Last year, a survey by global management consultancy Oliver Wyman found that shoppers in the UK spend more over this period than anywhere else in the world (£327) — yes, even more than in the US from where the ‘tradition’ originated (£302).

And while the uncertain political and economic outlook may convince some to reign in their buying this year, there’s plenty more of us who will use it as an excuse to cheer ourselves up and/or get the Christmas shopping done and dusted, especially when faced with a barrage of cheap deals on electricals, clothes, homewares and, well, pretty much everything.

Now, don’t get me wrong. Black Friday can be a great way of bagging a deal, especially if you’ve been eyeing up items for a while and can afford to pay for them without accumulating debt. 

Today however, I’m going to show you how avoiding the annual sales binge (which begins on 29 November) and investing this money instead could turbocharge your wealth over the long term. 

Why you should empty your basket

Let’s keep things simple to begin with and say you choose invest that £327 mentioned earlier in a cheap fund that tracks stocks from all around the world.

Let’s also assume the average annual return on stocks is 7% (inclusive of any dividends), that this money will stay invested for the next 20 years, and you make no further contributions over this time.

According to my calculations, this would give you £1,265 by 2039. Whether that’s worth exchanging the pleasure you’ll get from what you’ll buy on Black Friday is up to you. But look at what happens when you increase the length of time you invest for. Stashing away the same amount for 30 rather than 20 years gives you just under £2,500.

Still not impressed? OK, what if you invested the same £327 every year for the next 30 years (split into 12 monthly contributions of £27.25)? At the same rate of return, this would leave you with almost £31,000.

Now, let’s make things extra interesting. Let’s suppose you had a high risk tolerance and chose to invest your cash in a similar passive fund that tracks smaller stocks (which research shows have a tendency to collectively generate bigger returns than market giants). Although nothing is guaranteed when it comes to investing, what if you now achieve an average return of 10% per annum? After 30 years, you’d have just under £54,000!

Remember, all this money has been accumulated just by choosing not to spend the average amount on Black Friday/Cyber Monday. Think about how much more you could accrue if you were able to add to your monthly savings.

As a guide, doubling that £27.25 to £54.50 and investing every month for 30 years at a 10% annual return will bring you close to £108,000. So long as you house your investments inside a Stocks and Shares ISA or Self Invested Personal Pension (SIPP), you’ll also retain most of this amount since you won’t pay a penny in capital gains or income tax (although bear in mind that tax rules can change!). 

Black Friday can be a great way of getting things for less but the opportunity costs of splurging your cash are jaw-dropping. Keep this in mind before proceeding to the checkout.

The post Forget Black Friday. Here’s how investing your cash could make you rich! appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

A wave of positive trading updates from the housebuilding sector has done little to elevate the share price of Taylor Wimpey (LSE: TW) and its peers. Indeed, the London firm itself remains locked around the 150p per share marker as investors continue to fret over the health of the UK economy.

Of course the possibility of falling wage growth and rising unemployment could bite into homebuyer activity as we enter 2017. But I believe the massive supply and demand imbalance washing over the housing sector should keep house prices moving higher.

Indeed, the scale of Britain’s housing shortage was underlined in Chancellor Philip Hammond’s autumn statement on Wednesday. The government has pledged to establish a £2.3bn infrastructure fund to build 100,000 new homes in high demand areas.

With favourable lending conditions also likely to support home demand next year and beyond, Taylor Wimpey’s earnings outlook remains quite rosy in my opinion. But I don’t believe this is reflected in the firm’s share price at present.

Although the builder is expected to follow a 16% earnings rise in 2016 with a rare 4% earnings drop next year, Taylor Wimpey’s P/E rating remains at a mega-low rating of 9.1 times, up slightly from 8.9 times in the current period.

This reading falls comfortably within the bargain benchmark of 10 times, and suggests that the risks to the building sector are more than priced-in at current levels.

And Taylor Wimpey also offers terrific value in the dividend stakes, too. Anticipated dividends of 11.2p per share this year and 13.8p in 2017 yield a stunning 7.4% and 9.1%.

And these projections don’t appear speculative, like many other FTSE 100 operators either.

Dividend coverage of 1.5 times and 1.2 times for this year and next may fall below the widely-considered security benchmark of two times.  But Taylor Wimpey’s ability to generate boatloads of cash (net cash is expected to clock in at £360m at the end of the year) should soothe any fears of these forecasts not being met.

Set to soar

Low-cost flyer easyJet (LSE: EZJ) is another Footsie giant whose share price fails to reflect its dynamite investment potential, in my opinion.

There’s no doubt that Brexit pains are likely to weigh on big ticket purchases like holidays from 2017, especially as inflationary pressures smack consumer spending power. But I reckon easyJet’s dominant position in the budget sub-sector — allied with its broad European wingspan — should enable the airline to avoid the worst of these pressures.

And in the longer term, I’m convinced the Luton airline’s capacity expansion programme should deliver strong revenues growth. The business raised capacity 6.5% in the last fiscal year alone, to some 80m seats.

Sure, easyJet may be expected to endure a 20% earnings fall in the period to September 2017. But a subsequent P/E rating of 12.3 times marks a decent level on which to tap into the airline’s compelling long-term outlook.

And a projected chunky 42.2p per share dividend for 2017 — covered 2.1 times by predicted earnings — yields a market-beating 4%. I reckon easyJet offers irresistible value for growth and income chasers alike.

The post Are these the FTSE 100’s best ‘Black Friday’ bargains? appeared first on The Twelfth Magpie.

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• With a 9.3% yield, is this an amazing opportunity to consider buying dirt-cheap Taylor Wimpey shares?
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.