When you invest your stimulus dollars, be it through a bank, your pension or investing your stimulus check, don’t forget the other streams of income as well. This is where having a registered financial planner or CFP can pay off dividends as well. A financial planner will keep track of your investment activity and have you diversified so you don’t lose touch with the rest of your income. This is one area that personal or self directed IRA’s are not a good fit for.
When investing your stimulus check, it would be wise to diversify your investments by including other types of income. There are many avenues that you can explore including stocks, bonds and mutual funds. Investing in a diversified portfolio is important because you can always rely on the returns. When investing in just stocks, you don’t know what the economy will do next. In a mutual fund account, there are several options for investing including stock, bond and even real estate.
Stocks are probably the most popular choices for investing your stimulus cash. It is easy to buy stocks at a low price and turn them into profits quickly. However, this is also the riskiest type of investment. You are risking losing everything if the company you own goes out of business or you invest too much of your money in a company that doesn’t prosper.
Another option when investing your stimulus check is in credit card debt. Although you may feel like you have all of your bills paid and can easily manage another bill payment, credit card debt can balloon very quickly. You can also run into trouble if you get into debt with a credit card company you are unfamiliar with. Some credit card companies will not allow you to consolidate debts with them. This is a big mistake because they may then increase your interest rates or change your monthly payments.
If you don’t want to risk your money in high-risk investments or you simply don’t have the time to devote to managing your own investments, it may be a good idea to open a high-yield savings account. High-yield savings accounts offer very high interest rates but also come with a very low risk factor. If you have a lot of money set aside that you do not need to use right away, a high-yield savings account may be the answer for you. Even if you have to pay a higher interest rate initially, the amount of time you have to pay the interest and save up the money will more than make up for the initial expense.
Investing your stimulus check is an important part of preparing for the upcoming financial storm in the United States. Some Americans are panicking as the result of the recent pandemic. Being prepared by saving some of your income, investing your stimulus check and buying some bonds will give Americans some time to get through the bad times and hopefully come out on the other side stronger and more confident in their ability to weather the storm. It may also make life a little easier on the millions of families and individuals who are living paycheck to paycheck.