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For what? The pharaoh of Egypt was financially wealthy but couldn't spend it on antibiotics and couldn't buy a photograph or listen to an old CCR track . I am well positioned too, financially, but it doesn't look like I'll be able to spend it on as much progress as we could have because money now flows to the best scams.
Huh what? We print money and give it to people who don't create real wealth while people who do have had their wages cut. The financial system is less and less reflective of real economic output. So we will be wealthy like a king before the industrial revolution. No one knows what financial wealth means anymore?
If it weren't for trillions of $$$$ created by the FED, the depression would now be a recession.
And a depression it WAS ..only bazillions of bucks in social welfare that was not available the last go-round shielded us from the worst effects of it.
Like:
2 years of unemployment insurance, Food Stamps, Medicaid, Sect 8 housing, WIC welfare, old-fashioned state-run Welfare, free school lunches, earned income tax credits, free cell phones, energy/utility bill subsidies, and old fashioned soup kitchens.
Today the labor participation rate is barely above what it was in 1978!
And a weakening labor force bodes ill for the economy..except if you are in the top 10-20% of earners or asset holders.
I strongly suspect that is who posts predominantly on these forums.
Second, you probably won't be doing what you want to do. For that matter, you may be doing something you are very ill suited for and not even very good at. Once you are in a career track, there seems to be a "locked in" factor where you can't really move up or down - the only jobs you can get are the ones you've already done before, and if the initial choice was forced, rushed, or just not a good fit, it's game over.
Third, education and training doesn't seem helpful. Again, this is partly colored by location. All the education and certifications I've taken have done absolutely nothing for me. The job I have now would have been great to get me acquainted with the industry ten years ago at 17, but at 27, with experience, degree, and certifications, making $10.82/hr on a forty hour "equivalency wage" is catastrophic.
Lastly, life doesn't have the hope and promise that it once did. I was 23 in 2010, coming out of college with a major in a field that should have been decent (economics) and it was something I really enjoyed. Roughly four years later, I'm still stuck in a call center, no benefits, no insurance, and no real hope for the future. The collapse has really made me wonder how life went so terribly wrong, and it has killed my hope for a better tomorrow.
A very good post. I just wanted to speak to this, because I'm about a decade ahead of you and perhaps give you some hope. I have a degree in Econ, my Masters as well, though that has done nothing for me.
I would suggest applying for jobs in the securities industry. I started working for insurance firms as an analyst, then some financial firms as the same, and later a stock broker, then a trainer. When the market tanked, my firm stopped hiring people... and if your job is to train new people, and no new people are being hired... You can guess what happened to my job.
I flipped my life around completely. I left the securities industry, and moved back to TX from FL, because there were too many people in FL out of work in my area. Took a job in sales on the advice of a friend of mine who had been doing it for 25+ years for a company that he worked for.
I started out making about 40k... About half what I had been making. I knew that going in, but my job has a commission component... All the hard work I put in one year, if I keep that client and they keep ordering, I get paid for their business the following year, and the year after that, etc. My income has now surpassed my former income and I work a lot less after 4 years of doing this.
Now, I'm not saying to go out and get a sales job. It's not for everyone, and I certainly didn't like the feeling of not knowing how much I'd be making year to year or even month to month, and it still bothers me a bit because I have a wife and kid to consider. I'm just posting this because I had to completely leave my field of expertise, move, and start over, and I'm 10 years older than you. It can be done. I had help, my fiancee at the time (now wife) moved with me and transferred jobs with the same company, and my parents live in the same city, so we moved in with them while we house hunted for a few months.
Now though, I can say starting over was the best move I ever made, and the only time I ever use any of my Econ knowledge is the occasional post on an internet forum.
It's interesting to read the various individual responses to a question about a national dilemma. Many posters wanted to let the forum know how little the financial crash affected them, the younger ones allowed us a view of their joblessness and seemed a bit put off about the fact of rising economies failing to rise forever. One thing does stand out when reading the personal accounts of how individuals were affected by the fact of a government supported rescue of markets, and that is just how much we don't understand about an old system of finance that has a history of separate interests.
I can only say that I didn't really learn anything new. The direction of American economics has not changed much since the days of colonial mercantilism, the capital vs labor situation was certainly a mainstay of that system. In the process of wresting control from the British by the use of force the early day businessmen founded a new system of government/mercantile power, and that marriage of business and government has lasted throughout our history.
The various views of that power construct determines our political leanings, and it has been the reason for much of the debate between American's with regard to what a democracy should look like. That power has also been a great boon to some, allowing for investment returns that have greatly enriched their lives, but it's also been a source of fear and desperation for others, and that fact alone should be our first clue that there is no monolithic "American economy", we do have a financial system of separate interests, and that works against our best attempts to be united.
What I learned about the financial crisis... Not much. Having a Masters in Econ, and being in the financial field for almost 20 years, I'd already seen/lived through market crashes (tech bubble in 2000) and the Nasdaq just FINALLY got back to the highs it hit 14 years ago. It wasn't unexpected.
It is amusing to read the responses of those blaming the Fed. You guys just have no idea how a global economic system works, probably not even a micro one. The Fed is to be credited for how well they were able to mitigate the damage that was caused by investment banks and their securitization of mortgage debt, exacerbated by entities like Fannie/Freddie who let people who had no money nor credit to buy a home that was beyond their means, and our wonderful Congress, which is full of lifetime politicians and lawyers, who know NOTHING about economics, budgets, or how the economy works, either. The laws they pass governing the banking and securities trade are crafted and shaped by interest groups paying them to make them favorable to industry, not the consumer.
What can the average person do to weather hard times like we had? The same things that carried people through previous recessions. Don't live outside your means. Don't buy a home that is more than you know you can afford, and be honest about that. Don't try to keep up with the Joneses, that is a losing proposition in the long run in regard to your retirement and future expenditures (college costs, health care, elderly parents moving in, etc.) Contribute to your 401k if you have one, ESPECIALLY if you get a company match. That is free money that you are throwing away if you do not contribute. Do not touch your retirement savings unless circumstances are at their worst. The penalties are not worth it. Avoid interest. Interest is how OTHER people get rich, by letting their capital work for them. If at all possible, limit the interest you pay to your home mortgage. Pay off credit cards every month so no interest accrues. Cut unnecessary expenses. Yes, that means cable. That means cutting back and getting a less expensive phone plan. It means eating out less and saving more. It means avoiding buying that 60" tv on Black Friday because you want to replace your 50".
If you do all those things, and learn financial discipline, you may still go through tough times in a downturn, but you'll be a helluva lot better suited to meet the challenge.
Before the crash I considered buying. I just couldn't figure out what "I" was doing wrong and couldn't afford like everyone else. I got my answer from the banker when she gave me a sales pitch.... "and if you want to buy a bigger house you can get a loan where you pay interest only for the first 5 years". That's when I realized there must have been some fancy loans out there. I opted not to buy at all. I gave it 5-6 years before I would think about buying again because there were going to be alot of desperate sellers. That was about 6-7 years before the crash. Before that bank visit I used to dream of buying, after, not so much, I waited. That was the best self talk I ever had.
Everything else you wrote is excellent too.
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