Wednesday, February 27, 2008

Budget Benefits - spending decisons

A lot has been written about what American tax payers are planning to do (or should do) with the tax refunds they will get this year so I thought I would set out what I intend to do with the extra money available from the tax rebate and the rates waiver announced in today's budget speech.

The short answer is that I intend to spend the lot. No, not on consumer goods or even pseudo investments such as wine (tempting though it is). Nor do I intend to allocate any of the money to early repayments on one of our mortgages (why, when we have negative real interest rates?). Instead I will be shopping for additional investments. At this time, I have no idea what those investments will be. There will not be any investment specifically attributable to the rebate and rates waiver (although this is not a bad idea). Instead, the money will simply be absorbed by increasing the size and/or frequency of whatever investments I make between now and the end of April 2008.

And I really have to wonder why so many people have to be persuaded not to spend any windfall money they receive (whether from tax cuts, inheritance or otherwise)? Maybe I am missing something, but deciding to invest the money took a lot less time than typing this post.

No comments: