The ultimate first-world problem
July 24, 2012 3:03 PM Subscribe
I'm a young person with no debt and a pile of money to invest. The catch: I'm not real confident about the long-term health of the US economy.
posted by anonymous to work & money (25 answers total) 41 users marked this as a favorite
I'm 24 years old and live in a large American city. I've had the incredible fortune to "start on third base," as it were: I have a small inheritance, my parents paid for college, and I landed a decent white-collar job right out of school. I don't earn a ton of money - around $40,000 a year plus benefits - but I live extremely frugally (shared low-rent apartment, no car, don't eat out much) to the point that I make more than I spend. As it stands, I have around $65,000 in the bank, and that number is growing.
I've read some old AskMe threads and the wisdom seems to be: pay off debts, max out your IRA, talk to a financial advisor, invest in low-fee index funds. That's all well and good, but I'm under the impression that this path assumes that the economy of the US will basically grow forever, with maybe some minor setbacks along the way.
I'm not a doomsday prepper or Alex Jones fan - I'm not expecting a sudden collapse of civilization due to nukes/plague/Mayan prophecy/Obamacare. (In case I'm wrong, I don't think any investment plan would help much.) I can't predict the future, but I believe that there will be (at the very least) more 2008-size crashes in the next decade or two, and (more pessimistically) either an overall global slowdown or a cataclysmic economic disaster. To put it another way, I'm not super pleased about tying the rest of my life to the fortunes of the S&P 500.
I did talk to a financial advisor a while ago and got the basic "increase your contributions and put it in a mutual fund" spiel. I know the "correct" thing to do, but I'm also looking for perspectives from people less bound to the American investment banking system.
I know gold is a popular choice, but I'm wary of anything that advertises heavily to the Coast to Coast AM set. If there's a strong case for investing in metals though I'm happy to listen.