Redrick Terry:
It’s 4 Your Money time. Now we’re joined by James Nelson, financial advisor at NelsonCorp Wealth Management. James, welcome back.

James Nelson:
Thanks, Redrick. Good to see you.

Redrick Terry:
Same to you. So as the vaccine rollout continues, we’ve heard a lot of talk about pent up demand in the economy that could give a needed boost in 2021. What are you guys’ thoughts on that?

James Nelson:
Yeah. Yeah, we’ve heard a lot of arguments for and against it. Pent up demand, it’ll be interesting to see how much is there, the idea that the vaccines rolling out and hopefully life can get back to normal here sometime in 2021. And then people be out spending money and doing the things that they were doing beforehand. And there’s a lot of truth to that. And certain sectors will probably notice that change. On the other side, there’s a lot of meals that weren’t eaten at restaurants last year, a lot of travel that was not taken last year. So the idea that this pent up demand is going to make up the difference from last year probably doesn’t move smoothly across to all sectors. So we’ll see, but we certainly hope there’s a little bit of a push.

Redrick Terry:
So where could we look to give us some insight into that?

James Nelson:
Yeah. So we’ve got a chart here, a graphic that comes up. And it really shows the difference between income and savings. So the top line, that red line shows the income through the last five years. So it’s been a steady line up. And then towards the end there, you see that spike. And that primarily was the government intervention, that was the stimulus money, the checks that went out, the additional unemployment benefits. So incomes had a nice push earlier in 2020. That tapered off a little bit since then. But overall, 2020 was the highest income year in aggregate for the country that we’ve seen. Now we understand that a lot of people are struggling and it wasn’t good for everybody, but the data shows that the highest income year was last year in 2020.

James Nelson:
Now the bottom line there shows the savings, and savings has been stagnant. We can see that blue line move across the bottom of the screen there. And then again, we see a big spike there towards the end. That has to do with a lot of people not going out, not spending money the way that they were, and again, that stimulus money that helped boost up savings for people. It was also a record year for paying off credit card debt. So that’s a very positive thing. And again, that line there at the bottom last year, there was over a trillion dollars of still in checking [inaudible 00:02:41], that was double the year. So again, I’m very positive to see the savings rates go up.

Redrick Terry:
So what implications does all that have for investments?

James Nelson:
Yeah. We’re really interested to see about that pent up demand. Is it going to play out the way that a lot of people think? We’re interested in the travel, hospitality sectors. Restaurants, obviously. Hopefully, that’s a little bit of a tailwind and hopefully that plays out early in 2021 and get things moving again.

Redrick Terry:
Hopefully, time will tell. We will see. James Nelson, thanks for being with us. We appreciate it.

James Nelson:
Thanks, Redrick. Appreciate it.

Redrick Terry:
Absolutely. And if you missed any part of our discussion, we’ll make it available to you at ourquadcities.com.