How the Overlay Produces Tax Losses

Tax deferral is one of the most powerful wealth-building tools available to investors. Why? Because it allows you to reinvest money that would have gone to the IRS, compounding returns on that money and significantly increasing your long-term wealth.

In this episode, I’m joined by Robert Hendershott (HWM’s Chief Investment Officer and my husband!) to talk about Ultra Tax Efficient Wealth Management℠—a suite of services that uses cutting-edge strategy designed to minimize taxes on your capital gains without sacrificing returns or adding unnecessary risk–and why he came out of retirement to help us implement this strategy with our high net worth clients. 

Ultra Tax Efficient Wealth Management℠ creates its benefits through realizing investment losses while deferring gains using a long-short overlay composed of individual stocks, which allows tax savings that can continue to compound for as long as the gains are deferred. And over a lifetime, that can be huge.

We can’t overestimate how powerful this new-to-market wealth building strategy is, and in today’s conversation, we’ll start at the beginning, talking about:
 
  ✔ Why tax deferral benefits investors and follows the letter of the IRS law
  ✔ How Ultra Tax Efficient Wealth ManagementSM works, as well as the risks and rewards of this tax-aware investing approach
  ✔ Why personalized tax management is a must for sophisticated investors

The bottom line? Tax planning isn’t one-size-fits-all. But with the right strategy, you can legally and effectively minimize taxes while maximizing your wealth.

If you know someone who has capital gains in their life, listen to this episode and forward it to them–because this conversation could really alter your financial trajectory for the better by deferring millions in taxes–while keeping more of your money working for you. ⬇️

Here’s what you’ll learn in this week’s episode of Love, your Money®:

• 02:32 The genesis of Ultra Tax Efficient Wealth Management℠  at Hendershott Wealth, including my “it can’t really be this good” moment, and the decision to bring Robert out of retirement 
• 06:18 The general benefits of tax deferral and why compounding returns are such an important piece of wealth building
• 09:20 How concentrated stock portfolios affect your ability to leverage tax deferral, plus how tax loss harvesting works – and where it falls short
• 12:03 Breaking down financial jargon to help you understand the high level functioning of Ultra Tax Efficient Wealth Management℠  and how it is designed to create reliable, predictable losses to offset gains
• 15:38 Playing by the rules of the IRS to generate market gains and create recognized losses–so you can have your cake and eat it, too
• 19:24 A simplified-but-illustrative example of a long-short strategy in action for an investor looking to diversify $1 mil of Amazon stock (don’t try this at home!)
• 28:14 How we know UTEWM℠  is legit with the IRS, and why it’s so effective at creating tax benefits
• 28:58 What makes someone a suitable candidate for this strategy, why it hasn’t been widely implemented by financial advisors or investment managers yet, and what’s changed to make it attractive–and approachable–now
• 33:46 The three main strategy risks and uncertainties of UTEWM℠ , and the silver lining it creates when the market goes down
• 38:50 The true pote

Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.