Tribute to the Recession
While I know this economic time has caused lots of good people to lose their jobs, equity in their homes, etc. etc. I feel obliged to point out some of the good things we have experienced from this recession. I know my point of view is different as one of the people who has been fortunate to keep my job, and my point-of-view would likely to be different if I lost my job, which is not outside of the realm of possibility. Still, there have been beneficial effects of the recession, especially for people under the age of 30.
1) Housing/Rent
I saw an interview with Suze Orman (no jokes, please...) talking about how this recession was absolutely necessary because housing prices were spiraling out of control to the point where no one under the age of 35 would even be able to afford a home if they had continued. It's a valid point. This was a necessary correction in housing prices AND to the myth that the best investment is a house. It's one of the WORST investments but that's neither here nor there. I feel sorry for the people upside down in their house and with now wrecked credit but I also believe in personal responsibility.
For renters, you are paying a lot less. We got a huge concession on our apartment. I mean, I truly believe we are paying the fair price because I can't imagine paying what they actually had these listed as full retail value. Still, the negotiation power is in the peoples' hands now, especially with commitment items like cars, leases, etc.
2) 401k/Stocks
If you are under 30, this drop in the markets is one of the best things to happen. You are able to load up on cheap securities now for your 401(k) and investment plans. Trust me, I have made all the investment mistakes when it comes to daytrading/trading in general. Now, I'm just getting a well-balanced basket of index funds, contributing as much as I can to my 401(k), and hoping the market goes down more so I can be selfish and can buy even more shares...although, I'm okay with it going up for my parents' sake. That brings me to my next point:
3) Asset Allocation
Let this be a lesson. When you are 30, you should be in 30% safe, non-junk bonds, treasuries or CDs. 40: 40% bonds. 50: 50% bonds. I bet 9 of 10 parents you know, we were way too heavily invested in stocks, due to the idea that the market would always go up, and are now paying for it by having to recoup money in a very short window before retirement or working longer than they'd like. I hope that I always remember this lesson and make sure that at least half my money is in safe, capital-preserving investments when I'm within 10 years of retirement (I also hope I live to see 59 and 1/2.)
4) World Politics/Green Revolution/Peak Oil/Whatever
Go read the newest GQ (Michael Jackson on the cover) and the article about how Putin came into power in Russia. It may be controversial, but I believe there is some substance to it. Anyway, one of the reasons he has stayed in power was the mass influx of petrodollars that everyone was loving. The economic crisis has hurt a lot of the BRIC countries and has given the U.S a real opportunity to reduce our dependence on foreign oil and develop alternative energy. We probably won't get our crap together and take it but it gives us a chance. Also, if you believe in peak oil, this probably bought us another 3-5 years due to the reduction in fossil fuel consumption.
5) Deflation
Just like oil prices went way down (because Goldman Sachs stopped fucking with everything) which put a lot more money in consumers pockets, widespread deflation has made everything cheaper for the most part. But watch out for senior citizens who will still demand a cost-of-living increase. And will probably get it. Have I mentioned that I have soured on Obama in general lately? I mean what the hell was Cash for Clunkers if not just a direct way to subsidize auto dealers and how is going to let a 40-senator GOP just whip his ass like this? Democrats really are spineless pussies. Anyone read Tuesday Morning Quarterback on ESPN? He explains it better than me. Moving on.
6) Contractors
I didn't own or try to buy a house in 2005-2006, but even I remember what a dick people in the homebuying industry and contracting industry were on the whole. When they were overloaded with work, they would overcharge you and do a half-ass job or build you a house with paper-thin walls, at least here in Arizona. Now, shoe's on the other foot. You can name your price and save, just like Priceline.
7) Ponzi Schemes
Speaking of dicks, do you think Bernie Madoff would have ever gotten caught if not for a falling market and a huge demand for redemptions? I mean the SEC...heads up their asses. He was literally taking money and transferring it to his Chase bank account. He told investigators he averaged 20% returns every year based on his gut. He was supposed to be trading millions of shares but wasn't trading hardly ANYTHING. And they never caught on? Idiots.
8) Vacations
It's really cheap to go on vacation right now. You might need a vacation because you'll be doing 2 peoples' jobs at work, but it will be cheap.
9) Appreciation of non-monetary gifts
Seems like a lot of people recently are realizing money isn't all that important. It took losing that money for them to realize it, but we will take what we can get.
10) Sarah Palin
The economy is really what won the election for Obama/really tarnished Bush's legacy. Tiny Fey helped, but go back and look at the poll data compared to the S and P 500. With a strong economy, Sarah Palin would have came close or maybe even been a heartbeat away from the Presidency. A very old heartbeat. Don't mean to dog on John McCain because I have actually come to appreciate my senior senator since the election ended. I mean, I still think he is shady, but let's face it, so is Obama. Or all politics. Anyway, the drop in oil revenue in part likely caused Palin to resign in Alaska, too. Double score!
Moral of the story: The economy sucks and there are things about it that annoy me every day too, but 5 years from now people will be harkening back to when they could have bought stocks for cheap or how expensive housing is. So take advantage of it now. And save some cash in case things don't get better.
