Episode 97
Tax Loss Harvesting for Expats: The Direct Indexing Upgrade Nobody Talks About
For many British expats in America, building wealth in a taxable brokerage account often means accepting that a meaningful chunk of returns will be lost to tax each year. But with the right tools, that erosion can be meaningfully reduced, and for those with sizable accounts, the savings can potentially be substantial.
In this From the Trenches episode of Expat Wealth, Richard Taylor, Chartered Financial Planner and founder of Plan First Wealth, and business partner James Boyle explores tax loss harvesting and its more powerful cousin, direct indexing. They explain how deliberately realizing losses and reinvesting into similar holdings can lower taxable income, offset future gains, and compound into significant savings over time, and why this only applies to taxable brokerage accounts rather than IRAs, 401(k)s or UK SIPPs.
Richard and James go on to unpack direct indexing, a strategy made possible by the rise of fractional shares and low-cost trading, which allows an index to be rebuilt stock by stock rather than held through a single ETF. This gives far more opportunities to harvest losses at an individual position level and offers added flexibility for expats who may eventually leave the US and want more control over their holdings.
Along the way, they touch on the broader market backdrop, including the unwinding SpaceX hype, hyperscalers shifting from cash to debt to fund AI expansion, and a cautionary real-world story about a green card holder who came dangerously close to missing long-term residency and exit tax obligations entirely.
Whether you hold a brokerage account in the US, are weighing up whether these strategies apply to you, or simply want to better understand how tax efficiency fits into a long-term investment plan, this episode breaks down a topic that is often misunderstood but increasingly relevant for expats building wealth across borders.
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Expat Wealth is supported by Plan First Wealth. Plan First Wealth is a Registered Investment Advisor serving fellow expatriates and immigrants living across the US on matters such as retirement planning, investment management, tax planning and non-US asset management.
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Expat Wealth is affiliated with Plan First Wealth LLC, an SEC registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.
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. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that listeners seek their own advice in these areas.
ABOUT RICHARD:
Richard Taylor is a British expat, dual citizen (UK & US). Originally from Bolton, he now lives in Greenwich, CT, where Plan First Wealth has its head office.
As the firm’s leader, Richard launched Taylor & Taylor, now Plan First Wealth, and continues to fuel the firm’s growth. Richard is a Chartered Financial Planner (UK – CII) in addition to holding the IMC (CFA UK) and Series 65 (US – FINRA).
Connect with Richard on LinkedIn
TRANSCRIPT:
Richard Taylor, Founder of Plan First Wealth:
[00:00:00 – 00:00:19]
This is where I get a bit nervy. Because credit, I should say, is an integral and essential part of the capitalist economy. It’s the reason our societies have thrived so much, because we’ve been able to use credit to invest and grow. It’s finally balanced and when it tips too far, it often ends in trouble. And I do now look at this thinking, oh, we are, are we going to tip into trouble here?
James Boyle:
[00:00:19 – 00:00:34]
If you’re not implementing these things, you really should be right, because the nature of portfolio management has changed so much in the last five, 10 years. And these are really tools that, you know, if, if they’re not being implemented and implemented properly and efficiently, you’re leaving money on the table.
Richard Taylor, Founder of Plan First Wealth:
[00:00:34 – 00:01:55]
Had no idea about exit tax. Had no idea about long term residency. Had no idea there was a process for giving it up. Leaving the UK without giving up your green card as a long term resident and being subject to the act without doing any planning Catastrophic welcome to Expat Wealth, a Plan first wealth podcast dedicated to helping ambitious expatriates in America and Americans overse thrive. I’m your host Richard Taylor and Plan first wealth is the business I founded and run today and we work with successful expatriates, immigrants and internationally minded Americans to make the most of their opportunity and avoid the Expat landmines. First, a quick disclaimer. While Plan First Wealth LLC is an SEC Registered Investment Advisor, the views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views and positions of Plan First Wealth. Information presented is for educational purposes only. Now, if you aren’t already receiving our emails, please go to our website www.planfirstwealth.com and sign up there. It’s free and you’ll be notified every time we drop a new episode and so much more. Okay, let’s get back to this week’s show. Welcome back to another episode of from the Trenches. This is the show where myself and my esteemed colleague and good friend. Are we there yet, James? Can we we say that?
