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Why Buy-And-Hold Can Save You BIG.

Don’t Miss Out, You’ll Regret It (Part 3)

Key Points

  • By holding a profitable investment for over a year before selling, an investor has the opportunity to significantly reduce the amount of taxes that he or she will have to pay.
  • By holding an investment indefinitely, an investor can hold off on paying taxes indefinitely.
  • By deferring the payment of taxes, capital can grow exponentially faster than otherwise.

There’s a reason why buy and hold investors tend to do well over the long-term. And it’s not so much to do with picking the right assets to invest in; but rather, it has to do with how stocks are taxed, in general. Knowing the finer details of how taxes work can save you big time. Here’s how.

Continue reading → Why Buy-And-Hold Can Save You BIG.

Don’t Miss Out, You’ll Regret It (Part 2)

Key Points

  • Solid financial plannings means taking care of any tax advantage you can.
  • However, it’s important to understand that most tax breaks have deadlines, meaning: you snooze, you lose.
  • The HSA could potentially be the best plan you never heard about.
  • This program allows you to potentially invest with pre-tax savings, and spend without taxes as well.

Continue reading → Don’t Miss Out, You’ll Regret It (Part 2)

Don’t Miss Out, You’ll Regret It (Part 1)

Key Points

  • Tax planning is not just about figuring out how much to pay the government, it’s also about ensuring that your investment plan is tax efficient based upon your short-term and long-term goals.
  • Investments typically generate income from three different sources: interest, dividends, and capital gains; and each source is taxed differently.
  • These differences should be taken into consideration when forming an investment plan, as federal taxes can range from 0% to upwards of 37%. Continue reading → Don’t Miss Out, You’ll Regret It (Part 1)

Classic Cars: Classic Mistake?

The World’s Most Expensive Hobby (Part 3)

Key Points

  • To invest wisely, you need to define a benchmark before you actually make any investment decisions.
  • Even if you have a benchmark in mind, an active investment philosophy brings a whole host of issues when it comes to tracking investment performance.
  • These issues ultimately obscure the true performance of active investors, which makes it very difficult to figure out if one is investing prudently or not.
  • This obscurity is what likely perpetuates an active investing philosophy; however, over time, this can lead sub-optimal investment performance for the average investor.

Continue reading → Classic Cars: Classic Mistake?

Risk Management 101 (Part 1)

Key Points

  • Sound investing comes down to focusing on what you can control, while still maintaining a solid understanding the risks associated with what you cannot.
  • Risk Management involves understanding and controlling for the uncertainties related to the financial markets (systematic risk) or a particular company (idiosyncratic risk).
  • Risk-adjusted return can be quantified by the ratio of expected return divided by risk.
  • Volatility is a common, although imperfect measure of risk.

Continue reading → Risk Management 101 (Part 1)