Tag Archives: recession

Investing, Networth

Holy Hell the Stock Market is Down (Just Breathe)

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I’m a bit obsessive about my networth. Ok, a lot obsessive. It’s this game I play which helps me weather the storm of the everyday ups and downs of life. I know you’re not supposed to monitor your stocks on a daily basis, but I do, because that’s what I do. It’s certainly thrilling when they go up. Not so much when they go… down… and down some more.

Today the stock market had its 9th biggest decline in history so – when I looked at my Mint account and my jaw dropped to the floor with little birdies flying around my head – well, that was not an overreaction. It’s pretty painful to see all this money you’ve been saving for the year just poof disappear, at least on digital paper. It could come back tomorrow, or more could disappear. Who knows. China is making everyone freak out. My Apple stock is tanking, but so is the rest of the market.

I am not going to sell. I am not going to sell. I am not going to sell.

My entry into the stock market was interestingly timed. I got in right before the great recession. I had enough money in to feel the pain of losing almost half of it, but I was making so little at the time that the amount I was able to invest wasn’t really significant enough to cause serious long-term damage. Then, as the market recovered, I obtained jobs where I made more money, and more money. And I didn’t really like to spend all that money at Sephora, so I invested it each month. As the stock market went up, so did my networth. It was incredible to be investing in the market at that time. It clearly wasn’t going to last forever…

Today the market is overvalued. It’s due for a few major corrections. The trick of corrections is to A) not sell and B) buy more each time your heart jumps to your throat when you check your life savings, but not too much more in case the market continues to drop, which it probably will do.

Think Long Term and Forget About the Short-Term Fluctuations

Today I bought $1000 worth of Vanguard funds and $500-ish of Tesla stock. I’m fighting my stock market fears by throwing money at it whenever it surprises me with a swift downturn. Hopefully that will pay off in the end. It’s not rocket science, but it seems to have worked thus far.

I’m holding my breath right now as I have a feeling 2015-2016 is going to be a majorly bumpy ride. Are you in buy mode right now? How much do you think the market will correct itself before it stabilizes? Do you have any favorite funds that perform well when China implodes on itself for its overvalued currency?

Oh, and forget about my $400k networth goal this year… now I think $350k networth is a much more reasonable goal to close out the year with. That’s still $50k more than I closed out last year, but given my salary increase I thought this year would be a lot stronger. The whole $500k before kids goal is seeming more and more unlikely — though if I can maintain my income level… my plan is to get pregnant in June/July 2016, and then have a kid in March/April 2017… that’s still about a year-and-a-half from now, so I could be somewhere in the $425k range at that point, which isn’t HORRIBLE. $425k growing at an average of 5% per year after 30 years, if I don’t touch it, will =$1.8M, just shy of my $2M retirement goal.  But if it grows at 10% over 30 years then that’s $7.4M. So all I need to do is not touch that future basis and hope that the economy doesn’t entirely crash for a long term depression. $400k-$500k before I have a kid is the NEW goal.

 

 

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Generation Y, Let the Recession Humble Thee

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Lindsey Gerdes of Business Week asks: Is the Recession Putting Generation Y in it’s Place? Sarah Horne of The New York Post recently penned an op-ed column entitled “A Slice of Humble Gen Y,” noting that the economic downturn might be a helpful wake-up call for a coddled generation that formerly “felt secure enough to brashly knock on their bosses’ doors and demand better assignments, better titles, better salaries.”

Apparently the recession is a much needed wake-up call for us youngin’s.

“The fact that many of this generation’s boomer parents are suffering financially as well could be a positive thing for the youngsters’ sense of self, Twenge adds. “The cutting of the apron strings is in some ways a good development. If a parent is looking at their retirement and saying, ‘I can’t prop up my child’s lifestyle forever,’ it’s a lesson. To have to stand on your own two feet is a good thing,” says Jean Twenge, author the book “Generation Me: Why Today’s Americans Are More Confident, Assertive, Entitled And More Miserable Than Ever Before.”

I suppose that’s true. Had I not fallen into personal finance blogging I’d still be on my merry way to financial failure. The recession puts a new, even crueler lense on the situation. Just because my parents seemed to live their upper middle class life without much stress, with years of savings lost at the verge of retirement – it has me thinking, and worrying, and freaking out about saving.

