A Different Degree of Wealth

Maximize Your Investment Returns with Tax-Efficient Investments – Part Two


Investing to lower taxes and maximize tax-efficiency can help you build your wealth

When it comes to building wealth, tax-efficient investing is one of the most important considerations. Taxes can have a significant impact on your investment returns and can reduce the amount of money that you have available to spend, save and invest over time. The good news is that there are steps you can take to minimize these tax-related costs while maximizing your investments’ potential.

It goes without saying, a prudent financial plan and strategy takes into account tax-efficiency and what type of tax-efficient investing should be part of the overall investment strategy.

The importance of diversification and rebalancing

Investments are never guaranteed to make you money, but if you diversify your portfolio with a mix of different types of investments and rebalance periodically, the risk of losing your savings is greatly reduced.

One way to diversify is by investing in multiple asset classes (also known as asset allocation). For example, you could invest some of your money into stocks (equites), bonds and cash alternatives like money market funds. A well-diversified portfolio will have several different types of assets so that even if one sector performs poorly or becomes less popular over time, there are other areas that may perform better. This can help balance out any losses from one investment class while providing returns from another class.

Rebalancing means making sure that the percentages invested in each asset class don’t vary too much over time—for example, if stocks increase significantly while bonds decrease slightly during an upturn in the market cycle, it might be wise to shift more money out of equity into fixed income until they’re back at their original levels again.

As the great investment academic Burton Malkiel says regarding rebalancing:

“The right response to a fall in the price of one asset class is never to panic and sell out. Rather, you need the long-term discipline and personal fortitude to buy more. Remember: The lower stock prices go, the better the bargains if you are truly a long-term investor. Sharp market declines may make rebalancing appear a frustrating “way to lose even more money.” But in the long run, investors who rebalance their portfolios in a disciplined way are well rewarded.”

Tax advantaged investment accounts like Roth IRA’s allow you to invest with tax advantages and minimize your tax liability

A Roth IRA is an investment account in which you can save for retirement. The money you contribute to a Roth IRA grows tax-free, and you typically don’t pay taxes on withdrawals during your lifetime, if you meet certain criteria.

The most important tax advantage of a Roth IRA is that your contributions are made with after-tax dollars. The money that you withdraw in retirement will usually not be subject to income tax.

This makes a Roth IRA a powerful tool for saving for retirement and can help you plan ahead for the future.

How much can I contribute to a Roth IRA?

How much you can contribute to a Roth IRA depends on your income. The 2022 maximum annual contribution is $6,000 for those under age 50 and $7,000 for those aged 50 or older.

The IRS imposes limits on how much an individual can contribute annually based on their modified adjusted gross income (MAGI). Individual taxpayers who earn less than $129,000 can make full contributions; those earning between $129,000-$144,000K must reduce their contributions due to being in the phaseout range.

What are the features of a traditional IRA?

Traditional IRAs are not taxed until you withdraw the funds. You can withdraw your contributions at any time without penalty and your earnings will be taxed as ordinary income. Traditional IRAs allow you to deduct your contributions from your taxable income, which means that if you have a higher tax bracket now than you expect to have in retirement, this might be a good way to save money on taxes while still getting the full benefit of compound interest over time.

Why have a financial plan and how it will help you plan for taxes?

A financial plan is a blueprint for how you will manage your finances over the next 10 plus years. It will help you plan for taxes, retirement savings, debt payoff, college funding and more. One of the first steps in creating your financial plan is to set goals. These goals can be short term (pay off debt) or long term (retirement). Once you’ve identified what’s important to you, it’s time to make sure those priorities fit into an overall strategy that meets all of your needs.

When you think about taxes, you probably remember a time when your parents sat down with a stack of papers to figure out how much money they owed Uncle Sam. But taxes aren’t just something that happens once a year; they’re complex, and they require careful planning throughout the whole process from start to finish. Fortunately, there are various professional services available today which can help make sure everything goes smoothly.

