UNIT 2 “Planting" Money
There is an old joke about the conflicting ideas on money: One person remarks, "Money is the root of all evil," and his friend responds, "I know, I've been rooting for it all my life." What is your view?
A. The following words and phrases will appear in this unit. Listen carefully and study the definitions.
1. worse off: poorer or in a more difficult situation
2. better off: having more money than you had in the past or more money than most other people
3. inherit: to receive (money, a house, etc.) from someone after he/she has died
4. budget: n. a plan to show how much money a person or organization will
earn and how much they will need or be able to spend v. to save money in a planned way
5. allowance: pocket money
6. piggy bank: a small container, sometimes in the shape of a pig, which is used by children for saving money
7. passbook: a small book recording the amount of money you pay in or take out of a savings account at a bank or building society
8. portfolio: a collection of company shares and other investments that are owned by a particular person or organization
9. annual return: the amount or rate of income that an investment makes in a year
10. paycheck: the amount of money that you earn in your job
11. lottery: a game, often organized by the state or a charity in order to make money, in which tickets with numbers are sold to people who then have a chance of winning a prize if their number is chosen
Part I B
You are going to hear some people giving their opinions about wealth and poverty. What would you reply to these people? (This is an open-ended question.)
Audioscript:
Narrator: What would you reply to these people?
Alan: Well, as I see it, millions of people in the world are worse off than us, but there's nothing we can do about it.
Woman: I'd say that if you do have plenty of money, there's no point in spending it on private education for your children.
Man: It seems to me that the only way to help the poor in the world is to find ways of helping them to help themselves.... er ... not ... by ... er... giving them free food.
Woman: If you ask me, taxes for rich people should be really high — 95% or something — so that everyone is at the same economic level.
Man: Er ... in my view it ... it's worth making a lot of money ... er ... so that you can leave it to your children when you die.
Man: Don't you agree that if people are starving or have nowhere to live, it's the duty of better off people to give them food and shelter?
Woman: Look, let's face it, there's only one reason why people work and that's to make as much money as possible.
Man: Surely, as long as you've got enough to live on, there's no point in making more and more money.
Woman: If you're earning a good salary, surely you should save as much as you can for a rainy day.
Man: I must say that one thing is certain: money doesn't buy happiness.
Part I C
You are going to hear ten short conversations. Pay special attention to the second speaker in each conversation who reacts to the first speaker s opinion. Listen carefully to the tone of voice. Tick all the proper boxes to indicate the second speaker s response.
Audioscript:
Narrator: You’ll hear some people reacting to various opinions —decide if they are agreeing or disagreeing with the opinions expressed. Pay attention to the tone of voice they use. 1. Woman: Aren’t you glad you’re not a millionaire?
Man: Sure!
2. Man: Don’t you wish you could afford to spend your holidays in the Caribbean?
Woman: Mm, ye-es.
3. Woman: It’s not worth saving your money, it’s better to spend it.
Man: Oh, sure!
4. Man: It’s better to be happy than rich.
Woman: Hmm.
5. Woman: Well, basically, in a job the most important thing is how much you earn.
Man: Oh, yes!
6. Man: It’s really important to save a little money every month —you never know when you might need it.
Woman: I don’t know about that!
7. Man: The only way to survive on a tight budget is to keep a record of all your expenses.
Man: I don’t know about that!
8. Woman: Children these days get far too much pocket money.
Woman: Mmm!
9. Woman: In a family it should be the mother that controls the budget.
Woman: Yes!
10. Man: If I inherited a lot of money it wouldn’t change my life at all.
Man: Oh, yes!
Part II National Teach Children to Save Day
As a kid, he probably spends all the money he gets as fast as he can. By doing this, he also gets a 0% return on his money. However, some of the kids are already saving their money in a bank. Then they are ahead of others.
A.Listen to the report. Supply the missing information.
National Teach Children to Save Day
Subjects: elementary school children across the country
Time: Thursday, April 17
Sponsor: American Bankers Association Educational Foundation
Purpose: teaching children how to save money
Way of teaching: 2500 bankers making 5000 presentations
B. Now listen again. The following are some of the tips for parents to foster the savings habit in their children. Match Column A (Purpose) with Column B (How to do).
