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Investing and Taxes
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Taxes eat away at our earnings. Therefore minimizing taxes over a lifetime should be a goal for everyone.  Even if you don't pay them now, you probably will one day.

Not all accounts are alike. They are treated differently for tax purposes because Uncle Sam wants to encourage us to do things like invest for retirement and save for college. Some offer current tax deductions and/or tax-deferred growth, others you pay taxes now and never pay taxes on the growth.

Think about it like this. I have a gift to give you. Let's say an iPod. I can:
  • Hand it to you in the package it came in
  • Put it in a brown paper bag
  • Wrap it in pretty paper and tie it with a bow

A mutual fund, stock or bond, etc. is the iPod. An individual account, ROTH, Traditional IRA/401k and so on are the wrappers. Each is taxed differently--figuring out the best type of account to invest in from a tax perspective means more wealth for you.

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