You got to do whatever you can to avoid these really simple financial mistakes. When interest rates start going up, look, it is the ides of march. It is march 15, 2022 and tomorrow, interest rates are expected and pretty much will be going up by 25 basis. Points in case you don't know what that means.

It means a quarter of one percent. We expect interest rates to go up by 25 basis, points quarter of a percent at least seven times. That would bring us up to about 1.75 from where we are now at zero and potentially all the way up to 4.25 percent with 17 consecutive 25 basis. Point hikes.

So what happens when interest rates not only head in this trajectory, but what happens when they actually end up arriving to a range of 1.75 to 4.25? What are the things that could absolutely blindside us? Well, let's talk about that, but first a quick note that this video is brought to you by stream yard stream yard is an amazing opportunity for you to live stream to multi different platforms. At the same exact time like facebook, youtube twitch twitter, you name it any kind of source you want to connect as well, and you can learn more by going to medkevin.com streamyard and it's the same software that i use every time i live stream. So that way, when i put comments up on screen or we throw a donation up on screen or whatever we do it all through the magic of streamyard super easy to use platform check it out, link down below and that's betkevin.com streamyard. Okay problem number one: you don't want to get blindsided in first of all, if you're in margin, debt and you're really excited because you're only paying two percent margin at m1 finance you're, paying a low margin rate somewhere, prepare to get rug pulled because when interest rates Start trending up, you should expect your margin interest to start ticking up pretty substantially now, what's remarkable is that we are at some of the highest levels of margin debt in this country that we have been in since before the pandemic.

In fact, since before the pandemic, we were sitting around - maybe 550 billion dollars of margin debt to the fact that now we are up over 60 percent in margin, debt there's a good chance. People watching this have at least some form of margin, debt and the cost of you. Financing debt to buy stocks and options or securities is probably going to go up almost immediately when we start seeing the federal reserve increase rates. So if you're in margin and you're holding on to positions that are maybe going down in value or they're losing or you're speculating, just realize your debt burden is about to get more expensive, so buckle up, get out of margin.

If you can number two, we got ta talk real estate when the fed funds rate starts going up the 10 year. Treasury rate starts trending up as well. When the 10-year treasury yield yield. That's essentially, the rate right starts trending up.

Oh man, it actually just popped up again right now, uh, then you end up seeing real estate mortgage rates also pop up, and there are a few ways you can track this. First, you can look at the 10-year treasury yield by just popping over to something like cnbc. You can see it here, it's currently up at 2.16, it's worth noting that it was as low as 1.7 about a week and a half ago. So in a week and a half, it's moved about.

0.46. That's 46 basis points, it's absolutely ridiculous, and so it's no surprise that just this year today, i want to show you what mortgage rates have done and worth noting that every one percent move in interest rates tends to remove 10 percent buying power from the real estate Market, so take a look at this folks. We started the year out at a rate of 2.8 for the 30-year mortgage. It's now at 4.15.

I think we're gon na see five percent pretty dang soon so buckle up. Okay, now, look you zoom in on this. You see it gets even worse. Okay, just the last couple weeks, we've seen a little explosion, even in the last couple weeks of about a move of about 60 basis points or 0.6 percent.

That's a lot so pay attention to real estate. Real estate prices could come under pressure. Certainly, the buyers well some buyers in our market right now, probably going to start getting washed out with uh with purchasing power, so we're going to have to keep an eye on buyers. I don't expect a big kind of uh recessionary like foreclosure boom or anything wild.

Like that, but there will be some headwinds to real estate prices. Nothing like the 2008 financial crisis, knock on wood, okay, number, three helocs and arms. If you have adjustable rate mortgages on your real estate, you're gon na be paying more money so set aside some more cash, also helocs, which are home equity lines of credit. These are usually variable interest loans until they get to their paying off period, which is where you lock in a rate for about 10 years and then amortize out the rest of the rest of your loan that you owe during the first 10 10-year generally drop period.

You have a variable rate on your home equity lines of credit, expect those to go up home equity lines of credit have had rates of somewhere around three and a half percent. You usually get something like wall street prime plus, maybe a quarter of a percent or half percent we're going to see that wall street prime rate probably move up, and when the wall street prime rate moves up, your heloc's are going to move up. You could just google wall street prime rate, and then you could find out exactly what that rate is. Some were adjusted to libor or pegged to libor it's another one that you could use, but yeah the wall street journal.

Prime rate right now is 3.25 percent. I expect that to go up a quarter of a percent, every single meeting that the federal reserve has now and they have a meeting about every six weeks so about every six weeks you could see be seeing these 25 basis point hikes, hike, hike, hike, hike, hike. It's a problem so something that i've actually done here is i just refinanced properties now i started these refinances about a month ago, so i just completed the refinances, but we've mentioned this before it doesn't matter so much. In my opinion, if the rates are 4.25 now or 4.5 now on investment properties versus say, like 3.5 on investment properties, that one percent difference doesn't matter so terribly much for me right now.

