A change in the White House always makes investors a little nervous because they just don’t what to expect. We’re about a month into the Biden administration and he’s already taken a number of measures that might impact financial planning.

On this episode of the Money Wisdom podcast, we’ll find out what Joel Johnson thinks about the executive orders that have been signed and whether it directly impacts most people.

One of the first things Biden did was use an executive order to extend the federal moratorium on evictions, and that also prolongs a moratorium on foreclosures. These will run through the end of March at least. The eviction side of this affects many of the clients we work and this is a little controversial because of who ends up footing the bill when it’s all said and done.

The next executive order continues a pause on student loan interest and principal payments. This might not impact most of the people that listen to our podcast, but this will still get a lot of attention across the country. It’s hard to tell how much will actually change with the liberal payback periods that already exist but this is something many will be keeping an eye on.

Another big headline includes the Keystone XL pipeline. Biden revoked the permit for construction, but it doesn’t necessarily mean that the pipeline won’t get built. The question now becomes where does it get built and will the US get tax revenues from it. In the big picture, this action doesn’t really impact many investors that we’re working with.

The most recent headline was the latest stimulus package, which was pushed through after we recorded this episode. We’ve talked about how much these relief packages have helped Americans and the economy, but that doesn’t mean that these bills shouldn’t be more targeted to the people that need it. Not everyone needs the money but we have talked to a lot of people that are out of work and really need these extra dollars.

So what’s next? The increase in minimum wage across the board seems to be a priority but will it pass? Joel has changed his stance on this over the years. If you asked 20 years ago he wouldn’t be in favor but now that’s not the case. After owning a business and appreciating employees working hard, he could support that minimum wage in Connecticut or Massachusetts. But that’s not to say it won’t affect businesses and consumers because it absolutely will

We realize there are still more questions than answers for what the future holds during the Biden administration. If you need help making decisions with your money based on these policies and others, get in touch with us and get your complimentary Money Map Review started.

MAILBAG

Time to open up the mailbag and get to your questions.

The first question today asks about taking on a new, larger mortgage. In this situation, a couple is within five years of paying off their current mortgage but one spouse wants to build a new dream home, which means that it will come with a new, larger mortgage. When evaluating this, consider what your net equity will be. In most cases, you’ll still have the same amount of equity from this asset but it’ll just have debt attached to it. What you should consider is whether you’ll prefer to enjoy the nicer asset or being debt-free.

Our second question comes from someone that is getting really close to retirement and overwhelmed with everything that encompasses. Let’s try to keep this as simple as possible. Here’s what you need to focus on. First, where is you income going to come from?

Once you’ve determined that, then you move and look at what risks could interrupt this income? We want to find the big pitfalls like a drop in the market or large healthcare expenses and make sure you can account for those. Planning can really be narrowed down to those two things and then you can get into all the details from there.

[1:53] – Evictions and foreclosures

[4:33] – Student Loan Debt

[6:47] – Revoking the permit for the Keystone XL pipeline

[8:38] – Additional COVID stimulus

[11:07] – $15/hour minimum wage  

[15:06] – What should you be doing with your own money

[19:02] – Mailbag question about taking on a bigger mortgage

[21:30] – Mailbag question on what to focus on right before retirement  

Thanks for listening to this episode. We’ll be back again next week for another show.