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Saving Grace

Money-management strategies

Popular opinion portrays Generation Xers as slackers concerned only with cappuccinos and CDs, but two recent studies paint a very different picture of young adults.

In a recent poll conducted by research firm Louis Harris Organization for the Lutheran Brotherhood, about 50 percent of the 18-to-29-year-olds questioned said they "sometimes" or "always" have trouble sleeping or relaxing because of financial worries. Saving for retirement (cited by 59 percent) was their number-one worry, followed by a fear of not being able to afford long-term care (21 percent).

"Their concern about saving for retirement suggests that the confusion and uncertainty about Social Security has impacted them," says Todd Gillingham at the Lutheran Brotherhood, which offers life and health insurance, annuities and other financial products and services.

The good news: Xers are taking steps to deal with their fears. A 1996 study by mutual fund trade association Investment Company Institute (ICI) shows Xers have 38 percent of their household financial assets invested in mutual funds.

Where is the money invested? Seventy percent of the Generation X shareholders participated in equity funds, 44 percent in bond and income funds, and 52 percent in money-market funds. The typical Xer shareholder was a 28-year-old married, employed college graduate with a household income of $50,000 and assets of $16,000.

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This article was originally published in the April 1997 print edition of Entrepreneur with the headline: Saving Grace.

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