HOW YOU CAN LIVE BETTER

You can't throw a pinpoint 60-yard touchdown pass, so forget about
landing a contract worth an average of $3.2 million a year like Joe
Montana's. Your acting career ended with a bit part in your high
school's production of Bye Bye Birdie, so you'll never nab a
Schwarzenegger-like fee of $10 million a film. You can't sing, can't
dance and can't even vogue, so matching the $39 million that Madonna
made last year is unthinkable. And you're more likely to get struck
by lightning (odds: 1 in 600,000) than you are to hit the jackpot in
a state lottery (odds of winning the grand prize in New York's Lotto,
for example: 1 in 12 million).
Okay, so maybe you'll never be among the roughly 1.6 million
Americans who need at least seven figures to count their money. But
you don't have to be a professional athlete, a Hollywood star or even
extraordinarily lucky to achieve a degree of financial security that
exceeds the already enviable U.S. average. The crucial steps to a
better standard of living: a solid education, a finely honed career
strategy and a sound savings and investment program. ''You won't get
rich this way,'' says John DeMarco, senior vice president of PSI, a
Tampa market research firm that studies the affluent. ''But you will
get the financial resources to guarantee yourself a more than
comfortable lifestyle.''
Of course, making your own grass greener isn't quite as simple as
just networking at the office and undertaking a few quick investment
fixes. If you're serious about the goal, however, you can do it. Here
are strategies from top advisers in the four areas that matter most
to the majority of Americans: careers, housing, savings and
investments, and health care.

YOUR CAREER
The surest first step to a satisfying career and a handsome salary
is a good education. The average high school graduate, for example,
makes barely over half as much ($13,620) as someone with a B.A.
($25,308 a year), who in turn earns roughly half as much as someone
with a doctorate ($49,416) or professional degree ($51,876).
If your formal school days are behind you, you can still enhance
your earning power by continuing your education. ''Attend
professional seminars, go back to school for an advanced degree, take
a management or computer course,'' advises Maxine Wineapple,
president of New Options, a New York City career counseling firm. The
skills most in demand today, she says, are computer expertise,
technical writing, managerial prowess and foreign languages,
especially those spoken in Eastern Europe as well as Japanese and
German.
In this era of skimpy raises (1991 average: 5.3%) and corporate
downsizing, the professional who can piggyback one or more of these
talents onto his or her current area of expertise is the one who will
enjoy both the greatest job security and the best salary, Wineapple
contends. For example, she notes that a computer programmer with
roughly five years of experience averages about $35,000 a year. Add
managerial skills and you could command up to $70,000 as the head of
a 50- to 100-person communications department. Similarly, an
entry-level management consultant job pays around $27,000 a year for
employees with a bachelor's degree; add an M.B.A. to that resume
and you're looking at $50,000 to $80,000 instead.
You might also consider switching employers if you want a bigger
paycheck -- and bigger is the operative word. ''As a rule, the larger
the company, the better the compensation,'' says Susan Rowland, a
vice president at Towers Perrin, a compensation consulting firm in
New York City. For example, she notes that a financial manager makes
a median $47,500 at firms with less than $500 million in revenues but
fetches $61,200 at companies with sales in excess of $6 billion.
Similarly, a first-year corporate attorney earns around $41,200 at
firms billing $500 million or less but gets from $58,500 to $67,100
at companies that take in $3 billion or more a year. Rowland traces
the difference to the higher salaries top execs at giant firms earn
because of the greater complexity of their jobs. Says she: ''There is
a halo effect that lifts up pay at every level.''
You may also boost your career prospects if you're willing to
relocate to a place with a fast-growing job market. California, for
instance, is home to eight of the cities that NPA Data Services in
Washington, D.C. projects will have the largest increases in
employment in the 1990s: Anaheim, Los Angeles, Oakland, Riverside,
Sacramento, San Diego, San Francisco and San Jose. Other promising
cities on the list include Dallas, Denver, Fort Lauderdale, Orlando,
Phoenix and Tampa.

