28 responses so far ↓

• 1 dogatemyfinances // Mar 23, 2009 at 10:10 am

  This is why I don’t take advice from journalists squeaking by at 40K a year.

• 2 Tuesdays Tip // Mar 23, 2009 at 10:18 am

  My parents tell me the exact same thing! As depressing as the economic downturn may be at times, I believe it is the best opportunity our generation will see in the next 10-15 years (b/c we will face another recession in that time frame).
  The economic cycle creates opportunities for some and awakens others. Some of us will take advantage, while others will continue to play the victim. Which side are you on?

• 3 Funny about Money // Mar 23, 2009 at 10:29 am

  Bizarre. I can’t even imagine how anyone could expect young people to be buying stocks when those who do have jobs have no idea whether they’ll still be employed tomorrow and those who don’t feel lucky if they can find a position answering telephones.

  Obviously, if you are employed and you have a 401(k) or 403(b), this is the time to buy stocks and to add extra savings if your plan allows it. But outside of that, I think most people who are fortunate enough to still be working are stashing savings in bank accounts and the money market to build emergency funds. That would make sense.

  As for whether the meltdown helps the under-35 set: gimme a break! After the last recession, a study showed that people who finished their MBAs in the depth of that recession were “behind,” financially and in terms of their career positioning, those who graduated at the end of the recession. This was because the jobs the slightly older MBAs had to take paid less from the outset, and because they often had to take work that had less potential for advancement. The set that graduated when the economy was starting to boom again went into better-paying jobs with more promising futures.

  The trouble with journalists is that our idea of “research” is interviewing the required six (count’em, 6) people for the story at hand. On deadline, we rarely have time to look into the history of an issue, and many journalists are not trained to do so.

• 4 Kristy // Mar 23, 2009 at 11:00 am

  I am one of those who cheer every time the stock market plummets. Yes, it is scary, however, I agree that this is great for the younger generation. Unfortunately, not many youngsters will take advantage of the opportunity.

• 5 JoeP // Mar 23, 2009 at 11:24 am

  It will be terrible for our children and their children, who will be paying down the deficit that has a 2 wars and massive bailouts…along with who knows what in the next few congresses. In order to give our kids and their kids a big enough inheritance to balance out the unbelievable taxes they will face, now is a good time to start building your funds in the stock market.

• 6 asgreen // Mar 23, 2009 at 12:11 pm

  I think it is a mixed bag. For those of us who are in a secure job and can contribute to 401k/403b, the deal we have is awesome. But it is hard to see that things are great right now with job losses and salary freezes.

• 7 Meg from FruWiki // Mar 23, 2009 at 3:06 pm

  I can’t help but think of the local kids who are being packed into even more overcrowded classrooms now because schools are closing and 1st-3rd year teachers (i.e. those without tenure) are being laid off. Think of the effect that will have for them — and our future economy!

  Yes, the recession will be good for the few who can take advantage of it. The problem is, though, that they were the people who were already doing very well. The rich get richer, the poor get poorer.

  The only consolation perhaps is that we now see how many people we thought were “rich” — and who even thought themselves were rich! — were really living paycheck to paycheck because they were deep in debt. It does make me feel a little better to know that they didn’t have things all figured out when we were struggling to figure out their secret to “success”. Awww, schadenfreude.

• 8 LivingAlmostLarge // Mar 23, 2009 at 6:06 pm

  Kristy, is it because you are in a recession proof job? Do you think you’ll continue to make the same amount of money continually without layoffs?

  My biggest worry isn’t saving, it’s whether I’ll have a job so I can save.

  Asgreen, that’s it exactly. With a job, I have money to save, pay my bills, etc. But will be job be outsourced? Will it be downsized?

  Meg I agree 100% about the rich getting richer and the poor getting poorer.

  I heard on NPR, that the average investment banker makes 19x the median salary of $50k. My DH’s words out of his mouth “Damn I need to be an i-banker”. Um, yeah, me too.

  Apparently the disconnect between middle class and rich? The top 1% of earners salaries have gone up from 40x to 400x the average. So they are way, way above us.

  And supposedly I fall in the top 5% of earners, but heck I’m not even close to the top 1%.

• 9 Kristy // Mar 23, 2009 at 7:16 pm

  No I am not in a recession proof job and I am having a baby next month. I just think that if you can afford to save then now is a great time to be investing in the market or housing. If we were not having a baby in 3 weeks, we would be investing in real estate as well.