Then there are my friends who aren’t thinking about saving at all. And I do think maybe this wakeup call is a good thing. But it’s not quite bad enough for the people I know to cause any major lifestyle changes.

I don’t know what it was like for generations before, but given my upbringing and education I do have a sense of entitlement that I’ll easily admit I don’t deserve. That sense of entitlement has also led me to my own wakeup calls – too many failures to name. I’m doing ok now, but it’s still hard. I didn’t grow up in generation “Hard Work.” I grew up in generation “ADD.”

Regardless, I’m glad for this wakeup call. It’s better to have a recession in my 20s then later. I wouldn’t want to be in my 40s with all my life’s savings in stocks, watching it all go down the drain. I now know nothing is secure and even if I work my ass off, a job could be gone tomorrow. So save today, save tomorrow, enjoy the cheap/free things in life, and maybe enjoy the finer things much, much later.

What do you think?

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Times are hard — have some napkins

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I visited my aunt, uncle and cousins for a birthday party yesterday. They live in a very nice area in a relatively nice house for said very nice area, and, while they’re probably among the poorest in said area, they still are somewhere in the upper middle class, lower upper class. (I’m not really sure where that cut off is). Regardless, they’ve been living a comfy life until the recession hit.

Now, times are hard. Well, they aren’t that hard, but hard in the sense that their mortgage is a fortune and to keep up with the quality of life they’re used to living, and fit in with their neighbors, it costs a lot. My uncle runs his own business and his clients have been drastically cutting back. Once you get used to living a certain lifestyle, it’s hard to reduce your spending. I’m almost hoping to never let myself make that much money – because I think it would just get out of hand.

Then again, I think about having children, and the kind of life I want my children to have. I was very fortunate to grow up in a house where we could afford luxuries like summer camp, art lessons, etc. I don’t mind being frugal when it comes to clothes and things, but the extracurriculars add up. I want to have a decent income to spend on my children, if I have children, and looking at my aunt and uncle who are struggling on their current salary cuts (even though jointly they still make well into the 6 figures), I wonder what sort of salary I’d have to make to be able to give my hypothetical kids a life at least comparable to the one I had as a child.

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Layoffs Hit High Tech; Professional Dominatrixs on the Rise?

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Even though the tech sector is still doing better than some other industries in the U.S., it’s not immune to the current economic mess. As more companies report layoffs, demand for high-tech professionals is beginning to slide downward, according to statistics released this week.

Global outplacement consultancy Challenger, Gray & Christmas Wednesday released job cut totals for January, which prove the year-end trend to slash positions as a cost-cutting measure will continue into 2009. According to the firm, the number of planned job losses announced in January reached 241,749, which represents a 45% increase over December 2008 totals and 222% higher than the 74,986 cuts announced at the beginning of 2008, writes Network World.

Apparently with the layoffs comes an interesting career change for some women in high tech. The Daily Beast writer Tracy Quan reports on what becomes of Silicon Valley’s finest post job loss. That is, women in tech, sans jobs, freelance in the – legal – sex industry to get by. As they say, when the going gets tough, the tough bring out whips and chains and scream “who’s your mommy?”

Ok, they don’t say that… but they might as well. “With staff jobs evaporating and former nine-to-fivers cobbling together incomes through scattered side projects, freelancing as a dominatrix — or “pro-domme,” as industry types prefer to call it — has become a plausible gig option.”

The pay is pretty good, and it beats being unemployed. The article refers to Jessica, a pro-domme in her late twenties, who apprenticed at a dungeon before striking out on her own. In Manhattan dungeons, she said, the typical cut on a $200 session is 60-40 in the dungeon’s favor. So that’s $80 an hour. Four times what I’m making working a legit marketing job in high tech.

Still, I can’t quite bring myself to freelance in a dungeon. It’s not that I couldn’t yell at men and tell them worship me… it’s just, I’d be terrified of someone I know, professionally or personally, finding out – or worse – meeting me with their testicles tied in a knot in my dungeon. Yea, that would be weird.

