FINANZAS | FINANCE
Take advantage of your tax refund, so you can maximize your future. By: By: David David Pinzon Pinzon Financial Advisor
Have you ever wondered how to achieve a comfortable retirement? It is the time of the year when we start receiving our tax forms, and after visiting our tax professional, the wait for the "refund" starts. We start making plans for the new car we will buy and the smell of a brand-new vehicle, or the new shoes we wanted all year. We make plans to spend the money we haven't received yet. According to the New York Post, The average tax refund was about $3,100 last year. Here's what to do with your Money. Millions of Americans can't wait to get their tax refunds, but this year it might be wise to save that windfall rather than spend it.
Let's talk about our tax refund; if we visit the Compound Interest Calculator at www. investor.gov we could calculate how much our Money would do overtime. Let's say that we take $1,000 out of our tax refund and we put it at the back at 1% we would have $2,977.73 at the end of 40 years. However, if you take the same $2,000 on a Mutual Fund Account that follows one of the average Index at 12% you would have $186,101.94 at the end of the same time. If you were to do this for 5 years, you would have approximately 1 million dollars at the end of 45 years.
When we look at what the Market has done for the past 90 years, we can start making plans to maximize our tax refund. The S&P 500 Index originally began in 1926 as the "composite index" comprised of only 90 stocks. According to historical records, the average annual return since its inception in 1926 through 2018 is approximately 10%–11%.
Therefore, it is important to visit a Licensed Professional by FINRA and establish a plan that would help you maximize your Money.
However, when we look at these numbers at first, they look like a new and foreign language to us. Have you ever heard, "how can you win a game if you do not know the rules of the games?" The most important rule of the game is compound interest; as Albert Einstein once said "compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't pays it." MARCH 2021 • LAISLAMAGAZINE.COM 27
