Everything in life has risk. When it comes to finances, whether they are placed into a savings account, cd, the stock market, real estate, hedge funds, etc. there is an associated risk.
The extremes are that the savings account risk is that your money won’t keep up with the cost of inflation. On the other end of the spectrum, the investment could potentially lose all value.
When you are selling a highly appreciated asset, you need to determine exactly what risk tolerance is for the proceeds. This will help determine what course of action is right for you.
Here are just some of the factors that should be considered.
Do you have other assets or is this your only one?
Are you still earning income, close to retirement, or already retired?
Are you comfortable owning stocks, real estate, annuities or fixed rate savings?
Do you need a certain amount of monthly income, do you want to leave the largest legacy or is your intent to be charitable?
Do you need to remove assets from your estate for estate tax planning purposes?
Do you pay too much in ordinary income tax?
How important are guaranteed returns?
Do you understand the benefit of the time value of money?
Are you aware of how leveraging your assets may increase your return potential?
How would a loss of any kind affect the rest of your finances?
Identifying the risk is just the beginning of your decision making process. However, it will narrow down which options allow you to sleep comfortably at night. When all is said and done this is perhaps the most important aspect there is.
Paula Straub
http://www.savegainstax.com/
askpaula@savegainstax.com
760-917-0858
Fill out a Qualification Questionnaire and find out if you qualify to save capital gains tax at:
http://www.savegainstax.com/qq.html
No comments:
Post a Comment