Match column A with column B: 4,3,2,1
Audioscript:
On Thursday, April 17th, "National Teach Children to Save Day", 2,500 bankers will make 5,000 presentations in elementary school classrooms across the country to teach children how to save money.
"Bankers are committed to investing in the future of children because we want them to be able to make smart financial decisions throughout their lifetime," said American Bankers Association Executive Vice President Donald G. Ogilvie, "Education and money management skills are keys to a better life."
The ABA Education Foundation declared "National Teach Children to Save Day" as a way to show banking industry support for teaching children money management skills and encouraging them to save money for the future.
The Foundation coordinated a great effort with state bankers associations to encourage bankers to participate in "National Teach Children to Save Day". It also prepared a resource kit with tools to help bankers make presentations in classrooms. More than 125,000 students will be part of this national initiative.
The ABA Education Foundation also offers tips for parents to foster the savings habit in their children:
?Give them an allowance with the understanding that part of it goes into their own savings —a first step towards learning to budget.
?To make their savings visible and real, have them build up savings in a piggy bank. Then help them open their own bank savings account, and have them make deposits each month.
?Use their monthly statements, or the record in their savings passbooks, to show them how their money is multiplying.
?For every dollar your children earn, encourage them to spend 25 cents on what they want or need now, put 25 cents away for a bigger-item purchase later and save or invest the rest. (That's a 50% savings rate!)
?Make savings and investing fun. Give your children play money to "invest" in stocks they can track in local newspapers. If the stocks go up, pay them in more play money; if the stocks decline, they pay you.
Part III Safe Investing
Imagine that you have won a large sum of money in a contest. Some of it you decide to spend, but you also want to invest a part for your financial future and retirement. What would be the best way to invest your money for these time periods: six months, two years, 10 years, 15 years, and 30 years?
A. Listen to a news report about safe investing and answer the questions.
1. What is the first guideline to smart investing?
A. Developing a savings plan.
B. Setting up a bank account.
C. Setting clear investing goals.
2. What is a "diversified portfolio" of investments according to Mr. Boros?
A. A wide selection of investments.
B. A limited range of growth stocks.
C. A group of low risk bonds and securities.
3. Which kind of investment was NOT mentioned by Mr. Boros?
A. Mutual funds.
B. Bonds.
C. Certificate of deposits.
4. What is the third guideline to smart investing?
A. Investing in the New York Stock Exchange.
B. Developing a practical attitude towards gains.
C. Saving at least 11 % of earnings a year.
5. People should invest long term because:
A. The market has both up and down years.
B. You can earn bigger guaranteed returns.
C. 30% returns can be achieved with the right stocks.
Reference 1-5 CACBA
Audioscript
Hi, I’m George Boros. Have you always wanted to invest, but didn’t know where to get started? We’re here today to present you with three basic guidelines to smart investing, for your future.
Number one is to have clear goals. Decide how many years you will invest for, and what your needs will be in the future.
Number two is to understand the range of possibilities. You’ll want a diversified portfolio: one with a mix of stocks, mutual funds, bonds, and cash. It’s a jungle out there. Each of these products has different risks associated with them and also different potential rewards. Understand them before you buy, so there won’t be any big surprises later.
Finally, number three is to have realistic expectations. As our friend Leonardo da Vinci said in the year 1500: “He who wishes to be rich in a day will be hanged in a year.”
Over the past several years, New York stocks have averaged 30% annual returns, but don’t count on this continuing. While it’s true that since the year 1900, stocks have averaged an 11% annual return, it’s a roller-coaster ride with many minus years as well, so you have to stay in for the long term —you have to weather the storm —and not be too greedy.
Well, let’s get started and happy hunting!
