Charles Schwab explores the mystery behind 'Generation X'

If you were born between 1961 and 1981, you have probably heard the name "Generation X." The title of a novel by Douglas Coupland, a band fronted by Billy Idol, and a groundbreaking sociology textbook, "Generation X" also became the moniker slapped on the generational cohort that was bookended by the demographic wave of the baby boomers and the coddled generation comprised of the baby boom's children. In other words, Generation X was the neglected "middle child" of the late twentieth century: undereducated, over medicated, and generally pissed off, this group has become famous for its unwillingness to allow itself to be defined or demographically manipulated. It's also fairly well-known for its tendency to live in Mom and Dad's basement well into its thirties.

Over the years, marketers, demographers, and pundits have refused to leave Generation X alone, choosing instead to constantly poke and prod at it, seeking to uncover a generational identity that could be placed in opposition to the Woodstock generation, presumably as a lead-in to an inter-generational caged fight that would pit boomer selfishness against X-er self-loathing and the boomer "cause of the moment" mentality against Gen X's supposed apathy.

The latest contestant in the "let's define a generation" game is Charles S. Schwab. Just when x-ers thought it was safe to pretend that they don't have a generational identity, the recent "Charles Schwab IRA" study of over 5,000 25-to-40 year olds, has determined that Generation X is comprised of six distinct financial subgroups (the titles, by the way, are mine. I liked them better than "group 1, group 2, and so forth). Unsurprisingly, I know people in each batch. Do you?

Paycheck to Paycheck: According to Schwab, 25% of Generation X-ers live from paycheck to paycheck. They try to avoid racking up debt, but are unable to really put any money away. They are predominantly female, live on a strict budget (85%), and are very pessimistic about their personal, financial, and professional future.

The Grasshoppers: Schwab identifies 17% of Generation X as "spend now, pay laters." This group is spending considerable amounts of money, running up debt, and generally (61%) banking on a bright, beautiful future in which the money fairy will make everything okay. Predominantly male, they're also assuming (57%) that Social Security will still be solvent when it comes time for them to nose up to the trough.

The Dropouts: Unsurprisingly, 15% of Generation X has opted out of pursuing a consumerist lifestyle. At the bottom of the earnings pile (57% earn less than $50,000 a year), this group tends to avoid credit cards, is willing to pursue some risk in its retirement portfolio, and is quite happy living with less money, thank you very much. (Not that I know any of these people.)

The Wealthy Gamblers: Bucking the overall generational trend, another 15% of Generation X has apparently found its way to high incomes. Actively planning for retirement, this group is willing to take considerable financial risks in its pursuit of the big money. 96% are optimistic about their future.

The Ants: Another 14% of Generation X is apparently financially secure, but also financially conservative. They seek reliable, low-yield investments. 82% say that they are more likely to plan for the future than live for today.

The Overwhelmed: Finally, 13% of Generation X is confused and overwhelmed, yet optimistic. This group is, in some ways, the female answer to the "Grasshopper" group. They are dealing with considerable debt, often have variable-rate mortgages, and are generally in a very difficult position. Nonetheless, they remain optimistic about their futures, and 75% have a vision of where they want to be in ten years.

So there you have it: six nifty, generation-defining groups for you to choose from. Does any of this sound familiar?

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. His long-term plans include working until he dies.

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