Taxes are such a complex part of your financial life that they require a financial plan to make sure you are doing everything right. There are many different types of investments, each with their own tax treatments. A CERTIFIED FINANCIAL PLANNER™ can help identify the investments that best fit your needs and then design an investment portfolio that minimizes unwanted tax consequences.

That’s why it is so important that you get professional advice before making any major changes in your finances, especially if you’re considering selling assets or making large purchases during the next year (or months). The more time you take now, the less stress there will be later on when April 15th rolls around!

You may be surprised to learn that many of your assets are not as tax-efficient as you think. Investments such as stocks and bonds can potentially suffer from capital gains taxes on the sale of shares, which can be costly if you haven’t sold them before reaching a certain age or holding period. Even if you’re in the lowest income tax bracket, capital gains will still be taxed at either 0%, 15%, or 20% depending on your income and filing status.


We hope this article has shed some light on the importance of tax-efficient investing and how it can help you build your wealth. It’s important to remember that having a financial plan will help you plan for taxes and other expenses, so you don’t get caught off guard when unexpected things happen.

If you have questions about your plan, give us a call.

Have a great weekend!

Source: Ballentine Capital Advisors

Golf Tip of the Week

Keeping An Open Mind

Lower scores by being open minded.

Having the best equipment, playing on a top course, or having endless knowledge about the golf swing will never yield success in the game if the golfer doesn’t know how to use his mind on the course.

Things like anxiety, emotional reactions, and distractions can all cripple a golfer’s ability and keep him from success. Overcoming these obstacles is the key to lower scores and the only way to do that is “To Clear Your Mind.”

To improve, you have to keep your mind ‘Open’ to new techniques and instruction. It has been often said that a beginning golfer tends to be more open minded to instruction than an expert golfer who tends to view instruction with a skeptical and closed mind.

A great many golfers come to a lesson with so many preconceived ideas about their swing that they are unable to digest anything the instructor introduces. When receiving instruction you must be willing to try different techniques and put practice time in to perfect it. Withhold any judgment about the new technique until you have put it into practice for a while.

Ben Hogan comes to mind as a perfect example of keeping your mind open. He was one of the greatest ball strikers of all time, practiced relentlessly, and never seemed to tire of trying new techniques, in fact, he delighted in it because he believed there was always more he could learn. He kept his beginners mind, meaning he was always open and receptive to new things and ideas.

On the course you have to open your mind to letting go of stress, anxieties, distractions and reactions. These are negative components in a game. Deep breathing before each tee can release tension and promote relaxation, which will help you achieve a more relaxed swing.

While on the sidelines visualizing successful shots can eliminate emotional reactions instead of beating yourself up for a previous blunder. Also, keeping your mind on the game is critical for success. Instead of getting distracted by conversation, golfing tips from fellow players, text messages vibrating in your pocket…use your time to focus your mind on how techniques are working for you.

Keep your mind clear, open, and free from distractions.

Tip adapted from golftipsmag.comi

Recipe of the Week

Salted Caramel Brownie Slice

16 servings


  • 125g butter, chopped
  • 200g Baking Dark Chocolate, chopped
  • 1/2 cup caster sugar
  • 2 eggs, lightly beaten
  • 1 1/2 cups plain flour

Caramel Filling

  • 395g can sweetened condensed milk
  • 1 1/2 tbsp golden syrup
  • 2 tbsp brown sugar
  • 60g butter, chopped


  • 200g Baking Milk Chocolate, chopped
  • 1 tsp vegetable oil
  • 2 tsp sea salt flakes