YOUR HOUSE
With mortgage rates at their lowest levels in four years (9.26%
for 30-year fixed-rate loans) and real estate prices down by 30% or
more in some areas since 1988, many housing markets are more
affordable now than at any time in the past decade. Still, buying a
home today remains much more difficult than it was 30, 20 or even
just 15 years ago. That's particularly true for cash- strapped
younger households. Since 1976, for example, home ownership rates
among 25- to 29-year-olds have dropped from 43% to 35% and from 62%
to 54% among 30- to 34-year-olds, according to the Joint Center for
Housing Studies at Harvard University. Says Daniel Hoffman, director
of research at the American Affordable Housing Institute (AAHI) at
Rutgers University in New Brunswick, N.J.: ''Home ownership has been
postponed for a sizable chunk of a whole generation.''
If you are trying to break into the housing market, you can get a
helping hand with your down payment -- the major obstacle to
ownership for most ( renters -- from one of the myriad private and
government programs designed to help first-time buyers. For example,
Fannie Mae's Community Home Buyers Program allows first-time buyers
to put down as little as 5% of a house's purchase price (and two
percentage points of that may be a gift), compared with the 10% to
20% most lenders now require. To qualify for a loan at today's rates,
your income cannot exceed 115% of the median income in the community
where you hope to buy.
Nearly every state also has an assistance program for first-time
buyers. State plans typically offer a major advantage over their
federal counterparts: in addition to low down payments, their
mortgage rates are as much as 1.5 percentage points below market
rates. While such programs almost always have income qualifications,
the ceilings often go as high as $50,000 or more, according to Nancy
Randall, a research-project director at AAHI. In New York , for
example, first-time buyers with incomes below $54,500 are eligible
for 30-year fixed-rate mortgages at 8.3% on houses costing $151,500
or less.
Current homeowners looking to trade up to a larger, better house
face challenges of a different sort. If you are among them,
understand this: While you probably won't get, say, a 1989-level
price for the mid-size or smaller dwelling you live in now, you may
more than make up for a lower-than- anticipated profit by nabbing a
true luxury-home bargain. Higher-end houses have borne the brunt of
the real estate slump of the past few years. Whereas prices on
starter homes have simply remained stagnant or dropped slightly in
hard-hit places like New York, Boston and California, more expensive
homes are down 20% to 30% or more.
Sellers should not surrender to today's softer markets, however.
One ploy that could bring you a loftier profit, assuming you are in
no hurry to sell: list your home as high as 20% above its true worth,
then drop the price every few weeks until you get within 5% of its
real market value. ''Buyers will focus on the fact that the list
price has been dropping and think they're getting a bargain,'' says
Carolyn Janik, author of How to Sell Your Home in the '90s (Penguin,
$9.95).
If you bought your home at the peak of the house-price frenzy of
the 1980s, however, there may be no way for you to avoid a
substantial loss if you sell now. In that case, you might do better
to renovate your home into what you really want. According to the
National Association of the Remodeling Industry, adding a new
bathroom will run you about $10,000 and a master suite about $21,000;
figure on $8,000 to $21,000 to revamp the kitchen. Enjoy the
improvements, but don't expect to recoup more than 80% of your
remodeling costs when you sell the house.

YOUR INVESTMENTS
The truest measure of your financial well-being lies not in brick
and mortar but rather in your savings and investments. These assets,
after all, are the means to such important goals as your children's
college education and a comfortable retirement. While nearly
three-quarters of all U.S. households do have some money tucked away
in bank accounts, relatively few have invested for future growth,
according to Census Bureau statistics. Only one in five, for
instance, owns stocks or mutual funds. Fewer than one in 10 holds
bonds or money-market funds.
That style of money management won't buy your kids a B.A.
(estimated price tags by 2000: $40,000 at a public institution and
$100,000 at a private one). Nor will it provide you with much
financial security as you grow older (the nest egg needed for someone
now earning $50,000 a year to retire comfortably by age 65 is about
$336,000). In fact, after taking taxes and this year's estimated 3%
inflation into account, you barely break even on bank accounts and
short-term certificates of deposit at their recent rates of 5% to 6%.
By contrast, stocks are up 20% in 1991, as measured by Standard &
Poor's 500- stock index, and have averaged an 11.3% annual return
over the past 20 years.
If you do nothing else this fall, get your long-term money out of
CDs and put it to work in thoughtful investments. Exactly how you
deploy the dough will depend on how and when you ultimately plan to
use it. That's why your first step should be to clearly define your
goals and priorities. Or, as fee- only financial planner Bill Prewitt
from Charleston, S.C. puts it: ''Fuzzy goals equal fuzzy results.''
The shorter the time until you'll need your money, the more you
should put in cash investments that keep your principal safe. An
emergency fund that you might tap at any moment belongs in
money-market accounts or money funds, despite their recent low
yields. (For your best choices in money-market accounts now, see page
21; for today's highest-yielding money funds, see page 66.)
Put only half of a stake earmarked for use in three years or less
-- say, money you're setting aside to buy a new car or a house -- in
cash. With the rest, stretch for yield by investing in short-term
bond funds, which hold U.S. Government, corporate and municipal
fixed-income securities maturing in one to five years. Two funds that
consistently earn high marks from financial advisers for both safety
and yield: Scudder Short-Term Bond (800-225-2470), which recently
paid 9.1%; and Vanguard Municipal Bond Limited Term (800-662-7447),
paying a federally tax-free 6%, or the taxable equivalent of 8.7% for
investors in the 31% bracket.
For goals that are five to 10 years off, invest heavily in stocks.
For example, Neil Kauffman, a fee-only planner with Kauffman &
Drebing in Philadelphia, suggests that a college fund for a
10-year-old might have 50% of its assets in equity funds. He'd put
half of that total in no-load total- return funds that aim for both
income and price appreciation, such as Vanguard Wellington (up 69.3%
in the five years to Aug. 1). The rest might best be invested in
growth or growth and income funds, such as Neuberger & Berman
Partners (up 65.7%; 800-877-9700) or Gabelli Growth (up 65.7% in the
three years to Aug. 1; 800-422-3554). The remainder of Kauffman's
model portfolio: zero-coupon bonds (a $1,000 bond that comes due in
10 years would cost you around $450 with a yield to maturity of
8.2%).
As you save for even longer-term goals, such as a college fund for
a toddler or your own retirement portfolio, put as much of your
portfolio into stocks as your tolerance for risk will allow -- say,
60% or more. While total-return and growth funds should make up the
biggest portion of your equity holdings, you might consider putting
10% or so in aggressive growth or small-company stocks to give an
extra kick to your portfolio. Two small-stock no-loads that are
consistent top performers on a risk-adjusted basis: Pennsylvania
Mutual (up 62.3% in the past five years; 800-221-4268) and Nicholas
(up 78.9%; 414-272-6133).
Determining precisely how much you need to invest to meet these
goals also depends on your time frame as well as the amount you have
already socked away. (The worksheet on page 34 of MONEY's 1992 Best
College Buys, on newsstands now, can help you with college-fund
calculations. For help in figuring out retirement savings, see page
90 of MONEY's June 1991 issue.) Don't be too discouraged, though, if
you can manage only a fraction of the amount needed. ''None of us is
Croesus with unlimited resources at our disposal,'' notes Kauffman.
''Think of your investment plan as a kind of coloring book. You
start with an outline, fill in parts bit by bit, and eventually your
picture will be complete.''

