Amortization and Social Justice

This year, I am completing an EL ‘Portfolio’ along with my students. One of the sections of a portfolio is the Personal Statement. Here is Part I of mine – the nitty-gritty of what I hope to accomplish through teaching mathematics. As you may be able to tell, in the next section the ‘bird’s-eye view’ that I begin here will take an even higher vantage point, but I consider this to be pretty important stuff on its own. Tell me what you think!

Personal Statement – Perspective

As a human being – sorry, I mean educator – it’s easy to get caught up in the day-to-day tasks and interactions that make up our hourly existence; after all, we’re here, on the ground, not looking down on ourselves at ‘the Big Picture’ of our lives from a distant satellite. However, ‘the Big Picture’ is actually why we are here – it’s what grounds us in purpose, gives us perspective, and colors our perceptions of what daily tasks are important to achieve the end-goals we desire. 

What I mean to say is perhaps better answered by asking myself the important question: Why do I teach? The reason I teach is certainly not because I believe quadratics are an all-important topic of the universe. They are interesting, sure! But I teach so as to affect what I believe to be right in the world. For me, that boils down to three realms: 

  • Pursuing human sustainability
  • Creating a truly just society
  • Embettering ourselves as human beings

Although I do still use classes like Crew, Internship, and the Outward Bound Trip as times to teach ideas and principles of sustainability, in this piece I will concentrate on the other two driving forces for my practice, as they are where I spend the majority of my time focusing in mathematics classes, and where I believe the majority of perspective expansion – aka ‘growth’ – occurs. I find it important to repeat and emphasize a duality here – I am hoping to expand my students’ perspectives of the world, but I am also – through teaching – expanding my own. When I get frustrated in my craft, it often boils down to me just needing to reground myself in the broader perspective of why I am here. These two objectives happen and evolve simultaneously. 

Creating a Truly Just Society

Alright, so why does mathematics relate to pursuing a just society? Because as of 2020, capitalism is by far the best social system we have come up with, but that doesn’t mean there isn’t still room for improvement. Let’s be honest, capitalism is grossly inequitable. People in positions of power and wealth find ways, intentionally or unintentionally, to take advantage of and profit from people in positions of less power. I’m sorry, but that’s not a controversial statement – there will be no debate about it. Look to the subprime mortgage issues of the 2008 recession or subprime auto loan industry that began to spring up in the following years for quick and easy examples of this inequity – no matter how you slice it, calling those practices ‘legal’ does not mean they are fair, especially when you consider the Huxlian ‘Brave New World’ we live in today. I’m going to stop myself now before I go down the rabbit-hole on how myopic and greedy people can be in the name of ‘pro-economy’. 

Now, I am not here to provide any more reasons as to why capitalism, in its currently-conceived state, is inequitable – I’m here to propose my small contribution to the list of potential solutions to the problem. I am also not here to complain about inequity – I happen to be one of the lucky few in our society who was born into unbelievable privilege. Instead, I am here to share that I fundamentally believe with great privilege comes great responsibility. 

Allow me to discuss my privilege with you. On my first birthday, my hard-working, depression-surviving grandparents gifted unto me 10 shares of 3M stock (my initials are 3 M’s), and they continued to do the same (with different companies) every birthday and Christmas until they passed. Think about how lucky that is – a one-year old who didn’t get a cool toy from his grandparents for any of his birthdays, just got a stock portfolio. When I was sixteen and wanted to buy a car – because of course that is the most important thing a high school student can possibly have – my dad contrived a deal in which he would help me pay for the car if I invested my saved money that would have gone into the car into a stock instead. At the time, I was playing high school football and using some great new stretchy clothing under my pads, so after doing some research with him we put all $7,000 into the IPO for that company – Under Armour. I sold that stock several years ago to diversify, and the selling price was an order of magnitude higher than buying. To me, that sort of privilege without the responsibility to help others to understand their financial lives would be criminal. 

Thus, one of the major contributions that I have decided I want to make to the world is to – at least on my local level – teach financial literacy to our youth. I believe education is one potential pathway to overcoming inequity – when people have the baseline of understanding and the skill to be able to quantitatively analyze their financial lives, they can be less likely to be taken advantage of, or less likely to miss out on long-term wealth management strategies. 

One of the most important trends that I have noticed in my four years of teaching Financial Literacy is the strong correlation between students succeeding in ‘normal’ math class for 3.5 years and succeeding in quantitatively analyzing their finances. I know – that seems intuitive. If a student is good at math, shouldn’t they should be good at finances also? But let me assure you that the types of math are not necessarily directly correlated. Quadratics and cubics don’t have much use in personal finance, nor do rational functions. If I became the Secretary of Education right now, I’d be pushing to eliminate those topics from the curriculum and replacing them with a complete Data Literacy curriculum; however, that’s not the point. The point is that although the current mathematical standards in the U.S. seem to have low relevance to the types of maths that people actually use in the real world, if students understand the required mathematics well, they will have a much higher probability of being able to truly learn and understand financial mathematics… so long as you are exposed to it at some point. 

In this way, I am hoping to make an impact on the massive problem of social and financial inequity in the United States through my on-the-ground financial approach. Consider just one question that I ask students to calculate during their ‘big project’ senior year: What would be the wiser financial decision, given a mortgage of $400,000 over 30 years at 4% interest – making a $1,000 prepayment every month towards the mortgage, or investing the same extra $1,000 a month in the S&P 500 which has an annual return of around 7%? Well, consider the fact that the amount of interest paid on over the lifetime of that loan comes out to $287,478.03. That’s almost ¾ the cost of the freakin’ loan! Putting $1,000 extra towards the house every month would reduce the cost by over $150,000. I don’t know about you, but that’s a lot of money to me! The very observant student will realize that the correct answer to the original question, though, is not choosing prepayments or the S&P option, but to have a mix of both – prepayments up front that transition to investing as the loan ages. Honestly, if my students never get to that point but are at least thinking for themselves about smart ways to pay off loans (like the advantages or disadvantages of prepayments versus a shorter loan term), I am happy and feel that they have earned back a bit more freedom in their lives.


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