The Trail to Wealth

It’s time to provide a brief January 2021 market and portfolio update and highlight some of the main events that happened in the market this quarter and my outlook on 2021. In December 2020, the Fed committed to buying at least $120 billion a month in U.S. Treasuries and mortgage-backed securities (MBS) until U.S. economic conditions improved. Moving forward, I believe the market will continue to stay on an upward trajectory until the Fed decides to reduce the number of bonds, treasuries, and MBS that they purchase. I sold the bulk of my shares in Sunpower Corp for a 457% gain and used the proceeds to add to my positions in stocks I plan to hold for a long time (Advanced Micro Device, Microsoft, and Facebook).

Paying off small debts quickly can help your credit score by reducing outstanding balances and may help you qualify for a balance transfer credit card or a low-interest personal loan. One flaw with the snowball method is you’ll likely pay more in interest because you’re not tackling high-interest rate debt first. Making minimum payments on all debt, they would put the extra $125 towards credit card B. If this individual was to utilize the debt avalanche method, they would first pay off credit card A, which has the highest interest rate. With larger amounts of debt, the avalanche method works well because you can attack high-interest debts first, which in the long run will cost you a lot in interest payments.

If you have lost your job and do have an emergency fund, now is the time to put those funds to use to pay your rent, car payment, credit card bill, and other expenses you may have. If you happen to be in the very unfortunate circumstance of having lost a job and have little to no savings, now is the time to explore your financial options to include applying for unemployment and searching for another job. If you find yourself in a tough financial situation and have concerns surrounding how you’ll pay your bills, reach out to your lender, apartment management, or bank and see if you can work out a reduced payment or waive late payments. Below is a list of some financial institutions and the steps they are taking regarding mortgage payments: o Allowing customers to defer payments for up to 90 days, and missed payments are added to the end of the loan term.

Open a separate savings account and add money monthly and/or have a portion of your paycheck directly deposited into this account until you reach your emergency fund goal (3-12 months). If you already have a significant amount of savings, open another savings account and transfer 3-12 months worth of expenses. Money Market Savings Accounts (MMSA) are another option for an emergency fund because they pay a higher interest rate and operate similarly to a normal savings account. Pro Tip #1: If you decide to open a new checking account as your emergency fund (highly discouraged because savings accounts pay higher interest) make sure you destroy the debit card that comes with it.