James Boyle:
[00:01:55 – 00:01:56]
I think so.
Richard Taylor, Founder of Plan First Wealth:
[00:01:56 – 00:02:36]
I think that’s good friend James Bole get together to bring you behind the scenes as we build this business plan versus Wealth. We work with clients and we help people make the most this tremendous opportunity they have here in the US of A. Just before we get going, I just want to remind people we now have a dedicated mailbox where you can send us your questions. So if you’re a, well, primarily a British expat living in America, but honestly, if you’re an expert in America. And you have questions, feel free to email me or us. I should say sorry at Expat Wealth Plan First Wealth.com. And we will endeavor to answer your questions on this show. All right, let’s get going. Hi, James.
James Boyle:
[00:02:36 – 00:02:37]
How are we doing, Richard?
Richard Taylor, Founder of Plan First Wealth:
[00:02:37 – 00:02:38]
I’m good. How are you?
James Boyle:
[00:02:38 – 00:02:42]
Good. Are we in the. Would you call this the dog days of summer yet?
Richard Taylor, Founder of Plan First Wealth:
[00:02:42 – 00:02:51]
Well, I don’t know. It just, it’s. It’s just rained here for the past month, so I’m, I’m not sure. I’m not. I don’t even consider this summer yet. Very unusual for America.
James Boyle:
[00:02:51 – 00:02:53]
That is strange. Yeah. Yeah. Too much rain.
Richard Taylor, Founder of Plan First Wealth:
[00:02:53 – 00:02:54]
Yeah, too much.
James Boyle:
[00:02:54 – 00:02:58]
Better than wildfires and Canadian smoke haze.
Richard Taylor, Founder of Plan First Wealth:
[00:02:58 – 00:03:24]
Well, we, we had, we did have some Canadian smoke, but yes, I guess I would rather that than. Than wildfires and I shouldn’t complain too much. So. Do you know what I did this weekend? You do know. But we’ll tell people. Yeah, I went camping and we actually got very lucky because last week the weather was horrendous. This week the weather is horrendous. And we did get a. We, We. We happened to go during a, A break in the clouds and gorgeous the whole time we were there, too.
James Boyle:
[00:03:24 – 00:03:25]
Horrible.
Richard Taylor, Founder of Plan First Wealth:
[00:03:25 – 00:03:30]
But if I learned one thing from camping, it’s that I’m not for camping.
James Boyle:
[00:03:31 – 00:03:35]
It’s a pretty good takeaway if you, if you have to learn one thing.
Richard Taylor, Founder of Plan First Wealth:
[00:03:35 – 00:03:43]
Oh, my kids had a great time. And the only reason we went in was because my wife was gallivanting in Las Vegas at a Backstreet Boys concert.
James Boyle:
[00:03:43 – 00:03:44]
Very nice.
Richard Taylor, Founder of Plan First Wealth:
[00:03:44 – 00:04:05]
She had a whale of a time. And one of the, one of the other dads kind of suggested it, and I was like, well, what else am I going to do? You know what, what else I could have done would have been. Would have been. I’m not going to say better. It would have been easier and certainly less expensive because camping’s not expensive. I’ll tell you what, buying all the gear to go camping to learn that you don’t really want to go camping ever again, that was quite expensive.
James Boyle:
[00:04:06 – 00:04:24]
Yeah. Especially, you know, I think camping is one of those things where you can. It’s a, it’s a steep upfront cost. Right. You need. I’m not a camper myself, but you need tents, sleeping bags and fans and things. But most people, or I would say dedicated campers going to use those things for ideally many years to come.
Richard Taylor, Founder of Plan First Wealth:
[00:04:24 – 00:04:54]
Yes. And I’m not going to. If anyone’s listening to this, is local to me and wants two grands worth of camp, barely used camping gear for a grand. Hit me up because it’s yours. I want it gone. I don’t. I’m scared that this memory will fade and someone will say to me in six months, a year, do you want to go camping? I’ll be like, yeah, sure, why not? And then when I’m lay on that floor with my neck hurting at 2am questioning my life choices, I remember this is why I wanted to get rid of my camping gear. So I wouldn’t be stuck in this position again.
