So I have a friend who has a net worth of over 4m (age 48), mostly in liquid assets. Most of it is from selling his business and the majority of this is also in taxable accounts. Historically he is frugal but this does not equate to his investing decisions and tends to be compulsive in his decision making.
Aside from his overarching responsibility to educate himself in the Boglehead way and to work on his behavioral finance, my hope is to shepherd him along the way. With this, I am hoping that he will make an educated decision to move towards passive index investing.
Currently for assets:
Approx 3.5m with Fischer with 1.2 fee. Plan with this money has been growth. He told me he paid 38K in fees last year.
Approx 550k he haphazardly placed in Annaly in an effort to chase dividends for income. Also taxable.
He only works part time at the moment and intends to keep it that way.
With a potential move to Vanguard, Taxable at Fischer will have capital gains. One thought is moving $$$ to Roth annually. What are the options to minimize the current capital gains taxes, or future ones, if any?
With selling Annaly, there would be losses. Can tax loss harvesting work with selling individual stocks and purchasing an index fund such as total stock market? Or in order to tax loss harvest, would he need to stay in the same sector? This does not seem to be advisable.
Essentially I am looking for options to help him see where a move to a more sensible plan will also appear more sensible in the short term when confronted with losses and capital gains taxes. I hope this makes sense.
Aside from his overarching responsibility to educate himself in the Boglehead way and to work on his behavioral finance, my hope is to shepherd him along the way. With this, I am hoping that he will make an educated decision to move towards passive index investing.
Currently for assets:
Approx 3.5m with Fischer with 1.2 fee. Plan with this money has been growth. He told me he paid 38K in fees last year.
Approx 550k he haphazardly placed in Annaly in an effort to chase dividends for income. Also taxable.
He only works part time at the moment and intends to keep it that way.
With a potential move to Vanguard, Taxable at Fischer will have capital gains. One thought is moving $$$ to Roth annually. What are the options to minimize the current capital gains taxes, or future ones, if any?
With selling Annaly, there would be losses. Can tax loss harvesting work with selling individual stocks and purchasing an index fund such as total stock market? Or in order to tax loss harvest, would he need to stay in the same sector? This does not seem to be advisable.
Essentially I am looking for options to help him see where a move to a more sensible plan will also appear more sensible in the short term when confronted with losses and capital gains taxes. I hope this makes sense.
Statistics: Posted by SmoothieJ — Mon Aug 05, 2024 9:03 pm — Replies 3 — Views 626