B. Listen to a mini-talk about some concepts of investing. Complete the chart.
allowance: gifts
services: selling goods
reasons: stay ahead of inflation
increase of prices
achieve financial goals
a short-term goals
b. long-term goals
the downside:
the risk of losing money
Audioscript
Investing is a way to make money with your money. First, you have to earn money. As a kid, you get money from allowance, gifts, services, or from selling goods such as lemonade. Try to save some, if not all of this money. The next step is to make your money grow through investing. There are two main reasons why you should invest. The first is to stay ahead of inflation and the second is to achieve financial goals. Inflation causes the increase of prices. When a Big Mac goes up from $1.20 to $1.50 or when gas goes up from $1.30 to $1.70 a gallon, we say that is inflation. You need to make more money just to keep up with the rising cost of living.
Financial goals can be separated into two types: short-term goals and long-term goals. The first refers to the things that you need or want now or within the year, such as a bike, a computer, or a video game. Generally, it takes less money to reach these short-term goals. However, long-term goals are expensive and require some planning. They are things you need or want in a few years or more, for example, going to college, buying a house, and even starting a business.
Investing is like "planting" money. A small amount of money invested will often grow to a larger sum over time. You've heard the phrase, "Time is money." With investing, time also makes money. Although investing can make money with money, the downside of investing is that there is a risk of losing your money. The key to investing is to minimize the risk and to maximize the financial reward.
Part IV. More about the topic: How much Money is There in Y our Saving Account?
I.O.U.S.A. is an American documentary film that focuses on the shape and impact of the United States' national debt. The film describes systematically four serious deficits shaping the U.S. economy: budget, savings, trade, and leadership.
In this section you will learn something about the personal savings situation in the United States. After listening, answer the following questions.
1. What is the title of the book the man is trying to promote?
Don't Buy Stuff You Cannot Afford.
2. Among all the interviewees, how much is the biggest amount of money in their savings account?
About one thousand dollars.
3. What are the three types of people in U.S.?
a. Those who saved and invest;
b. Those who could easily save more but choose not to:
c. Those for whom savings is difficult.
4. According to Alan Greenspan, what is the ultimate goal of the Federal Reserve?
To get a high level of real material well-being by setting a platform of stability.
5. According to the reporter, what will too much easy credit for too long result in?
A false sense of wealth.
Audioscript:
Man 1: Did you know millions of Americans live with a debt they cannot control? That's why I developed this unique new program for managing your debt. It's called Don't Buy Stuff You Cannot Afford.
Wife: Wow, let me see that. If you don't have any money, you should not buy anything. Hmm, sounds interesting!
Husband: Sounds confusing!
Wife: I don't know, honey. This makes a lot of sense. There's a whole section here. How to buy expensive things using money you saved.
Husband: Give me that. And where would you get this "saved" money?
Interviewer: How much money do you guys have in your savings account?
Boy 1: Uh, couple of hundred bucks.
Boy 2: Uh ... about a thousand, maybe.
Girl 1: Are you talking about moneywise?
Girl 2: I end up using most money in my savings account, so it doesn't look like where I can use this savings account. I'm not actually saving anything. I'm just storing a thing.
Girl 3: I think most people can say that they live paycheck to paycheck. A good majority of us do. Narrator: There are three types of people in our country. Those who save and invest. Those who could easily save more hut choose not to. And those for whom savings is very difficult. If Federal Reserve policy creates strong economic growth and keeps inflation low, every one can benefit. However, if inflation rises, people who are less well off will suffer more.
Alan Greenspan: The Federal Reserve seeks solely to get as high a level of real material well-being as we can by setting a platform of stability. We cannot pick and choose amongst various areas of the population because we just have no means of doing that. If fiscal policy is (has) lacks, or savings are exceptionally low, there is nothing monetary policy or any central bank can do about that. We cannot live in the present only. Human beings cannot survive unless they create provision for the future.
Narrator: Americans must start to save again. And they need to invest those savings to help create a better future for themselves, their families, and our country. At the same time, Americans need to know that the money that they are saving will hold its value. Too much easy credit for too long can create a false sense of wealth. No one plays a more important role in all of this than the Federal Reserve.
