Most of us know that we need to invest our money in the stock market to grow our money. Even when interest rates weren’t close to zero like they are now, the stock market was a good place to be. In fact, over time, the stock market is a useful tool in building wealth, so long as you stay the course and invest for the long-term. But there is more you can do than just invest your money to grow it, you can use tax efficient investing to keep more of your money too.
By being smart about your investing strategy and keeping tax efficiency in mind, you can keep more of your money from Uncle Sam. I know I can’t be the only one who isn’t a fan of forking over my hard earned dollars. So below is an outline of how you can get started with tax efficient investing. Don’t worry, it’s a lot easier than it might sound.
What Is Tax Efficient Investing?
First off, we need to make sure everyone understands what tax efficient investing is all about. In a nutshell (help, I’m in a nutshell! Sorry, couldn’t resist), it means strategically investing in a way that ensures you pay the least amount of tax possible.
To do this, you fund certain types of accounts before others and you place certain investments in each of these accounts strategically so that you can take advantage of the tax code. And taking advantage of the tax code is our ultimate goal. [Read the full article]