Why The Wealthy Do Not Use Index Funds

[@supermutant]

some people, especially, very wealthy people, like to be made to feel like they’re special. They like to be wined and dined and be sold something that they feel only they can get into only something that they have access to and that’s not gonna be index funds.

[@dabrigalive]

I wish I was not so financially ignorant in my earning years and opened a taxable account. I am now retired with all pre-tax savings. One financial group on KZbin call these tax infested accounts. It is what it is… However, thanks Dustin for making it work for my wife and I despite my myopic financial knowledge.

[@July.4.1776]

Real estate is a great tax advantage with diversification away from stocks. It is nice to have something tangible. The depreciation on the buildings helps on the tax front. Having a good CPA sure helps.

[@TheTacticalathlete]

Thank you Dustin dropping knowledge for us to get our dough straight

[@craighill842]

Next level goods that not many advisors are offering!

[@AlexRodriguez-np4xx]

I did my tax lost harvest on black Friday. Nov 25th . Great example.

[@July.4.1776]

Everyone preaches Roth, but sometimes traditional is a better choice weather it be Irmaa or staying out of the next tax bracket on income tax or the dividend tax rate or profit from long term capital gains.

[@ygbodybuilder3023]

Waiting to 70 1/2 is not a better option

[@Cingearth]

So why does Warren Buffett says that he advises to go and invest sp 500 ?

[@imabeliever85]

I like with VTI, you’re investing in America’s future. And if one or two companies does unexpectedly bad, like Facebook, or Tesla, you don’t have all your eggs in one basket, the indexes are self cleansing

[@kckuc310]

I have a lot….. of shares of VTI

[@imabeliever85]

@@kckuc310 That’s where my Roth is

[@uther10]

Thanks for the video and the great information. Very interesting to think about.

[@billyrayband]

It would be helpful to see a more realistic example of this. How much wealth, gains, and losses in a brokerage account does it take to pay off? What is the typical result on your tax return? $100, $10000 reduction in taxes owed?

[@davidwolfe5138]

Good explanation. I think you should elaborate why this, as your title mentions, is more in the realm of the wealthy. In this example of a $13k account mirroring the DJIA, the position in Disney at only 1.84% of the Dow would only be around $239 value. You can’t harvest a lot of loss with that.

[@harrychufan]

Yepppp. You have to be willing to differ from the index if you want your losses that bad. It seems like it adds complexity and really doesn’t add to return. I’ll just continue to tax loss harvest by selling VOO and buying VTI.

[@davidwolfe5138]

@@harrychufan Yes, that’s a great move for 2022. I’ll just add two considerations: 1- I’m guessing most people’s VOO losses will likely be Long Term, so after offsetting other LTCG, there’d be a 3k limit per year offsetting ordinary income, though the excess will roll over. 2-Works in a down year, but the wealthy mirrored accounts will likely have tax loss harvesting opportunities every year. I’m aware there are funds that focus on this if that’s desired. I’m not familiar with them. Hard to beat the history of overall returns and avoidance of complexity/effort with your suggestion.

[@martinguldnerAutisticSwanGuru]

@@harrychufan You have to wait 30 days because of the wash sale rule. When you buy the same or like stock, etf within 30 days you lose the write off of the capital loss.

[@harrychufan]

@@martinguldnerAutisticSwanGuruVTI and VOO are not similar enough to trigger that. VOO and SPY probably would.

[@aaronmeadows1667]

I sold MTTR for my loss harvest against my GLD gains, but will buy it back.

[@alexcamacho8998]

You can only write off up to $3k in losses per yr against ordinary income though….

[@ronloftis9080]

but it can offset all your gains. If you have 30k in gains, you can take 33k in losses.

[@nrossman89]

What are your thoughts on products like betterment with TLH built in

[@coreytaylor1673]

Good stuff. Got me thinking again.

[@wilma6235]

I couldn’t find a better performing index than the S&P 500

[@kckuc310]

Yep

[@DubTuck002]

This is pretty much ch how I explain to my clients why Index funds aren't for everyone.

[@July.4.1776]

Really wealthy people generally are self made thru businesses they started or own and operate. ( Gates, Bozos, etc)

[@brucesmith6868]

Thanks Dustin good info!!

[@July.4.1776]

Never a great idea to insult potential customers

[@marsajib]

i forget when you went over it . but what are the etfs that beat the snp500

[@MatthewBuntyn]

Over time, small-cap indexes (value in particular) outperform large-cap indexes. The problem is that you'll have to endure years of underperformance and increased volatility

[@richardsantos4833]

Which index fund beats the S&P long term?

[@Compounddeznuts]

Small cap stocks

[@TheBeagle1956]

Look at SCHD, a dividend growth ETF that has outperformed the S&P500 over the past five years. It is a Schwab ETF that invests in companies that have increased their dividends for at least ten years in a row with a minimum market cap of $500M. It has an expense fee of 0.06% which is dirt cheap.

[@emyabara3371]

Hi Dustin, how much commission do you charge?

[@ElCidPhysics90]

I like this. However, I'm a W-2 employee, high salary and max out on my deductions each year. How does this help me?

[@ronloftis9080]

If you have maxed out all your 401k and Roth IRA, then you would be investing in a taxable account. By tax loss harvesting, you are avoiding capital gains taxes by using tax loss harvesting. Or you could use tax loss harvesting (up to a 3k max loss) against dividends in your account to offset the divs.

[@snakeonia7542]

If I have 2 brokerage accounts I can’t sell the fund in 1 and buy in the other?

[@ronloftis9080]

You could sell VOO (S&P500) for instance and buy VTI (total stock market) without any trouble. They have pretty much the same performance.

[@GO-pe2cp]

What is the best index if not s&p ?

[@ZCAR355]

VTSAX or VTI

[@johngill2853]

Best? In future? We don't know But total stock market and total international market should be a good bet

[@harrychufan]

S&P 600 value is probably the best index historically if it went back far enough.

[@RebeccaEvans]

Hard water is the best XD. Kudos to your liver. Nights off from alcohol are the best.

[@robertryan3490]

Can I tax loss harvest using target date funds in a taxable account?

[@robertryan3490]

@@passive101 what if I sell target date 2025 and buy target date 2030?

[@harrychufan]

@@robertryan3490 that works. Although personally I wouldn’t hold TDFs in my brokerage, because of the bonds creating ordinary income

[@robertryan3490]

@@harrychufanI see your point, thanks!

[@robertryan3490]

@@passive101 thank you!

[@TheBeagle1956]

Target dates funds are terrible investments. Any fund holding bonds should be avoided. Bonds should only be purchased individually, which is easy to learn.

[@cato451]

I’m wealthy I use index funds

[@nathaniverson]

cough B-REIT cough

[@stephenjones2873]

I was starting to wonder if you drank nightly.

[@davidk6498]

Are you buying each stock and the percentage to match the index so you can sell or buy each stock ?

[@johngill2853]

What's your definition of real wealthy? Are you talking to 1%, which I just seen is about 11 million dollars plus? Then maybe your video means something but it's too small a group with two wide in the ways they made money to really categorize them. If you mean like four or five million, have you ever heard of Bogleheads?

[@bobpug]

Heard a conversation on CNBC today..F You wealth now considered 25 million...remember in the 70's when having a million could purchase 25 average houses? Now about 4 or 5 average houses..goes to show how much the dollar has shrunk in value..

[@anthonybarksdale350]

They use IUL