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Last week (on Friday) I blew my cool (whats new) at some of the things a self described financial planner said, and I shouldn't have. But what blew my cool was that this professional couldn't come up with a good suggestion for what his clients should do with the money saved from the tax cuts..so....here I offer my humble non expert suggestions at what you might do with the money that the government will not confiscate from you due to the cuts. (Im sure if I did this stuff for a living I would have even more suggestions)
Average family of 4 supposed to see $1200-$1600 in reduced federal income taxes (if you combine the previous cut and this cut. I will base the figure on the lower of these two, $1200 this gives us a nice even $100 a month to play with.
IF you invest your $100 a month into an investment vehicle that will average over the long run a 10% interest rate for you. (not exceedingly hard to do) this is what you can expect to see.
100mo at 10% for 5 years = $7,743.70
100mo at 10% for 10 years = $20,484.49
100mo at 10% for 20 years = $75,936.88
100mo at 10% for 30 years = $226,048.79
As you can see consistancey is required so you don't want to see congress take this money back away from you. A great idea is to put this into a 401k or a 403b plan, lacking that an IRA with a whole market mutual fund will do.
If you are a concerned parent you can also take this money and put it into CD's each year untill you have amassed $5,000 and then invest that into a
RIC-E Trust Account
for your child...this investment of $5,000 will net you kid some $2.4million after 65 years.....with $2.4 million in his retirement account, imagine how much more relaxed your child can be during his life...wish my folks had thought of this...but then they didn't have RIC-E trusts back then either.
Or of course, you can believe the guy in the other thread who told you that there was nothng you could do with the money you will get from the tax cut but I wouldn't.
Now for paragraph 2 of this,
I had originally planned on countering some claims with threads from the net about the positive impacts of the newest Bush tax cuts....and I found many many articles on these benefits. What I found out however is that if I altered my search parameters a bit, I found that there are two nearly evenly divided camps, 1. is the rabbid anti-bush dem. person who slams the cuts for every reason under the sun and
2. is the apparently repugnican accountant who tends to overlook some very real issues.....
My conclusion is that you can't trust either side and should be skeptical and conservative..the prudent thing to do in this case is to save what you can when you ca....perhaps following the strategies I laid out above or some that are even better that I haven't thought of.
In the end all I can actually tell you is, be conservative with your money, don't listen to anyone who tells you there is nothing you can do and realize, there are no get rich quick schemes. If it looks too good to be true, it most likely is.
[ 06-02-2003, 02:14 PM: Message edited by: MagiK ]
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