What assets should you hold in each account to minimize taxes?
01/19/21 • 37 min
#62: It might seem obvious that the best performing car isn’t just a function of the car itself...but also WHERE you’re driving it.
Ferraris vs. Hummers will perform best in very different environments.
When it comes to asset management, a similar thing is true.
A few episodes back, I did a 3-part series on asset allocation. However, asset allocation is only part of the puzzle to optimizing your portfolio.
To maximize total after-tax returns, WHERE you hold your assets is just as important as WHAT assets you hold.
Asset allocation is WHAT you hold.
Asset location is WHERE you hold it.
You have to make sure you drive the Ferrari vs. the Hummer on appropriate terrains.
Asset location strategy is about holding the right asset classes in the right accounts bearing the right tax profile.
The goal is to minimize taxes on the way in, minimize tax drag while you invest, and minimize tax liability upon withdrawal.
How do you do this?
This week, I talk with Jonathan Duong, CFA, about how to manage your asset location to be as tax-efficient as possible. (This is part 1 of a 2-part discussion.)
In addition to best practices and general principles, we discuss optimal asset location for:
- Stock holdings (both indexes and individual stocks, both dividend and non-dividend paying)
- Non-tax exempt bond holdings
- Tax-exempt bonds
- REITS
- Physical real estate
Check it out here:
https://hackyourwealth.com/asset-location-part-1
What asset location principles are most relevant to you? Let me know by leaving a comment.
Don't miss an episode, hit that subscribe button...
If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!
I need your help, please leave a listener review :)
If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!
Links mentioned in this episode:
- Wealth Engineers
- Financial planning software: eMoney, Advyzon, Covisum
- How to set your target asset allocation and rebalance your portfolio efficiently (HYW058)
- Schedule a private 1:1 consultation with me
- HYW private Facebook community
Intro/Outro: Old Bossa by Twin Musicom.
#62: It might seem obvious that the best performing car isn’t just a function of the car itself...but also WHERE you’re driving it.
Ferraris vs. Hummers will perform best in very different environments.
When it comes to asset management, a similar thing is true.
A few episodes back, I did a 3-part series on asset allocation. However, asset allocation is only part of the puzzle to optimizing your portfolio.
To maximize total after-tax returns, WHERE you hold your assets is just as important as WHAT assets you hold.
Asset allocation is WHAT you hold.
Asset location is WHERE you hold it.
You have to make sure you drive the Ferrari vs. the Hummer on appropriate terrains.
Asset location strategy is about holding the right asset classes in the right accounts bearing the right tax profile.
The goal is to minimize taxes on the way in, minimize tax drag while you invest, and minimize tax liability upon withdrawal.
How do you do this?
This week, I talk with Jonathan Duong, CFA, about how to manage your asset location to be as tax-efficient as possible. (This is part 1 of a 2-part discussion.)
In addition to best practices and general principles, we discuss optimal asset location for:
- Stock holdings (both indexes and individual stocks, both dividend and non-dividend paying)
- Non-tax exempt bond holdings
- Tax-exempt bonds
- REITS
- Physical real estate
Check it out here:
https://hackyourwealth.com/asset-location-part-1
What asset location principles are most relevant to you? Let me know by leaving a comment.
Don't miss an episode, hit that subscribe button...
If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!
I need your help, please leave a listener review :)
If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!
Links mentioned in this episode:
- Wealth Engineers
- Financial planning software: eMoney, Advyzon, Covisum
- How to set your target asset allocation and rebalance your portfolio efficiently (HYW058)
- Schedule a private 1:1 consultation with me
- HYW private Facebook community
Intro/Outro: Old Bossa by Twin Musicom.
Previous Episode
FIRE goal setting for the new year
#61: All right champs – new year!
That means a fresh opportunity for goal setting to transform your financial situation this year.
To kick off the new year, I recorded a short episode this week about goal setting, mindset, and behaviors to help you make big strides toward your FIRE goals in 2021.
I also invited a couple other leaders in the FIRE community to share their best advice when it comes to financial goal setting for people who are serious about pursuing FIRE.
Check it out here:
https://hackyourwealth.com/new-year-goals-2021
Are you setting any FIRE related goals for 2021? What are they? Let me know by leaving a comment!
Don't miss an episode, hit that subscribe button...
If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!
I need your help, please leave a listener review :)
If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!
Links mentioned in this episode:
- The exact spreadsheet I use to analyze income, expenses, and net wealth
- Schedule a private 1:1 consultation with me
- HYW private Facebook community
Intro/Outro: Old Bossa by Twin Musicom.
Next Episode
Asset location for non-traditional assets + considerations for early retirees
#63: Last time, we talked about general asset location principles, plus best practices for major asset classes like stocks, bonds, and real estate.
But what about non-traditional asset classes?
Also, if you’re planning to early retire, should your asset location considerations change at all...given that you generally cannot touch your tax-advantaged accounts until you’re nearly 60?
This week, we continue our discussion with Jonathan Duong, CFA, about both these topics as they relate to tax-efficient asset location.
We discuss:
- Commodities (gold, oil)
- Currencies
- Illiquid investments like LPs, private equity, private loans, etc
- Speculative holdings like Bitcoin, art, collectibles
- How asset location considerations might change for early retirees
Listen here:
https://hackyourwealth.com/asset-location-part-2
If you’re thinking about early retirement, what is your asset location plan? What are you holding in your taxable vs. tax-advantaged accounts? Let me know by leaving a comment.
Don't miss an episode, hit that subscribe button...
If you liked this episode, be sure to subscribe so you don’t miss any upcoming episodes!
I need your help, please leave a listener review :)
If you liked this episode, would you please leave a quick review on Apple Podcasts? It’d mean the world to me and your review also helps others find my podcast, too!
Links mentioned in this episode:
- Wealth Engineers
- Financial planning software: eMoney, Advyzon, Covisum
- Asset location: What assets should you hold in each account to minimize taxes? (HYW062)
- How to set your target asset allocation and rebalance your portfolio efficiently (HYW058)
- Schedule a private 1:1 consultation with me
- HYW private Facebook community
Intro/Outro: Old Bossa by Twin Musicom.
If you like this episode you’ll love
Episode Comments
Generate a badge
Get a badge for your website that links back to this episode
<a href="https://goodpods.com/podcasts/hack-your-wealth-157903/what-assets-should-you-hold-in-each-account-to-minimize-taxes-11076004"> <img src="https://storage.googleapis.com/goodpods-images-bucket/badges/generic-badge-1.svg" alt="listen to what assets should you hold in each account to minimize taxes? on goodpods" style="width: 225px" /> </a>
Copy