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Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-03-2007, 07:11 PM   #1
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Struggling with decision- pay taxes and invest or Muni Bonds

If you had a windfall of $31K in the next three weeks and cannot take advantage of any 401K plans, IRAs, or Roths due to high income, where would you invest the $31K after the government takes their 33%?

Owe nothing to no one including the mortgage being paid off. Retirement hopefully 5 years away.
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-03-2007, 09:05 PM   #2
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

Well if you have your asset allocation, then stick to it. Do you not have an taxable brokerage account? Open one with vanguard.
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 06:55 AM   #3
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

Invest in whatever makes sense to you, ignoring taxes. Never let the tax tail wag the investment dog. It is hard enough to make good investment decisions without having taxes as a primary consideration.
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 09:34 AM   #4
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

Quote:
Originally Posted by brewer12345
Never let the tax tail wag the investment dog.
Has everyone noticed the stunning growth in dividend funds since their tax rates were reduced, especially in Australian stocks (where dividends aren't taxed at all)?
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 09:49 AM   #5
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

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Originally Posted by Nords
Has everyone noticed the stunning growth in dividend funds since their tax rates were reduced, especially in Australian stocks (where dividends aren't taxed at all)?
Yes, and it is bone-headed, IMO. BAck in an old life, I was an insider at a large number of companies. One of them paid/pays a fat div yield. DVY was started up and quickly became one of their largest shareholders. When DVY's index construction changed from 50 to 100 stocks, they were actually scared that the switch-over would trash the stock price. I imagine that things are even screwier now that DVY's assets have mushroomed.
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 10:15 AM   #6
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

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Originally Posted by brewer12345
Yes, and it is bone-headed, IMO.
I imagine that things are even screwier now that DVY's assets have mushroomed.
Yet quite profitable and thus fundamentally conflicting.

EWA is an even more extreme example, although I'm sure that the treadmill squirrels at iShares, Powershares, and Wisdomtree are working on a Vietnam small-cap dividend ETF as we speak...
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 10:20 AM   #7
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

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Yet quite profitable and thus fundamentally conflicting.
If something doesn't make sense, I will happily forgo some profit.
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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 10:22 AM   #8
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

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Originally Posted by Nords
EWA is an even more extreme example, although I'm sure that the treadmill squirrels at iShares, Powershares, and Wisdomtree are working on a Vietnam small-cap dividend ETF as we speak...


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Re: Struggling with decision- pay taxes and invest or Muni Bonds
Old 01-04-2007, 11:03 AM   #9
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Re: Struggling with decision- pay taxes and invest or Muni Bonds

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Now see, it's attitudes like that keeping you from joining the big leagues at Barclays!

If you make your fortune from my idea then send a few dollars to Dory's server fund...
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