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  • James Veal

Top 10 Wealth Building Resolutions for African Americans in 2021

You would probably agree with me but 2020 had to be one of the worst year’s ever. For most people, it could not have ended soon enough. The investment world experienced a devastating hit on the stock markets around March 11th of the year. COVID-19 had changed just about everything.

Long-term investors and those who had the nerve to invest doing that time period managed to escape and profit the year with solid gains. However, plenty people fell prey to stocks going down but didn’t realize that such volatilities creates opportunities at times and those who stayed - patiently capitalized.

To help you make 2021 a better year for your portfolio, I’ve got 10 New Year’s investing resolutions for you to consider. Now, you don’t have to do all of of them. But if you pick and choose the one’s that fits your situation, you’ll probably like the results. Here we go:

1. Build Your Savings. The bear market in March 2020 was a great opportunity to buy stocks at cheaper prices. However, many people did not have access to funds because of COVID-19, layoffs, and a lack of savings. Nevertheless, do what you can to increase your savings just in case we encounter another pandemic or when some of your favorite stocks get cheap.

2. Contribute to Your 401(k) Plan At Work. Close to 45% of businesses do not offer any sort of employer retirement plan. That is down right shameful! If yours do, join it ASAP. Three great things happen when you contribute to a 401(K) plan: 1) You have an opportunity to build a large portfolio over time from your monthly contributes, 2) your monies grows on a tax-deferral basis and decreases your tax responsibilities, and 3) it could be used to produce additional monthly income in retirement along with a pension and Social Security.

3. Buy Individual Stocks. Many people aren’t familiar with or have much experience in buying individual stocks. This is a perfect time to learn about investing in the stock market in 2021. Real Estate is where most people go to seek passive income. There is nothing wrong with that but investing in the stock market produces a 10% average over any ten-year period compared to about 6% in real estate. Have you seen the investment returns on notable company's such as Apple, Tesla, Zoom, Amazon, and Moderna recently?

4. Open a IRA or Roth IRA Account. If you receive income from a job, you can contribute to an IRA. It provides tax benefits and allows your money to grow without any tax consequences. It is extremely important for people that work for an employer that doesn’t offer a 401(k) to immediately open an IRA or Roth IRA account. You’re responsible for your own retirement. Whether you’re 20 or 60, retirement accounts are important for your long-term financial stability.

5. Turn Off Your Favorite Business News Source. Many of us go on vacations to take a break and relax a little. Well, that can be said about our portfolios. Some of us never take a break from watching the latest business news channels. If buy quality stocks and you’re a long-term investor, you should be able to skip a week here and there. You might find it actually helps you not to obsess about every economic news item that effects the company stocks you own.

6. Ditch the Deadweight. We’re big believers in buying and holding stocks, but that doesn’t mean you should hang onto every share you’ve ever bought. If you no longer believe in a company’s future growth potential - and there’s no reason to expect things to turn around any time soon - then it may be time to hit the sell button. Never fall in love with individual stocks.

7. Help a Friend or Family Member With Investing. One of the most rewarding things you can do with your new and improve investment knowledge is to pass it on. Helping loved ones become smarter with their money won’t just make you feel better about yourself - but it can also help reinforce the lessons you’ve learned about investing yourself. Share the knowledge.

8. Keep a Journal of All Your Investing Decisions. Another way to hold yourself accountable is to write down your reasoning for every purchase or sale you make in your portfolio. Years from now, you might remember that you sold shares of a certain company, but the odds are high you won’t remember why. A journal lets you see where you got things right and what mistakes you possibly made.

9. Don’t Invest All of Your 401(k) Contributions Into a Stable Fund. One of the biggest problems with regards to your 401(k) is that there is no one to assist you in choosing the different investment options. If you’re not familiar with stocks (most people aren’t), most people simply park their money in the safest option available. That’s usually a disaster because a portfolio consisting of an assortment of investment options in most cases generates a much higher return over the years than if it sits in a measly stable fund.

10. Have fun! Above all else, don’t think of investing as a chore. Putting your money to work can be fun. There must be something exciting about the stock markets if most millionaires and billionaires invest their monies. Consistent contributions to your IRA/Roth or brokerage account(s) makes your job quite easy. Hopefully, when you check back and look at your portfolio after a few months or years - you’re smiling.

I hope these resolutions will make you smarter, happier, and richer in 2021 and beyond. Let me be the first to wish you a Happy New Year.

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