James Boyle:
[00:04:54 – 00:04:59]
You’ll have to replay this episode over and over. Yeah, to get the message to sinking.
Richard Taylor, Founder of Plan First Wealth:
[00:04:59 – 00:05:12]
My kids had a good time, which is the main thing. But Guy, it was, it was an experience and you know, I can tick it off and move on with my life. I don’t think if I, if, if on my deathbed, I don’t think one of the things I’ll be worrying about is that I didn’t go camping more often.
James Boyle:
[00:05:12 – 00:05:14]
So didn’t get out. Not 10 enough.
Richard Taylor, Founder of Plan First Wealth:
[00:05:14 – 00:05:16]
Yeah. So what about you? What you been up to?
James Boyle:
[00:05:16 – 00:05:30]
We’ve been spending time at the beach down the shore, which was, was briefly interrupted by the Canadian wildfires, fires that we mentioned. But other than that, it’s been a pretty nice summer down here in, in Philadelphia. So I can’t, I can’t complain. Not camping on you.
Richard Taylor, Founder of Plan First Wealth:
[00:05:30 – 00:05:31]
It’s been raining on you.
James Boyle:
[00:05:33 – 00:05:38]
Summer showers here and there like last night. We got some thunder and lightning, but nothing. Nothing crazy.
Richard Taylor, Founder of Plan First Wealth:
[00:05:38 – 00:06:02]
All right, well, I’m glad you’re having a good summer. I am as well. I just wish I played a bit more golf. Right, so let’s get into this. We’re going to try and keep this episode to 30 minutes, which for us is not all that easy. So what’s going on in the world? Well, it’s. We’ve. Shock horror. The memorandum of understanding didn’t hold. Knock me over with a feather.
James Boyle:
[00:06:02 – 00:06:04]
Are we sick about talking about this yet?
Richard Taylor, Founder of Plan First Wealth:
[00:06:04 – 00:06:12]
Hey, of course we are. I tell you what though, I’m sick of talking about this. And SpaceX. Oh my God, if I have to Hear more about SpaceX, we haven’t fielded.
James Boyle:
[00:06:12 – 00:06:27]
That many questions about it from the people we work with. Which is interesting, I think reflects probably some of our underlying core investment tenets. But it’s obviously been garnering a lot of heat in the news and in the headlines, which people love to chat about.
Richard Taylor, Founder of Plan First Wealth:
[00:06:28 – 00:07:20]
I think that’s good because I think our clients are. A lot of people come to us this way and then I think a lot of it get conditioned to try and not feed into this constant need to react to every story or event. And the SpaceX was just classic. It was just all hype. From the master of financial engineering, Elon Musk, it was all hype. If you ain’t got him pre ipo, which, you know, normal people working in the ipo, it was, it was obviously just going to explode and then crash. And that’s exactly what we’ve not crashed but you know, come back down to earth. That’s exactly what we’ve seen. And it must be tiresome, honestly, running a business where that’s all people want to talk about because then, because there’s always. Then it’ll be open AI and then it’ll be anthropic. Right. And I think you have to, unless you’re a professional investor and even then I think that’s fraught with difficulties, you have to tune out this stuff.
James Boyle:
[00:07:20 – 00:07:36]
Yeah, I think some of the more interesting sort of downstream effects have been the sort of projected IPOs of some of those companies that you mentioned. So OpenAI and Anthropic, with some of the AI jitters we’ve seen in the, in the markets the last few weeks and I think we’ll talk about it.
Richard Taylor, Founder of Plan First Wealth:
[00:07:36 – 00:07:36]
It’s cracking.
James Boyle:
[00:07:37 – 00:07:42]
Yeah, it kind of seems like that’s going to be delayed, you know, maybe indefinitely until we have a clearer picture.
Richard Taylor, Founder of Plan First Wealth:
[00:07:43 – 00:08:03]
Hyperscalers, they seem to be transitioning from, they seem to moving into debt. You know, before it was saying, listen, we’re not too worried, they’re all funding these endeavors out of, out of revenue or profits, earnings. But now they seem to be transitioning to debt and that changes the calculus somewhat.
