Disappointed with your stimulation control? Here’s how to make over $ 600

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Recently, lawmakers passed a $ 900 billion relief plan that includes, among other provisions, increased unemployment benefits, a second round of paycheck protection program loans for hard-hit small businesses and checks. direct stimulus packages in the amount of $ 600 for eligible adults and children.

On the one hand, this is good news. On several occasions during the year, direct stimulus checks have been taken off the table during lawmakers’ negotiations, so making it a final bill means Americans will now get their hands on the money they need and deserve. On the flip side, those $ 600 payments are only half of the amount Americans received under the CARES Act, which was passed in March.

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If you’re disappointed with your $ 600 stimulus check, you might not have to settle for that amount alone. Invest that money wisely, and it can turn into well over $ 600 over time.

Use your stimulus money wisely

Let’s be clear: if you are having financial difficulties and need your stimulus money to pay for immediate expenses or essential expenses, you shouldn’t invest that money. Likewise, if you don’t have a healthy emergency fund – money to pay for unforeseen expenses or to get through a period of unemployment – then you should deposit your stimulus money in the bank (or leave it there s). ‘it comes by direct deposit) to offer you protection.

But if you are in good financial shape and don’t need your stimulus money to meet your short-term needs, then investing it makes perfect sense. And that could help it to become quite a large sum.

The stock market has historically generated an average annual return of around 9%, so if you invest your money in stocks and let it sit for 10 years or more, it is fair to assume that your portfolio will generate a return of 7%, because it is a little below the market average. If we follow that number, here’s what your invested $ 600 could become over time:

Leave $ 600 invested for these many years …

And it will become that sum (assuming an average annual return of 7%)

ten

$ 1,180

20

$ 2,322

30

$ 4,567

40

$ 8,985

50

$ 17,674

Table and calculations by author.

As you can see, if you’re 20 and invest your $ 600 stimulus, leave it alone for 50 years and let it grow, you have the potential to turn it into $ 17,674. It is quite impressive.

If you don’t know much about how to invest in stocks and don’t have the time or the mental bandwidth to learn how to research companies individually, the solution is simple: put your stimulus money in. index funds. Index funds allow you to invest in the wider market without having to go through a ton of legwork, and they’re a good option for newbies who want to put their money to use quickly.

While a $ 600 stimulus check can be disappointing, especially if you were expecting twice that amount, you have the potential to turn that windfall into a bigger sum. If you don’t need the money for other purposes, open a brokerage account and put it to work. Or use it to fund your IRA and invest it for retirement. Either option is a good way to get the most out of that money.

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