What's in store for you:

1. Photo From My Life
2. Financial Thought: Tax Drag
3. Life Thought: Buy Once, Cry Once
4. Good Sh*t: Stompy the Bear

Subscribe to this Newsletter

Photo From My Life:

Financial Thought:

Know Your After-Tax Return: If you're in the accumulation phase of life and live in a high-tax state like California, New York, or New Jersey, it’s worth being intentional about where you hold different types of investments.

One of the biggest mistakes I see investors make is owning income-generating assets in taxable accounts without understanding the after-tax impact. These investments often kick off ordinary income which, for many high earners, means getting taxed at rates north of 45%.

Just because something earns 7% on paper doesn't mean you're actually keeping 7%.

This isn't a piece about the investment merits or portfolio benefits/downsides of private credit, REITs, or covered call strategies. However, before you allocate to them, you need to ask one simple question:

What’s the true after-tax return?

If you have access to tax-deferred or tax-free accounts (IRA, 401k, Roth, etc.), that’s often a better place for these strategies.

Here are a few common investments I’d think twice about owning in a taxable account:

• REITs
• Private Credit Funds
• Bond Funds (Corporate, High Yield, Bank Loans)
• Covered Call & High-Income Strategies
• Business Development Companies (BDCs)
• Private Real Estate Debt (Hard Money Lending)

Again, context matters. Your financial goals, income level, and tax bracket all play a role in what’s best for your situation. This isn't specific advice, but rather a framework for asking the right questions.

To make this a bit more real, lets use a live example.

Let’s assume you invest $100,000 into two different vehicles, each earning 8% annually for 20 years:

• Private credit fund: Yields 8% per year, but this yield is taxed at 45% because it's considered income. You reinvest all proceeds back into the private credit fund on an annual basis.
• Equity index fund: Appreciates 8%. We'll assume no dividends to be even more conservative. You sell all of this at the end of 20 years.

After 20 years:

• Private credit fund: You'd end with ~$236k because your annual return is 4.4% after paying ordinary income tax.
• Equity index fund: You'd end with ~$466k, but to liquidate, you'd need to pay long-term capital gains which would leave you with ~$358k!

Even with the same headline return, the structure and tax treatment of an investment can create a massive difference over 20 years.

Tax drag is real and it matters more than most people think.

Life Thought:

Buy Once, Cry Once: I’m not Dave Ramsey. I'm not a budgeting specialist. Because of this, I rarely write about spending habits. It feels personal. However, I want to break my rule today because this isn't really about spending.

I recently stumbled across a philosophy that’s stuck with me: Buy Once, Cry Once.

The idea is pretty simple. It’s better to feel the pain of paying for a quality item once than to deal with the ongoing annoyance (and hidden cost) of replacing something cheap multiple times. It's not just about things either. It's about services too.

As a society, I feel like we fall into the trap of buying what is “good enough.” Fast fashion does this to us. Shoes that wear out in six months. Kitchen tools that break under pressure. Even software platforms or service providers that looked cheaper on the surface but end up costing time, stress, or both.

I'm slowly realizing that it's just not worth it.

I recently discovered the Saddleback Leather brand, whose tagline says it all: “They’ll fight over it when you’re dead.” Yes, their bags are expensive. But they’re meant to last a lifetime. They offer a 100 year warranty. That kind of durability in both products and businesses has become something I deeply value.

Don't get me wrong, this isn’t just about buying nice things for the sake of it. It’s about intentionally choosing fewer, better things. Choose to partner with businesses (or people) who prioritize quality above all. I admire anyone who takes the long view. Whether it’s a craftsman building a leather bag to last 100 years, or a founder choosing to scale slowly so they can deliver excellence, not just speed.

There’s a hidden upside to all of this too. When you start prioritizing quality, you start needing less. Life becomes simpler. Better. More durable.

What other brands fit this mold?

Good Sh*t:

Stompy the Bear:

I swore I wouldn’t be that parent. I wouldn't blast toddler music in the car like it’s the latest Drake album. But here I am. My son now throws out song requests like a mini DJ every time we get in the car.

And I’ll admit it. Stompy the Bear slaps.

It’s got this weird jam vibe that just works. The beat is catchy, the chorus is chaotic in the best way, and somehow, we both end up head-banging by verse two.

I still try to sneak in my Spotify playlists from time to time, but I'm content listening to my son's requests. Stompy the Bear rises to the top.

Parenthood has humbled me in many ways. This is just one more tally on the scoreboard.

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.

‍