James Boyle:
[00:08:04 – 00:08:31]
This for people listening. We’re recording this on the morning of July 29th. This is a big week for earnings, especially in big tech. We have, I think Microsoft and Meta this week, Amazon and Apple later in the week. And I think you’re exactly right. This kind of blank check to just expand capex at all costs is not sitting right with investors at the moment. Right. They’re trying to figure out what is the return on these actual expenditures and is this sustainable in the near term.
Richard Taylor, Founder of Plan First Wealth:
[00:08:32 – 00:09:18]
This is where I get a bit nervy because a lot of the historic boom and bust, all the busts, it’s debt. It’s when people start overextending and using debt. Railway build out, Internet build out, telecom build out, arguably global financial crisis that was all fueled on debt. And yeah, debt is an integral and essential part. Credit, I should say, is an integral and Essential part of the capitalist economy. It’s the reason the societies have thrived so much, because we’ve been able to use credit to invest and grow. It’s finally balanced. And when it tips too far, it often ends in trouble. And I do now look at this thinking, oh, we are, are we going to tip into trouble here and, and.
James Boyle:
[00:09:18 – 00:09:30]
Leverage that in particular. Right. Just to echo that point. So we’ve seen a shakeout in the South Korean chip makers market. Pretty significant shakeout throughout July and some of that healthy, right? I mean it’s never comfortable.
Richard Taylor, Founder of Plan First Wealth:
[00:09:31 – 00:09:32]
They went berserk.
James Boyle:
[00:09:32 – 00:09:53]
Yeah, yeah. You need to kind of take some of the heat off those trades that, you know, everyone in the classic shoeshine worker is talking about, you know, what’s going to make them rich overnight. It’s healthy to see some correction, I think in those markets. And market breadth is, has been expansive and that’s encouraging, isn’t it?
Richard Taylor, Founder of Plan First Wealth:
[00:09:53 – 00:10:30]
Funny. So just going back in recent memory, it was bitcoin, then it was gold, then it was the, I think then you have the hyperscale, you know, I mean the hyperscalers have probably have been throughout this Nvidia and stuff but, but then they had their moment back in the sun and now it’s, then it was the, the chip makers and they all, if you can, if you can catch that wave, good for you. But they all come back down to earth, don’t they? Look at bitcoins having a, having a real torrid time. Gold has fallen from its highs. The chip makers are having a significant.
James Boyle:
[00:10:30 – 00:10:54]
Wobble and there are other parts of the market that are performing well. Right. I was taking a look at some statistics this morning. Seven of 11 S&P 500 sectors finished Monday in the green. 70% Of S&P 500 stocks are above their 50 and 200 day moving average. So we’ve got some of this money that might be coming out of the overheated chip maker. Tech trades is finding a home elsewhere,.
Richard Taylor, Founder of Plan First Wealth:
[00:10:54 – 00:11:30]
Which is encouraging, oversimplifying it, but there really are two schools of thoughts. Right. The one schools of thoughts is you make money by trying to catch the next bitcoin gold chip makers before they start that historic run and you get out before they start following the ensuing dive or you buy the market, you sit tight, you don’t react. And you know, we believe that’s way to making 8, 9, 10 a year over 20, 30, 40 years. And that for most people is more than enough. A million, you know, a million dollars compounded at 10 annual years over 30 years.
James Boyle:
[00:11:31 – 00:11:31]
Go ahead.
Richard Taylor, Founder of Plan First Wealth:
[00:11:31 – 00:11:56]
17 Million. You can turn 1 million into 17 million just by compounding at 10 a year. Now 10 a year is a lot, a lot, a lot. But, but so is 17 million. Yeah, but if you can plug yourself into the, into the market and generate 10 a year over 30 years, that can turn into 17 million. That’s a lot more than inflation and that’s without doing anything.
James Boyle:
[00:11:57 – 00:12:02]
It’s with sticking to a plan. Right. I think I’d push back on not doing anything because I know what you’re saying.
Richard Taylor, Founder of Plan First Wealth:
[00:12:02 – 00:12:09]
But no, no, you’re absolutely right to push back 100. Sorry. Yeah. Because that sitting on your hands is much harder than you would think.
