His Investment Is in the Future

Steven Sanders likes to tell high school kids that if they work from age 18 to 65 and earn an average of $18,000 a year, they’ll make $846,000 in a lifetime. If they can average $25,000 a year, they’ll make $1.2 million. But they’d better learn to manage that money well: Less than 2% of people who retire are financially independent.

The kids whistle at the amounts. They nod politely at the Philadelphia financial planner’s warning. After all, they’re kids. They’ll never be 65. Anyway, why worry about it now?

Sanders really got their attention, however, when he analyzed a hypothetical paycheck from that $18,000 job and showed a 12th-grade class at Bell High School in Central Los Angeles how hard it is to manage a single month. Subtracting taxes and employee benefits, he cut the $2,500 gross to $1,500, then tried to make it cover a list of expenses--rent, food, utilities, car, insurance, entertainment, medical, clothing, miscellaneous. “Damn,” said one boy, “that’s a lot of expenses!” “Bummer!” said another.

Throughout the presentation, Sanders dispensed homilies. The more you learn, the more you earn. You spend more on food if you shop when you’re hungry. Pay yourself first: Save 10% before you start spending. You do not spend what you do not see.

That last one Sanders, now 32, bolstered with a story from his own boyhood. Desperate to replace his $1.99 canvas “bobos” with fancy sneakers, he put all the change he could save from his teen-age earnings into a mayonnaise jar wrapped in tape to hide the money. When it was full, he had enough for the sneakers, “but then I didn’t care about sneakers any more. My goals had changed, and instead of buying sneakers, I started a college account.”

More people should do what Sanders does, which is visit half a dozen major cities a year, taking his show to several classes at several high schools in each. The school districts choose the schools, but he particularly likes inner-city kids, partly because he was one, more because his advice may be immediately pertinent: “Many of these kids,” he says, “will go right into the work force from school.”

His trips are sponsored by Citibank MasterCard and Visa, but he doesn’t push the brand when he discusses credit cards (“Buy now, but don’t forget to pay later!”), and he covers a lot more than credit in his subway ride through financial life. He doesn’t have a lot of competition on the circuit, though of course, anyone could share such expertise in schools--banks, brokerages, oil companies, the IRS, any business or organization that depends on consumers and gives lip service to the term “outreach.”

Certainly everyone knows there’s a need for consumer education. One report after another details the unmitigated ignorance of our high school graduates, unaware of how finance charges mount on their credit card statements, incapable of figuring percentages in their heads, of doing totals without calculators.

High school seniors are “virtually unprepared for the many critical purchasing decisions they will need to make after they graduate,” concluded a 1991 study sponsored by the Consumer Federation of America and American Express. Only a third of those asked knew the purpose of credit bureaus or the obligation of tenants to obey a lease; less than a quarter knew that a certificate of deposit pays the most interest on bank savings.

But they’re only ignorant, not incurious. They’re not even so ignorant.

Quite a few in Sanders’ Bell High audience were already working. Several supplied precise tax percentages for his hypothetical paycheck. They understood the blurred line between consumer “needs” and “wants” better than most adults and knew that stocks give people “a share in a company.” They also wanted to know how much money Sanders had put away and what he thought of a get-rich-quick scheme on TV.

What’s more, they were appreciative--a rare quality in teen-agers. Most said on a form provided that they found the hour valuable. He “got right down to the point,” they said, and even “made it fun.” Several wished it had been longer. Four were going to start their own mayonnaise jars; more planned to begin “saving as much as I can. Seriously. “

For his part, Sanders gets as much as he gives. But he frets that the bell rings and he can’t always talk with the kids individually--the girl, for example, who provided quick definitions of “maturity date,” “collateral” and “bonds,” or a boy who asked what education and training prepared Sanders for his career.

And Citibank? These programs, says Executive Vice President Richard Srednicki in New York, “help people understand financial issues and their own responsibility in being a good customer and a good consumer.” That’s good for Citibank, which does business “with one in four families in the country--mortgages, student loans, credit cards.”

These high school students, he adds, “could ultimately have one or more of our products,” and although experts such as Sanders are hardly selling Citibank, “we hope at the end, people will think we go the extra mile.”

Not a bad beginning--for Citibank or for future consumers.