Surprisingly, the US Government is going to help many Americans make a million dollars, if they want to. Do you want to?
The new economic stimulus package being worked out in our government will mean that most American citizens will be getting free money from the government this spring to the tune of 1800 dollars or more for a married couple with 2 kids. I say free money because instead of a tax rebate, it seems it won’t even matter whether the citizen actually paid any taxes. Many poor people pay no taxes. It also seems that the very people who pay most of the taxes in this country won’t get a penny. That’s the so-called rich people.
A new report by the Congressional Budget Office shows that the facts are, the “super-rich,” the top 1 percent of households, are now paying a record 27.6 percent of federal taxes and a record 38.8 percent of income taxes. By contrast, the bottom 80 percent of households—representing 90 million households—pay 31.1 percent of federal taxes and just 13.7 percent of income taxes. Keep in mind the “super-rich” are defined as a four person household making at least 134,000 dollars. Hardly super rich in my book!
Okay, so how can we all make a million dollars? I’ll show you and it’s not that hard.
Let’s assume we get a check from the Uncle Sam for 1800 dollars. I will also assume we are 25 years old. Your situation will vary.
All you have to do is invest the 1800.00 in a large cap mutual fund using a Roth IRA.
The Stock Market has returned about 12% per annum over the last 70 years, so we will assume we can do that on average. Since it is a Roth IRA, we won’t have to pay any taxes on the earnings.
In 60 years, this account will be worth $2,420,027.20.
Yes, it took a long time to make this money, and we would be 85, if we even live that long. My point is, investing when you are young pays huge dividends. Roth IRAs are the best way to change your life and the life of your kids. Take advantage of them. I am starting a series soon on Roth IRAs and why they are so good.!
What do think about the free money? Should we spend it or invest it? Leave me a comment!