James Boyle:
[00:12:09 – 00:12:40]
Way harder. Yeah. We have these conversations day in and day out, week in and week out, and when there are concerns, right. They’re often for very valid reasons. It’s not something that we dismiss out of hand. But the practical reality is how can you have the confidence in your plan and know that over that 10, 20, 30 year retirement you can rely on a portfolio that generates income that grows above and beyond a rising cost of living and do that without fear of running out of money? That’s key to investment management.
Richard Taylor, Founder of Plan First Wealth:
[00:12:40 – 00:12:55]
It’s a leap of faith. It’s a leap of faith, but also there is lots of evidence that one can bring to bear to give you confidence. But ultimately in the heat of the moment, I don’t believe it’s about evidence. It’s about trust and faith in the plan.
James Boyle:
[00:12:56 – 00:12:57]
Yep, absolutely.
Richard Taylor, Founder of Plan First Wealth:
[00:12:57 – 00:12:58]
Moving on.
James Boyle:
[00:12:58 – 00:13:39]
Fed decision. Might as well mention the Fed. Right? Cause they’re still in the news. Fed decision coming tomorrow. Warship press conference and deciding what to do with rates. Seems like consensus is that he’s not going to change anything. They’re not going to change anything. Hope is that headline pce. Some of those inflation numbers are cooling, so that’s still garnering headlines, still garnering eyeballs. I don’t think there’s going to be a major change this week, but we’ll see what happens. Obviously the goings on in Iran, if I can be as euphemistic as possible, are contributing to this inflationary concern. Right. Oil up 40% year to date. It’s not something that anyone wants to continue for the long term, so we’ll see what happens.
Richard Taylor, Founder of Plan First Wealth:
[00:13:39 – 00:15:43]
Watch this space. I’m excited to announce that Expat wealth has its first sponsor, the Global Financial Planning Institute. The GFPI exists to provide education, community tools, resources and ongoing research for financial planners and other advanced financial professionals working with international and cross border clients in the US And Americans abroad. I’m a GFP Institute fellow and I’ve put all our employees through their GFPI programs when they join us. I’ve met some great people. I’ve learned a ton. It’s a genuine community of internationally minded folk doing their best to serve their clients properly and critically sharing what they know in the oftentimes challenging and ambiguous US Cross border environment. And as anyone in this sector will tell you, you’re always learning. So if you work with international clients and or Americans abroad, or if this is an area you’re looking to get into, you check out the gfpi@www.gfp.in stute you will be glad you did and I hope to see you there soon. Okay, so what we’re going to talk about today for the main part of this is we were going to talk about tax loss harvesting and as part of that direct indexing, right? This is something that we’ve started to introduce for some of our clients, not all. We have a core philosophy and we have portfolios that adhere to our core philosophy. And these portfolios are low cost, super straightforward, globally diverse and they’re appropriate for pretty much everyone, I think. But sometimes some people want, or, or their circumstances mean it’s prudent to consider other tools in our toolbag. Okay, and one of those tools, tools in our toolbox I should say. And one of those tools is tax loss harvesting and direct indexing. Now tax loss harvesting is actually something we do within our regular portfolios anyway. But direct indexing is taking it one step further.
James Boyle:
[00:15:44 – 00:16:43]
Absolutely. It’s supercharging it, you could say. So let’s start with what is it, right? You hear this phrase tax loss harvesting get thrown around. What does it mean? At its most simple, right? Just as an illustrative example, here it is deliberately selling a position that is held down right at a loss, harnessing that loss, right? You can, you can recognize that loss and then immediately turning around and reinvesting in something that’s similar, right? It can’t be identical, but something that’s similar give you a, give you an example. You sell an S&P 500 tax lot, a holding that you have at a loss, you realize that loss turn around and invest into a total market fund. So it’s not about getting out of the market, certainly not about timing the market. It’s a pure tax play to increase your after tax return. So that’s always the goal here, is increasing that net return after you’ve paid your taxes.
Richard Taylor, Founder of Plan First Wealth:
[00:16:43 – 00:17:10]
Just to specify as well, this is not relevant for what we call qualified accounts. So if you have money in an IRA, 401k, even UK SIP, we’re not talking about, we’re not talking about those accounts because those accounts aren’t taxed until you take the money out. So this is just for a brokerage account where you’re taxed on what we call an arising basis. So you’re taxed as you realize gains as you receive dividends.
