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The Sword-Finance, its Sheath-Accounting, and the Shield-Tax Planning: Lesson 1 When to Sell and Investing Tax Tips
Posted by: Nelson Nguyen (IP Logged)
Date: July 22, 2014 09:56AM
Warren Buffet coined the phrase “Economic Moat,” which you can learn more about in the following article entitled “Economic Moats, Durable Competitive Advantage and Wide Moat Investments.”
Investing legends often begin with tales of knights and shining armor. Young investing squires grow into investing gurus like Warren Buffett (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio) and Howard Marks (Trades, Portfolio) who wield their investing knowledge like weapons with skill and craft. The Sword-Finance can be wielded by a mixture of Modern Portfolio Theory or the Legendary Value Investing methods. Its Sheath-Accounting keeps the Sword-Finance sharp and free from the elements.
I describe Finance as forward-looking where you often project, model and value the future cash flows of assets or projects. With sound Financial Analysis skills, you can wield the Sword-Finance to defeat your enemies and gain new territories. Generally, Accounting is more focused on the past where you often prepare financial statements, audit financials, and prepare taxes. Accounting is the language of Finance. If you understand the language, you can understand what the Income Statement, Balance Sheet, and Cash Flow Statement are really saying. Proper Tax Planning can save you a lot of money. You fought hard for your hard earned money using the Sword-Finance and its Sheath-Accounting. The Shield-Tax Planning can protect those precious earnings from poor tax planning.
In the world of investing, proper Tax Planning can save you hard earned money or help you pay less taxes. What I want to talk to you about is “I.T.” 1) Investing and 2) Tax Planning. My focus today is: the Shield-Tax Planning and how to use it with the Sword-Finance and the Sheath-Accounting. Today’s lesson is on: “When to Sell and Investing Tax Tips.”
Question: When do I sell?
Selling Check List:
Does your accountant get I.T.? Do they help you understand 1) how to Invest and 2) how to save on Taxes? Death and Taxes are unavoidable. However, with the proper Tax Planning, you can avoid unnecessary taxes. There is a difference between: 1) Tax Avoidance (legal means to pay less taxes), and 2) Tax Evasion (illegal and can lead to stiff penalties, interest, fines and even jail time). If your accountant does not get I.T. (Investing and Tax Planning), then you must hold the keys to your Economic Kingdom.
Guru Discussed: Howard Marks: Current Portfolio, Stock Picks
Joel Greenblatt: Current Portfolio, Stock Picks
Stocks Discussed: SPY, QQQ, DIA,
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