Legacy Investing & Wealth Management Market Mondays – 4/10/17
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Sorry that I’ve been missing in action but my work schedule has been crazy. I will get back to more of a regular schedule soon.
I’ve seen some really good articles recently on ways of saving money and eliminating debt. From the Pennyhoarder article I shared on Twitter last week here are a few ways of eliminating debt. I’m also adding a few of my own:
First, if you have a million credit cards all with high varying interest rates, either consolidate them by getting a personal loan or do a balance transfer to one credit card. Personal loan rates (depending on your credit score) can be in the single digits compared to the average credit card rate. Before you do a balance transfer make sure you check the terms. Most will offer no interest for a certain period of time then jump you up to 15% or so lol. The devil is in the details!
Another way is to use Dave Ramsey’s debt snowball method – paying off the smaller credit card balances (while still paying the minimum balances on the others) then moving on to the next credit card. Even if the interest rate is not that high on the smallest credit card balance you are wiping away credit cards one at a time. Here is what I would add; as you’re paying the credit cards off you should be closing some of the cards with the highest interest rates. Leave the ones with the lower interest rates open for credit score purposes. The challenge while you leave some open is to stop using them unless it’s for small purchases that you pay off early every month. This will get your credit score moving up again.
Negotiating your bills down is a strategy I’ve never used before but could be worth a try. There is even a free app called Clarity Money (looks like only on iOS right now) to help you find and cancel wasteful accounts, get organized, manage and lower your bills by taking advantage of discounts you may not know you’re eligible for and get better deals on credit cards. You can also create a savings account with automatic transfers to encourage saving but you can do that with most online banking.
Making extra payments on any existing loan will cut your payment schedule and also the amount of interest you pay. This is especially true if you’re a homeowner. You would be surprised at the number of years you cut from a 30-year mortgage from paying lump sum amounts to the principal. We had a 30-year loan and cut about 7 years from making extra payments once a year. I’m just talking about paying up to $5,000 per year for about 5 years straight. Whatever strategies you use to pay off debt there needs to be patience and diligence. It’s not going to happen overnight, but it will so keep focused and you’ll look up one day and be debt free!
Since the last Market Mondays post, the S&P 500 went up several percent and is currently trading at 2357 as of today’s closing. It’s been trending lower since making an all-time high on March 1st. Looking at the charts, the S&P 500 is forming a wedge and its either going to break down or break out. See the picture below and look to the right at the red lines drawn to see the wedge pattern.
Since we haven’t had a correction in so long (since election night) we’re overdue and it very well could have started in March. It would be healthy and everyone is looking for it. Once that happens then I think the market will resume higher but I’m not very invested until then.
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Disclaimer – Legacy Investing & Wealth Management LLC or any of its advisers are not liable in any way for any losses incurred through trading by readers of this weekly blog. Any information or strategies of trading suggested here involve risk of capital loss and this weekly blog is not considered investment advice. Individuals who invest in securities are solely and completely responsible for any and every outcome that may occur.