3d ago in General discussion
Your ass(et) location, matters
WHERE you invest should semi-dictate WHAT you invest in.
Example (directionally accurate, NOT 100%):
You own $100K in a REIT (Real Estate Investment Trust).
That REIT pays out dividend payments of 4% (aka $4,000).
If you own the REIT in your retirement account (i.e. 401k, IRA), no tax implications.
If you own that REIT in your brokerage account...you get taxed on that $4K.
Say you are in the 24% federal tax bracket, you lose ~$1K to taxes...simply bc you didn't put enough emphasis on WHERE you choose to invest in a specific location. ($4,000 X 0.24 = $960).
Asset location can be a HUGE deal.
Good news is: it's VERY controllable.
ACTION ITEM: Review your investments in EACH account. Any heavy-dividend paying stocks/REITS, or interest-paying investments...should be held in a RETIREMENT account...where you are saved from paying taxes.
Make sure your investments in a brokerage account are tax-efficient. 馃槈
PS - IF you realize you have inefficiencies in your brokerage account, be wary of selling out of positions...bc that creates EVEN more taxable events. Questions on how to get out of positions? Comment on this post and let's get educated together!
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Your ass(et) location, matters
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