(MONEY Magazine) – A more glossy gathering of self-made women could scarcely be found than at the annual Power Lunch for Women to benefit Citymeals-on-Wheels, which provides meals for homebound elderly New Yorkers. There the women were last November in Manhattan's Rainbow Room, suited up in Armanis and Ungaros, their French-manicured nails uniform as plastic spoons, giving off the scent of self-confidence as strong as perfume. They picked at fantastic desserts while watching a short film about the helpless older people who were the beneficiaries of their $250-a-plate largesse. Luncheon speaker after luncheon speaker confessed that she identified with the proud but broken women. Not far beneath the chrome of their professional success lurked the slimy toad of fear, the revolting fantasy that they too might end up living in a box outside Bergdorf's.

"I have nightmares about it sometimes. I mean, I'm not married and I have no personal safety net, only an elderly mother," confessed a veteran TV producer in her mid-forties. "I don't want to wake up as a bag lady when I'm old. Am I weird?"

Not at all. The prevalence of bag-lady fears, particularly among professional women who are beyond economic dependence on a man, is really quite astonishing. It emerged time and again as I talked to hit moviemaker Nora Ephron, best-selling author Gloria Steinem, superagent Joni Evans, former Planned Parenthood director Faye Wattleton and others. They, just like me, harbor fears of finding themselves old, alone, forgotten, homeless.

Not long ago, when San Francisco psychologist Melanie Horn heard a female patient over 40 express fears about becoming a bag lady, Horn put it down to feelings of emotional deprivation. "But these days we're all looking at these fears more realistically," she says. "I have some myself. We're seeing ourselves and our relatives get older and probably not having enough financial security to last."

It has been only in the past 25 years that women have had to learn to balance a career with caregiving; now they have to figure out how to build a nest egg that will sustain them for the rest of their lives. For today's healthy 50-year-old women, those lives will routinely extend into their eighties and nineties. It's all so new to us. No wonder so many of us--despite the progress we've made--are still struggling with the fear that we are not capable of controlling our financial destinies.

And we haven't many role models --especially single or divorced women--who retire in comfort and style. Jackie Kennedy was one. But Jackie's business was marrying rich and powerful men and extracting the most from it--a way of life almost as quaint as the pillbox hat. Contemporary women who earn their own income and can afford to retain a financial consultant generally bring along heavy psychic baggage. "Many are almost afraid of having the responsibility of managing their money," says New York City financial adviser Michael Braun. "They start off believing that they can't do it, so they really don't try." Instead, they buy clothes, go into debt, and then find themselves without any resources to invest as a hedge against the future they fear.

My own frozen reaction to the first time I earned more money than it took to pay the monthly bills was: "I just don't want to think about it." My book Passages, which I'd thought would sink without a trace, produced a windfall instead from three years on the bestseller list and translation into 28 languages. But after the euphoria of bestsellerdom wore off, I felt vulnerable. It wasn't money that had motivated me to spend three years of my life writing that book, supported by loans and grants.

"Now you'll have to learn how to husband your money well," said my accountant. Husband my money? As a divorced single mother at the time, I prided myself on stretching meatless spaghetti for two nights by adding chopped fresh veggies (that was before we learned to dignify the dish by calling it pasta primavera).

But suddenly everybody was giving me advice or pitching investment schemes. I had no confidence that I could avoid ending up like the proverbial dupe who wins the lottery and two years later is on the hook to Uncle Sam for back taxes. So I began giving the money away. Writing checks to charities and making gifts to family members--unburdening myself of the responsibility the money represented. "You're crazy!" protested the man who later became my husband. "At least buy a house." So I did; in effect, burying the money in the sand beneath a leaky basement on Eastern Long Island. I still own that house, and it continues to absorb my spare cash. The mortgage, at 8% interest, was probably the best investment I'll ever make.

When I hit my fifties, I felt another kind of financial fear. Although I was now remarried, both my husband and I are entrepreneurial types, and our fortunes rise and fall with breathtaking volatility. What would happen if I needed to take a year out to nurse a sick family member or deal with illness myself? It's not enough to have a few fixed assets, an IRA and an individual pension plan conservatively invested in blue chips--but that's all I had.

It gradually dawned on me that I would have to practice what I preach in my recent book, New Passages, to people entering second adulthood: You must be willing to take risks if you're going to shape a new self. So I set out to shape a new "financial self"--not a defeatist bag lady, but an active steward of my own money and an educated partner in joint decisions with my husband.

It meant being willing to expose myself as dumb. I read my friend Andy Tobias' wonderful book, The Only Investment Guide You'll Ever Need (Harcourt Brace, $12). Then I called him up to ask him questions. Andy told me I was grown up enough to retain a financial adviser. I said to the adviser: "Explain it to me like I'm in kindergarten"--and he did. When he forced me to think about how much risk I could stand, I realized that here was a chance to catch up. I had to think long term, socking away a maximum amount of money to grow and compound in a highly diversified portfolio. And I had to ignore the market when it went down.

To my surprise, I found that investing for growth is exciting. It changes the way I think about myself. Now my husband and I are experimenting with living bicoastally. He wanted to try out a new career, and we found relatively cheap rented digs in Berkeley while we became acquainted with the San Francisco Bay Area. Camping like graduate students was incredibly liberating (except when we were screaming at each other to get out of the sole bathroom). Just this fall we took the plunge. We bought a house and acquired a 20-year mortgage. Did I mention that the house happens to be in a high earthquake and fire zone? This locks us in to our philosophy: Second adulthood is the time of life to take maximum risks.

My bag-lady fears sometimes recur, but they don't control my actions anymore. The best way I know to counteract anxiety is to turn on the lights and face the bogeyman--or, in this case bogeylady. Educating myself about investing is the equivalent of turning on the lights. Now I'm not only willing to accept responsibility for my own money, I've started giving seminars about New Passages to women (and their financial planners) who want to make sure their money outlasts today's extended life span.

But just in case, I'm never going to forget how to dress up meatless spaghetti!

Sheehy's latest book is New Passages: Mapping Your Life Across Time (Ballantine, $12.95).