Why 2008 will be a good year for young professionals...

Reading through the financial news for the past year has been a depressing experience. With all of the talk about the USA going into a recession, record numbers of foreclosures pulling down the housing market, and banks needing billions of dollars from foreign investors just to survive the consequences of their horrible lending practices, it's hard to stay positive about one's financial future. Many people see 2008 as a year in which the United States will only continue to slide away from its position as the world economic power. With countries like China, India, and Brazil becoming greater threats to unseat the United States from it's dominance, is it possible to stay optimistic about our future? If you are in your 20's and just starting your career, I believe there is reason to think that 2008 will be a good year. Click "Read More" to see my 4 reasons why 2008 will be awesome...


1. Interest Rates are Falling


The Fed has recently cut the interest rates several times in the past few months. Many critics believe that this will be the catalyst for increasing inflation rates. For me and the millions of people out there with significant amounts of student loans, this is a good sign. Once I graduate from law school in May, I plan on consolidating the huge amount of student loans I incurred over the past three years. Consolidating my loans at a lower interest rate could end up saving me thousands of dollars over the almost infinite life of my loan.

The other reason the falling interest rates is a positive for those of us who aren't completely grown up yet is that mortgage rates are at their lowest point in a while, which means that many of us can afford to get into a home sooner than later. Which leads me to reason number 2...

2. Buying a House is Cheaper

I do feel bad for those homebuyers who were duped by greedy lenders with shady practices during the housing boom. Many of them have already lost their homes to foreclosure and many more will lose their homes in the near future. I don't feel bad for the investors who jumped into the housing market thinking they could make a quick dollar by flipping houses and then lost their investments in the housing bust. They should have known better. For those young buyers who haven't purchased their first home yet, the misfortune of others means more house for the money.

Living in Las Vegas the past three years has been disheartening because the cost of homes was out of reach for most average buyers. That's no longer the case with Las Vegas' nation leading foreclosure rates. As long as the price of homes continues to fall, I will continue to wait until I can afford a decent size home for a reasonable amount of money. With the money I save by buying a cheaper home, I plan on investing for my retirement, which is a perfect transition into reason number 3...

3. The Stock Market is in Decline

According to David Leonhardt of "The New York Times," the stock market is currently "overvalued" by 10 percent, relative to historical norms. In a recession, the market can decline more than expected just because investors are worried, rather than the reality of underlying economic indicators. When the market declines more than it should, stocks will become a more attractive long-term investment.

This is good news for those of you who haven't invested a significant amount of money in the stock market. If you are planning on buying stocks in the future, your long-term outlook is much better than those investors who are planning on retiring soon.

4. HD-DVD is Dead

The resolution of the High Definition format war won't exactly pull the United States out of a recession. However, it does mean that I can stop waiting to update my movie collection to HD. Toshiba just announced this week that it would no longer support the HD-DVD format. This was disappointing to me, even though I know that Blu-ray is a better format. I was disappointed because I hate Sony. Sony has historically been notable for creating its own in-house standards for new recording and storage technologies instead of adopting those of other manufacturers and standards bodies. Need an example? Think about BetaMax, or Minidiscs, or ATRAC, or Memory Sticks. The list goes on and on. I guess I was just hoping that Sony would lose this format war and stop forcing people to convert to their formats just to buy their products. I can't say enough how much I hate Sony. That being said, I'll finish off this post and head down to Best Buy to purchase a Blu-ray player...