free enterprise economic system – economic system where people have freedom as consumers and producers

budget – a plan for managing a person’s income and expenses

income – money a person gets from working or selling goods and services

expense – the costs a persons has for goods and services they buy

profits – the money made by a business after paying all expenses

scarcity – a shortage of a resource

entrepreneur – a person who starts a business

• Henry Ford – founded the Ford Motor Company in 1903 and developed the Model T by 1908. Ford used interchangeable parts, mass production, and the assembly line to reduce the price of the Model T and revolutionize manufacturing. He helped create a mobile society by mass producing and marketing the Model T automobile, making it an indispensable part of American life. Through his efforts, the automotive industry became a world-wide phenomenon. Born on a farm near Detroit, Michigan, Ford worked on the farm, at a shipbuilding firm, and for a company which serviced steam engines. During the winters he experimented on building his own internal-combustion engines. He drove his first home-built automobile in 1896. He retained complete company control and used it to amass billions of dollars. (TEA – Social Studies Center Biographies, 2000)
• Mary Kay Ash – founder of Mary Kay Cosmetics, Inc. Mary Kay Ash used direct-sales marketing and women as sales people to create a multi-million dollar business. Born in Hot Wells, Texas, Mary Kay Wagner Ash founded Mary Kay Cosmetics in 1963 with $5,000 in capital and her innovative marketing ability. She gained experience with direct sales of consumer products in homes by managing Stanley Home Products in Houston from 1939 to 1952 and serving as national training director of World Gift Company in Dallas from 1952 until 1963. She motivated her sales staff of “beauty consultants” by paying the highest commissions in the direct-sales industry and rewarding those who recruited new “consultants,” giving prizes, public recognition at annual conventions, and profit. The cosmetic company manufactures all products and sells them directly to the sales people. They receive training in goal setting, self-motivation, and customer service, and function independently. As the company expanded through the 1970s, it built upon the changing role of women as a potential labor pool. Consultants increased from 10 in 1963 to 70,000 in 1980 and sales climbed to $90 million in 1979. Mrs. Ash served as Chairman emeritus of Mary Kay Cosmetics and also on the board of service organizations including the Horatio Alger Association and the Texas Breast Screening Project of the American Cancer Society. (TEA – Social Studies Center Biographies, 2000)
• Wallace Amos – founder of “Famous Amos” cookies. He dropped out of high school to join the Air Force. Later, he became the first African American talent agent for the William Morris Agency. He attracted clients by sending them homemade chocolate chip cookies. Friends suggested he start his own business, and he opened the first store in Los Angeles, California. He is now a motivational speaker and volunteer for Literacy Volunteers of America, helping thousands of adults learn to read.
• Milton Hershey – founder of Hershey’s chocolate. Hershey never had a formal education; he was apprenticed as a teenager to a candy company. His first attempt to open his own candy business failed, even after he worked for six years. His second attempt failed as well. Finally, he opened a successful candy business in Lancaster, Pennsylvania, but he only made caramel. After he attended the World’s Fair in 1893, he started experimenting with chocolate. He found the perfect formula at the same time that consumer demand for chocolate was very high. He sold the caramel candy company and devoted all of his efforts into making chocolate.
• Sam Walton – founder of Walmart. Walton grew up on a farm in Oklahoma during the Depression. He worked a variety of odd jobs to help his family, and he worked his way through college. He bought his first store with a loan from his father-in-law and developed many business practices there that would help him make Walmart the number one retail store in the world. He made sure the shelves were stocked with a variety of goods at low prices, and he also bought from the lowest-priced supplier. He bought in volume so he could buy goods for lower prices, a savings he passed to his customers.

WAYS OF EARNING, SPENDING, SAVING AND DONATING MONEY:

• Earning – providing a paid service, completing a paid job, interest from saving
  • Examples: taking out the trash, taking care of a pet, cleaning your bedroom
• Saving – setting aside money, either in a savings account or piggy bank, earned or given for future use
  • Examples: buying what you need and not what you want, following a budget
• Spending – purchasing goods and services to satisfy wants and needs
  • Examples: paying bills on time, prioritizing what is more important, budgeting money
• Donating – giving money or goods and services with a monetary value to a charitable organization
  • Examples: donating money to nonprofit organizations, donating time and services