The Holidays are upon us. This is the season to be jolly. First Thanksgiving, then Christmas, and last the celebration of a New Year. Christmas represents the highest celebration of the big three Holidays. As documented by historians, this is a celebration of the birthday of the noblest being to walk the earth. A person of Jesus’ stature is certainly worthy of a day of honor and respect. The sad reality as we approach His day is that we hear less mentioned of Jesus and more and more mentioned of Santa Claus. From my perspective, this was a plot by the marketing geniuses of this world to turn a day of celebration into a day of commercialization. Retailers account for 50 percent or more of their profit during this time of the year.
Despite the fact that Christmas has become more commercial over the years, it is one of the few times throughout the year that families come together and enjoy each other’s company. It is one of the few times throughout the year that people attempt to extend a hand to those who are less fortunate. It is one of the few times throughout the year that churches, synagogues, mosques, and other places of worship are filled to capacity. Even though Christmas has become more commercial, there are many great things that happen during this time of the year that we should enjoy and appreciate.
As a financial writer I wanted to write about a gift that keeps on giving. As I began to reflect on this gift, I put my financial mind to the test. This gift had to be something that all can afford, simple, free of taxes, and offered a guaranteed return on investment unmatched by any other investment.
Treasury bonds are simple, free of federal taxes and in some cases free of state taxes. They have the full faith of the U.S. government. Therefore a return should be realized. However, the initial minimum investment cannot be afforded by all. Secondly, the rate of return on treasury bonds is low when compared to other investments. I want to ensure the return on investment on this particular gift was unmatched by any other investment. As a result I have to rule out treasury bonds.
In the world of finance, as you began to seek out investments with better than average returns, the risk on such investments tends to be great. For a gift to keep on giving, this gift had to be a safe investment. This gift has to have 100 percent certainty that you’ll never lose your initial investment. As a result, I could not consider risky investments such as stock, futures, commodities and hedge funds.
I want this gift to transcend racial, educational, and social backgrounds. Mutual funds are known for being diversified. Mutual funds require a relatively small initial investment, thus allowing many to afford them. However mutual funds are not free of taxes. A well-diversified portfolio of mutual funds should generate a positive rate of return over an extended period of time. The gift that I’m seeking has to produce more than a positive return. It has to produce a return that’s unmatched by other investment. As a result, I have to exclude mutual funds.
I want this gift to be stable enough to withstand the test of time. Real estate has a good track record of withstanding the test of time. Real estate is less volatile than other investments. In most cases it appreciates over time. Both stability and appreciation will allow this gift the ability to keep on giving. The initial investment for real estate including down payment, closing cost and moving expenses may be too expensive for everyone to afford. Plus the ongoing maintenance cost coupled with other risk factors associated with investing in real estate may create a negative return on investment. Furthermore, it will take 3-months or more to find a decent property at a bargain price. Christmas is right around the corner. I have to rule real estate out.
I want this gift to be so special that the recipient of the gift will be filled with joy, hope and inspiration. This gift had to be something that the man of the hour (Jesus) will endorse. This gift had to be so valuable that when you receive it, you will want to protect and preserve it.
As I continued to reflect on this gift, I come to realize that no matter how much financial brilliance I can muster. I will never be able to come up with a monetary based gift that will meet the terms and conditions that I was looking for.
I was blessed to identify the gift that keeps on giving. This gift is something that all can afford. It’s simple, free of taxes, and offers a guaranteed return on investment that’s unmatched by any other investment. This Christmas, may we all give and receive the gift that keeps on giving. The gift I am referring to is LOVE.
Have a Merry Christmas and a Happy New Year!
(Mortgage and Money Coach Damon Carr is owner of ACE Financial. Damon can be reached @ 412-856-1183.)