How Much You’d Have Now If You Invested Your Tax Refund in Disney Stock in 2023

What are you going to do with your 2023 tax refund? When surveyed, 25% of Americans told GOBankingRates they’ll put it into savings, 15% plan to pay down debt, 13% plan to put it toward bills, and around 7% said they are going to treat themselves, donate it or travel. The final 4% — not including those who do not anticipate getting a refund this year — plan to invest the money.

Find Out: IRS Increases Gift and Estate Tax Exempt Limits — Here’s How Much You Can Give Without Paying
Be Aware: Owe Money to the IRS? Most People Don’t Realize They Should Do This One Thing

What would have happened if you had invested last year’s tax refund in the stock market? How much would you have now if you had invested it into a top stock — like Disney?

Investing the Average 2022 Tax Refund in Disney

According to data released by the IRS, the average American received a $3,167 tax refund in 2023, on taxes paid in the 2022 tax year. When you add up all the refunds the government sent out in 2023, the total sum comes out to a staggering $334.86 billion.

So, how much would the average American have right now if they had invested their tax refund in Disney stock? The price of Disney stock after market close on April 15, 2024, was $112.95. On April 14, 2023 — the Friday before April 15 — Disney stock closed at $99.58.

Using the stock prices on those two dates and the average refund value, it’s possible to calculate roughly how much the average American would have if they had invested their entire refund in Disney stock.

This means that if the average U.S. taxpayer had invested their refund in Disney in 2023, they would have $3,592.21 and made a $425.21 profit.

Check Out: 10 Valuable Stocks That Could Be the Next Apple or Amazon

Should You Invest Your Tax Refund in Disney in 2024?

While Disney has exceeded earnings in Q1 of 2024, investing your money in a single stock comes with risk, since you are dependent on the performance of a single company. If you’re looking for an investment for the long term, financial experts usually advise you to invest in index funds, which track a larger section of the market, such as the S&P 500.

What Is the Highest Disney Stock Has Been?

Disney stock had its peak on March 8, 2021, when it closed at $201.91. The price then experienced a slow decline for the next three years, with a low of $79.32 on Oct. 4, 2023. Since then, the stock has generally trended upward, though it is still far from its all-time high.

Is Getting a Tax Refund a Good Thing?

You get a tax refund when the amount of income tax that your employer withheld from your paycheck exceeds the actual tax liability you owed for the year.

Your employer is required by law to withhold income tax from your paycheck based on your income and the information you provided on your W-4 form, but if the information on this form is inaccurate, your employer may withhold more tax than you owe. That money is then returned to you by the government after you file your tax return.

While getting a refund can feel great, it might not be the optimal thing to do. This is because of a financial concept called the time value of money. Simply put, it means that money in your account right now is worth more than getting the same amount of money sometime in the future.

This is because if you have the money right now, you can do something with it — you could invest it or pay down debt. If you have credit card debt or a mortgage, for example, then paying it off now instead of a year later saves you from getting charged extra interest. If you invest the money now, you will receive returns for the time the money was invested.

You also have to account for inflation. Not only do you lose out on investment opportunities, but your money will be able to buy fewer goods and services a year from now. This is why it may be a good idea to adjust your tax withholding so that you pay less tax throughout the year and get a smaller refund.

Final Take

If you had invested your tax refund in Disney stock in 2023, you would have made a decent return. However, if you want to put your tax refund toward your retirement, it may be better to invest it in a passive index fund, such as the S&P 500.

GOBankingRates surveyed 1,005 Americans aged 18 and older from across the country between Jan. 23 and Jan. 26, 2024, asking fourteen different questions: (1) How do you plan on filing your taxes for this year?; (2) When do you expect to file your taxes this year?; (3) How much do you expect to receive in a tax refund?; (4) What do you plan to do with your refund?; (5) Do you feel confident you are receiving all the deductions you feel qualified for?; (6) Do you believe your tax dollars are being spent effectively?; (7) Do you believe you are paying too much, too little, or a fair share in taxes?; (8) Have you ever been audited before?; (9) Who will/would use your tax dollars the best?; (10) How much is the standard deduction for a single filer (and married filers) in 2024?; (11) What concerns you the most about Tax Day?; (12) Do you expect your tax refund this year to be more or less than last year?; (13) What do you understand the least about your taxes?; and (14) What would you rather be doing than your taxes? (Select all that apply). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.

More From GOBankingRates

• 6 Expensive Costco Items That Are Definitely Worth the Cost

• How Much Does the Average Middle-Class Person Have in Savings?

• 5 Reasons You Should Consider an Annuity For Your Retirement Savings

• 10 New Cars to Avoid Buying in 2024

This article originally appeared on GOBankingRates.com: How Much You’d Have Now If You Invested Your Tax Refund in Disney Stock in 2023