YOUR HEALTH CARE
The vast majority of Americans are well satisfied with the quality
of medical care they receive, according to a Gallup poll released
this summer. The cost of their treatment is quite another matter.
Indeed, nearly one in four Americans postponed treatment in 1990
because of fears over how much it would cost, according to a
nationwide survey conducted last year by the Los Angeles Times. And
nearly half worry that they would be unable to afford high-quality
medical care if they became critically ill.
With good reason. Health-care costs rose 8.6% last year and have
increased at a rate nearly double that of inflation over the past
decade. Insurers and employers have responded by shifting an
ever-greater proportion of health-care costs to consumers by raising
deductibles and co-payments and by restricting coverage for certain
conditions and medical procedures. You may be able to pare your costs
considerably if you work for one of the nearly 40% of all companies
-- up from just 15% in 1985 -- that offer more than one health plan.
The cost of the most comprehensive option may be as much as 25%
higher than that of the most basic plan.
While you don't want to go without coverage that you really need,
there is also no reason to pay for insurance you'll never use. For
example, a couple who are in their fifties probably don't need
prenatal and well-baby coverage. Nor do you need to pay for insurance
for your spouse if his or her work policy provides most of the same
benefits as yours at no cost. Advises Charles Inlander, co-author of
Getting the Most for Your Medical Dollar (Pantheon, $15.95): ''Don't
choose the Cadillac policy when all you really need is the
Chevrolet.''
You can trim your out-of-pocket expenses even more if you or your
spouse works for a firm that offers a flexible spending account.
These accounts allow you to pay a portion of your unreimbursed
medical bills with untaxed dollars, typically up to a maximum of
$1,000 to $2,500 a year. Although half of all companies with 1,000 or
more workers sponsor such plans, only about 20% of their employees
use them, estimates Kenneth Sperling, a consultant in the Rowayton,
Conn. office of Hewitt Associates, a Lincolnshire, Ill., benefits
consulting firm. Failure to use an FSA is just plain stupid, because
the tax savings can be sizable. For example, a couple with two
children who make $50,000 a year would shave $674 off their federal
income and Social Security taxes if they put $2,000 into their FSA.
If you need an individual policy, compare prices and features from
several insurers before making a decision. Take the highest
deductible you can comfortably afford; the higher the deductible you
choose, the lower your monthly premium will be. Other valuable
features include a ceiling on lifetime benefits of no less than $1
million and an annual limit on the amount of money you pay out of
your own pocket: $1,500 for individuals and $3,000 for families. As
a rough rule, a 45-year-old with three dependents could expect to pay
at least $250 to $300 a month for such a major-medical plan.
Getting medical coverage, however, is not as easy as simply
signing a check made out to an insurer. According to various
estimates, between 8% and 24% of all applicants are denied coverage,
mainly because of pre-existing conditions ranging from serious
illness to pregnancy.
If you have been turned down for a policy, you may be able to get
coverage from Blue Cross/Blue Shield -- that is, if you live in one
of the 11 states where the Blues open enrollment to all comers for a
few months or more each year. The typical cost of such a policy for a
family of four: $250 to $600 a month. Some 25 states also offer
high-risk insurance pools for individuals who do not qualify for a
regular health policy. Your state insurance department can tell you
if yours is among them.
Get the coverage you need, pronto. Without it, you jeopardize the
other smart financial moves you make to boost your standard of
living.