Newspaper Page Text
4
(Generation Xers are
good finanaal planners
ou may not like their attitude,
their fashion or their music, but
Generation Xers are doing some
thing worth recognizing: they’re
saving for the future.
According to a recent survey, Gen
eration Xers may be the most serious
generation since the Great Depres
sion when it comes to putting away
money for retirement. The survey,
conducted by the Stern Marketing
Group, reveals that 55 percent of young
adults aged 22-34 are saving for re
tirement.
So while they may have earned a
reputation as slackers and whiners,
the reality is that Generation Xers
understand the value of money and
the importance of building long-term
financial security.
Unfortunately for the 41 million men
and women born between 1965 and
1976, the future does not look quite as
bright or as promising as it did for
preceding generations.
Faced with corporate downsizing,
increased cost of living, escalating
home prices and the uncertainty of
Social Security benefits, today’s young
people are having to take charge of
their financial lives at a much earlier
age.
Betting on the market
It uséd to be that people didn’t even
start thinking about investing in stocks
or mutual funds until middle age, but
today that’s no longer true. Men and
women in their early 20s are already
discovering the benefits of making
long-term investment.
“What’s so unprecedented today is
not only that so many Americans are
investing in the stock market,” says
Joe Nocera, senior editor of Fortune
magazine, “but that we’re now depend
ing on the market to provide some of
the things we view as fundamental to
a decent middle-class life.”
Despite the common misconception,
you don’t have to be a financial wizard
to reap the benefits of the stock mar
ket. Experts agree that common sense
and reasonable expectations go a long
way in helping people make smart
investment decisions.
“Thedifference between winners and
losers in the market is often a question
of whether your emotions are in tune
with the general market,” explains
Peter Mauthe, 1996-97 president of
the Society of Asset Allocation and
Fund Timers Inc.
By Elizabeth
Scheibner,
Copley News Service
The Georgia Investor »An Advertising Supplement to Augusta Focus Newspaper * FALL ¢ 1988
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GETTING AHEAD -— Young investors consider themselves aggressive,
and Generation Xers are more likely to scan daily newspapers,
financial newsletters and on-line investment services than older
investors. Pholo lllustration by Marcia Rules CNS
It used to be that people
-didn’t even start think
ing about investing in
stocks or mutual funds
until middle age, but
today that’s no longer
true. Men and women
in their early 20s are
already discovering the
benefits of making long
term investment.
While there are many ways to evalu
ate stock performance, many inves
tors are using the Internet or invest
ment software programs to analyze
financial information and create their
own stock portfolios. Quicken Inves
tor Insight, (800)446-8848, is an on
lineinformation gathering service that
allows you to keep tabs on an unlim
ited number of stocks for a nominal
monthly fee.
If you want information on particu
lar stocks, Netßesults
(www.isnetwork.com) is an on-line fi
nancial advisory service you can sub
scribe to that provides customized buy
and sell recommendations of specific
mutual funds based on your response
to a few basic questions. Another good
resource for evaluating stocksis Value
Line Investment Survey for Windows,
(800)535-9648, ext. 2730. This soft
ware program can call up and print
data on 1,700 stocks and rank them
according to criteria that you define
yourself, such as the highest antici
pated rate of revenue or profit growth.
Of course, not everyone is comfort
able making investment decisions
without the advice of a money man
ager or financial adviser. With over
22,000 registered investment advis
ers in the United States alone, how
ever, finding the right professional can
be a daunting task. For this reason,
many investors are turning to third
party referral services for help.
The International Association for Fi
nancial Planning, (800)945-4237, and
the Institute of Certified Financial
Planners, (888)237-6275, are two or
ganizations that provide referrals to
financial planners in your geographi
cal area who are in good standing.
Saving for retirement
In recent years the number of Ameri
can workers participating in 401(k)
plans has risen dramatically, making
it the most popular retirement sav
ings vehicle around. More than 22
million Americans currently partici
pate in 401(k) plans and, according to
experts, that number is steadily grow
ing, particularly among the younger
generation.
One of the reasons 401(k)s are so
popular is that they offer special tax
advantages and are generallyrisk free.
The money you contribute to a 401(k)
plan is deducted from your income and
is not taxed until you start taking it
out, usually at retirement when you'll
be in a lower income tax bracket.
Unlike traditional pension plans,
401(k)s allow you to choose theamount
Investing
generation
Young people born between 1965
and 1976, sometimes called Genera
tion Xers, face investment and financial
challenges unique to their group.
®There are 41 million Generation
Xers.
®mGeneration Xers are expected to
switch jobs frequently, unlike their
grandparents and parents did in the
'4os and 'sos. Therefore, they will
not have one company to “take care”
of them, and Gen Xers will need to
devote more time to planning their
individual retirement needs.
®The outlook for much old-age help
from Social Security and Medicare is
sketchy.
®Gen Xers are expected to marry and
have children later in life unlike like
their parents did. This will put a
double burden on them as they save
for their kids’ college and prepare for
their own retirement.
mGen Xers likely will postpone
buying houses. This will add still
more financial pressure later in life.
mGen Xers are expected to live
longer than previous generations,
which may mean they'll work longer,
or if in bad health, be more costly to
themselves.
®Money experts’ main advice for
Gen Xers” Save a lot and start early.
Source: Met Life
By Dan Clifford
Copley News Service
of money deducted from your paycheck
and how you want the funds invested.
What’s more, if you change jobs, the
money in your account can be rolled
into a new employer’s plan, rolled into
an IRA, or taken as a full or partial
withdrawal (subject to early with
drawal penalties).
When you consider the fact that most
people will work an average of 40 years
or more during their lifetime, it’s easy
to see the value of participating in a
401(k) plan -- no matter how large or
small your income.
Today’s generation recognizes that
they have to accept responsibility for
their own financial destiny and are
willing to make the sacrifices now for
a more secure future.