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Guide to spend stimulus money wisely – Bitcoin runs out of steam

Written by Hivelr News · 3 min read >
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Spend Wisely

As the stimulus check finds its way into the pocket of the eligible recipients, it is time to think about spending it wisely and preventing people from going deeper into debt. Millions of people lost their jobs because offices, restaurants, and air travel shut down during the pandemic, while some of them were lucky enough to be able to work from home or transition their business online. With the stimulus checks on their way, it is imperative to understand your finances before deciding what to do with the stimulus checks.

The first thing is to understand your current financial situation. Here are few questions to help you to understand your current financial conditions:

  1. How much cash do you have in hand?
  2. How much are your current monthly income, expenses, and savings?
  3. How much do you owe on the mortgage, student loan, and credit card?

If you have positive monthly savings, enough cash in hand, and debts under control, it is an excellent opportunity to think about investing. However, if it is the opposite, then the best use of your stimulus check is to prioritize to pay down your most expensive debts. The most significant mistake people made was to jump into the stock market or Bitcoin because of the “Fear of Missing Out” (FOMO).

Pay down your debt

The first thing to do when receiving the stimulus check is to pay down your outstanding debts with the highest interest rate, such as credit cards or line of credit. It is important because it costs you money every month for any debt you owe. For example, if you have a $5,000 line of credit with a 10% annual interest, it means that you pay $41.67 per month until you pay off your debt. However, if you use the $1,400 check to bring your line of credit to $3,600, it will bring down your monthly payment to $30, and it will save you $140.04 per year. The same principle applies to credit card debt.

Read more: Line of Credit and Loan Payment Calculator

Fear of Missing Out (FOMO)

With the rise of free commission trading Apps like Robinhood and social media like Reddit WallStreetBets, many regular people fell into the “Fear of Mission Out” (FOMO) trap because they saw their co-workers made a quick buck on GME, Tesla, and Bitcoin. The most critical element that many retail investors missed was that the asset price had already entered the “Mania Phase,” the beginning of a bubble when it got the media attention.

Read more: Asset Price Bubble vs. $1.9 Trillion Stimulus Package

As soon as the news hit the mainstream media, the enthusiasm-induced momentum drove the price higher, beat the delusional price, and entered the “Blow off phase” when the bubble began to burst. Many first-time traders lost money on GME stock because they bought in when the price peaked and then sold it when the stock hit bottom. So, what is the optimum strategy?

The optimum strategy to build a retirement fund is to invest in a low-cost index fund such as S&P 500. The management fee is as low as 0.05%, and it gains a 10% annual return on average. The index fund rebalances itself as it adds the best up-and-coming companies while removes the poor performers. For example, the S&P 500 index added Tesla after the electric carmaker made a positive profit in four consecutive quarters.

Read more: Index Fund: The Optimum Investment Strategy


S&P 5003,968.94+ 0.65% (+25.60)
Dow 3032,953.46+ 0.53% (+174.82)
NASDAQ13,459.71+ 1.05% (+139.84)
Russell 20002,360.17+ 0.31% (+7.38)
VIX20.03– 3.19% (-0.66)
US 2-YR0.14%
US 10-YR1.62%– 2 bps
US 30-YR2.37%– 3 bps
OIL64.73– 1.01% (-0.67)
GOLD1,729.90+ 0.04% (+0.7)
Bitcoin54,525.36– 9.12% (-5,470.99)
As of Market Close on Mar. 15, 2021.

Stock Market

S&P 500, Dow 30, and Russell 2000 hit another record high as the market gains confidence in the economic recovery after the stimulus package approval and positive vaccine news. Nasdaq gains 139 points after the market rotation last week from overvalued technology stocks to undervalued energy and cyclical stocks. The small-cap index Russel 2000 has outperformed the large-cap index in the last few months as more successful IPOs entering the stock markets. The volatility index continues to drop as the fear of inflation diminishes.

Bond Market

The long-term bond yield (30-YR) drops by three basis points, decreasing the discount rate and increasing the stock price valuation. It explains why the stock market hits another record high. The spread between 2-YR and 10-YR bonds narrows, indicating tame inflation in the future.

Read more: Steepening and Flattening Yield Curves as Indicators


Oil price is hovering around $64 – $65 per barrel to assess the market reaction of the stimulus package and the economic reopening.


Gold jumps slightly higher to $1729 per ounce as Bitcoin loses $5,470 in market value. Gold competes with Bitcoin and other cryptocurrencies to gain market share as the hedging instrument against the government-issued currency’s inflationary effect.


Bitcoin runs out of steam and falls nearly 10% from its all-time high as India considers banning cryptocurrency. Bitcoin closes at $54,525 from more than $61,000 on Friday. India is putting together a bill to criminalize the possession, mining, trading, issuance, and exchanges of cryptocurrency assets.

Stimulus Check Delivery – The US Treasury announces that Wednesday is the official day for stimulus payment after President Biden signed the bill last week. However, the government has started issuing the checks through direct deposit for people who provided the IRS their banking information on last tax filing.

Rogers acquired Shaw for CAD$26 billion – The shares of Shaw jumps 42% to $34 per share, trading below $40.50 of the offer price and suggesting a potential hurdle for the acquisition. The deal will help the company to create synergies to build the 5G networks.

Photo by Mathieu Stern on Unsplash

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Written by Hivelr News
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