The average tax refund issued this year as of April 2 was $ 2,893.
Photo: PAUL J. RICHARDS / AFP / Getty Images
Although tax returns are not due for another month, you may have been one of the first to file theirs. In fact, you may already be waiting for your refund.
Many people have been financially harmed by the pandemic, so they may need their tax refund to pay for things like housing, groceries, or other essential bills.
And if you don’t have an emergency fund saved, which would be enough money in the bank to cover at least three months of living costs, then your tax refund should go directly to the bank to save it.
But what if you could use your cash back money to invest it? In fact, it could turn your refund into $ 100,000 or more..
The average tax refund issued this year as of April 2 was $ 2,893, according to The McDowell News. That’s more than double the number of stimulus checks recently issued to eligible individuals.
If you have a roughly equal amount, investing it wisely could help turn it into $ 100,000.
And if you do not have experience investing, there is no problem, since you don’t need to know about the stock market to take advantage of it. And there is a specific investment designed for the people who are in your case: the S&P 500 index funds.
The S&P 500 index funds, like all investments, carry risks. But over time, the S&P 500 has managed to deliver solid returns, so if you stick with the index funds of the S&P 500, it is very likely that you will be able to increase your wealth substantially.
Note that over the past 30 years, the S&P 500 has delivered an average annual return of more than 12%.
Now, let’s say you receive a tax refund of $ 2,893. And let’s also be a little more conservative and say that for the next several decades, the S&P 500 offers an average annual return of 10%. If you invest your $ 2,893 in S&P 500 index funds and let your money sit there for 37 years, you will end up with just over $ 100,000., without having to do any additional work.
This many years, for many people, could be just the time when they will be in the last phase of their life, which they could spend comfortably and without money worries.
Of course, there are a host of S&P 500 index funds to choose from, but To get started, consider the Vanguard S&P 500 ETF as it has a strong performance track record and it is a good option if you are looking for a solid investment to start with.
–You may also be interested: IRS remembers that homeless people can also get stimulus checks and other tax benefits
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.