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Can The Less Affluent Build Personal Wealth?

October 10, 2002 — Many wonder how it is possible that during the 1990s, when stock and home equity values were rising, the net worth of many Americans declined. What do these changes in wealth holdings imply for low- and moderate-income families? Will they be able to buy a home, send their children to college and live comfortably during retirement?

Dr. Stephen Brobeck, executive director of The Consumer Federation of America (CFA), will provide perspective on these and other financial questions Oct. 25 when he presents “Can the Less Affluent Build Personal Wealth?” The lecture, which is free and open to the public, will be held at the University of Utah, from 12 noon until 1 p.m., in the Marriott Library’s Gould Auditorium

A national expert on saving and wealth accumulation, Brobeck will identify the economic, institutional, cultural and socio-psychological factors contributing to the growing wealth disparity in America. “Over the last decade, despite increases in income, many households increased their debt burdens, offsetting gains in their financial assets,” he notes.

Brobeck will also report on the impact of a promising new social marketing strategy, the America Saves Campaign. Initiated by the Consumer Federation of America and currently used in more then 20 communities nationwide, the program encourages greater family savings.

While in town, Brobeck will meet with various community organizations working on local initiatives to encourage lower-income households to save for the future.

Brobeck’s information could not be timelier in light of these sobering statistics:
— Between 1983 and 1995, the average net worth of U.S. households in the bottom 40 percent of the population declined by 80 percent.
— Today, the bottom 40 percent of households in the U.S. hold 0.2 percent of the available wealth.
— In 1999, 53 percent of Americans said they sometimes, most of the time or always “live from paycheck to paycheck.”

“As our department is interested in improving the well being of families, educating lower-income consumers is a vital topic,” says Cathleen Zick, professor and chair of the U’s Department of Family and Consumer Studies. “To improve their financial position, lower-income consumers must avoid using credit for purchases and instead save, then pay cash, for purchases. This is one way lower-income families can stretch their money a lot further, which, for some, may translate into having a down payment for a home or being able to pay cash for a car.”

This is the second annual lecture on family financial matters co-sponsored by the University’s Department of Family and Consumer Studies, TIAA-CREF, a national financial services organization, and Kappa Omicron Nu Honor Society.