Posted at August 11, 2022 Posted In Blog, Financial Freedom, Taxes

If your investment strategy is not lined up with your tax strategy, your financial plan is inefficient.

– Real Asset Investing Team

At the beginning of 2022, you probably set a financial goal and are now looking to confirm that your plan will ‘sure up’ well as we near the end of the year. It is imperative to make the right moves now in order to make the most of your earnings this year. You are likely already investing money and now is a good time to be sure it is invested in the most profitable way for you.

For instance, if you have a 401k…it is offering you a temporary tax offset, no cash flow, and a future tax bill. You may have real estate offering you cash flow…but with no tax compensation. As you think about your top line, deductions, losses, and deploying capital you can’t forget expenses – and taxes are likely your greatest expense. Taxes reduce the efficiency of any financial plan. Right now, you can invest in a more efficient way and still mitigate taxes for THIS year.

“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.”

Milton Friedman

When your investment strategy lines up with your tax strategy, your return on investment can increase rapidly. For example, an investment with a 10% return that also offsets income in a 35% tax bracket actually earns you 45% in year one. If you only had a 10% return on investment that does not offset taxes, it takes 4.5 YEARS to reach the same rate of return. This shows how an investment strategy aligned with tax mitigation is the most efficient way to plan.

If you are paying large amounts of taxes, we can help you find a more effective way to reach your goals and reduce your tax bill. You still have investment options for 2022 to help offset your taxes and increase the efficiency of your financial plan. We are committed to finding the right opportunities that fit your specific tax mitigation needs. Whenever you are ready, we can help you develop an investment and tax strategy to increase your financial efficiency and move a little faster on your path to freedom.

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