What the meltdown means to me, a married 25-year-old without a house
Filed under: Real Estate, Retire, Recession
Even though I don't have nearly as much to lose in my retirement account as my elders, the sad state of our economy has still had an effect on my life plans, but not all for the worse. I share many of the same concerns as they do regarding the strength of our economy and the overall health of our financial institutions but by virtue of my youth I see fewer immediate downsides and a silver lining inside the gloomy forecast.Since we didn't get caught up in the fever of home ownership that swept America recently, my wife and I aren't in the position to lose our home because of the rising interest rates that many others were hit with. Even though we dodged the subprime bullet, one of my biggest concerns is that when we are ready to purchase a home in the near future we won't be able to get a mortgage with favorable terms thanks to constricting credit.
As far as retirement goes, I'm still socking away as much as I can in the hope that I make out well when the upswing happens, but I'm worried about being called upon some day to finance the retirement of my older coworkers as well as the remnants of the bailout package. Speaking of employment; I'm not losing sleep over my livelihood as a result of the current crisis because two of my three jobs are in higher education, an industry which I think will fare better than others.
While I am concerned that it may be harder to get a mortgage in the near future, the current housing slump means that we may be able to purchase a house sooner than we had anticipated. With sinking housing prices and several forms of government incentives, it's likely that we'll be able to purchase a home that fits both our needs and wants without overextending our reach.
All things considered, I'm concerned but not distressed by the current financial crisis. At 25 I have plenty of time to build my retirement savings and have multiple sources of income, none of which are attached to the banking industry. I have my worries about the financial well being of my older family members, the overall health of the economy, and the leadership of the country; but I am confident in myself and my generation's ability to cope with the current situation.
Reader Comments (Page 1 of 1)
10-07-2008 @ 10:46AM
i love food said...
haha john smith classic
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10-07-2008 @ 11:49AM
Bas said...
Consider yourself lucky right now.
My husband and I bought a house right before the run-up in prices with a 30 yr. fixed low rate, qualifying on only one of our salaries - but over the last 2 years, my mother-in-law was layed off from her job, went thru much of her savings trying to live and pay for her medications and health insurance until she could file for social security (she looked hard for a job, and still looks, but don't let anyone tell you that age discrimination doesn't exist), got sicker, and now lives with us and we help support her.
Over the next couple of years, whether it is the elderly moving in with their kids or younger people moving back in with their parents, I think that we're going to see a lot more of this happening. If you are only a couple of years from retirement, you don't have the time for the market to recover.
In addition, everyone says the market will recover, but will it recover to where it was before, if the "before" was artificially inflated? And if it does, who's to say that taxes (to pay for rising entitlements) and inflation won't completely wipe out any paper recovery?
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10-07-2008 @ 2:43PM
s.blankensihip said...
As the old saying goes, "Bully for you" Josh Smith, too bad that most other young folks don't think like you.
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10-07-2008 @ 4:03PM
Nikki said...
I am 27 years old, and believe i have a pretty good head on my shoulders. I'm "single" meaning, not married, and well, i rent - living with my bf - as opposed to own. Don't get me wrong, I would love to own my own place someday. As an immigrant, I was fortunate enough to work my arse off and strive for the best. I am well educated, very open minded, and a hard worker. I saved up - but now, with hard times, i have pretty much depleted my - then growing- savings, sigh! I have already accepted the fact that, all the SSI they so willingly take out of my cheque will not come back to me. It's the truth, I'm a realist. I teach ESL and freelance Medical Copy Editor, but I certainly am not making anywhere near what I did when I worked full time. However, I don't regret giving up my FT job to pursue what I truly desired to do. I travel as much as is feasible - and of course, being an ESL Teacher, this has it's advantages because I can still travel to other countries to supplement my income, and live cheaply. I am very very concerned - as is everyone - about the future of this country. I love saving, but once I realised sometime earlier this year that my IRA was losing money, I pulled out and used it to finance the last semesters of my schooling, so that I would get the best out of it and at the same time, avoid the penalty for early withdrawal- but I did leave a chunk in there just in case! LOL - now I can't and haven't even beared to look at what is left in there!
I did, earlier this year, at the advice of a good friend by gold (coins) as a means of saving. However, since I wasn't really making all that much, I still restricted my buying power, and only purchased, a little over $4000 in gold. That is my only saving grace at this point in time since it has doubled in only 6 mths. I think of it - of course - as a long term investment (the gold) and it's out of sight out of mind. I don't know when I'll be able to start saving again, and it hurts me to see my once growing savings acct, now down to a measly few dollars. I don't have much faith in the American economy right now because this was a long time coming, and we are still putting band-aids on the growing sore...not the best solution. And, of course, the bailouts only support the trickle-down effect ideology, which, in all honesty never supported the hard working class Americans, and fellow legal immigrants of this country even when the economy "seemed" ok. It saddens me so to see such a bleary future.
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10-09-2008 @ 8:40AM
Sherry said...
Where did you buy gold? I would love to do that. I have heard the commercials about it on the radio. But never take down the number.
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10-11-2008 @ 4:22PM
jcworth said...
There are reasons to buy some gold, but as a long term investment is the worst one. Don't take my word for it,Check out the long term rate of return on gold for the last 100 years vs stocks or real estate. Great way to guarantee you remain poor. That being said, having 20 thousand in silver dimes & bulk junk gold jewelry could be worth, shall we say, its weight in gold, when the shtf.
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