  • Preheat oven to 350F/325F fan-forced. Grease a 20cm x 30cm lamington pan. Line base and sides with baking paper, extending paper 5cm above all edges of pan.
  • Place butter and dark chocolate in a medium saucepan over low heat. Cook, stirring, for 5 minutes or until melted. Remove from heat. Stir in caster sugar. Cool for 10 minutes.
  • Add egg to chocolate mixture. Stir to combine. Sift over flour. Stir until combined. Spread mixture into prepared pan. Bake for 20 minutes. Cool.
  • Meanwhile, make Caramel filling: Place condensed milk, golden syrup, brown sugar and butter in a saucepan over medium heat. Cook, stirring constantly, for 10 to 12 minutes or until light golden (see note). Pour caramel over brownie base. Bake for 10 minutes. Cool completely. Refrigerate for 3 hours or until set.
  • Make Topping: Place chocolate and oil in a heatproof bowl set over a saucepan of simmering water, ensuring base of bowl does not touch the water. Stir until melted. Spread over caramel. Sprinkle with salt. Refrigerate for 1 hour or until set. Cut into squares. Serve.

Recipe adapted from

Health Tip of the Week

Facing Dementia in the Family

When you or a loved one first receives a dementia diagnosis, you may feel a range of contradictory emotions, sometimes simultaneously. Many people undergo a period of profound grief, with feelings of shock, denial and deep sadness. The prospect of facing this significant life change can make you feel demoralized, embarrassed or angry. You may even want to keep the diagnosis secret from friends or other family members.

On the other hand, you may feel a sense of relief. Finally, your suspicions have been validated, and you and your loved ones can seek out more support and therapeutic interventions.

Allow yourself time to adjust.

The shock of the diagnosis can be paralyzing. Be gentle and compassionate with yourself; allow yourself to move through the mourning process. Try to feel all the feelings, rather than deny them, and be up-front with your family and friends about your diagnosis. You’ll likely move into problem-solving mode faster.

Set up routines and expectations.

People with dementia don’t always believe they need help, so power struggles can ensue over daily tasks, warns Johnston. Clearly defined routines and predictable schedules for tasks such as cleaning and eating may help avoid some conflicts and help you both feel more settled. Orderly, peaceful environments also create calm.

Find an experienced dementia care counselor—for both of you.

One of Johnston’s studies found that when caregivers and people with dementia sought treatment for depression, they gained greater access to care, services and support. “Caregivers should have someone to talk to regularly, who can provide support, educate them about the illness and coach them on how to cope as it progresses,” says Johnston.

Give each other space.

As the disease progresses, rapidly swinging moods and angry, negative outbursts can take a great toll on caregivers, Johnston says. Plus, more than 90 percent of people with dementia develop behavioral symptoms or psychiatric problems at some point during their illness. It’s perfectly OK to calmly say, “I need to have some privacy,” and leave the room to have a moment of peace, to allow both of you to calm down.

Pace yourself.

Caregivers may have trouble sleeping due to worry over their loved one’s needs, yet still not have anyone to relieve them the next day when they’re exhausted. The weight of all of these concerns can cause even the most resolute caregivers to experience stress, resentment and even depression. Rest when you can, and prioritize. Keep the day structured and predictable as much as possible, the environment uncluttered and activities simple, Johnston says.

Make time for daily exercise.

A daily walk in a park or just around the block can be an effective antidepressant and antianxiety remedy for both of you, says Johnston. If needed, keep a sturdy transport wheelchair stowed in the trunk to broaden your options for walks together while running errands.

Tip adapted from hopkinsmedicine.orgiii 

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Ballentine Capital Advisors is a registered investment adviser. The advisory services of Ballentine Capital Advisors are not made available in any jurisdiction in which Ballentine Capital Advisors is not registered or is otherwise exempt from registration.

Please review Ballentine Capital Advisors Disclosure Brochure for a complete explanation of fees. Investing involves risks. Investments are not guaranteed and may lose value.

This material is prepared by Ballentine Capital Advisors for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation or any particular security, strategy, or investment product.

No representation is being made that any account will or is likely to achieve future profits or losses similar to those shown. You should not assume that investment decisions we make in the future will be profitable or equal the investment performance of the past. Past performance does not indicate future results.

Advisory services through Ballentine Capital Advisors, Inc.


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