Now let’s make a plan to invest that money, because we weren’t used to spending it anyway. $200 invested per month in a well-diversified, low-cost portfolio, over 30 years could yield you as much as $298,000 or more!**
Wow, I just found you 300 grand!
We simply used funds you didn’t ever think about that the government used to “hold” onto for free. That’s the power of opportunity cost and compound interest.
So how do you get access to that money if you are receiving a few thousand dollars each year in tax refunds? The answer to that would be some combination of working with your HR person and/or tax professional. But what I want you to remember is, it’s your hard earned money and you should have the power to use it to benefit YOU, not the government. Get on a written plan & budget today so you can tell your money where to go. And be aware of everything that comes out of your gross pay and make sure it’s the most effective use of your hard-earned dollars & cents!
*”Most Americans who expect a tax refund say it’s important to their financial well-being”, appearing on CNBC.com, a division of NBCUniversal
**assuming an 8% yearly interest rate, compounded