Would you ever consider legal sex work if you needed the cash, or have you ever done any of this kind of work? I’ve always been interested in working as a phone sex operator… seems like a pretty easy job. But I doubt the money is all that good, especially these days where everyone has the Internet.

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Sequoia says RIP, How Worried Should I Be?

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I’m trying really hard not to worry about this whole financial “crisis.” I’m young(ish) and resilient, as are my stocks, as is my career, and I’m in a much better place than all the baby boomers who are currently watching their 401k’s break even after years of saving… or worse.

Me? I have a job. It’s more stable than not, though after the latest Sequoia report came out it’s looking more and more like if I don’t have the skills to hack it at a web startup, I’m going to be toast. Or dust. Or dust-buttered toast. I’m nervous.

More than anything, I wish I had some serious skills – like computer programming. Then I’d be able to do something useful. But I know that I have to do a lot to prove that I’m useful over the coming months, or it will be my head on the chopping block.

Working for a startup, I’ve always assumed any day could be my last. That’s the joy of working for a startup… even if the markets are doing great, you could be unemployed tomorrow! 🙂

I really wonder what the Silicon Valley shakeout will look like in the coming years. During my brief stint in business journalism, one thing I saw was how many silly companies were getting millions of dollars just because they happened to have a persuasive CEO. It’s totally a bubble, and with the latest turn in the economy, it’s certain to burst. I’m trying to just hold my breath and hope for the best. Again, I’m young, and this won’t last forever. I just hate that I’m trying my darndest to save and I’m still losing money. Bah.

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What Recession?

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Every other day the media is telling us that we’re either in a recession or the government has miraculously saved us from entering one. I’ve even heard talk about an upcoming depression, despite plenty of safety nets in line to prevent another 1929.

These are the times when I really wish I knew more about the economy and what it all meant. I watch my stocks go up and down… and down again, but understanding why is a whole other matter.

The latest AP article I read on the subject explained that Federal Reserve Chairman Ben Bernanke just said that a recession is possible.

Seems like he’s late to the game, doesn’t it?

Ok, so he’s in charge of the Federal Reserve, which must have some significance, economically speaking. He said that policymakers are “fighting against the wind” in trying to steady the economy.

I guess earlier this year he tried to give a pep talk on how great the economic future was looking for this country and now he’s going for the surefire glass is half-empty approach in case of a meltdown. Better to say I told you so late then I never told you so at all.

This is where the tricky economic babblygook comes in and I get lost. The GDP (or gross domestic product) will not grow much over the first half of 2008 – and could contract slightly.

Sounds like a bad situation. Growth is good. Shrinkage is bad.(Just ask a porn star.)

Apparently under a rule someone wrote somewhere, six straight months of declining GDP means we’re in a recession.

So Bernanke thinks that the stimulus package will help economic growth in the second half of this year and into 2009.

Uhm, I’m still under the impression that a $600 tax “gift” is not enough to encourage most folks to run out and spend. Or maybe I’m just so caught up in this personal finance world that I forget how most people spend their money.

If I were the government, I’d give out larger chunks of money to random people, with a weighting on lower income families. $600 is not enough to encourage spending, but maybe $3000 is. So don’t give it to everyone or just limit to really specific demographics and viola, you have more consumer spending. $600 is usually just enough to pay off credit card bills, if you’re frugal with your credit.

Maybe what the government is doing for businesses will help more, as well as those interest rate cuts that I’m still unclear on. One of the key interest rates was cut to 2.25 percent to “spur buying and investing by individuals and businesses.”

I’m not sure how that spurs buying and investing. All I know is that my ING Direct account savings interest % is lower than it’s been in a long time and that makes me less likely to spend any of my money.

I guess homeowners and people who have larger loans benefit from this. I certainly don’t.

Will the Fed drop its interest rate again when it meets at the end of April? There’s plenty of speculation, but no one knows for sure. It seems that stocks will certainly be following the news closely.

Still – most of the trouble seems to stem from banks loaning out these unfixed interest loans to people who wanted to buy houses who just couldn’t afford them. Now those people, and those banks, are figuring out their screwed. I didn’t go to Harvard or anything, but does it really take a calculus scholar to figure out that equation doesn’t work?