It is definitely a good day for your morale and for your wallet – tax refund day. You may not want to hear this right now, but if you put off a bit of immediate gratification, you now have the leverage that you need to create even more leverage for yourself in a few months! Let’s take a look at some of the financial benefits of investing your tax refund.
Money now, more money later:
Good investments have the advantage of moving off of something we call “compounded interest.” This may seem like a difficult financial term. It is not. It simply means that money makes more money for you if you leave it alone and let it grow. Einstein himself said that compound interest was one of the most incredible phenomena in the universe, and this is a man who studied the universe in its entirety! If you do not know about the wonders of compound interest, make yourself aware of just how much money you can have for yourself in the future if you give up just a little bit today.
Investing is saving:
Another reason to invest money is that it gives you an excuse not to spend it. Investing means that you have money that you can go to in an emergency, even if you have that money in an investment that is not completely liquid. It is much better then turning your entire financial world upside down by taking out a loan or going into debt through a credit card.
In short, if you are investing, then you are protecting yourself from the day to day things that can happen to you unexpectedly. You can also think about it this way – every day that you stay out of a medical emergency is a day that you allow yourself to make more money with your investment capital.
Money to lend:
If you have money in investments, then you have money that you can lend or leverage for loans yourself. The richest people in the world take out loans just like you do. However, they have money in the bank that can cover those loans if everything goes wrong. If you are going to be rich, then you need to incorporate the same kind of financial strategy in the way that you operate.
If you have money to invest, then you also have money to lend to people that can put you on the other side of the debt equation. You do not have to spend your life in debt to others – you can actually become the bank in certain instances.
Yorkville Advisors, LLC is a privately owned and operated hedge fund sponsor.