- Contribute the annual maximums to your Roth IRA and tax-deferred retirement account (s)
- Use your health savings account (HSA) as a retirement account, if you have access to it
- Hold investments for as long as you can
- Avoid day-trading and other short-term speculation
- Ensure that investments are held in their ‘tax-efficient’ location (ie Shares in taxable accounts, bonds in tax-deferred accounts)
You don’t have to be a tax expert to do any of these things, but you will reap the rewards every spring if you do as much as you can consistently.
4. Refuse to pay high fees
If you choose to hire a full-time advisor, the language of fees can sometimes be confusing. This is especially true when an annual fee of 1% to 2% doesn’t sound like a lot and terms like “management fees” and “advisory fees” seem extremely official. The point is, fees are analogous to “guaranteed negative returns”. You must be extremely careful before agreeing to pay them unless you are perfectly clear about the benefits you will receive.
The reality is, just skipping these fees and choosing a long-term passive investment portfolio that requires little on-going maintenance is a very easy way to double your money. High and unnecessary fees can, at worst, have the effect of adding years to your professional lifeThus, by avoiding them completely, you allow your investments to grow without a hitch.