Financial advisor gives tips on investing stimulus money
RICHMOND, Va. (WWBT) - The COVID relief payments are making their way to bank accounts around the country, giving some a much-needed financial boost. But while some may use it to catch up on bills, or perhaps buy a big-ticket dream item, others are thinking of turning that money into more money.
JJ Wenrich, of Wenrich Wealth, says more and more young people have been putting money into the stock market, and many are planning to use that stimulus check as their gateway.
“I do think that Robin Hood and the buzz around what happened with Reddit and GameStop certainly contributed to that, but it was happening way before that. There has been a push for more financial education,” Wenrich said.
But before you go all Gordon Gecko, Wenrich advises that you do your research before you start trading.
“You want to own companies that, as you go about your everyday life, you say ‘Wow, this is a great business. I wish I owned that company.’”
He adds that it’s not all about chasing after the hottest stocks and that in his experience, “the best investments changing people’s lives, by putting away $5,000-$10,000 and then just leaving it alone, have been in companies that they used, that they believed in.”
Alternatively, he advises considering investing in your future.
“Long term, down the road, maybe retirement? Then look at a Roth IRA. Something that is longer-term that will defer the taxes for you.”
He adds that whichever route you take, be patient: It will be a wild ride with good days and some bad ones.
“Markets take the stairs up, and the elevator down. And you just have to be prepared for those elevators down, and be willing to see those fluctuations and see yourself lose money for a little while.”
The final piece of advice: don’t spend it all. If you must, only use what you’re willing to lose because you might need some for your emergency fund.
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