Financial Opportunities for Young People

by Dr. Ben on September 22, 2011

This article is directed to young people and, of course, their friends, families and other loved ones.  As a young person you have the most valuable financial asset of all—TIME.  Time will not only “heal all [financial] wounds,” it will provide you with unparalleled opportunities for wealth-building.

It may not seem like it but you have a tremendous advantage.  Partially, this advantage is a result of the lousy economy and the redistribution of wealth and assets it has caused.  Previous generations gained from the stability of employment, the general prosperity, and the appreciation of assets like homes and investments.  As is commonly said:  “A rising tide lifts all boats.”  And the tide was rising for many years.  You may envy them for the opportunities they enjoyed, their financial success, and the assets they accumulated. But to continue with the story — now the older generation is watching the tide go out and their financial boats are capsizing, sinking, or left high and dry.  It is far better as they say in the stock market to “buy low, and sell high.”  Your generation will have the opportunity to buy low.

The Glass is Half-Full

It’s easy to look at the unemployment rates and the job market challenges as real negatives.  It’s also easy to see that consumer confidence levels at low levels.  But on the other hand if you are looking for real-estate it can be purchased at bargain-basement prices.  And this generation has opportunities to create internet-based businesses which their elders could not even conceive of.  For those interested in the stock market some blue-chip companies can be invested in at prices we haven’t seen in years. There is also a social safety net in place that is there to insulate you from the consequences of some of the worst realities like homelessness, starvation, and major illness.  Prior generations could count on more stable employment and benefit guarantees, but they were also at more at risk for complete and utter financial and personal disaster.

Social and economic mobility are also not quite as constrained as in the past.  Yes, prejudices still exist but the barriers of the past have significantly eroded.

You see some opportunities have diminished while others have increased.  You just have to be aware, informed, highly motivated, and more strategic.

You have to be More Strategic

My generation looked to jobs in manufacturing and white-collar middle-management in government and industry.  Yours sees growth in the service sector, technology and health care.  When I graduated from college anyone with a degree could easily find employment.  That’s no longer the case.  Now the percentage of college grads is much higher and the competition much more fierce.  As a result, many high school grads are foregoing or deferring their college education.  They see the high tuition costs and better, more immediate returns in the trades, or elsewhere.  It’s a mistake in my opinion, based on short-sightedness.  As your elders have discovered, things change.  Only they change more rapidly and profoundly than in the past.  You will need to be much more strategic and flexible than those who preceded you.

Financial achievement and wealth accumulation is not so much to the swift.  We all know stories about instant millionaires who just as instantly lose it all.  Those who exercise good judgment, spending restraint, and practice sound financial principles like paying yourself first and saving and investing a portion of all you earn will do well.

Set High Goals

There is no reason if you are in your teens, twenties or thirties that you should not expect to become a millionaire.  Certainly hundreds of thousands or millions of dollars will pass through your hands by the time you’re ready to retire.  You need to be serious about keeping some of it, and the more the better.  Just be aware the rules have changed.  A house is now more of a home than an investment.  A job is not necessarily a career, but a stepping stone.  You may have to change jobs, careers, locations, and investments more often and with more determination.  The carefree days of the hippies and baby boomers are long gone.

Remember, TIME is on your side.  With high goals, flexibility, strategy, and a keen eye for exploiting opportunities which may come your way the odds are definitely in your favor.  These factors along with your hard work, determination and resiliency will ensure that you win the financial survival game, even with the current downturn and a few mistakes along the road.

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