Wednesday, September 9, 2020

Managing Wealth

Let's say your portfolio has been doing well, providing a healthy income while continuing to grow in value,  but you need a larger lump of cash for a one-time unusual project (such as building a workshop/observatory).  

Do not just take the money distributed across all your mutual funds like you do for your monthly income.  

Look for a mutual funds that has underperformed the rest.   When you sell shares from it, the capital gains you will pay taxes on will be less than selling shares in all your mutual funds.   At tax time, you will pay much less income tax.

In my case, FLSPX had only grown 62% over the six last years, so it is the dog.  When it comes time to replace the Jaguar with a Corvette convertible, part of this dog will die. (I am glad my Springer spaniels do not read my blog. )

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