The perks of a tax-free investment make it a no-brainer, but individuals can maximize its value if they are strategic about managing it. With the tax year ending on 28 February 2023, now is the time for people to invest and maximize their benefits.
When referring to 'last-out', it is implied that individuals should remain invested for the long term. The power of compounding means that investments have the potential to grow exponentially for every additional decade that they remain invested. To harness the full power of tax-free investing, it is recommended to resist the temptation to access or withdraw money invested in a tax-free investment.
The power of a tax-free investment lies in the higher compound growth that it provides when compared to an investment in a taxable unit trust. Over the longest possible period of time, this can double the value of an individual's investment nest egg, as described in Strategy 4 below.