Today, we are going to show you a simple way to increase returns that doesn’t involve choosing the best fund, having a complex options strategy, or putting your money with a fancy hedge fund manager.
Examples of brokerage accounts (taxable)
Examples of retirement accounts (tax-deferred/tax-exempt)
- Roth IRA
Asset Location – putting your investments into specific accounts to pay the least in taxes
- Place tax-inefficient investments (bonds/REITs) into retirement accounts
- Place tax efficient investments (equities) into brokerage accounts
- Pull out your tax return and evaluate how much in dividends and interest you are paying (line 2b/3b on 1040 or Schedule B)
- Evaluate if it’s possible for bond/REIT holdings to be sold and repurchased in retirement accounts
- Always think in after-tax returns!
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