  As for my job, I am paid on commission, so nothing is guaranteed. I will have good years and bad years, last year was my best year. I have also spent a lot of time taking courses and educating myself in my career…this has helped my income as well. Dh on the other is in a recession proof job….he manages a liquor store. People drink in good times and in bad.

  The reason I am cheering on the plummet of the stock market is because DH and I have been responsible with our money since the day we married. We already have an E fund, paid off cars and hardly any debt. It is a perfect time for us to invest. Now, in saying that, we would have invested more had we not been saving for my unpaid maternity leave. After maternity leave is over, we will reevaluate what is left over and see where we should allocated the leftover money.

• 10 dogatemyfinances // Mar 23, 2009 at 8:08 pm

  Even if you have a pile of cash, I don’t understand how you could possibly be cheering for all your friends’ layoffs and losses.

• 11 fengshui // Mar 23, 2009 at 8:37 pm

  I was out for happy hour last week on St Patty’s day, and there was a pretty decent sized group of us. At the table, only 3 of us had jobs…. Kind of hard to even think about buying a home when you have no income…..

  And, I wasn’t sure what you meant by: “Finally because credit is non-existent, we won’t get into trouble borrowing money we can’t pay back”.

  Credit is non-existent?

• 12 Kristy // Mar 23, 2009 at 8:38 pm

  As I said, I cheer when the stock market plummets. Not when friends lose jobs.

• 13 fengshui // Mar 23, 2009 at 8:41 pm

  LAL, are you referring to you AND your hubby in your statement “And supposedly I fall in the top 5% of earners, but heck I’m not even close to the top 1%”? You say “I” but I wasn’t sure if you meant “we”. I thought I remember you posting something recently about you calling your job a “non-job” because it didn’t pay well, and it was just something you did while you’re a FT student? Or else I’m confusing you with someone else…. ?

• 14 Abigail // Mar 24, 2009 at 4:31 am

  Actually, Dog is incorrect about the woman’s salary. She’s actually a family friend and wrote an entire piece on when she realized she was a millionaire (at least on paper). She’s mainly just a very well-respected personal finance writer. But, as I said on Dog’s blog, I think the headline was tacky and sent the wrong message to people who’ve had to watch friends and family suffer through layoffs.

  I think in this economy, though, seniority may be a slight liability, LAL. At least in journalism, the trend has been to hire the newbies, pay them next to nothing and then get them to do the work of several people. This allows them to lay off the more experienced journalists making the bigger salaries. I think we may see more of that as we go along in this recession.

  I do think, though, that this recession will ultimately benefit our generation. At least, in that housing prices are becoming saner and stocks are no longer overvalued. That said, it’s hard to figure out how to take advantage of these things if you’re worried about keeping your job. So… A few conflicting messages in this period.

• 15 LivingAlmostLarge // Mar 24, 2009 at 12:09 pm

  Kristy, I think I’ve been reasonably responsible with our money since we married and even before. But I still do not feel as though this is a great time. It is very difficult not to worry about losing our jobs or finding one in my case. It is very difficult to wonder if we did lose our jobs, we do everything correctly and have 6 months EF, what happens if we can’t find a job in 6 months?

  I think that it’s definitely harder to be investing when most twenty-something as paying off debt like student loans, car loans, mortgages, and even trying to save a substantial emergency fund.

  Fengshui, if you read a lot of credit card companies, mortgage companies are not giving out loans as freely apparently. People are having a tougher time getting credit.

  Abagail, I certainly hope so. In my field, the trend has been for people with tons of experience be willing to take any job at any salary. So they can advertise for a specific skill set and salary and get tons of applicants.

  I agree it’s hard to take advantage of home prices or stocks when you want to be sure you have a job.

• 16 Kristy // Mar 24, 2009 at 12:34 pm

  LAL, I too am worried, especially since I work on commission and am the breadwinner and I am going on maternity leave. However, I do not think its wrong to be excited to invest when the market is low, which I have been. I would have LOVED to have invested more in stocks or in real estate this time around, but its not in the cards. However, I will be prepared for the next recession so that I can take full advantage of the low stock prices and hopefully low real estate prices.

