Consider tax efficiency from "summary" of The Bogleheads' Guide to Investing by Taylor Larimore,Mel Lindauer,Michael LeBoeuf
When building your investment portfolio, it's important to pay attention to tax efficiency. This means being mindful of the tax implications of your investment decisions and seeking to minimize the taxes you owe. By considering tax efficiency, you can potentially increase your after-tax returns and keep more of your hard-earned money in your pocket. One way to achieve tax efficiency is by holding tax-inefficient investments, such as actively managed mutual funds, in tax-advantaged accounts like IRAs or 401(k)s. Since these accounts offer tax-deferred or tax-free growth, you can avoid paying taxes on the dividends and capital gains generated by these investments. This can help your investments grow more quickly over time compared to holding them in a taxable account. On the other hand, tax-efficient investmen...Similar Posts
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