Monday, April 28, 2008

What to do with your Government Handout -er Rebate Check


I won't belabor the point that President Bush's Government Stimuless Plan is a bad idea that will further weaken the dollar, driving oil, commodity and food prices ever higher.

(I did that here)

Besides, he doesn't usually ask me for my opinion and your check is apparently already in the mail.

I won't be getting one but I'm happy to tell you what to do, and what not to do with yours.

1. Pay down your debt: pay off some of the fun you've already had. Credit cards first, then car loans, and if you're saving enough for retirement and educating your kids, pay down home equity credit lines and your mortgage.

2. Invest it in a home improvement: preferably an improvement to your kitchen or a bathroom. Either will give you the most leverage with your investment. A new sink, counter top, floor tile, even new faucets will add at least as much value to your home as you invest, probably more.

3. Spend it in your community: go to your local hardware store and spend it on stuff made in America. Something made by Toro for example.

4. Buy American: If you spend it on stuff, make sure it's American stuff because the check you have in your hand is money borrowed from the Chinese so make sure you don't send it back to them. We're all going to have to pay it back someday.

5. Donate it to charity: The federal government is not a charity but they think you are so give the money to someone more deserving.

6. Put it in a Section 529 Plan for your kids' college education: Invest in your kids. The cost of a college education is growing at double the rate of inflation due mostly to politics and mismanagement. Soon only rich kids will be able to afford college. Best get a head start.

7. Put it in a Roth IRA: If you got a check, chances are you qualify for a Roth IRA. Pay the price now or pay it later, retirement is coming faster than you think. If you get into a jam, you can always get at the contributions without penalty and in the mean time the money will grow and distribute tax-free at retirement.

8. Save it: I know it's a radical idea. Banks have these things called savings accounts and they will be happy to take your money, pay you some interest, keep it liquid for you, and better yet, lend it to someone else who might start a company or build a building or otherwise create jobs and economic growth.

Whatever you do, don't buy consumer electronics, like that Plasma TV your perpetually adolescent buddy just put on three-years-same-as-cash, as you might as well just send the check directly to China or Japan. My apologies to my friends at Best Buy but whatever you buy there will be in the landfill in five years.

1 comment:

Bike Bubba said...

Five years? Man, you're optimistic.

(I've done quite a bit of reliability work in electronics....it's NOT pretty)

:^)