Tag - stimulus check

Smart Way to Spend Your Stimulus Check

You may be wondering how to best use the $1,400 payment you may have received as a result of the latest round of stimulus relief. One thing may folks will be doing with their stimulus money is investing it! A recent survey shows that retail investors on average plan to put 37% of their stimulus into stocks. For those investors ages 25-34, the intended share is close to half. Data from the Census Bureau show that of all Americans that received a payment, 15% were putting at least some into savings or investments. One of the best ways to build wealth is by investing. Investing allows you to put your money into accounts that have the potential to bring you a strong return. If you don’t invest, you are missing out on opportunities to increase your financial worth. There is the downside that you have the potential to lose your money in investments, however, if you invest wisely, the potential to gain money is significantly higher than if you never invest. When it comes to investing you don't just have to invest in stocks. You can invest in real estate either through owning your own home, purchasing a home as a rental or vacation property or purchase an investment building. When you invest in real estate, you are putting some of your money into the equity of the property, which is like a forced savings account that can bring you a strong return down the road. Plus, with homes expected to appreciate by 6% in 2021 you could be looking at an amazing return on your investment! Have questions about investing in real estate? Reach out to us by email or give us a call at anytime.

Effects of the New Stimulus Package

Home loan interest rates have been moving higher recently, but they're still at very attractive levels that are close to those historic lows we saw throughout 2020. However, with President Biden’s administration recently passed another stimulus plan in an effort to continue to revive our battered economy many are worried about the effect it will have on the housing market. The massive new stimulus plan is causing fears of inflationary pressure – and remember inflation is the arch enemy of interest rates. Initially what the money from stimulus does is create economic activity and some inflation, but after the effect of that wears off, debt takes over and you have to make the payments on that debt. Which leaves less money to generate economic activity and slows the growth. Think of it like a family that just went to into debt to purchase a new car. The initial purchase creates economic activity, as the manufacture, seller, and dealership all make a little money from the transaction. This economic activity generates some inflation pressure, but it wears off and what remains for many years is the monthly payment on that debt which acts to slow the growth. This is exactly what is expect to happen with the governments issuing stimulus money. With the stimulus plan going into effect, we believe interest rates will continue to bump a bit higher at the beginning of the spring market. As people continue to gather more and return to work it will alleviate inflation pressure and we will start to see rates relax more later in the year. If you have been considering a home purchase you have two options, choose from the rate today or the rate in the future. I highly recommend getting locked into a lower rate now while you have the opportunity to. Plus, if you buy into a rate that you don’t love we can always refinance your loan in the future. Let’s get your loan moving before rates move higher! Contact me today to see how you can benefit before things change.