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Rekenthaler Report

Keeping What You Earn

The painful math of taxable accounts.

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This article was originally published in February 2014.

The Big Picture
The paper's title caught me by surprise. "The 50% Rule: Keep More Profit in Your Wallet," by Stuart Lucas, chairman of the financial advisory firm Wealth Strategist Partners, advocates that investors retain at least half the profits generated in their taxable accounts, thereby giving less than half to government bodies and investment professionals. At first thought, the goal seemed very unambitious. With mutual fund expense ratios less than 1% for most large funds, investors surely need not leak anything like 50% of their profits.

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.