What's The Most Important Investment Element?

Hello everyone, the lesson here on the evolution of money in today's video. I'm going to talk about

what

the

most

important

investment

element

is. Actually,

what

I'm going to do in this video is debunk a couple of common myths that might be out there. there, so if you ask people you know if you're considering

investment

s, what are some of the common things that we should consider, you know, and some people you know might say fees, you know, there's a lot of talk about that in this moment. Hey, you should have the investments that have the lowest fees, another one will obviously be the performance, you know, what's the return on that particular investment?

Well, fees and performance are certainly things to consider as you're putting together your portfolio, there are actually five other additional things that I want to talk about here today that I think could have an even bigger impact on your bottom line. , for your investments, for your retirement, for your taxes, so let's dive into topic number one. Looking at taxes, a lot of people don't really think much about how their investments are taxed or how they are taxed today or how their taxes will be taxed in the future in retirement. This is something that has been a fairly common topic.

I've talked a lot here on the YouTube channel about retirement planning and having a tax plan, but I think this is something that's often overlooked, so if we think about taxes here, we have essentially three categories. what we sometimes remember is our non-retirement segment, so those are things that are not part of any type of retirement plan and remember we have to pay taxes on that money every year and we have a couple of items preferential taxes. there we have long-term capital gains, we have ordinary dividends, both are taxed for

most

of us at a maximum tax rate of fifteen percent if you're in one of those higher tax brackets or the highest tax bracket, I should say That's going to be 20 percent, plus you're going to be affected by that Medicare surcharge and things like that, but for most of us, unless we're in the highest tax bracket, 15 percent, but we also have profits of short-term capital and we have interest, and just like We're putting together a portfolio where many times we don't think about that and many times we have no control over interest or short-term capital gains and just to update that is the text to your ordinary income tax rate and so it goes. be in your highest marginal tax bracket and depending on what it is, it could be 22 24 33 percent or more if you're in one of those higher tax brackets, so we want to think about that and how do we balance the portfolio where we put you have your traditional deposit and that's one that we've talked about as I think a lot of people tend to put most of their retirement savings into that, but remember that's also what we call the text deposit later on, it's well, and so you will be taxed as you withdraw that money in retirement and whether you want it or not, at 70 and a half, you will have to start taking what are called mandatory distributions or RMDs and for many people, as we do financial planning for individuals.

We found that when we mapped these things out, we found that people are often in a higher tax bracket in retirement because of those RMDs than they were when they were working, so that's something you definitely want to think about. and then the last one is the Roth bucket and you basically pay the tax as it comes in and you don't pay any tax as it comes out as long as it's a qualified distribution that's in the withdrawal you know there has to be some rules there has to be as well. be there for at least five years and then you have to be over fifty-nine and a half to be able to get it out without penalty, so again, when we look at this for people, you want to think. on your taxes because you know again you know saving a couple of basis points is like basis points are a fraction of a percentage, but saving a couple of basis points on your rate is almost meaningless if you're saving your money in the wrong area, so I want you to think that one of those number two things is your behavior as an investor, so I think a big part of what we do here as financial advisors is help clients manage the amount of risk they are assuming. within their portfolio and moderating that because a lot of times you know we're watching the news, our clients are watching the news, they're hearing things happening on the inverted yield curve, which means a recession is coming.

We've been getting a lot of calls recently about that and so clients want to sort of panic and do something a little more irrational with their portfolio, maybe sell it at the wrong time, so you know, we want to watch what that behavior is and keep you down. control. whether you're managing your own investments or you have a financial advisor that understands you and understands what it is that you're trying to accomplish and helps you stay on the right path here with what the other one's behavior is. What we want to see is how much you should save and that's something we've talked about a lot and in fact we have a whole video series.

I'll do a little add-on here, but for our Resource Center we have a whole workshop on creating your retirement vision is for videos, we go into a lot of depth on this, but a lot of times one of two things happens: people aren't saving enough money to their retirement or they are saving too much, you said right. How can you save too much? You know it well. Saving too much for retirement really sacrifices that lifestyle that you have today because you're putting so much emphasis on the future that you're giving up and it's there, and you're trying to save money today. and you're not doing some of the things that maybe you'd like to do, so we want to create that vision and we really want to figure out what you want that retirement to look like and make sure that you're not saving too much or you're saving enough money and then we also want to look at as We advance cash flow, so cash flow is something that is the basis of the financial planning that we do.

I think regardless of your age or how long you have to retire, this is something that will be very valuable to you, but especially to those of you who are getting very close to retirement or who understand that cash flow is going to be absolutely critical. because understanding what those particular negative cash flows are going to be is going to dictate how much money you're going to need to withdraw from those retirement accounts and, again, that's going to come back and affect your tax situation is going to affect your ability to sustain it over a long period of time, but understanding which is that cash Louis is another very

important

factor for that, so anyway there are five quick things to consider that I think might be more important than some of the common things that you hear people talk about all the time on the news, you know, if you turn on CNBC, that's pretty much all they talk about, they're talking about the news of the day, what companies are reporting. profits which companies should we buy mutual funds are big advertisers on those trading channels and that's why they are trying to promote themselves people are talking about fees some people are talking about hey just look at the index and everything but we actually have a couple of There are other very important questions that we have to answer for ourselves before taking a step to choose those individual investments.

Anyway, I hope you got something of value from today's video. I mentioned it before, but look at the resource center we have. I have some links right below the video here today. There will be additional free content that we have available that is not here on our YouTube channel. Some downloads. Some other videos that will also be where we stream our live events, which we have some great ones. Coming soon here, so if you haven't checked it out yet, sign up, it's completely free, super easy to do and don't forget to hit the subscribe button, the like button, share it and I'll see you in our next video. great day thank you