Lisa Simpson
Oct 13,2009
In: Real Estate

Recession Offering Opportunities to the Youth

In the beginning of the current year, a young salesperson residing in Scottsdale in Arizona, disciplined himself – did without costly meals and vacations. Instead he put every dollar he could spare into the stock market. The worth of his portfolio has gone up three times since the market began to turn around in March. Jubilant he described the situation to be like purchasing a swimming gear in autumn or a winter coat in spring.

But septuagenarian Irvin Hall living in far away Detroit is experiencing recession in quite another way. His mutual funds dropped by 35% at the time of the stock market crash that began last autumn. It continued to spiral down for the following six months. But the story did not end there – his pension from General Motors went down by 10%. With the company reducing insurance benefits he and his spouse have to dish out enormous amounts for health care. Hall bemoaned, “It takes your mind a while to really adjust to this. You’re expecting, hey, I’m set for life, and then all of a sudden that’s taken away.”

The focus has been on the plight of the baby boomers of yesterday who are in a sorry plight today. But those in their twenties and thirties times have been good and they are feeling secure. Many who had been tenants had little or nothing in stocks. Thus they did not take a big hit on the value of their non-existent house or 401(k) account. But now they are poised to invest at a time when prices have gone down to absurd levels.

The value of property has gone down by 30% generally but in some pockets it is down by a much as 50%.
The young are benefiting in other ways also. The cash-for-clunkers has helped them to exchange their weather beaten old jalopies for swank new cars at a reduced price. John Rogin a dealer in Buick in Livonia, Michigan commented, “They’re never going to see that again.”

With the record breaking drop in consumer price index since the last 12 months, the young have been able to put in more money in stocks and housing. George Jaramillo is a business analyst of Atlanta. He said, “This is a historic time. It’s a great opportunity to make some great gains in the future.”

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