that read: B.Y.O.T.

Volusia school officials say that they realized they should take advantage of, rather than fight, students’ deep connections with their devices. At the same time, the district found that the cost of providing and maintaining computers for students was becoming prohibitive.

Since the change, Volusia officials say, they have not encountered many tech support problems or complaints from teachers. Rather, students are more engaged, they say, and the only problem that regularly crops up is that students forget to charge the batteries in their devices.

“It’s almost like bringing your homework,” said Jessica Levene, manager of learning technologies for the Volusia district, where 21 of 70 schools are using B.Y.O.T. “Make sure you have your device and that it’s charged.”

She conceded that students could text each other more easily now but said the school was keeping them busy on their devices. And while district administrators worried initially that poorer students would not own devices, they discovered something of “an inverse relationship” between family income and the sophistication of their devices, particularly smartphones, said Don Boulware, the district’s director of technology services.

At Woodward Avenue Elementary School in the Volusia district, fifth-grade teacher Dana Zacharko said her students tended to bring in smartphones or iPod Touches. She said she had found apps that allowed her to teach all kinds of subjects.

The Judiciary Is Afloat in Stormy Seas, Circuit Judge Tells Law Students

The judiciary is often referred to as the "third branch" of the federal government. But U.S. Court of Appeals Judge D. Brooks Smith of the Third Circuit, in a speech to Penn Law students this week, retold a joke told by one newly elected member of the House that would have given the federal courts a demotion.

Degrees of Debt: Colleges’ Debt Falls on Students After Construction Binges

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