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15 Million Americans Plan to Turn Their Trump Stimulus Check Into a Money Machine



An unprecedented pandemic calls for unprecedented action. In the wake of the proliferation of the coronavirus disease 2019 (COVID-19), which has been confirmed in more than 2 million people worldwide and north of 600,000 Americans, Congress acted swiftly to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, which was subsequently signed into law by President Trump.

The CARES Act is a $2.2 trillion stimulus juggernaut that provides $500 billion in loans to distressed industries, $350 billion in small business loans, $260 billion to broaden the unemployment benefits program, and $300 billion for direct stimulus payments to American workers and seniors.

Uncle Sam's arm and hand emerging from a mailbox with a fanned pile of one hundred dollar bills.

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Who qualifies for a coronavirus stimulus check?

As you might have right imagined, the bulk of interest in the CARES Act lies with these direct stimulus payments to what may amount to as many as 140 million American households. These so-called “Trump stimulus checks” can equate to as much as $1,200 for a single taxpayer, or $2,400 for a married couple filing jointly. Each household can also receive an additional $500 per qualifying child aged 16 and under. Thus, a married couple with two children may net as much as $3,400.

Then again, not everyone qualifies for a coronavirus relief check – or at least the full amount.

For single filers, couples filing jointly, and head-of-household filers with respective adjusted gross income (AGI) above $99,000, $198,000 and $136,500, no stimulus check will be paid. Comparatively, single filers, couples, and head-of-household taxpayers with respective AGIs under $75,000, $150,000 and $112,500, will collect the maximum benefit.

For those folks who fall in between these upper and lower income bounds, $5 in stimulus benefit will be removed for every $100 in AGI above the lower bound. For instance, a single filer with $85,000 in AGI can expect to receive a $700 stimulus check.

Dependents aged 17 and older, along with most non-citizens without a Social Security number, will also be excluded from receiving a stimulus check.

A stack of coins and cash bills, a clock, and a stock market quote board all superimposed next to each other.

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Some 15 million Americans plan to invest their Trump stimulus check

The big question is: What should you do with your stimulus check once it arrives?

According to a recent survey of more than 1,000 people by online credit repair site Crediful, almost half of all respondents said they planned to use their stimulus check to buy groceries or pay various bills and utility costs. 

But what stood out as particularly striking is that 10.7% of survey respondents planned to invest their Trump stimulus check. If we assume this percentage can be extrapolated out to the approximately 140 million households potentially receiving a stimulus payment, it means (at least) 15 million Americans, or about 1 in 9 households, plan to turn their coronavirus payouts into a money machine.

There’s absolutely no denying that the stock market has been exceptionally volatile of late. Last month, the CBOE Volatility Index, often referred to as the “fear index,” wound up hitting an all-time high. This is because we’re witnessing unparalleled disruption to the labor market and U.S. economy, with nearly 17 million jobs lost in a three-week span and some economists projecting the unemployment rate could spike as high as 30%.

However, the stock market has an impeccable track record of making investors money, so long as they hold onto their investments for long periods of time. Data from Crestmont Research finds that any 20-year rolling period over the past century for the benchmark S&P 500 (SNPINDEX:^GSPC) would have made investors money, inclusive of dividends. In fact, ending the 20-year rolling period in more than 40 of the past 100 years would have resulted in an average annual return of at least 10%.

A businessman in a suit staring intently at a messy pile of cash in front of him.

Image source: Getty Images.

Here are a couple of smart ways to turn your stimulus check into a money machine

If you find yourself among the 15 million Americans likely to put your stimulus check to work on the investment front, here are a few ways you can turn that payout into a bigger sum of money.

First of all, you could always consider aligning your investment up with the broader market by purchasing an exchange-traded fund, or ETF. For example, the Vanguard S&P 500 ETF (NYSEMKT:VOO) very closely mirrors the performance of the benchmark S&P 500, but only winds up charging a microscopic expense ratio of 0.03% per year. This means the Vanguard S&P 500 ETF allows you to hang onto virtually all of your investment. Since we know that there’s never been a 20-year rolling period where the S&P 500 hasn’t made investors money, inclusive of dividends paid, dating back at least a century, the Vanguard S&P 500 ETF is a pretty safe bet.

Another option would be to consider dividend stocks. A 2013 study from J.P. Morgan Asset Management found that companies initiating and raising their payouts between 1972 and 2012 returned an average of 9.5% per year over this four decade stretch. Meanwhile, non-dividend-paying stocks returned an average of just 1.6% annually over this same time frame.

One exceptionally safe option to consider is healthcare conglomerate Johnson & Johnson (NYSE:JNJ), which just announced its 58th consecutive year with a dividend increase this past week. The thing about healthcare is that it’s far more defensive than you might realize. Since we don’t get to choose when we get sick or what ailment(s) we develop, healthcare stocks like Johnson & Johnson tend to experience little or no disruption in cash flow. It also doesn’t hurt that Johnson & Johnson is one of only two publicly traded companies with the highly coveted AAA credit rating from Standard & Poor’s. This means S&P has more confidence in J&J paying back its debts than it does of the U.S. federal government making good on its own debts.

No matter your investment choice, as long as you intend to hold your positions over the long run, you’ll have a pretty good chance of turning your stimulus check into a money machine.

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Are Sallie Mae Student Loans Federal or Private?



When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances



Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit



Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.



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