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Home > Blogs > Here's the Deal > Archives > 2009 > March > 17 > Entry
Recession can be great — if you are young
Yeah, we know. It is great to be young.
And, as if to hammer in that point in a current events sort of way, the folks over at MSN Money are pointing out that if you are younger than 35, this whole recession thing might actually be a great thing for you.
Unlike how it is for those of us who are 35 or older, that is; those of us for whom the financial crisis is but a drain on our retirement funds, killer of home equity and job prospects, and abuser of credit lines.
If you’re young, the story says, the biggest threat to your future financial security isn’t the current crisis — your greatest risk is that fear will cause you to miss some once-in-a-lifetime opportunities.
Among the benefits to “youngsters”:
Houses are on sale. Home prices are down 27 percent from their July 2006 peaks, according to the S&P/Case-Shiller Home Price Indices, and values have fallen more than 40 percent in some areas.
Those just starting out who can now afford better homes and neighborhoods than they could have just a few years ago.
Prices could drop further, but for now, interest rates are still near generational lows but are likely to shoot up once the recovery begins.
And the Internal Revenue Service will give you an $8,000 tax credit if you buy before Dec. 1.
Stocks are on sale. If you’ve got at least 30 years until retirement, your investment should be sound. Even those who invested before and during the Great Depression, when stock indexes plunged by up to 90 percent, eventually came out ahead.
Credit is tight. So you won’t be able to borrow your way into trouble, at least for a while, as much as your elders. You may actually learn to live within your means.
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