Get Ready To Travel!
I booked a flight for the first time in over a year. In May, I will fly to Los Angeles to visit my parents; our first in-person visit since December 2019. I look forward to waiting in long lines and battling the Los Angeles traffic.
The Dow Jones US Travel and Leisure Index just traded to an all-time high after cratering last year. When COVID arrived, the index dropped 38%. It bottomed last March, and it has since risen 85%! Apparently, I'm not alone in my willingness to travel. As we emerge from our COVID winter, planes, trains, and automobiles will benefit from the surge in demand. Housing, travel, and entertainment should also do well.
A key component in a financial plan is spending. Spending is one item we can control. The more we spend, the less we can save. However, now is an excellent time to spend some money. The current US personal saving rate is 20.3%; since the late 1980s, this number has mostly been negative, and the 62-year average annual savings rate is a minus 20.8%. It appears we have money burning a hole in our wallets.
If you have invested wisely and followed your plan, you're an excellent candidate to spend money. Here are a few ideas to help you kick-start your spending.
- Shop local. If your neighborhood looks like mine, several restaurants and small businesses have closed their doors. It's time we support the survivors and give a boost to the newcomers.
- Take a trip. It's time to hop on a plane or take a road trip. Load up your family, rent a home through Airbnb or Vrbo, and make some memories. Invite friends and family to join you on your journey.
- Buy a big-ticket item. Maybe it's time to buy a second home, a sailboat, a new car, or all three! Are you ready to spend a month or two in the mountains or at the beach?
- Upgrade your home. Adding a fresh coat of paint or installing new floors will enhance your home. Purchase a new BBQ and picnic table and invite your neighbors over for a feast.
- Donate to your favorite charity. Families and individuals struggled last year as the nation's unemployment rate soared above 14%. People who don't own a home or investment portfolio missed the recovery. Donating money to a charity will give these people an opportunity to experience some joy.
It's been a long twelve months, but things are starting to improve. Now is the time to spend some money and rev up the economy. Let's all do our part!
A mind that is stretched by a new experience can never go back to its old dimensions. ~ Oliver Wendell Holmes
April 9, 2021
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets.
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