Hard lessons to be learnt from Recession

"Hey, you buy this apartment in OMR today; you will make a 30% profit in next 2 years". "Invest in this stock. It is set to double in the next 3-4 months". "iPhone on an interest free EMI. Let’s go buy it".

Barely in their late twenties, these were very common languages I could hear amongst young people two years ago. I felt happy looking at these young people behaving "responsibly" rather than blowing their money partying.

Specifically, in the IT industry, these were very common. Owning a car and a two B/R apartment at 26 is something I or my previous generations could have only dreamt.

The housing bubble burst in the US reached the Indian shores much faster than anyone had predicted (thanks to global outsourcing), came lashing on the employed class like a Tsunami.

Today, we hear a lot of lay offs and we hear stories of people, in tears refusing to move out of the HR manager's cabin. Reason - they have been just laid off.

"How do I pay my mortgages? Will I be able to sell my home even at a break even?" are the questions that are eating the brains. I know of a person who lost his job last April and is still not successful in finding a job. He tried to sell his car, but no takers till date.

Another friend of mine has taken a home loan where his EMI is almost equivalent to his salary. Although we did caution him, his rationale was that the house prices will go up and he can always sell it and make about 20% profit.

But alas, the prices have dropped by more than 40%. Car sales have dropped by more than 25% - 40%. 6 months back, we were fighting rising inflation. But today we are bracing Deflation, which is equally bad, if not worse.

So, is there a lesson that the youth can learn from this recession? Is there a lesson that the corporate's in the hi-tech world can learn from this recession?

Sure there is. Corporate’s should look at standardization of salaries. Individuals should look at acquiring "what they need" rather than "what they can afford".

Clearly, our older generation has a lot of teaching to do to the youth today.

What do you think? Easier said than done, uh?

- Shanky