What to do with your stimulus check

For those of you who have lost your job over the past few weeks, this may not apply to you. If you absolutely need your stimulus check to pay for your monthly bills, you will not find value in this post. You may, however, find value in this blog. So please, start here.

For those that are finding this stimulus in a time of relative financial stability, you are going to want to perk up, because we are getting creative.

First thing’s first, what does your debt look like? No, I don’t mean your mortgage. Do you have any debts that are charging more than 6%? If no, you’re going to want to invest it. The reason for this percentage is a bit more technical than I want to make this post so I’ll be sure to explain in more detail and link it here in the coming days (subscribe to get notified when I do).

Okay, you’ve paid off any debts that are charging over 6% and you still have money left over, now what? Well welcome to CPTCashFlow.com, we invest here. But how?? You could, of course, use Robinhood. It’s the simplest way to get that money from your bank account into the market and start making money. But you’re more clever than that. We are in it for the long haul. We’re in it to retire early AF. So what’s our best course of action?

Your 401(k)!!! The problem is getting it there. Well, it’s actually much easier than you’d think. If your part of this community, you know how to live off of less. This means that stimulus check could be at least 2 weeks of expense if not more for those who are married and got that double-check. So up your 401(k) contribution from your working income to balance so that the stimulus check doesn’t just pad your non-interest accruing checking account.

Example Time

My wife and I have 1 child, which qualified us for $2900 total. This is an entire month of expenses for us and then some. This means I can set 1-2 entire paychecks (I get paid bi-weekly) at a 100% contribution rate. That’s right, I won’t be seeing direct income for a whole month.

So, what does this actually do for retirement? We can look into the past for that. The last time the market dropped 30% in a single month as it has recently was late October 2008. If you were to drop an extra $2900 into VTI (the ETF that I use) and waited 10 years, it would have grown by 181%. It would be worth $8,149 as of October of 2018.

Remember the “Great Recession?” This is what happened immediately after…

Don’t think to yourself that these numbers are unrealistic or that investing is only for the rich. Look it up yourself, look at the returns. Investing is for the rich because the people that do it right become rich.

Don’t let this check just drive consumerism. Invest in your future.

Thanks for reading!

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