How Millennials Could Boost Their Savings Using Tax Refunds

A tax refund is always welcomed and most people end up spending their full refund on fun things. Millennials will do well to avoid the trap of spending their tax refunds on vacations and buying fancy things. Financial analysts say that Millennials will do a whole lot better if they have a plan in place to invest their tax refunds.

Rubicoin, a company that helps individuals with their investments have shown that if someone received a $3,000 tax refund every year and put it into three popular stocks such as Apple, Netflix, and Amazon for ten years, they would be able to turn that $30,000 investment into a massive $220,000 savings. That should be enough to pay off all of their debt and more.

In a statement, Emmet Savage, CEO, and co-founder of Rubicoin said

The takeaway is that anyone, regardless of their financial knowledge, can build long-term wealth by taking just a few positive steps in the right direction. When someone receives a windfall like this — a few thousand dollars that they previously didn’t have — it’s easy to spend it on something that is instantly gratifying like a holiday or a new TV. Making the decision to forgo that in favor of long-term financial freedom isn’t just possible, it's actually pretty simple.

Rubicoin Research Shows That Investing Does Pay Off

Rubicoin did an analysis of using the $3,000 strategy and assumed that the average millennial would have worked for around a decade as of now. They used a simple stock strategy that even novices would be able to follow and split the $3,000 into three parts of $1,000 each and invested it into popular tech stocks.

Rubicoin

They tracked the progress of those stocks from 2009 till date and found that the millennial investor would have accumulated a total of $220,000 which is a $190,000 profit after deducting the investment amount.

Most millennials don’t do any investing with their tax refunds as they generally use the funds to pay off their student loans and reduce overall debt. However this approach does not work well for them financially in the long run. Rubicoin realized that it would be difficult for millennials to pump in a major chunk of their tax returns into investment and decided to bring down the investment amount from $3,000 to $1,000 and examine the results.

The results were still promising. With $10,000 invested over a ten year period, the investment grew to more than $73,000. Rubicoin suggests that it is better for millennials to invest their tax refunds into reputed stocks then that ofthe promising but volatile cryptocurrency industry.

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