(MONEY Magazine) – COVER STORY: THE SACRIFICE OF THE CHILDREN

The college admissions mess by Eric Schurenberg A process that has come to consume entire families has paused once again as high school seniors face the acceptance and rejections of their college applications. But the residual feelings of cynicism, bitterness and sheer exhaustion pulse on. Why? Because that very process is at once misleading, capricious, excessively expensive and, worst of all, fails to match students with colleges where they will flourish. Blame it on ambitious parents who push their children to the most selective colleges, on a growing industry of self- serving merchandisers and ''rating'' services, and perhaps most of all on the increasing use of marketing techniques by the colleges fearful of enrollment declines. Page 142 -- Saga of a superapplicant. Page 144 -- One high school copes. Page 148

Breaking the myths of admissions by James W. Wickenden Much of the angst that grips both students and parents is based on bunk. An ex-director of admissions reveals the reality. Page 153

SPECIAL REPORT: COPING WITH INFLATION

Your best ways to beat inflation by Jerry Edgerton Slow growth and rising prices recall the stagflation of the 1970s. But despite the worrisome economy, there are smart stategies to help you prosper. Page 58

Nine timely, worry-free investments by Jerry Edgerton Accelerating inflation and a slowing economy are signaling caution -- especially for investors who rely heavily on growth stocks and equity mutual funds. Fortunately, there are still investments that offer safe, inflation-beating returns. Page 60 -- The best hedges against inflation. Page 62 -- The California Raisins are hedging their income investments against inflation with 40 acres of beachfront land. Page 64 -- A Christian business executive and his wife, a radio show commentator, are avoiding speculation to conserve what they think of as God's gifts. Page 66

How to cope with lending rate gloom by Greg Anrig Jr. Don't sink into a funk over rising interest rates. You can beat today's high cost of money by managing your debt more carefully. Pay down principal where possible, starting with credit-card loans (they have the highest rates) and home-equity lines of credit (they move up fastest). If interest on your adjustable-rate mortgage is over 11.5%, you may actually come out ahead by refinancing to a new ARM with a low 9% teaser rate. Page 70 -- Soaring rates disrupt a family's building plans. Page 72 -- How lending rates are increasing in tandem. Page 76 -- A couple come out ahead with an ARM. Page 78 -- A consumer's guide to beating inflation. Page 81

FEATURES

The $50,000 haircut by Frank Swertlow A 43-year-old newspaperman in seemingly good health is told he has an aneurysm in his brain. It could burst at any moment. Or it might never hemorrhage. Brain surgery, on the other hand, could also leave him crippled, blind or dead. He has just a few weeks to decide what to do -- and to prepare his wife and two young children for the ordeal that threatens all their dreams. This is his story in his own words. Page 84 -- What you should do to protect yourself in sickness and in health. Page 94

Checking in on budget motels by Richard Ford ''These cheapjack places are to real hotels what a Barcalounger is to an honest-to-God chair or a Full Cleveland is to a cashmere overcoat,'' writes the peripatetic author, whose 1986 novel The Sportswriter was named one of the year's five best by Time magazine. ''And we like them a lot . . .'' Page 102 -- The leading budget motel chains. Page 106

How to launch an investment club by Walter L. Updegrave A team approach can make serious investing both fun and profitable. In addition, investment clubs are a great way for novices to gain stock-picking experience and for more sophisticated investors to pick up valuable tips for their own portfolios. Here is a rundown -- based on 7,000 existing clubs -- on what you need to know to establish your own. Page 117

COVER CREDITS: Photograph by Tom Arma, stylist Pamela Goldman, makeup by Paddy Crofton of Olive Head

Mastering the math behind your money by Clint Willis Spend 20 minutes with this article and you learn just how easy some useful personal-finance computations can be. All you'll need is an inexpensive pocket calculator. Page 129 -- The arithmetic to figure how much you should save. Page 130 -- And how big a mortgage you can afford. Page 132 -- Four top number crunchers. Page 133 -- What are you really earning on your investments? Page 134 -- Are tax-free yields best for you? Page 138 -- Are tax-free yields best for you? Page 138

DEPARTMENTS 5 Editor's Notes College admissions; introducing the MONEY Guide to the Basics of Personal Finance 7 Wall Street Blue-chip stocks ready for a rebound 15 Money Update Credit-card pitches you should dodge; a tax-deferred CD that's too good to be true 23 Money Helps Answers to your questions 31 Investor's Scorecard Banks vs. funds; rising points 39 * Fund Watch Solid funds for under $250; hot money markets with double-digit yields 53 Your Health Rating the medical and nutrition newsletters 159 Model Portfolio New alternatives in retirement plans 163 Home Office Basic choices in fax machines 169 Investing Basics How to keep your portfolio tuned to the business cycle 175 Family Finance Fast ways to raise rainy-day cash 180 Mail Letters from our readers 183 Retirement Is an immediate annuity for you? 187 Real Estate Choosing and using a broker 191 Money Profile A Texas maverick's view of inflation 194 May Checklist What to do now

Clockwise from top right: David Strick, Jan Staller, Eugene Mihaesco, Tom Zimberoff, Tom Arma