River Valley Coaching

Are you getting money from the government Tax Stimulus Package? If you are like most Americans, you have already thought of all the possibilities in your mind of what you can spend it on. A vacation, new leather couch, computer, or Ipod would be nice.

What if you could turn your rebate into 10, 20, or even 30 times the original amount on the check? Does that sound like a good deal? Well, consider this: since you didn’t even know you would be getting a check in May, hypothetically you could survive with out it, right? What if, instead of spending it, you invested it in a Mutual Fund with a great track record? I know, that doesn’t sound as fun as the Ipod, but work with me and let’s crunch some numbers.

The average family of 4 will be receiving $1800? What if you invested it in a Mutual Fund instead of spending it on something that goes down in value, becomes obsolete, or breaks?

Did you know that $1800 over 20 years at 12% would give you $19,606.60. That’s without adding another dollar the entire 20 years!!

Now, what would happen if you left it in the mutual fund for another 5 years? That would be $35,709.35!!!

What about a total of 30 years? $64,709.35!!!! Now that’s a pretty good tax rebate.

Now, if you invest the money you won’t have the opportunity to spend it…yet. But someday you will have a lot of money to spend.

However, if you choose to spend your check in May, you lose the opportunity to invest it forever. That is called Opportunity Costs and they are expensive!