Advice to grads: Strap yourself in for the long ride ahead

What advice do we give graduates for the worst economy most of us can remember? The same advice as for when times are flush.

Lives are longer than business cycles. Start saving today, even if you have loans to pay off. Use some of your graduation checks if you don't have a job.

One of the countless benefits of youth is the almost unimaginable horizon to let savings compound. Today's 21-year-olds can expect to live past 2065. Invest $50 a month between now and then, and you'll leave an estate of $283,000, if you earn 6 percent annually.

Make 8 percent - not inconceivable if you buy mutual funds that invest in developing countries such as India and China - and you'll wind up with $643,000. Stocks are on sale during recessions. Start contributing to a Roth IRA or a 401(k) as soon as you get a paycheck and never tap them until you retire.

Find work you like. Follow your passion. As more and more research shows, and as numerous ex-managing directors at Wall Street banking companies might now testify, you'll be happier than if you follow the money.

Try different careers. Our schools are pretty good at teaching the skills and theory of the workplace but not so great at letting students experience the office, store or factory before they are thrust into it. Designing computer games may seem more appealing when you're playing Spore than when you're crunching code and eating cold pizza at 3 a.m. to try to make the ship date.

Try on different internships. In recessions, employers are inclined to be especially interested in cheap or free labor. Design your own internship – offer to work free at an interesting company and live with your parents.

Speaking of factories, don't assume U.S. manufacturers are dead. The goods and equipment they produce are worth more than ever. The people they're hiring have changed. There are fewer of them, to be sure. But they're more highly trained.

Avoid debt. Even if you can defer repayment of student loans, try not to. Interest still may accrue and leave you with a much bigger bill than you started with.

The credit card "reform" bill about to be signed by President Barack Obama does little to end the complexity or expense of credit card borrowing. Rates will still be well into double-digits even as bank borrowing costs are close to zero.

When you're paying, especially at rates of 15 percent or 25 percent, compound interest is the enemy. Never carry a month-to-month balance unless it's an emergency. Unlike mortgage interest, credit card interest isn't even deductible on your tax return.

Vote. Get involved. Pay attention! While you were growing up and getting a degree, your elders set the stage for a disaster even worse than the one we're coping with now. Medicare, the war in Iraq and the financial bailouts are adding trillions in debt to the country's books that your generation must help pay back.

War and bailout costs should diminish. Medicare and Social Security expenses, however, are set to mushroom. The sooner we get spending under control and raise taxes - both are necessary - the less painful will be the country's burden in 2030 or so.

Younger generations must help make this happen. The good news is that baby boomers will soon start retiring en masse, leaving millions of job openings for the young and smart.

Buy inflation bonds. One way Washington will probably solve its problems over the long term is to let prices rise so it can repay its enormous debts with depreciated dollars. Invest in T. Rowe Price's Inflation-Protected Bond Fund or a similar mutual fund, and you'll be ready.

Take your time finding someone to love, but stick with him or her. Divorce is hell on spouses and kids, but it also drastically reduces chances for a comfortable retirement for both parties.

Read history for perspective. Living in the United States of America in 2009, breasting adulthood and holding a wet-ink degree, you're better off than 99 percent of humans who ever lived. The Great Recession of 2008-2009 doesn't look bad next to the Black Death of 1347-1351.

Never go without health insurance. Young adults hardly ever become seriously ill or injured, but if they wind up in the hospital without coverage they can bankrupt their parents.

Take intelligent risks. Embrace rejection, because the person who never failed never tried. Use all your vacation days. Give back. Volunteer. Be nice to flight attendants, motor-vehicle bureau employees and health-insurance processors. It's not their fault their organizations are messed up.

Wear seat belts. In every boom, live partly as if hard times were only a couple calendar pages away. In every slump, know that, statistically, a recovery is probably only months in the future.

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