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$5 University Challenge

I recently heard about an amazing money challenge that a professor at Stanford University gave to her students.

She split the class into teams of 3 students and gave each team $5. The challenge was to see which team could generate the highest ROI (Return On Investment) in two hours, i.e., see who could make the most money in that period, starting from $5.

I loved sharing this story with my daughters as there are so many financial lessons which I'll highlight at the end.

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Bartering to make money

I asked my daughters what they would do. Like many of the Stanford students, they said they would buy something with the $5 and then look to sell it for a higher price. Seems like a good idea.

Many of the Stanford students who used this approach managed to do well and come back with an average of around $8 after two hours.

I explained to my daughters that these students generated 'x1.6 ROI', as they came back with 60% ($3) more than their initial investment ($5).

However, other students in the class did significantly better.

Being creative to make money

The students who did really well realised early on that the $5 was just a distraction. They should just use the two hours to make as much money as possible.

"What can we do to make money if we start with absolutely nothing?"

Some of them did jobs to help others in that time slot to get paid for their services and managed to make more than $10. For example, one team stood in line at a much sought-after restaurant and then as they got close to the front, they sold their position in the queue for around $12.

Selling their space in the queue for money

The winners of the $5 University Challenge ...

The winners of the competition realised that at the end of the two hours, they would have to do a 3-minute presentation to their class on what they did. The team saw this as an opportunity and decided to sell this presentation time as an advertising slot to local businesses that wanted to sell or recruit students from Stanford. This group made a significant return (reportedly selling the slot for over $600) and still had their initial $5 with them.

3 Key learnings for your kids from this story

1. There is more than one way to make money

Many people live most of their lives with only one source of income, their jobs. I want my kids to grow up thinking of lots of different ways to make money. Even if they decide to get a job (at the moment, one wants to be a teacher and the other a vet), I hope that they have many different sources of income. Whether this is from investing, their job, selling something they produce or using their spare time to come up with ideas like those shared in the Stanford challenge above.

2. Your current financial position isn't a limiting factor

The students who did well in this challenge didn't get anchored to the money ($5) that was given to them. They looked at the time they had available and became creative.

I feel this is really empowering as it helps young people realise that if they develop a skill or focus on being creative, they can do so much more than those who are fixated on their current financial position.

Many people look at what they have or what they earn and believe that in the future they might get 5% extra each year from a pay rise. However, if they think about using their time to develop new skills or doing something creative, they could make significantly more. I'm not saying that it will be easy but it definitely requires the right mindset for it to ever happen.

3. Learning to sell can lead to unlimited wealth

Learning to sell is one of the key skills to help your kids increase their future earning potential. If they learn to sell then their future earnings are potentially unlimited. As the story above showed, the students made $600 in two hours as they saw an opportunity to sell something they had that people wanted (the time slot in front of the class of students).

This doesn't mean your kids have to necessarily become a full-time salesperson. If they do learn to sell, however, then it could help them generate many new sources of income when they are adults which could supplement their earnings from their chosen careers.


I hope you share this $5 University Challenge with your kids and ask them what they would do if they were in the class.

It shows that it is possible to make money in many different ways.

Use the story to start a conversation with your kids about:

  • There is more than one way to make money

  • Your current financial position isn't a limiting factor

  • Learning to sell can lead to unlimited wealth

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Thanks for reading!


P.S., If you are worried that your kids don't how to manage money YET, then grab them a copy of Grandpa's Fortune Fables. After reading the book, they will know more about money than most adults. Available on Amazon (£9.99) or as part of our Special Bundle below.

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