Investing

How to Invest Your Tax Refund Wisely

By Kanwal Sarai
Categories ▾

Most people spend their tax refund even before it arrives. Your tax refund is your hard earned money being returned to you, because over the previous year the government charged you too much tax.

Will you spend your hard-earned refund on toys, the latest gadgets, vacations, beer, sporting events, or lottery tickets? Or will you spend your refund wisely?

The key to financial success is to acquire revenue generating assets. During your peak earning years it’s important to invest in assets that generate income. My favorite revenue generating assets are dividend paying stocks. Why? Because owning dividend paying assets require no additional work or annual expenses. Dividend paying stocks continue to pay dividends (cash) year after year, and the best ones pay increasing dividends every year.

In a previous blog post, I wrote about my success with owning TransCanada TRP. Imagine you received a $2479 tax refund in the year 2000, and invested the full amount into TRP (a dividend paying stock), and held onto the stock. You would have received $3481.66 in dividends and your $2479 investment would be worth $9534 today....a return of over 525%.

My advice to you:
Instead of spending your tax refund on buying the latest gadgets, invest in buying quality dividend paying stocks when they are undervalued, and become financially successful!

Did you enjoy reading this article? If so, I encourage you to sign up for my newsletter and have these articles delivered via e-mail once a month…and it’s free!

Kanwal Sarai

With more than 27 years of investing experience and a passion for investing and teaching, I demystify the world of investing. My goal is to help you grow your net worth by investing in quality dividend paying stocks. Build your own stream of increasing income today.

icon-single-twitter     icon-single-youtube     icon-single-facebook     icon-single-googleplus

Leave a Comment

Start typing and press Enter to search