Tax-Managed Investing with Phillip Ramsey and Bryan Dewhurst

Episode 52:

If you’ve followed us for any length of time, you know how we feel about IRAs and 401(k)s. They are great, but hardly the only game in town, especially if you don’t want all your money tied up until you are 59.5. That’s where tax-managed investing might come in handy. Investments are a great source of residual income, but there is a lot of mystery and fear surrounding investments.

That’s why we wanted to do a deep dive in this episode. Tax-managed investing isn’t new. It’s been around for a while. But it has recently gained a lot of popularity. As consumers and advisors become more and more tax-conscious, we wanted to dig into this topic so you have a starting point for knowledge on what can seem like a tricky subject.

Why would you choose this strategy (or set of strategies) in addition to an IRA or other retirement accounts? How do taxes affect the rate of return on my investments in a given year? Find out the answers as we tackle these questions and more.

What You Will Learn in this Episode:

  • How to leverage tax-managed investing instead of or along with traditional retirement accounts
  • How money managers are able to mitigate tax liability within portfolios
  • What tax loss harvesting is
  • Why we focus on clients and hire experts to manage portfolios
  • The differences between short-term and long-term holdings
  • How to use dividend-paying stocks along with tax-managed investing strategies
“As you age, you want tax protection, but taking less risk may not be the right strategy. When you’ve got Social Security payments, maybe a pension and money saved up, you could handle more risk as part of an overall plan.” – Bryan Dewhurst Click To Tweet “When we talk about sources of residual income, investment is an important one that needs to be understood before just jumping into it.” Phillip Ramsey Click To Tweet “There are very popular, very good managed funds that are focused on total return, but can create huge tax liabilities that you need to be aware of.” – Bryan Dewhurst Click To Tweet “Taxes affect the real rate of return of an investment fund. So the rate of return that shows up on your account summary needs to be understood alongside the taxes you pay on that investment income.” – Phillip Ramsey Click To Tweet “You want the total return upside of the market, but if you can limit the amount of capital gains tax, you'll be in a better situation given your overall tax liability from all sources of income.” – Bryan Dewhurst Click To Tweet “There are many, many ways to mitigate tax drag on investment accounts, so you wind up keeping more of those returns.” – Phillip Ramsey Click To Tweet “How are money managers able to mitigate the tax liability within these portfolios? Mainly by centralized trading and implementation.” – Bryan Dewhurst Click To Tweet “Tax managed accounts are not just using one strategy, but multiple strategies. They work together to make your tax liability as low as possible.” – Phillip Ramsey Click To Tweet “Dividend-paying stocks are very popular. When you couple that with tax-managed investing, that is ideal.” – Bryan Dewhurst Click To Tweet