Our President, George W. Bush, signed a bill that was already approved by Congress earlier this year to send every American who has filed a 2007 tax return a check to stimulate the slowing US Economy. Many people immediately criticized this stimulus package saying that it would not help out the economy one bit. Many other people are excited to get an additional check from the IRS to help supplement the raising gas prices as well as the raising prices in the food industry.
House Speaker Nancy Pelosi is already calling for a second economic stimulus bill, however Bush wants to see the results from this first bill before looking at other options.
But what are most people doing with this added little bonus check this year?
From the different poles being conducted online right now, most people are wasting this money in 3 different ways:
1. ) Bush wants us to “spend the money", but where are we going to spend it? Consumers are talking about buying products like expensive electronic toys for our cars or home entertainment centers, clothes for either themselves or their kids, video games, ipods, or some other trinket we don't REALLY need.
But even if that money is spent in these places, aren't all of these products made in FOREIGN countries?
By spending our money in those areas, we're in effect shipping that money to Japan, China, Malaysia, Korea, India, and many other countries. This bill surely will stimulate the economy, just not the US Economy.
2. ) Most people, from what I've gathered online, want to SAVE it. But what does this really accomplish? There's always SOMETHING that comes up (car needing repairs, your hot water heater goes, or you can fill in your own “Murphy's-Law-event" here). So that money I'm sure WILL be used at some point this year.
But let's just say the money doesn't get used up with an emergency or miscellaneous need. Due to all of these rising prices, inflation is going to take a CHUNK out of that money next year. The $1200 that you get this year will only be worth maybe $1100 next year. So by “saving it" you may be in effect letting it slowly slip through your fingers.
3. ) Lastly, you're wondering why the economy is going so bad because you just opened up the mail and (you guessed it) you've got 4 credit card bills! You may have already done your fair share to stimulate the economy by running up your credit cards, so you're GLAD to take this extra cash. Because, chances are, you already spent it 3 months ago and now you're going to use it to lower your credit card balance.
Paying off debt is just about as bad as throwing it in your savings account. . . Except you're more or less throwing it away.
All of the above ways to use your stimulus rebate check result in one thing: a depreciated asset. Whether it's a new toy or pair of jeans, a tiny interest-earning savings account, or previous debt - this stimulus check won't do much to help out the average American UNLESS they can find a way to create an ASSET out of that money.
Let me explain.
If you take $600, put it in a box, and a year later you take it out you still have $600 (less adjusted for inflation). This money didn't do ANYTHING for you this year. The best case scenario above is saving it and hopefully still having it worth about as much next year.
If you can PUT YOUR CHECK TO WORK FOR YOU and you can create an ASSET that CONTINUES to pay you, now you've got something that is worth it's weight in gold the next year.
You can invest, but that will only give you limited returns in today's economy.
Instead, many people have learned to start their own online business. Since the investment to start an online business is so much less than it is to start a conventional brick-and-mortar-type business, the opportunity for entry is so much greater for the average American. By creating a business with a monthly profit, you are in one way growing your rebate check.
I'm convinced that if the average American invests that money into training and resources to build their own business, they can easily in a year's time create a monthly income of over $1200. That, in effect, would be like getting a rebate check every single month.
Whatever you decide to do with your stimulus check, make sure you are making the best of it by creating an asset that will pay you over and over again. If many people can do this our entire economy might still not be saved, however many more Americans would be able to live a better and healthier lifestyle with that supplemental income.
Additional video commentary by the author on this topic can be found here
Adam Holland is an entrepreneur and internet marketing coach.
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