Husband: I think I got it. I buy something I want, and then hope that I can pay for it. Right? Man: No. You make sure you have money, then you buy it. Husband: Oh! Then you buy it! But shouldn’t you buy it before you have the money?
Man: No.
Wife: Why not?
Man: It’s in the book. It’s only one page long. The advice is priceless, and the book is free. Wife: Well, I like the sound of that.
Husband: Yeah. We can put it on our credit card.
Narrator: So, get out of debt now. Write for your free copy of Don’t Buy Stuff You Cannot Afford. If you order now, you’ll also receive Seriously, If You Don’t Have the Money, Don’t Buy It.
Part V Do you know?
There are few of us who have never dreamed about what we would do if we won a lottery ticket worth millions of dollars. Yet in the meanwhile, we also hear lots of stories of lottery winners gone bad. According to several academic studies, sudden wealth only exaggerates your current situation. If you're unhappy, bad with money and surrounded by people you don't trust, money will make those problems worse. If you're fulfilled, careful with money and enjoy a life of strong relationships, the lottery could make those strengths better.
A. Listen to a news report about a Hungarian winning a lottery ticket. Before listening, answer the pre-listening questions. After listening, answer the post-listening question. Make a comparison between the answers.
Pre-listening questions:
1. Have you ever dreamed of winning a lottery ticket? If you won a lottery ticket worth millions of dollars, what would you do?
2. Have you ever heard of anyone winning a lottery ticket? What did they do with the money? Post-listening question:
What did the Hungarian do with the money after he won the lottery ticket?
a. donate a large sum to a homeless hostel:
b. bought the first car in his life:
c. bought a new house:
d. enjoy lif
e.
Audioscript:
An unemployed and homeless Hungarian man has become one of the country's biggest lottery winners. He spent a dollar on the ticket and won more than 2.5 million dollars. Nick Thorpe in Budapest has been telling us more.
This actually happened in September, which was his big win. It only just turned out recently when he donated a large sum to the homeless hostel where he spent off and on a lot of time over the last years. He's now donated some of the money to them. He bought the first car in his life. He's bought a new house where he and his wife and children will now live and he's also saying, though he is not going to let the wealth go to his head. He just wants to start enjoying life at the tender age of 55, he says.
B. Now listen to another news report about a lottery ticket. Decide whether the statements after the report are true or false. Put T or F in the brackets.
1. (F) 4. (T)
2. (F) 5. (F)
3. (F) 6. (T)
Audioscript:
If you found a lottery ticket worth millions of dollars, what would you do? Well, a man in the Spanish town of La Coruna faced that very dilemma and resolved it by handing in the missing ticket which was worth more than 6 million dollars. Manuel Reija Gonzalez told the BBC why. Manuel Reija Gonzalez: What I did was, I returned the ticket, because I really
felt it was my duty to do it. Nothing else. I never for a moment thought about keeping it because I wanted to be able to sleep well at night with a clear conscience, because here was somebody who had a problem forgetting his ticket and I put myself in his shoes, and I thought the best diing to do was just to return the ticket.
And the hunt is now on for the missing lottery winner. Louisa Fid is the Deputy Mayor of La Coruna.
Louisa: It's quite an initial experience ... It's that we're trying to find somebody in order to give him or her 4.7 million Euros. OK, we have two years to find the rightful owner. In the first few hours since the announcement was made, the 6 persons, these people, appeared to claim they were the rightful owners and we have to check which time the ticket was bought, how much money that person spent on it, if it was just a single bet or a multiple one. Let us know if the person who claims to be the owner is the rightful one.
And if he isn't, and the ticket still isn't claimed after two years, the money goes to the man who found it.
Statements:
1. The lottery ticket is worth 4.7 million dollars.
2. Manuel Reija Gonzalez thought for a couple of days before he decided to return the lottery ticket.
3. Manuel Reija Gonzalez couldn't sleep well at night because of the lottery ticket.
4. The lottery ticket was publicly announced in order to find the owner.
5. No one came to claim the lottery ticket.
6. If the lottery ticket is not claimed after two years, the money goes to Manuel Reija Gonzalez.