So, you just got your tax return and you’re ready to put it to work. Investing your extra cash is crucial to significant financial increase. If your savings are just sitting in the bank, you are actually losing money thanks to inflation. By putting that money to work you can increase your worth rather than allowing inflation to eat away at it. 

When your tax return arrives, there are so many ways to invest and increase that influx in cash. Here are five ways to take advantage of your tax return this year.

Invest in a Private Label Brand

Investing in a private label brand is one of the best ways to generate a passive income and maximize your tax return. A private label brand is a product made for a retailer that is meant to compete with brand-name goods. These goods are sold by one company and are branded by another. For example, Walmart’s Great Value, Amazon’s Amazon Essentials, and Costco’s Kirkland Signature.

But this isn’t only available to big name brands like Walmart and Costco. You can work with a manufacturer to develop a brand and product, and then sell it on Amazon and other platforms. When done correctly, this is a very lucrative and relatively easy way to create a passive income stream. And it will last long after tax season is over.

At EcomRanx we specialize in working with people like you to make the most of your investment. In just 3-6 months you can have a fully flushed out Amazon business. On average, our clients generate $60 to $600 a day in sales per product.

There are four steps in our process:

1. We develop a product that is designed to sell
2. We source and ship the product
3. We create a premium Amazon listing
4. You sit back and watch the sales roll in

Our Amazon Launch packages start at just $500, just a fraction of your tax return. Work directly with Amazon experts to make the most of your investment. Click here to get started!

Invest in The Stock Market

You’ve heard it time and time again, invest in the stock market. Gone are the days of letting your money sit in a savings account. If you already have a secure emergency fund, use your tax return to invest in the stock market.

But what is the stock market really? The stock market is where investors connect to buy and sell investments, or stocks which are small equity shares in a public company. By investing you are hoping that the company will perform well and that your share will become valuable. In the future, if you choose to sell your stock, you could earn a profit.

What types of stocks are there?

There are multiple types of stocks that you can add to your portfolio. Figure out which ones will benefit you most!

1. Common Stock – Like the name, the common stock is the most “common” type of stock. It represents holding a share of the company. If the company tanks, your money is gone.
2. Preferred Stock – Like the common stock, a preferred stock is a share of a company. However the difference is that the preferred stock receives money back when a company dissolves.
3. Growth Stock – High risk, high reward stock. Sky rockets in times of economic growth.
4. Value Stock – A more stable option compared to the growth stock. Stocks of stable, well-known companies that have gradual upward growth.
5. Blue-Chip Stock – Low risk, low reward stock. Stocks of well-known companies.
6. Cyclical Stock – Perform similarly to the economy. Rises during growth, falls during recessions.
7. Non-Cyclical Stock – Performs better or worse without any tie to economic growth or recession.
8. Defensive Stock – The stock of a stable company that is needed for the wellbeing of individuals. Often found in the healthcare industry.
9. Initial Public Offering (IPO) Stock – A stock that raises the capital of a company from private investors.
10. Penny Stock – Stock of small companies that trade at $5 or less per share.
11. Environmental, Social, and Corporate Governance Stock – Socially conscious stocks.

Once you understand the different types of stocks it’s time to decide your approach. Do you want to choose the stocks on your own or do you prefer to have someone manage the process for you? Then get a brokerage account which offers one of the easiest and cheapest ways to buy stocks. 

The most important thing to remember about stocks is that they are a long term investment. They generally increase in value by 10% each year. Keep a hold of your stocks and watch them gradually increase over time.

Invest in Real Estate

Real estate is an increasingly common way to invest your money. The consistent trend of the housing market is up, so regardless of immediate fluctuations, you can generally count on long term gains. Use your tax return on a downpayment for a townhouse, condo, or single family home. Once you have a property, get renters in it as soon as possible and use their rent to pay off your mortgage. They cover the monthly payments, and you get the benefit of an increasing asset. 

You don’t have to buy property to “invest in real estate.” Another way to do it is to convert your basement into a rental property or Airbnb. Use your tax return to dig out a separate entrance if you don’t have one already, or use it to deck out the place and increase its value and appeal. 

Other options include investing in real estate investment trusts (REITs) or by using online real estate platforms like Prosper or Lending Club. These are ways to be involved in real estate without actually managing a property.

Pay Off Debt

Every day your debt exists it is increasing. With interest steadily growing the amount you owe, the faster you pay off your debt the less you have to pay. Your tax return is the perfect extra cash to put towards your debt. It might be difficult to put your extra cash towards that if it’s not required but if you think of it as earning all that money you would have paid in interest, the idea becomes a lot more appealing. You can “earn” hundreds–even thousands–of dollars simply by paying your debt off early.

If you can’t pay off your debts in one fell swoop with your tax return, there are still effective ways you can pick away at it. You’ll be able to pay off your debt quicker if you focus on paying the loans with the highest interest rates first. If you have multiple debts, consider consolidating them into one new loan. This can lower your overall interest rate and help you become debt free faster.

Invest in Your Retirement Fund 

As the famous anonymous quote states, “the best time to invest was yesterday. The next best time to invest is today.” Thanks to the power of compound interest, the sooner you start investing in your retirement the better. If you’ve found it difficult to invest in your retirement, your tax return is the perfect opportunity to jumpstart your retirement account.

Most employers offer a traditional 401(k) plan to each of their employees. Investigate ways you can add pre-tax money from each paycheck to your retirement fund. This makes it feel like you aren’t even losing any money out of your paycheck!

If your employer will match up to a certain amount annually, make sure you take advantage of this benefit! Use your tax return to get closer to qualifying for the maximum match. And remember, every little bit counts. Investing your money is a long-term game. Stay in the game and you’ll reap the benefits.

Happy tax season! Use your tax return this year to catapult you toward your future financial goals.