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Seven Reasons Why You Should be Investing After Tax Dollars!!!!!!! In Addition to Using Retirement Accounts.

Seven Reasons Why You Should Be Investing After Tax Dollars

October 24, 2018 Update: This should now be called Eight Reasons Why You Should Be Investing After Tax Dollars in addition to using retirement accounts. I added a note about how investments funds may give you better options to retire earlier.

Investing after tax dollars puts your money to work for you.  Your tax return should show dividends, interest or other investment income.  Why? Because investments are opportunities to make things happen for you now and into retirement. 

Seven Reasons Why You Should be Investing After Tax Dollars:

  1. Don't do all the work.  All your earned income comes from you.  Your money can be working for you and bringing you more value.
  2. After tax dollars are dollars that have already been subject to income tax. These after tax dollars won't get taxed again when you take the money out of your investments while the money in retirement accounts will be subject to tax when you take it out.  Yes the profits from your after tax investments can be subject to taxes but the principal won't get taxed again. While money in your retirements will be subject to tax when you take the money out (unless it is in a ROTH IRA).
  3. When you decide to open your own business you will need money to get it started.  Having after tax investment money is the ideal source to fund a new business. 
  4. You need money set aside for emergencies.  While money set aside for emergencies should be liquid money, it should be working for you. 
  5. You are the BOSS.  Having after tax money invested empowers you, giving you control over your life rather than being a victim.  When opportunities come your way you can use after tax money to take advantage of those opportunities. Taking retirement money out for these opportunities will cost you. If you are not yet 59.5 years of age you will be subject to a 10% early withdraw penalty in addition to the income taxes on that retirement money. You could be looking at paying 25% of more in taxes on that retirement money that you take out.
  6. You are planning and making things happen.  You have a plan, a budget that includes savings and investing.  So you are not waiting for a miracle, you are making it happen.
  7. You feel good about what you are doing and are making healthy life choices.
Take charge of your life.  Investing after tax dollars will empower you to have more choices and control over your own life.  This will cause you to be more lively, more joyful, and to live your life rather than let life dictate terms to you. Having money working for you will give opportunities to do things for yourself and others.

 (Added October 24, 2018) A local financial adviser told me recently that some of his clients would like to retire early but they don't want to pay the 10% penalty for early withdraw from their retirement accounts, so they are looking at a 72-T which has its own limitations and restrictions. Having money in investment accounts can give you the option to retire early without using retirement funds paying the early withdraw penalty and not restrict your use of your retirements for the next five years. Yes, having money in investment accounts in addition to your retirement accounts can make you the boss when deciding when to retire.

Investing is for you.  Create another life for yourself, a life of power, impact, and control.  You can do this by putting your after tax dollars to work for you.  Start today.  One measurement that indicates how you are doing is your tax return. A CPA can prepare a tax return for you but the CPA Superhero will prepare your tax return(s) for you and empower to use what it says to take charge of your life and make more things happen for you.

This is a unique time in history with increasingly rapid changes and what you expected yesterday probably is not what you see today. In this environment it helps to have someone to regularly look at strategies with. The CPA Superhero is willing to help you with your goals and strategies. Contact me today via text or email to setup a time for an initial phone conversation.

Jeff Haywood, CPA
The CPA Superhero

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My posts contain general information that does not fit every situation and is not all inclusive and as always in your tax situation everything "depends on facts and circumstances."  So call me to talk about your specific facts and circumstances and what you want to accomplish.

Be careful when reading articles about your finances or the tax law and its application, including my articles, because the wording and definitions are such a challenge and the articles are influenced by the writers perspective, specifically his own clients situations that he is mindful of and other situations the writer is not thinking of . The point is talk to your CPA about your situation and don't draw conclusions based on articles, including from, because concepts and definitions are not very clear and, of course, they are subject to change. Now is the time to be having discussions about your situation and developing strategies for you and your businesses. Again, please contact me using my information above to discuss your situation. I help business owners all over the U.S. and foreign countries with their U.S. tax returns and strategies to reach their goals.

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