Managing taxes: keep more of what you earn

Are you a tax-smart investor? Investors tend to measure investment success solely based on returns. But returns are only part of the story. That's because taxes are one of the biggest detractors of wealth and can erode your overall portfolio value. The bad news is taxes impact every investor, regardless of your income level. The good news? Taxes are an expense you can help to control.

Let's look at a hypothetical market scenario that shows how tax management can potentially help you keep more of what you earn. We have a contribution of $100,000 into a diversified portfolio investing in 60% stocks and 40% bonds. The before tax value of this portfolio over a 40 year timeframe would be significant. But as Ben Franklin famously wrote, "Nothing can be said to be certain, except death and taxes." Without effective tax management this portfolio could potentially lose 62% of its value.

I have a question for you. Are you willing to, potentially, give away this much money in taxes? Talk to your financial advisor today to see if you're utilizing tax savings methodology, and make tax management a part of your regular conversations with your advisor. Who can help explore other methods in an effort to help you keep more of what you earn.