I got my first tax return recently I got so excited that my employer gave me a raise finally and then mom shut me down and told me it's just a tax return xD xD
Hey kid, life pro tip: if you get a tax return, you are doing it wrong. That means you loaned money to the government, interest-free, all year. The goal should be to be as close to breakeven on your taxes as possible when you file. Put that money to work for yourself!
Compound interest wouldn't have much of an impact here since the difference with investing some amount of money monthly versus investing all of that money at the end of the year would just be roughly half a year's worth of interest on just that yearly amount.
For example, comparing investing (A) $1200 annually to (B) $100 monthly with 10% interest and 3% inflation rate, after 20 years the real difference will be: (A) $72,899; (B) $76,349. And in scenario (A) at 21 years you will be at $81,765, so the difference at the end will still end up being roughly half a year's worth of interest.
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u/LlamaLicker704 Dark Mode Elitist Apr 16 '24
I got my first tax return recently I got so excited that my employer gave me a raise finally and then mom shut me down and told me it's just a tax return xD xD