Stock market games have been a staple of economics, financial literacy, math, and business classes since before the internet. Research, real-world application, and competitive game play make stock market games a fun alternative in classes than can often be overly dry and factual.
The problems with traditional stock market games
For all the benefits of stock market games, there are some obvious and serious drawbacks.
How many people have been given $100,000 to invest for a short period of time? The stock market game is a fun fantasy, not a real-world skill. In fact, being given $100,000 detaches investing from how the necessary investment capital is formed; through working, earning, and saving.
Rewards risk, not thrift
The key to winning stock market games is to gamble on high-risk momentum or penny stocks, maximize margin trading and hope for a home run. The reality is that wealth is usually built slow and steady, not quick and easy.
Teaches the WRONG lessons
Successful students may believe they are ready to make big money fast and easy. GameStop and Wall Street Bets ring a bell? Those who lose money or just find it too complicated may avoid investing altogether or stick to "safe" investments like CDs. A recent Bankrate survey found only 23 percent of millennials say that the stock market is the best place to invest long-term. Yet it is impossible to save enough for retirement without equity investing.
Omits the important lessons
- Successful tax-advantaged investing in a 401(k) or IRA
- Importance of getting your employer-match free money
- Load versus no-load mutual funds
- Index versus actively managed mutual and ETFs
These are just a few critical fundamentals of investing missing from stock market games.
Budget Challenge Investing is the solution
How about a game with the engagement and competitive scoring of a stock market game, but put it in the context of managing the complete finances of an independent young adult? A game that teaches about long-term investing and the importance of an employer match and tax advantaged accounts. A game that regularly requires critical thinking and analytical and decision-making skills? A game that forces students to decide the tradeoffs inherent in a real budget. A game that rewards the behaviors and habits students really need to achieve financial independence and security. A game that is engaging, competitive, and fun where mistakes result in desirable learning taking place. Budget Challenge + Investing is that game.