This was one class no one planned on skipping.
In honors economics Wednesday at Severna Park High School, students talked CDs. But theconversation had nothing to do with music and everything to do with something else on high school seniors' minds -- money.
Certificates of deposit, stocks, junk bonds, investment portfolios, inflation and risk were just a few topics John R. Hill touched on as part of a special eight-week program for high school students.
Hill, a partner in the Columbia-based financial advisory firm of Hill, Solow, Jaso & Molesky, and another financial planner in a Severna Park firm have volunteered in two county high schools to teach financial planning and show students how to apply it.
Hill's message: Start now.
"I urge everybody, when you get out of school, PYF -- pay yourself first," he told the class. "Right after school, start savingsomething. You'll appreciate it when you're 40 or 50."
Judging bythe students' rapt attention and rapid-fire answers, it was a message they took to heart.
"I've been working since middle school," said Paul Reusing, 17. "He's shown me (money's) not something you spend and blow it all. You need to put some away for yourself. He's taught me the value of money."
"You learn some of the strategies and know-- when you're making money -- what to do and how to budget and savefor the future," added Paul Lavallee, 18.
John Yurch, who regularly teaches the economics class, contacted Hill when he heard about the program offered through the Annapolis chapter of the International Association for Financial Planning.
Hill, a former chapter president, had proposed the course to county school officials. The High School Financial Planning Program uses a curriculum from the Denver-basedCollege for Financial Planning.
The college textbook points out that the average teen-ager spent $3,000 in 1987, that more than 3.5 million teen-agers have access to credit cards, that the average U.S. citizen saves less than 3 percent of his gross income and that only a small percentage of baby boomers will retire with financial independence.
In February, Hill began teaching the class once a week.
"There's a high level of interest," Yurch said. "These kids want to make sure they're here on Wednesdays. Surely, at this time in their life, it's needed."
In the first few sessions, Hill covered budgeting,insurance, investment and building portfolios. By the end of the course, each student will create his own financial plan. Roger Thusius, a planner with Comprehensive Financial Services in Severna Park, teaches a similar course at Northeast High School.
During Wednesday's class, Hill found his students divided when he asked whether they'd rather own stocks or bonds in a company that subsequently fails. Hill suggested bonds would be the better bet.
"You're a creditor, you're in line to collect," he said. "As an equity owner you're not. Does that mean everyone should put all their money in bonds? No."
And if he were to give them $10,000, how would they invest? Hill asked hisclass. Lavallee said he'd diversify, while another student, pointingout that this was a gift, opted for high-risk, high-yield bonds.
Hill agreed, adding that during no 20-year-period in the history of the stock market had investors failed to get back as much as they put in.
In a discussion of risk, Hill brought up junk bonds, which arehigh-yield bonds issued by companies with poor credit.
"Does thatmake it a bad investment?" he asked. "No, because it may be a higheryield. The risk you take is that that company may go out of business. The more risk you're willing to accept as an investor, the greater your return should be."