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11 Mar 2009 04:39 pm

The View From Your Recession

A reader writes:

I'm in my late 20's, and have spent the past 6 years working in systems engineering and operations.  I've worked my way up the ladder to the point that the next logical jump is a management role.

The current economy means that the jobs that I would have been applying for had I gotten to this point 2 or 3 years ago no longer exist, or not many of them.  There aren't nearly the number of smaller tech companies that want to take a bit of a risk on someone untested in a management role, so it would be hard to move up the ladder at the moment.  On the other hand, I have enough experience/skills that I have a high level of job security, and an active job market for my skills should I choose to leave my current employer. 

So I'm looking at this downturn as an opportunity.  I've spent a few years saving with the idea of putting a down payment on a home, but prices haven't softened in my area (Boston) as much as they have elsewhere in the country, and renting is still a better deal.  So instead I've taken those savings and started aggressively building an IRA, built on conservative (but historically successful) investments like S&P 500 tracking funds.  It means putting off some of those milestones for a few years, like buying a house, but making even pessimistic assumptions about the economic recovery, should mean I get to my mid 30's with retirement savings that are in pretty good shape, and more than enough to make a down payment at that point.

As of a year ago, all of this was a stretch.  This part of the country is one of the few that has a large number of jobs in my field, but all of those areas of the country have been very expensive for a long time.  No one in my position has been able to afford a home here in this decade, unless they had money from their parents to fall back on.  And trying to save for a reasonable(!) down payment (in this area that means needing $50k or more) almost entirely eliminated retirement saving as an option.

The point is, the recession is hurting a lot of people.  But for those of us who are young and lucky enough to work in growing fields, it's putting us in a position to pursue some of the goals that were until very recently apparently out of reach: household savings that will provide for us in retirement, home ownership well within our means, and wealth building based on something other than our parents' largesse or good luck with options -- in short, financial independence. 

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