  And I do think that long term, if the younger generation is investing in 401Ks and other retirement options, then yes this will be an advantage long term. They are buying low. As for housing prices, do you really think that most 20 something year olds should be purchasing real estate? Isn’t that part of how we got into this mess in the first place, by not making a 20% downpayment when buying real estate?

• 17 Sarah // Mar 24, 2009 at 1:14 pm

  Kristy,

  You think only 20-somethings with dreams of homeownership were the ones not able to scrape together 20% for a downpayment? Haha!

• 18 Tuesdays Tip // Mar 24, 2009 at 1:19 pm

  From my experience, the 20-somethings weren’t the problem with the mortgage meltdown. I can’t tell you the number of people in their late 30′s and 40′s who decided it would be a great idea to buy a property they can’t afford to begin with and now are claiming they were “forced” into buying the house.
  I don’t worry about the 20-somethings, I worry about the people who think that signing a contract indicates they were “forced” into an agreement.
  I stand by my statement that the next 2-4 years will be the best opportunity 20-somethings see to get ahead until the next recession comes around in 10-15 years.

• 19 Kristy // Mar 24, 2009 at 1:23 pm

  Sarah and Tuesdays Tip…did I say only 20 somethings?? No. I said they were part of the problem. Part of the problem is that as 20-somethings, they want instant gratification and don’t feel like saving for items they want…hence the abundance in credit card debt and no down payments.

  I am well aware of what is going on in the real estate market…as I work in it and have for the past 8 years.

  Tuesdays Tip…I agree with you though, now is best time for the young people to get ahead.

• 20 Tuesdays Tip // Mar 24, 2009 at 1:28 pm

  Kristy, I think you will agree then that everyone is part of the problem. Sorry, it just drives me nuts when others point at 20-somethings and claim they know nothing about finances. Working in the mortgage industry I see my fair share of borrower in their 30′s, 40′s and 50′s that still have NO CLUE about personal finance.

  Your 20′s is an opportunity to make mistakes and figure it out. Hopefully sooner than later. I’m excited for the next few years. Yes it will be tough for some people, but you create your own opportunities so rather than focus on the negative I prefer to focus on all of the opportunity out there!

• 21 Kristy // Mar 24, 2009 at 1:31 pm

  Tuesdays Tip-Yes I agree, everyone had a part in the mortgage meltdown. Our country has become a group that likes to blame everyone else and take no personal responsibility for their actions. Hopefully, this will change. I am like you, I try to look at the positive instead of focusing on the negative. Hopefully it will pay off in the future!

• 22 LAL // Mar 24, 2009 at 8:09 pm

  Kristy, I believe that even if I had more spare cash, I would not be investing. I would saving it for cash. Even with the market cheap, right now I am thinking about the job prospects. If I were older would I be investing? It depends, on how much cash savings I had at that time.

  As for buying a home in your 20s? Depends mostly on where you live, if you ever want to move, and COLA. I think some areas of LCOLA it’s cheaper to buy than rent.

  Sarah I agree it was more than 20-somethings that caused the problems.

  TT, a lot of people were “buying” and flipping homes in their 30s/40s because it was “easy money.”

  I don’t know what the answer is. Live at home?

• 23 eemusings // Mar 28, 2009 at 2:52 am

  Hell no, it’s a terrible time to be starting out. For those with some money stashed away it’s a great time to be investing or looking at buying a house, but for us right about to start our ‘real lives’ reality bites.

• 24 DL // Mar 28, 2009 at 10:46 am

  “Real Life” is 10 times better than any stage of life prior to. I have more fun now than I did in college. Here’s the logic: In school you go to class, do homework, and usually pay to attend. Now, I work during the day, rarely have work to do when I get home, and take home paycheck based on my performance. How could it be any better?
  Paying to do work vs. getting paid. To me its a no brainer. And there are million, yes millions, of opportunities in a market like this. I love the fact that I’m still in my 20′s and have an opportunity like this to take advantage and get ahead while others are paying the price of the lifestyle they could not afford the last 5 years.

• 25 LivingAlmostLarge // Mar 30, 2009 at 10:54 am

  EEMusings, I agree it’s a great time if you have money saved.

  DL, I like working better than school. Go home, nothing to do. School, you have to read, write papers, etc.

  But do I believe most will get ahead? No way, they are too busy struggling to keep afloat, trying to keep their jobs in this recession. If we hit something like double digit unemployment how many will still be hunting for a job?

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