Afford Anything Q&A: The Hidden Tax Drain in Your Investment Strategy
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Feb 25, 2025 Listeners dive into investment strategies with insights on minimizing capital gains taxes and the nuances of asset management. Job transitions are discussed, particularly how Employee Stock Ownership Plans stack against 401(k)s. The complexities of relocating to Brazil while managing U.S. retirement accounts are explored, highlighting crucial tax implications. Proactive financial measures, like seeking raises, are emphasized as inflation impacts personal finances. The need for tailored financial advice based on individual circumstances is underscored throughout.
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Tax-Efficient Rebalancing
- Rebalance taxable brokerage accounts by adding new money to underweighted assets.
- Avoid selling to rebalance, minimizing capital gains taxes.
Tax Optimization
- Hold assets in taxable accounts for at least one year and one day to qualify for lower long-term capital gains rates.
- Prioritize tax-efficient investments within taxable brokerage accounts.
ESOP Considerations
- Consider total compensation, not just salary, when evaluating a job offer with an ESOP.
- ESOPs concentrate risk by tying your investments and paycheck to one company.