Investing your tax refund, especially in something like the Vanguard S&P 500 ETF can help your money grow big over time even though many families prefer saving because they’re unsure where to invest.
Grow Your Money with Smart Investments like Vanguard S&P 500 ETF
According to the Motley Fool, getting your tax refund to work for you by investing it can be a smart choice. While lots of families got tax refunds in 2024 only a few plan to invest the money as per a survey by Bankrate. Many prefer to save it instead, maybe because they’re not sure where to invest. But turning your tax refund into something valuable is easier than you might think, especially with options like the Vanguard S&P 500 ETF which spreads your money across top American companies and has low fees.
If you invest your tax refund in a Vanguard S&P 500 ETF you could see your money grow over time. Historically, the Vanguard S&P 500 ETF has grown about 9.8% every year which means your investment could get much bigger. For example, if you put the average tax refund of $2,850 into the Vanguard S&P 500 ETF it could become over $47,000 in 30 years if you reinvest any dividends you get. While some may worry about investing all at once, history shows it’s usually better to do that than to spread it out showing the benefits of taking Vanguard S&P 500 ETF investment chances early.
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Invest $2,850 Tax Refund in Vanguard S&P 500 ETF for $47,000 in 30 Years: A Smart Investment Move! (PHOTO: ETF Stream)
Why Acting Promptly with Your Tax Refund Can Lead to Greater Long-Term Returns
Furthermore, waiting for the best time to invest your tax refund might not be a good idea. Some people prefer to spread out their investments over time to reduce risks but history shows that investing all at once usually works better. Since the stock market tends to go up over time investing quickly could help you make more money in the long run. So, it’s better to grab investment chances early instead of waiting for things to change like investing in Vanguard S&P 500 ETF.
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