For many people, tax refund day is like Christmas in the spring. As they prepare their tax returns over the next few weeks, millions of Americans will hold their breath in anticipation of how much their tax refund is going to be — and then run to the mailbox every day hoping to receive their “gift” from Uncle Sam.

Last year, 111 million refunds were issued, which amounted to an average individual income tax refund of $2,860. Most people have big plans for how they’re going to spend their refund: a new big-screen TV or home entertainment system, a fancy summer vacation, a down payment on a new car or boat, or new jewelry or clothes, for example.

But here’s a different idea: Don’t spend your tax refund — invest it instead. No, investing your tax refund won’t be nearly as much fun as spending it. Nevertheless, it will almost certainly end up being a more beneficial financial decision.

Let’s assume you receive the average tax refund of $2,860. If you…


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