Now is the time for young people to become investors

Are you investing right now? You probably should be. In fact, despite all the fear about the stock market and people's 401(k)s tanking, investing is one of the few areas I think people should be cutting back on now.

Why? For the same reason I tell people (at least young people), they shouldn't stop contributing to their 401(k) retirement accounts: the stock market is on sale and the bargains are better now than they have been in years. A few examples (disclaimer -- these are EXAMPLES, not stock-picking advice. Choose your own investments carefully based on your own financial situation):

• On Jan. 20, shares of PNC Financial Services Group Inc., which last year bought National City Corp., closed at $22 a share. Nobody liked bank stocks then (most investors still don't). But yesterday PNC closed at $40.93, meaning if you bought then, you'd have doubled your money.
  
• Last October, I interviewed an investor who told me he thought he was getting a bargain by buying Procter & Gamble stock while it was trading in the $57 range. Right now, PG is trading at about $49; it's worth less than it was then, but it's a strong company (everybody needs toilet paper and detergent) who's shares are going for a bargain.

This month's Black Enterprise magazine has a cover story on investors in their 20s who have picked up on this and are taking the opportunity to make long-term investments while stocks are cheap. What about you? Are you investing now, or sitting on the sidelines until the market picks up.

Two financial pleddges you should take

I logged into my ING savings account the other day was redirected to their "Declaration of Financial Independence". It's 10 money practices they want people to commit to, and I gotta say it's a pretty good list.

Some of the highlights: "We will use our home as a savings account", a point in which they stress bringing a big down payment to closing and warns against borrowing against our houses; "We will invest for the long-term" and "We will ignore unsolicited credit card marketing."

What's interesting is that banks and investment companies have shifted their advertising to focus on more practical financial habits like saving instead of borrowing and bringing a down payment when buying a home instead of touting zero-down mortgages. The New York Times ran a story in August about how bank ads encouraged people to continue to go into debt. (A disclaimer here: ING Direct has always encouraged saving, given it's part of their business model. And by the way, they're not paying me to write about this).

ING isn't the first company to issue that kind of declaration. Check out Black Enterprise magazines' Declaration of Financial Empowerment, which they started promoting, if I remember right, in about 2000. It also has 10 good principles that everyone should try to apply (although #8, supporting African-American owned businesses, may not resonate with everyone).