By Ryan Wu

For many Americans, the COVID-19 pandemic calls to mind the world-changing crisis of 9/11 or the 2008 financial crisis — events that have left a permanent mark on society, from how we travel, buy homes, and the rise of surveillance. This novel Coronavirus which has confined half of Americans to their homes has already started to reshape our relationships with the government, the outside world, and how we use the internet.

Note: I am not a financial adviser so do your own research; this article is for entertainment only.

In an effort to flatten the curve, people have left streets and businesses deserted. Corporations as large as Royal Caribbean Cruises to the local bodega are struggling under current market conditions. To keep the US economy afloat, Trump has called upon the Federal Reserve to enact monetary policies cutting the interest rate down to zero percent in an effort to convince Americans from hoarding not only toilet paper, but also cash to increase consumer spending and the stimulate the economy. Moreover, the planned a historical $2 trillion stimulus package that would be releasing $1,200 of funds to American adults earning $75,000 or less and temporarily pause student loan payments.

The 2008 recession stimulus package was nearly $900 billion

In a faltering economy, economists believe government intervention could boost the economy, fend off unemployment, and increase confidence in the market. This stimulus package is like an antibiotic staving off bacteria; in this case, antibiotic is money and the bacteria is a recession. By lowering interest rates, theoretically, people would spend more money because there are fewer incentives to save and make loans cheaper. However, a caveat is that banks and loaners are less willing to give out loans because of the low interest rates. This is why the Federal Reserve has begun an extraordinary measure of essentially pledging to back up all asset loans from defaulting. Put simply, the Federal Reserve is trying to persuade banks to give out loans and guarantee banks that they will likely not lose money.

So how will you get that $1200 check from the government? One the $1200 check will only be given to adults making below $75,000 a year and will go decrease the more they make. There is no concrete method for the government to determine who is getting the check, thus they are currently relying on the 2018 Federal Tax return. This method leaves many questions open such as what happens if you joined the worked force in 2019. If you do get your hands onto the check, it may titillate you to spend that money, especially since saving accounts rates will fall, but there are smarter ways for you to wisely spend that check than purchasing those new fire kicks.

Dividend Portfolio

Crisis moments like this pandemic offer ‘once in a lifetime’ opportunity. Right now, it is the perfect time to create or invest in a dividend portfolio — stocks that will pay you for partial ownership in the company. Equities are down about 32% from all-time highs. Unlike the 2008 recession, the current crisis did not come from a structural problem in the economy. It came from an external force that will pass and thus will allow many companies to bounce back quickly. Companies like Disney, Netflix, and Coke Cola are on ‘sale’ right now, and there is no better time to buy up some positions when these companies’   sales will eventually normalize in the upcoming months. COVID-19 has accelerated unsettling changes, such as the dependence of virtual storage of medical files. The call to flatten the curve has forced to people to depend more on companies that virtualizes work and school — TelaDoc and Zoom. As a result, the virus has pushed people to become accustomed to this software. Effectively, the virus has allowed these companies to prove its software’s worth in historically difficult markets to make sales such as education.

If you are starting out, you want to create a brokerage account. There are numerous no-brokerage fee accounts floating online. One of the most simple and straight forward brokerage is the progenitor of no-fee brokerage, Robinhood (link). If you want access to more free data-driven features, WeBull (link) has shaken up the industry with more advanced trading patterns. Both platforms allow new investors to learn and understand how to trade, plus they have an app.

High-Interest Savings account and No-Penalty CD account

Put that money in a rainy day account for unexpected expenses. We are in unprecedented times, and no one knows how long people we are cooped up in the upcoming months. Unemployment is at an all-time high.

There are numerous high-interest saving accounts currently on the market that will dole out 1.7% APY on your money compared to the rock-bottom interest rates at Bank of America (0.3% APY) or Chase (0.1% APY). Reputable online banks such as Marcus by Goldman Sachs, American Express Online Savings, and Discover Bank Savings all offer above-average rates to make your money work for you.

Another choice is to throw your money into a no-penalty CD (Certificate of Deposit). The advantages of these accounts allow you to lock in a high-interest rate at the same time allows you to pull out your money when interest rates rise or you need access to your money.

Pay Debt

Yes, pay off that credit card. Since those interest rates will not go down during this market downturn, unlike the temporary student loan payment pause. Paying off credit cards and other high-interest debt is an immediate guaranteed return.