The Cash Flow Clock: For Retirees - Book - Page 73
The Cash Flow Clock
Taxes and Investments
Our tax decisions affect our investments. Our
investment decisions affect our tax liability. Yet,
most “financial advisors” are actually “investment
advisors” or “insurance agents” who claim to have no
responsibility when it comes to tax decisions even
though their recommended investment decisions can
have significant tax consequences. Most “tax
advisors” are actually “tax preparers” or “software”
that aren’t even consulted before making investment
decisions.
A good day for our investments typically means that
we will pay more in taxes. A bad day for our
investments may be an opportunity for tax strategies.
We need to look at our financial plan from the
perspective of both investments and taxes in order to
get the most out of our assets.
To illustrate this point, let’s look at March 23, 2020.
That was when the S&P 500 hit its lowest point
during the COVID pandemic. The market had
reached almost 3400 earlier in the year. On that day,
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