Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back - Softcover

Palmer, Kimberly

Softcover

ISBN 10: 158008236X ISBN 13: 9781580082365

Verlag: Clarkson Potter/Ten Speed, 2010

Inhaltsangabe

As a young professional today, you are part of a generation with greater earning power and more advanced degrees than preceding ones—along with a fresh, holistic outlook on financial success. Yes, you might have taken out more debt than previous generations, but that doesn’t mean you’re a slacker living off credit cards and takeout as media pundits would have people believe. Kimberly Palmer, the Alpha Consumer columnist for US News & World Report, frequently receives questions from twenty-, thirty-, and forty-something readers like you about making smart, sustainable life choices, including:

What should I be doing with my savings?  •  Should I take on freelance jobs?  •  Where should I invest my money?  •  Should I buy a house or keep renting?  •  Does it make sense to share a mortgage with my significant other?  •  Can I afford a baby?  •  How can I support the causes I believe in?  •  Should I start a nonprofit?

In Generation Earn, Palmer answers these questions—and many more—in three parts. Part one centers on the self, covering professional goals, personal spending, debt management, and investing. Part two focuses on creating a home, including renting, mortgages, marriage, and saving for baby. Part three addresses the world at large, including green spending, sustainable donating, and supporting nonprofits. Add it all up and you have a plan for every major decision you’ll have to make to create a successful life.

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Über die Autorin bzw. den Autor

Kimberly Palmer, senior editor and personal finance columnist for US News & World Report, writes the magazine column and daily blog, Alpha Consumer. She has appeared on NBC’s Today show, CNBC, and CNN, and written for the Washington Post and the Wall Street Journal. She and her husband just welcomed their first baby and bought a townhouse in the Washington, DC, area.

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Introduction: Meet the New Young Professional

As the twenty-first century began, journalists and financial advisers began throwing around a new term to describe the current group of young people: Generation Debt. This term evoked slackers who lacked their grandparents’ sense of financial responsibility—instead of saving for a rainy day, they wasted their money on lattes, iPods, and takeout. These people were made to seem as though they lived off credit cards, student loans, and whatever help their parents could send their way.

This mythical tribe soon had its own spokespeople and leaders. Reporters found scores of young professionals caught up in spiraling credit card debt willing to dish about the forces that had created their mess. In response, popular books advocated eating ramen and reusing popcorn bags to get free refills at the movies.1 Before long, a Village Voice column and two books, one with a subtitle that called our era a “terrible time to be young,” were named after the alleged phenomenon.2 The financial crisis of 2008 and 2009 generated even more extreme stories of woe: the Minneapolis Star Tribune profiled a twenty-five-year-old with $94,000 in student loan debt who was resigned, permanently it seemed, to living in her in-laws’ basement.3 NBC’s Today Show featured a handful of twenty-somethings with various degrees of credit card, student loan, and car loan debt. “I don’t even go get a Starbucks,” bemoaned one. “When I go to the gas station I don’t get a drink. I don’t—nothing. I can’t afford it.”4

Pundits used these kinds of examples in order to justify an increasingly condescending attitude about our financial aptitude. On the Fox Business Network, Beth Kobliner, author of the best-seller Get a Financial Life, said that even Ivy League college students graduate without understanding how to pay for everyday expenses. She recalled one student who asked her how to take out a loan to rent an apartment, and she had to explain that people use income, not loans, to pay their rent. “Basic, basic concepts they just don’t know about money,” she said.5

The term generation debt stuck because there is some truth to it. Two out of three college students now take out student loans, compared to less than half in 1993.6 By the time the typical graduate walks across the stage to pick up his diploma, he owes $22,700.7 Average credit card debt among twenty-five- to thirty-four-year-olds has climbed 50 percent since 1989, to over $4,000 per person.8

But most of us are not letting our debts define us. While student loan burdens are heavier than they were in generations past, more of us have college and advanced degrees that give us greater earning power. The number of people enrolled in graduate programs has increased over 70 percent since 1976, making Generations X and Y the most highly educated group of Americans to date.9 Meanwhile, our incomes have largely been underestimated; studies by the Federal Reserve Bank of Minneapolis show that, with adjustments for inflation and benefits, the median compensation rate has gone up 28 percent since 1975.10

