What's in store for you:

1. Photo From My Life
2. Financial Thought: Mutual Fund Challenge
3. Life Thought: Effort
4. Good Sh*t: First Tee Time

Photo From My Life:

Financial Thought:

Mutual Fund Challenge: Here’s your challenge for the week. Take 5 minutes and review every mutual fund you own in a taxable account. Why? Because some mutual funds are ticking tax bombs.

Most investors don’t realize that mutual funds can generate capital gains distributions even if they never sell a single share. If a fund manager sells appreciated holdings inside the fund, those gains can get passed through to shareholders. You receive the tax bill whether you wanted the gain or not.

This is one of the reasons I generally prefer low-cost index ETFs in taxable accounts. ETFs have a unique structure that allows them to be far more tax-efficient than most traditional mutual funds.

Before you rush out and sell every mutual fund you own, there’s an important wrinkle. What if your mutual fund already has a large unrealized gain?

Let’s use a simple example:

• You own a mutual fund worth $100,000.
• Your cost basis is $60,000.
• If you sell today, you’ll realize a $40,000 gain.

Assuming a 15% federal capital gains rate, that’s a $6,000 tax bill (before any state taxes). So, should you sell? The answer depends.

Will the future tax savings from owning a more tax-efficient investment outweigh the taxes I have to pay today to make the switch? And depending on your tax bracket, state of residence, holding period, and the fund itself, the answer may be yes or no.

I’ve included a short video below showing how to look up a fund on Morningstar and review some of these details yourself.

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Life Thought:

Effort & Business Insider: I keep getting reminded that a little extra effort goes a long way.

Over the last year, I've noticed wealth managers highlighting media features in publications like Forbes, Business Insider, and others. After talking with a few friends, I learned there are a variety of ways people get featured. Many of them essentially boil down to paying for exposure.

There's also a service called HARO (Help a Reporter Out), where journalists send requests for expert opinions and sources. I'd imagine there are hundreds of thousands, if not millions, of people subscribed hoping to land press mentions.

So instead of just replying through the platform, I spent an extra five minutes to go above and beyond.

Whenever I saw a relevant request, I looked up the reporter on LinkedIn, sent a brief note introducing myself, shared a few thoughts on the topic, and let them know I was available if they needed a quick quote or background perspective. I included my email and phone number to make it as easy as possible for them to reach me.

Ten days later, after only three submissions, I was quoted in a Business Insider article about SpaceX.

Will this meaningfully impact my business? No. But that's not really the point.

The point is that most people stop at the obvious step. I've found there's almost always a backdoor you can find after a bit of effort.

Good Sh*t:

First Tee Time: As I've shared with this newsletter many times, I'm trying to get better at golf. It's not working.... Probably because I don't go to the range to practice. Regardless, I want to share a golf related hack.

I book the first tee time of the day. When I take a cart, I can play 18 holes in about two hours. I get all the enjoyment of a round of golf without disappearing for five hours on a Saturday. Once you get used to being the first group out, a normal tee time feels painfully slow.

Disclaimer: VDB Wealth is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance.

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