Recently, The Trump Administration announced their new tax plan with a promise of a $4,000.00 raise to the average American family. First things first, breaking down this claim would take weeks and might be a never ending argument. The $4,000.00 amount comes from trickle down benefits of tax cuts on corporations. Also good to remember, averages lean towards extremes. The Median American family won’t benefit quite as much. Here are some things to think about from the claim:
- what is the average family?
- is the $4,000.00 actual dollars earned or dollars saved?
- is the $4,000.00 simply benefits from businesses?
All those thoughts aside. the tax plan (or lottery, inheritance, tax refund, random stranger, etc. might give you some extra money to work with next year. Side note: don’t play the lottery. Politics aside, if you get a windfall, what would you do with it?
Here are five options I would recommend:
- Throw the money in a low-fee auto-investment account like Betterment or Wealth Simple and watch it grow! baby! grow!
- Throw the windfall in a high yield savings account and leave it alone until your children have grey hair (or for a long time if your children have grey hair)
- Donate the money to charity if you have your finances where you want them
- Use the 80/20 rule and save some and spend some (Chronicles loves this idea and this idea takes less discipline than the other ideas)
- Use the money to buy items for sale at garage or estate sales and flip those items for profit on Amazon or eBay. This idea of retail arbitrage is a great way to make a quick dollar. Look for a unique arbitrage idea in the near future!
There are hundreds of ways to use a windfall . . .try one of my ideas or share your own below. Make your money work for you. Stay rational.
-B&T