But what does matter more is if i'm locking in those variable loans, that is i'm refinancing on variables, having those sort of unpredictable raises over time, especially since there is a chance, the fed's going to have to hike more than they have in the past. Because of this potential for longer term, more persistent inflation, so personally, i'm preferring refinancing right now over home equity lines of credits or variable styles of loan. Now in the future, i do expect that interest rates are going to come back down again. That might be in 2024 or 25, something like that.

When rates start coming down again, then i can always refinance again and then go back into like an arm or into helocs or whatever. But right now i don't mind. Just lock me in give me that fixed rate, whatever i'm not going to pay points for it just give me, whatever the rate is hey four and a half percent, still a good deal i'll. Take it right now lock it in and then i don't have to worry about it, because i'm going to look and make sure that a i can afford the payment where it is or b my payments or my tenants are making the payment for me.

So that sort of covers it either way as long as those are conditioned, i'm good with refinancing. Okay. Next savings: don't expect that, because the federal reserve is raising rates, your savings yield is actually going to go up. Why? Because banks have way too freaking much money? They've got so much money, they're parking all their excess money over the reverse repo market to the federal reserve.

There is so much extra liquidity in the market. Banks do not need more cash right now, so, in my opinion, most banks, with the exception of those that are looking to maybe market and get more clients. Okay, maybe hopefully, sofi actually gets their act together and gets some more clients here, and we see some growth again right with the exception of like marketing plays, i don't actually expect savings rates to go up yet once we get to these higher levels, though, if we Start getting fed funds rates of somewhere around two three or four percent to try to pull down inflation. That's when i would not be surprised to start seeing the return of high yield savings.

Remember those days where you could get like - and this was just like a few years ago, you get like two percent on your high yield savings account yeah. Those will eventually come back, but in my opinion no time soon, so i wouldn't be prepping for those. Instead, i'd be taking my savings and i'd be paying off things like credit cards and student loans, because once you've got to start making those student loan payments again if you've got a variable rate loan on those, those payments are going to go up and credit cards. Probably the absolute worst thing to have.

The first thing you should probably ever ever pay off is, or are credit cards, get rid of these credit cards. It wouldn't surprise me at all to see the average credit card rate go from about 16 percent back to 20. Maybe even 24 pretty dang soon. My guess is that for every about quarter percent hike that we see at the fed, you might see credit card rates, move about one percent, that's pretty wild.

So we get to one percent on the fed funds, probably gon na, be paying about four percentage points more on credit cards than you otherwise would be paying had. We stayed at zero, not so ideal and then, of course, if you're looking to shop for a car and you're thinking about buying a car. Well, first of all, this is the worst time, in my opinion, to even think about buying a car because you're paying fat premiums right now, everybody's raising their prices for cars. The car prices have shot up so much you're, paying it's kind of like buying a stock.

At the top of the market and like fomo into a car right now, i think now is the worst time to buy or lease a car. But if you were going to, you'd probably want to do it right before the rates go up rather than right. After because then you're going to have high prices and higher rates, so yeah carb rates are expected to go up as well, unfortunately, and so these are some of the core ways, in my opinion, that you're going to be affected by these higher rates. Now, one of the things that you can do is if you do think that, for example, the 10-year treasury yield is going to keep skyrocketing.

One of the things that you could potentially do is short bonds. Now this is, i would say, a more of a like. A pro move uh, it's honestly, relatively generic. I don't want to elevate myself into saying that this is like definitely a pro book, but it's it's something that it just takes a little bit more thinking about.

I will give you a quick explanation if you wanted to, if you really think the 10-year treasury, for example, is going to go up, you could short something like tlt. This is what i've done. I have shorted the 20-year treasury bond etf and basically, when interest rates go up and yields go up, treasury bond values, so a bond etf goes down, and so i'm happy to say i shorted somewhere around about 139 on the tlt, and it's made me some money. So far, but i think this is just the beginning.

I expect this short to continue to make money and you might not believe this, but when i sent this alert out to course, members everybody in my stocks and psychology, money group obviously gets alerts every time i make a buy or sell a transaction and uh when I made this purchase over here, it's probably like here march 3rd, or something like that. I don't know it's somewhere around this this area here when i made this purchase and i called up jp morgan, said i want to short this with a million dollars. You won't believe it. I asked them.

What's the short borrow rate, how much is it going to cost me to short this thing and they're like well right now, it's showing negative 0.59 percent and i'm like what you're going to pay me to short treasuries and they're. Like yes, sir and i'm like sign me up, it's a broken market anyway. Folks. Thank you so much for watching this video.

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