Save early, save often

Consultant helps youngsters learn the basics of building wealth.

By: Jeff Milgram
   For 48 years, financial consultant Jack Halberstadt told clients how to make their money grow.
   Today, his "clients" are growing as well — elementary and middle school students in the Princeton Regional School District. Mr. Halberstadt, 76, is semi-retired from Halberstadt Financial Consultants Inc., the business he founded.
   "The basic rules for building wealth are …," he tells the students in Joyce Robinson’s third-grade class at Community Park School. "One — save early and save often. Two — save as much as possible. Three — earn compound interest. Four — try to earn a high interest rate. Five — leave deposits and interest in the account as long as possible."
   After turning his consulting business over to David Walter, Mr. Halberstadt looked for something to keep busy. "Retirement was never on my agenda," he said.
   So he approached Dr. Jeffrey Graber, the Princeton school system’s assistant superintendent for curriculum and instruction, with the idea of teaching money-management fundamentals to young people. Dr. Graber loved the idea.
   This year, Mr. Halberstadt has brought the basics of his money-management lecture to all of the district’s elementary schools and the John Witherspoon Middle School. He uses plain English peppered with examples.
   "One day they’re going to become adults and they’re going to have to deal with the day-to-day management of money," Mr. Halberstadt said.
   To explain why the lottery isn’t the most reliable road to wealth, Mr. Halberstadt starts off his lectures with a raffle. Each child’s name is placed in a hat and the winner gets a crisp new $5 bill.
   "I compare it with the state lottery. Lotteries are gambling and that is not the way to build your financial future," Mr. Halberstadt said.
   "I want to get their attention," Mr. Halberstadt said. "Secondly, I want them to learn about play money."
   Play money, Mr. Halberstadt explained, is the money you can afford to do without if you had to "as opposed to serious money — money that is allocated for food, shelter, clothing and college.
   "I stress the importance of not taking serious money and using it as play money," he said.
   He takes the class over the history of money, the barter system, the difference between making money by owning a company and making money by investing in a company. He discusses checking accounts and credit cards.
   He also warns them to be skeptical about celebrities endorsing products in television commercials.
   But for Mr. Halberstadt, the most important lesson is saving.
   He tells the class that if they save $1 a day, starting now, they will accumulate $4,168 by the time they graduate from high school if they earn 5 percent compound interest. But that figure will grow to $4,614 if they earn 7 percent interest.
   "What you want to count on … is that the income you earn over time is what is going to make you wealthy," he tells the class.
   "Twenty years from now, I’m going to come back to talk to you and see how you made out," Mr. Halberstadt tells the class.
   And the children are taking his message to heart. In a show of hands, many of the 28 students indicated they get allowances, have savings accounts and regularly make deposits.
   "I learned a lot about saving money and how much interest it can give," said Quinta Jurecic, 8.
   "I learned a lot about interest and how it can grow in the bank. And I learned how you can use your money," intoned Leah Annitto, 9.
   "I learned about the lottery … and I learned about how the products and the famous guys on TV and how you have to think before you buy," noted Cody Bell, 9.
   Mr. Halberstadt’s lecture fits right in to Ms. Robinson’s class work. On Wednesday, the day Mr. Halberstadt spoke, the children wore colonial headgear for a lesson on the Revolutionary War. Later, they would play a barter game, Ms. Robinson said.
   The students also follow certain stocks to learn about the ups and downs of Wall Street.
   "I try to bring the real world into the classroom," Mr. Halberstadt said. "This will help with their math studies."
   But Mr. Halberstadt admits he gets something out of the interaction with the youngsters.
   "I get a lot of psychic income and a feeling of giving back to the community," Mr. Halberstadt said.