As for credit cards, only one in three college students carries one at all.11 The average amount owed is just $495. Among twenty-five- to thirty-four-year-olds, more than half pay off their entire balance each month.12 And, when asked how we feel about our economic standing, most of us say we feel pretty good. In a 2009 Pew survey, six in ten respondents under the age of forty said their standard of living is much or somewhat better than that of their parents at the same age, while just 15 percent said it is worse.13 This is true even though many of us experienced two recessions before reaching mid-career, first when the tech bubble burst in 2001 and then when the subprime mortgage crisis led to housing market collapses and bank failures in 2008 and 2009.

However, all these facts and figures don’t quite capture the zeitgeist of our generation. Few would mistake us for self-satisfied Alex P. Keaton types, reaping the bounties of capitalism. The popping of the tech bubble and the subprime mortgage crisis underscored the importance of sacrifice and hard work and made it clear how hard it can be to get ahead. Nor are we purely do-gooders—college kids canvassing for their political idols. We are something in between. We want to own nice homes, feel financially successful, support our families, one day send our kids to college, and change the world at the same time.

Although we may now have some money to invest, our goals involve far more than just becoming rich. The financial crisis of 2008 dovetailed with a growing interest in sustainability, simplicity, and even frugality. Instead of living exclusively for our own pleasures, we have embraced a new level of social consciousness. We care about the environment, our cities, and social justice. Many of us also want kids, and, thanks in part to loud warnings about the decline of fertility with age, we aren’t putting that off forever, either.

As the “Alpha Consumer” blogger and columnist for US News & World Report, I frequently receive questions from readers about navigating this terrain: What should I be doing with my savings? Where should I invest my money? Can I afford to buy a house, or should I keep renting? Does it make sense to share a mortgage with my boyfriend? Can I afford a baby? How can I support the causes I believe in? As a young professional myself, I have many of the same concerns.

This book explores those questions and gives you tools to help you make the best decisions for your situation. It explains how to improve your bank account as well as how to get closer to reaching your bigger financial ambitions, from living debt free to saving for a child’s future college education. It looks at how to manage money in relationships, both before and during marriage. It asks when it makes sense to accept financial aid from parents, and how to handle requests for assistance from other family members. It will help you decide whether you’re ready to buy a house, have a baby, or take a break from your career. It also explains how to make an impact on the world with your money and resources, whether that means starting a nonprofit or spending and investing in a way that supports your values.

Along the way, we’ll meet twenty-, thirty-, and forty-somethings who have faced those challenges themselves. Before moving in together, Chicago couple Pasha Carroll and Matthew Krise wondered how they should combine, or not combine, their bank accounts. They give partial credit for the success of their relationship to their solution—to keep almost everything separate—although many couples find combining everything equally satisfying. Kate and Thomas Deriso show us why cooking and even growing some of their own food in northern Virginia isn’t a sacrifice but a way to live more richly. Keith and Katy Hewson decided that the best way to start out married life was to live with Katy’s parents in their Houston townhouse. While the older couple covered the mortgage payments, Keith and Katy pulled their weight by handling most of the monthly bills, which meant each couple saved thousands of dollars. Lindsay Hyde, a twenty-eight-year-old from southern Florida, turned her passion for mentoring young girls into a nonprofit that now operates in three cities.

Each of their paths began with questions: How should we manage our money together? Is there a way to afford the lifestyle we want? How can I feel like I’m making an impact without sacrificing my own financial security? My husband and I also grappled with these issues as we prepared for the birth of our first...

Details zur Ausgabe

• Verlag: Clarkson Potter/Ten Speed
• Erscheinungsdatum: 2010
• Sprache: Englisch
• ISBN 10: 158008236X
• ISBN 13: 9781580082365
• Einband: Taschenbuch
• Anzahl der Seiten: 240
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: gpsr@libri.de; gpsr@libri.de; ; Europaallee 1; Bad Hersfeld; 36244; Deutschland