I talked about this in a Yahoo! Finance column back in February: The recession is going to be harsh for everyone. Yet younger people are relatively well positioned to weather the downturn.
From Newsweek:
If you ' re in your 20s, congratulations! It's not nice to rejoice in the misery of others, but if you're just starting out on your financial path, you are in a position to cash in on the crisis. "If you're 25, this is a great opportunity, you'll be buying in at a low in the market," says Steven Thalheimer, a Silver Spring, Maryland, financial planner. In addition to your workplace 401(k), plow as much as you can afford (up to $5,000 this year) into a Roth IRA. That money will accumulate tax-free until you need it for retirement. Save as much as possible for a home down payment, too. Under the new tighter lending practices, you'll need one to get into a house, and it's a good time to start house hunting. You'll be able to get into many real-estate markets at 2002 prices. Resist debt, and use as little of your money as you can for everyday life, so you can plow as much as you can into your retirement accounts, investments like diversified stock market funds and a home.
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You are on to something. The artificial run-up in home prices caused by loose lending practices led to a price bubble. Some took out risky loans, but others rented - those people, along with young people just entering the market will benefit from housing becoming more affordable. Not to mention the fact that mortgages for people with good credit, a job, and a down payment are still easy to get. And, as we have seen, without those things, you can't own a house anyway - instead the house owns you!
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