Thursday, January 17, 2013

To be young....

The Philly Fed and Empire Index were weaker than expected but housing is holding up (thank you 4% mortgage rates). Markets have the sense that the weaker economic data means that the Fed is going to keep propping up the banks which means green markets.

I'm going to paraphrase a great article I read last week on the state of America for the young.  In this case, we're talking about the millenials and their prospects for the next 40 years.  Much of this will sound negative on the surface but to the young this should serve as a wake up call and hopefully provide them with some inspiration to strive for a better outcome.

The ugly....

* unemployment for young people is about double the national average. Student debt is now the single largest contributor to the nation’s credit delinquencies and it's growing by the month.  Unfortunately, it's also one of the few debts you can never erase, even with a bankruptcy.

1) Make don't speculate - The world has changed and it's never going back to the world of 1998 no matter how much some software sales reps wish it would :)

One of the key reasons unemployment is high but corporate profitability is higher?  Companies trimmed the fat in 2007 and realized they never need much of that bs to begin with.  Young lawyers, finance and marketing gurus can't sniff a job in the traditional corporate world right now because they are cost centers not revenue generators.  The take away?  Build something, write code, break apart your dad's old iphone and figure out what's inside there because understanding how to build something of value will never go out of style.

2) More education?  This one is hard for old-timers like me to realize but the traditional model of go to college, get a job sounds like it's toast.  I've seen this argument three times in recent weeks - if you can get into a truly top-tier school (The top 10 only + McGill) then go - otherwise, consider alternatives.  Get online. NOW.  Not the bs from DeVry, University of Phoenix, etc, but check out what Codecademy is doing, or Udacity or Minerva or Coursera.  We're approaching a day where the quality of FREE online education is going to exceed what is taught in a normal private university.  Companies are also looking for people that understand things and they are ignoring the paper on the wall. 

3) Ignore old people like me - I want my kids to go to a great college, learn something, then maybe go grad school and onto a career.  Unfortunately, that's 1995 thinking.  Oh, and China has launched an initiative to generate nearly 200 million college graduates by 2020.  Good luck competing with your 2 yr associates degree in Sports Management. 

So can everyone be an entrepreneur?  Well, maybe not but you're going to have to try.  Build something someone wants - homes, cars, zumba classes - and people will beat a path to your door but the traditional pathways for success in the US are changing. 

This past week I read a book with my daughter about young inventors and she is now on a mission to have a patent before the age of 12.  While that is highly unlikely, at least I have her thinking like an Edison.  America of tomorrow will need more Edisons, Gates and Jobs and fewer attorneys, bankers and marketing managers.

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