Four Simple Questions for Savvy Investors

Four Simple Questions for Savvy Investors

June 30, 2020

What’s the secret that sets savvy investors apart from the rest of the pack? The answer is that they know what questions to ask their financial advisors to make sure that their money is always working for them.

We outlined a few questions that you need to be asking your financial strategists and tax advisors so that you can invest like the best. We recognize that every situation is different, but knowing the answers to these questions can help you to ensure that you can retire comfortably.

How can I stay tax-smart with my income management?

With taxes, the sum is often more important than the constituent parts. Over the course of a financial year, many income streams can be taxed in different ways. To stay tax-smart you must ensure you withdraw your money from the right place, at the right time, and with the proper balance. This sequence of withdrawals can maximize your take-home total. When and where you get your money is often as important as how much you get, provided you have the monthly income you need. If you don’t know how your money is withdrawn, speak with your tax advisor today.

Will my income remain consistent in retirement?

If your money comes in sporadically in different amounts throughout the year, then managing your annual return can be a nightmare. If you have an inconsistent income and aren’t meeting your retirement needs, it’s possible you are “eating the chicken, not just the eggs.” Having a steady, reliable, and positive cash flow is the key to long-term financial happiness. If you don’t have this kind of investment structure, finding a dynamic team of financial strategists is essential to successfully diversifying your portfolio.

Why are there inconsistencies between my investment team’s advice and my accountant’s advice?

The simplest answer is that taxes are complicated and the easiest thing for most accountants to do is follow the IRS’s basic recommendations. However, the path of least resistance is not necessarily the best for you. If you have an experienced financial [KW1] team that is watching your back, then there are still some pieces of maneuvering that require an expert opinion and should be discussed with both parties to come to the best conclusion for your money.

Are dividends appropriate for my portfolio?

Stocks with dividends get more credit than they should, especially stocks with super-high dividends. Speak with your advisor about this option to know if they are right for your situation.

If you don’t know the answers to these questions, you aren’t alone. Financial strategy is complex, and becoming a savvy investor takes good advice from trustworthy advisors.

Check out our financial health resources above to ensure you’re informed about your options.