How to Invest Your Tax Refund

It’s April. The birds are singing, flowers are blooming, and you are banking on that big tax return to take your family on that vacation you have been dreaming of all year.

Maybe travel isn’t your thing, and you prefer possessions such as flat screen t.v.’s and the latest shoe craze?

In this post, we will show you how to invest your tax return and make it work for you.

We all know that debt is a huge deal in America. So many of us are plagued with high interest credit card bills. Want to improve your score, please your significant other, and be able to borrow more money should the need arise in the future? Use that hefty refund to pay off a few of those high interest credit cards and breathe a sigh of debt-free relief.

Tragedy hits people every day when they least expect it. Most people do not have a nest egg to rely on when tragedy strikes. What if you take at least a small portion of that refund, and tuck it away in an interest bearing account for any misfortune that could come your way? Having a few extra dollars put back when that transmission goes bad could save you in the long run.

Politics are all over the place right now, and the future of retirement seems to get more and more diminished every year. A large majority of elderly people are still working past the age of 65, and some, with multiple jobs. You worked all your life, but do you have anything to show for it? Putting back some money for retirement now, could pay off big in the future, as you finally get some time to relax with your family and enjoy the life you worked so hard to build.

Do you rent your home? Do you want to rent forever or would you rather bask in the glory of owning your own house for a fraction of what you would rent it for? Investing in the real estate market could pay off big in the future, and, if house buying is something you enjoy, the market of “flipping houses” has never been better. Invest your refund in a home and enjoy peace of mind.

Investing your refund may seem hard once you have it in your hand, but it could pay you off three-fold in the long run.

Keeping Things Simple When Looking at a Stock

I have spoken with countless people (professionals and non-professionals) regarding stock they are invested in. Though many may “sound” intelligent describing the minutia as to why a particular company is a good investment. For long term investing, I think Warren Buffett has a great way to describe what HE looks for.

Here are four items he utilizes BEFORE he invests in a company by buying their stock:

  1.  Any Good Investment Idea Can be Put in One Paragraph: most great companies are simple and easy to understand (think Coke or McDonalds)
  2.  Circle of Competence and NO Called Strikes: know what you are good at, and do not pick a company at a bad price. Make your BEST decision always.
  3. Invest in great businesses that have a terrific person running it: Peter Lynch once said: “buy a business that is so good that any idiot can run it because sooner or later one will”.
  4. These businesses are hard to find, so do not sell them: Buy at the right price, and you will not need to sell these stocks.

A great video that wraps this all up is found here: Warren Buffett on Investment Analysis