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tax return
what would you do with $1200 dollor tax return that is the question of the day? I bet your wondering what I would do with a $1200 dollor tax return well I will tell you. the first thing is I would invest in a savings account and in a couple of years I would have alot of money from saving a little bit of my pay check at a time. I bet your wondering how much I would save each time well about $125 dollors.And in a year or two I would have a lot of money. After saving all that money I would buy a house and a car and some otherthings.
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The biggest problem with savings accounts is that they pay very low interest. At 5%,it takes almost 14 years to double the starting amount,35 years at 2%. With inflation running between 2 and 5% per year, your $1200 buys about the same amount, perhaps a bit less than, it would today. (which makes Odogg24's comment almost sensible).
Don't let this discourage you, though. You can find very safe investments that have a better interest rate, which will help things grow faster. Most safe investments are between 5% and 7.5%, and sometimes as high as 10%. (10% will double the start in about 8 years).
I'm not too sure what you mean by putting $125 per paycheck into your account - weekly? monthly? biweekly? Assuming monthly, you probably can set aside about $1200 per year. You'll be able to save the $1200 off your interest alone in about 34 years (2%), 13 years(5%), 7 years (10%).
Of course, you can always shortcut things - buy an investment property, where your tenants pay your expenses, and depreciation makes sure you are in a loss situation for taxes. Capital gains will allow you to get loans and buy more properties, which can speed up the process tremendously. |
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Comment by: Odogg24 - 2008-05-15 21:49
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| Dude, just go to Vegas gamble it all away and sleep with a prostitute. Then you will have an interesting story to write about that may make you $5000. Hell, at the least you will have had a better time than watching paint dry, oops, I mean watching interest accrue. |
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