CHICAGO--()--Teretha Scales, 17, went to the bank with her dad a few months ago and opened her own college fund. Today, she puts 75 percent of her allowance each month into that account. Stanley Whitaker, 16, is more aware of the difference between what he needs to buy and what he wants to buy. “I’ve stopped spending money on junk and games,” he says. “I’m more focused on saving my money. In our generation, we aren’t doing that enough.”
“Financial literacy must be a priority in our schools”
That’s just the kind of learning that Magnetar Capital founder and CEO Alec Litowitz had hoped for when he, along with co-founder Ross Laser and partner Dave Snyderman, created the Magnetar Youth Investment Academy, an academic enrichment program now in 21 Chicago-area locations.
During the past decade, Litowitz, a father of four, said he has become increasingly concerned about financial literacy in this country. “Financial literacy must be a priority in our schools,” said Litowitz. “Our children are graduating high school and entering a world where it’s far too easy to accumulate debt. They must be equipped with the information they need to make smart financial decisions.”
Through the Magnetar Youth Investment Academy, students receive 40 hours of instruction on a variety of topics, including financial planning and decision making, money management, risk management and insurance, credit and debt, and saving and investing.
At the end of the course, students are invited to compete in a year-long Magnetar Stock Market Portfolio Competition, which awards a college scholarship to the individual or student team with the highest-performing portfolio at each participating high school.
Additionally, all graduates receive a gift certificate for $100 to open a Custodial Investment Account, as well as educational sessions for students and their guardians about how the account works.
“The Magnetar Academy model is important because it provides students with an engaging environment in which to learn how to be successful in managing their money,” said Heidi Albert, leader of the Magnetar Academy programs at Johnson College Prep and UIC College Prep. “Already, students are opening bank accounts. They are coming to class with very real and challenging financial questions that we are able to talk through. It’s been a terrific education for all of us.”
This year’s graduates at Johnson College Prep were among the two pilot classes initiated in 2011. In 2012, Magnetar Capital formed the Magnetar Capital Foundation to focus on expanding the program. The Foundation underwrites curriculum development and evaluation, teacher stipends and all other expenses related to the program.
Today, more than 300 Chicago public students have taken part in or are enrolled in Magnetar Academy programs at 21 locations, including UIC College Prep, Jones College Prep, Gary Comer College Prep, Lindblom Math and Science Academy and the Urban Prep Academies.
For more information about the Magnetar Youth Investment Academy, visit www.magnetaracademy.org.