I don't mean to sound holier-than-thou...I have lost money, had to do more with less at work, and have been stressed about the future just like everybody else.
1) Housing/Rent
I saw an interview with Suze Orman (no jokes, please...) talking about how this recession was absolutely necessary because housing prices were spiraling out of control to the point where no one under the age of 35 would even be able to afford a home if they had continued. It's a valid point. This was a necessary correction in housing prices AND to the myth that the best investment is a house. It's one of the WORST investments but that's neither here nor there. I feel sorry for the people upside down in their house and with now wrecked credit but I also believe in personal responsibility.
For renters, you are paying a lot less. We got a huge concession on our apartment. I mean, I truly believe we are paying the fair price because I can't imagine paying what they actually had these listed as full retail value. Still, the negotiation power is in the peoples' hands now, especially with commitment items like cars, leases, etc.
2) 401k/Stocks
If you are under 30, this drop in the markets is one of the best things to happen. You are able to load up on cheap securities now for your 401(k) and investment plans. Trust me, I have made all the investment mistakes when it comes to daytrading/trading in general. Now, I'm just getting a well-balanced basket of index funds, contributing as much as I can to my 401(k), and hoping the market goes down more so I can be selfish and can buy even more shares...although, I'm okay with it going up for my parents' sake. That brings me to my next point:
3) Asset Allocation
Let this be a lesson. When you are 30, you should be in 30% safe, non-junk bonds, treasuries or CDs. 40: 40% bonds. 50: 50% bonds. I bet 9 of 10 parents you know, we were way too heavily invested in stocks, due to the idea that the market would always go up, and are now paying for it by having to recoup money in a very short window before retirement or working longer than they'd like. I hope that I always remember this lesson and make sure that at least half my money is in safe, capital-preserving investments when I'm within 10 years of retirement (I also hope I live to see 59 and 1/2.)
4) World Politics/Green Revolution/Peak Oil/Whatever
Go read the newest GQ (Michael Jackson on the cover) and the article about how Putin came into power in Russia. It may be controversial, but I believe there is some substance to it. Anyway, one of the reasons he has stayed in power was the mass influx of petrodollars that everyone was loving. The economic crisis has hurt a lot of the BRIC countries and has given the U.S a real opportunity to reduce our dependence on foreign oil and develop alternative energy. We probably won't get our crap together and take it but it gives us a chance. Also, if you believe in peak oil, this probably bought us another 3-5 years due to the reduction in fossil fuel consumption.
5) Deflation
Just like oil prices went way down (because Goldman Sachs stopped fucking with everything) which put a lot more money in consumers pockets, widespread deflation has made everything cheaper for the most part. But watch out for senior citizens who will still demand a cost-of-living increase. And will probably get it. Have I mentioned that I have soured on Obama in general lately? I mean what the hell was Cash for Clunkers if not just a direct way to subsidize auto dealers and how is going to let a 40-senator GOP just whip his ass like this? Democrats really are spineless pussies. Anyone read Tuesday Morning Quarterback on ESPN? He explains it better than me. Moving on.
6) Contractors
I didn't own or try to buy a house in 2005-2006, but even I remember what a dick people in the homebuying industry and contracting industry were on the whole. When they were overloaded with work, they would overcharge you and do a half-ass job or build you a house with paper-thin walls, at least here in Arizona. Now, shoe's on the other foot. You can name your price and save, just like Priceline.
7) Ponzi Schemes
Speaking of dicks, do you think Bernie Madoff would have ever gotten caught if not for a falling market and a huge demand for redemptions? I mean the SEC...heads up their asses. He was literally taking money and transferring it to his Chase bank account. He told investigators he averaged 20% returns every year based on his gut. He was supposed to be trading millions of shares but wasn't trading hardly ANYTHING. And they never caught on? Idiots.
8) Vacations
It's really cheap to go on vacation right now. You might need a vacation because you'll be doing 2 peoples' jobs at work, but it will be cheap.
9) Appreciation of non-monetary gifts
Seems like a lot of people recently are realizing money isn't all that important. It took losing that money for them to realize it, but we will take what we can get.
10) Sarah Palin
The economy is really what won the election for Obama/really tarnished Bush's legacy. Tiny Fey helped, but go back and look at the poll data compared to the S and P 500. With a strong economy, Sarah Palin would have came close or maybe even been a heartbeat away from the Presidency. A very old heartbeat. Don't mean to dog on John McCain because I have actually come to appreciate my senior senator since the election ended. I mean, I still think he is shady, but let's face it, so is Obama. Or all politics. Anyway, the drop in oil revenue in part likely caused Palin to resign in Alaska, too. Double score!
Moral of the story: The economy sucks and there are things about it that annoy me every day too, but 5 years from now people will be harkening back to when they could have bought stocks for cheap or how expensive housing is. So take advantage of it now. And save some cash in case things don't get better.
I don't mean to sound holier-than-thou...I have lost money, had to do more with less at work, and have been stressed about the future just like everybody else.