Taxes – The great wealth destroyer

ABOUT THIS EPISODE

Taxes will never go away. So how can you minimize the impact of taxes on your wealth. Remember: Taxes are a thing but not the only thing. Listen as John explains why having the right mentality really helps you build a life that you desire.

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth, with offices in Hawaii, Colorado and Illinois. John's also the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values. Would you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a freak copy mild right to your door. I'm Michael Dlan, your host for the next few minutes as we chat with financial expert, business owner and author John Browning. Welly, John Brownie, how are you today, sir? I'm doing great. We've got we've got some rain here today, but we've got even we've got some polar vortext going on and in Chicago and rain where I am. And what's it like where you are? Little rocks about forty three and a little bit of rain. So I would...

...take them. I take the polar thing if it brings snow with it. I haven't seen snow and yeah, well, by Miers Lenny, Snow. Yeah, like nine inches in Chicago last time. But I was talking to my my son's we're living living in our house out there, and they said it was just it was all it was. Wept, you know, hard to deal with that. It is it. Are Complaining, of course, but the complete when it gets high, that it was too hot. So now satisfy those guys. That's true. There's I've always heard that in Chicago you have two seasons, right, you have summer and construction. And and I'm resonating that with that, John, because in Little Rock near my house, they're recon reek, their constructing or reconstructing this one major intersection and dude, I'm telling you, they have the road destroyed. It went from a four lane down door one lane. It's just it drives you Maddie, just makes you want to stay at home because they're destroying everything you know, in order to rebuild it. But I want to talk today about great wealth destroyer.

Okay, there are, there are a number of things, but the one in particular that I want to talk about that is probably worse than the road construction I'm dealing with is taxes. The great wealth destroyer. Right, talk to us today about taxes, because somebody said one time. Taxes are a thing, but they're not the only thing, but they're a big thing. Talk about how taxes can destroy your wealth. Yes, if not me is correctly, they can have a big negative impact on your wealth. And I also want to make sure that people understand that that hople think texts or anything not an only thing too, because there are times when and you do need to time, when to take to take gains and to actually pay those taxes, because it's all about balance, right. We talked about this in the last episode episode. And you get too far and I've had people who just I can't, I've got so much in better gain, I can't take...

...any of these what it's not that you have to take the entire gain all at the same time, right. You can span it over years. You can. There's just different ways to go about it, and that's part of what a financial advisor does, is it help. They help you with knowing when to take those gains and when and when and how to work with your CPA or accountants to minimize the impact of those. There's there's a lot of mistakes that people make on this. The most common one is I don't want to take my profits because I have to pay taxes on those profits. Right. Well, it's a whole idea of investing is that you actually make profits. So that's probably that's actually a good thing. I have to explain that to people. But there's what happens. If you never take that profit, then that position grows and grows and grows and begins to get your portfolio unbalanced. And when that happens you're exposed to more risk. And I've had clients,...

I've experiences, I've watched this. I'm trying to get them to take some of their gains. Haven't done it, and then the price on that particular portfolio instrument drops and they end up losing much more than they would have paid in taxes or if they would have taken just a little bit, they could have minimized that right. So that's a that's one mistake that's often made. The other mistake, and this is really common and as well, especially with younger people, is that they want to lock all their investments away and retirement accounts, which a lot of investment id I just say, yeah, that's exactly what you're doing. What you want to protect your assets and your growth against taxes, so you put it in a tax advantaged retirement account or something like it, and I agree. Right and again, this is not personal investment advice, as we always say on the show, but it depends on you. We got to have a personal conversation to give you that advice. But generally speaking, you need some of your portfolio because you don't know...

...what's going to happen in your life. You need some of your portfolio. Want to taxable account that you can access if you need it without getting another tax penalty, which you would get in most or many retirement accounts. So having a taxable investment account is probably one of those good ideas. Again, depends on your personal situation and in you manage that taxable account differently than you would your tax advantaged account in order to minimize the taxes, right, but these are the things that a financial advisor does for you, trying not to take, you know, those shorter term gains and your taxable account, but put investments that may have a shorter term gain or may have instruments in them that would result in a in a full taxation of the income. So it's something like that. Keep those in your tax advantaged account and put more of...

...the other stuff into that taxable account. But right now one thing that, with rates being so low, if you're keeping a bunch of casts and it cash in your Emergency Fund, which I recommend for almost everyone. I have say almost everyone, but I don't think I've ever met anybody that they didn't suggest having a certain amount of cash in their emergency fun trying to remain compliant here. Yeah, but you're losing money on that because inflation is much higher than the interest rate that you're getting on you or just playing cash. So you want to minimize that too. So you want to have that investment account that's earning you a at least a little bit more than inflation, so you're not actually losing money. So don't get too hung up on I'm I don't want to pay any tax axes, because taxes are a thing, not the only thing. That's right. So so two thoughts on that. Number one, we do need to pay taxes and be happy about it, because I really do like driving on good roads. So all the construction and demolition they're...

...doing drives me baddy, but boy when it's done and am I happy. And those are my tax dollars at work. So that's okay, I like it. The other thing that struck me as you were talking about that, John, is to keep our keep your eyes fixed on the goal. The goal and building a life in a portfolio is not how little tax can I pay, but can I build the life in the retirement that I'm really desiring? Right? So you keeping your mind and your eyes fixed on what is the goal and knowing I'm going to have to navigate some barricades and some bumps and some potholes along the way, but as long as I get to the goal of building a life, enjoying my life, doing what I want to do and having that retirement success, exactly. And and you. And the other thing is you don't want to build the life that you want to retirement at the expense of living and living your life today. And if it's all...

...tied up in those retirement accounts, it's kind of what's happening right. You're not saving for your goals in between now and then when you can take it out. Yeah, very much, so, very much, so so so many options and things that people can choose from, so many competing voices that they can listen to. It gets confusing. It causes us to just procrastinate and say you know what, and that's why I would encourage people to reach out to talk to John, because he's that calming voice who he understands all those pieces and how they all fit together, and they fit together differently for each person, and we talked about that on a couple episodes ago, the different from good options and bad options. A good financial plan versus a great financial plan, and that's really dependent on you, and so you need to just reach out to John, had that conversation and let him help you understand more about not just taxes being the great destroyer of wealth. There are some other things that are great destroyers of wealth to that you might not be thinking...

...about right now that we don't have time to talk about on this podcast today, but John has all the time in the world for you to reach out John Browning, Guardian Rock wealthcom, ask him for a copy of his book, as he need to read that as well, but just have a conversation with him and see how he can help you mitigate some of those taxes, because he's a master at that, but also hopefully earned some gains and you can pay some of those taxes. So I can get a new road and be happier. Right, that's right. The Oh, there's a lot of good things that Tang you know, we all complain about government and everything else. We think about our folks in the military. Right, thank God for them in the sacrifices that they make, and that's part of what our tax dollars go for. So taxes are not all bad. Right, that's right, that's right there. Yes, you're right, that's a good way to say it. So we'll leave it at that today. John. Hopefully people reach out and you can have great discussions with them and help them to build a life and not just a portfolio. Thanks, Buddy. Have a great week. All right, you do the same. Money really is a big...

...part of our lives, and John Browning can help you and your family learn how to keep money in the proper perspective. It's important, but it's only a tool that could help you build the life that you want. If you'd like John Emilio a free copy of his book build a life, not a portfolio, go to John's website, Guardian rockwealthcom, and click the contact us link and send your request. John Will Mell a copy of his book right to your door. Absolutely free thanks for listening to building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automagically when it's released. Have a terrific day.

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