Insider Tax Tips #4: Best ways to invest your tax return
You’ve done your tax, you’re expecting your return to arrive in your account any day now but you’re still debating what to do with it. Perhaps you’re not expecting a big return, or maybe you know this will be your last big return as you’re leapfrogging another tax bracket after this year. Whatever your circumstances, it’s never too late to think about investing your return in long term profits. But you haven’t come here to listen to us say some catch-all comment like “invest in stocks”. Instead we’ve put together 5 specific kinds of shares and other strategies to make the most out of your return.
No, we’re not suggesting you start the next Snapchat. But if you’re still finding your feet in the big scary investors world, think about using apps that can ease you through the transition. Acorns for example, takes the spare change from your everyday debit card expenses and spreads them among a diverse portfolio of shares. You can choose low risk or high risk portfolios to suit you, and it will always ask you to verify before it allots your spare change. Once you get a knack for it you can try your luck at investing in bigger endeavours.
2. MITCH Shares
Who the hell is Mitch? Well it’s not who but what. MITCH stands for Media, Information, Telecommunications, Consumer and Health. These are the big five types of shares you want to start investing in. Not only will they be sticking around, these types of services are expected to grow tremendously as we continue towards a digital world.
3. Government Bonds
Another fail safe way to start investing is through government bonds. They’re low risk and will always return periodic payments without the gamble. if you maintain them until their maturity point you will always receive the maximum of what you’re promised. You might come across the word Exchange-traded Treasury Indexed Bonds – these are impervious to inflation and maintain a fixed interest rate. if you’re looking for a safe bet, look no further.
4. Investment properties
This can be the more expensive option, but if you’ve already been saving for an investment property your tax return can be a nice cherry on top. Investment properties are a great source of profit. You’re receiving a regular income flow from rental tenants, and if you’re smart about the house you choose you can find property value rises in the right suburbs meaning you can charge more in future. With the help of one of our income tax professionals, you can be creative with your tax deductions as well. Treat your investment property as a giant office – every time you need to drive there, pay for maintenance, property management fees, even council rates can all be claimed back next tax season.
We’ve mentioned this one before in a previous blog and we’ll say it again. we don’t want to be a broken record but depending on your employment circumstances you can claim after-tax Superfund contributions as another tax deduction. Not only do you get the tax deduction in the short term but you’re setting yourself up for a better retirement in future.