James Boyle:
[00:17:10 – 00:17:23]
Yep, absolutely. That’s a great point. And we’ll talk a little bit about, you know, who does this make most sense for? Right. First of all, it has to be a brokerage account, right. And very likely it has to be a sizable brokerage account.
Richard Taylor, Founder of Plan First Wealth:
[00:17:23 – 00:17:40]
And let’s say you have a million dollars in a brokerage account and it’s growing. But we’re trading, we’re rebalancing, and every year you’re realizing some gains. And if your brokerage account is making 10%, say in one year, maybe after tax, that’s down to eight.
James Boyle:
[00:17:40 – 00:19:32]
And tax loss harvesting is a way to increase that, right? If it’s eight and a half or nine, as opposed to without these tools. Yep, exactly right. So the benefit has to outweigh whatever cost is associated with taxless harvesting. It’s an area where the industry has matured a lot. So, you know, with the advent of low cost trading, or in some cases no cost trading, a lot of these techniques have become more and more attractive and more and more applicable. So when you, when you harness that loss, right. Or harvest that loss, what, what can you do with it? Right. How does that help you? Number one, you can reduce your taxable income for the year. It’s up to a limit. It’s a Fairly low limit, $3,000 per year. But those are immediate tax savings. Right. Very easy to understand. The remainder, if you have more losses above and beyond that $3,000 limit, you can offset that against taxable gains. And that remainder is a key point, carries forward indefinitely. Right. So if you don’t, losses don’t disappear. If you don’t use it in that tax year, you can continue to carry them forward until you’ve, until you’ve used them up. So you get immediate tax savings. And it’s a mechanism to defer taxes. Right. And there’s that old maximum, that’s a dollar of tax deferred is, is tax saved. So that’s kind of the key sort of logistics of it. Right. Increase after tax returns. This is a method to do that. You have to be careful about things like wash sales but, but you know, if you’re certainly our platforms, if you’re doing that in an organized manner, you’re avoiding those things through the system. Right. You’re not, you’re not introducing that complication. You want to be doing that throughout the year. Right. This is not. Sometimes people misunderstand, say, okay, let’s take a look at it in December. How should I be thinking about using these losses? I have a couple positions down, which I do. Ideally, you’re doing that throughout the year.
Richard Taylor, Founder of Plan First Wealth:
[00:19:32 – 00:19:32]
Right.
James Boyle:
[00:19:32 – 00:20:19]
The portfolios we manage, we’re doing these, I mean, daily, literally. And especially we alluded to this earlier, the momentum, the speed with which markets move now with the Internet, with seamless trading, anecdotally certainly seems to have been amplified. I mean, you can look at Covid and beyond, but in the last few years, market moves, markets move on a dime. So opportunities appear and disappear very quickly. If you’re not looking at these things in your portfolio daily or an intraday basis, you are missing tax dollars, you’re missing savings there. So this is not a one time a year. Let’s take a look. Do it throughout the year. And if you’re not, you should be considering this.
Richard Taylor, Founder of Plan First Wealth:
[00:20:19 – 00:21:25]
What should we just say? So before we get started indexing, we’re doing this for the vast majority of our clients who have brokerage accounts with us through ETFs. So we might. Most of our portfolios utilize ETFs. In fact, all of them do. And you can do, you can do tackles harvesting at an ETF level. But there is now a way to kind of enhance that even further, which is direct indexing. So James’s, James’s point before he used an example of selling AN S P500 index tracker when it’s down the. That’s 500 stocks in one ETF. So that’s, it’s kind of quite a blunt instrument. And direct indexing is a way of doing this outside of the ETF wrapper. So rather than being limited by the S P500 tracker, you can now essentially rebuild the index in individual stocks. And that provides much more opportunity for highly targeted tax loss harvesting.
James Boyle:
[00:21:26 – 00:22:01]
Absolutely. It gives you so many more chances to take advantage of those losses when they occur. In essence, you’re getting roughly the same return as the index. It’s designed to, that’s the idea, replicate the index, but you have full control over each holding. And with direct indexing, the index is going to be up or in the long term, the index is going to be up. There will always be individual positions within that index that are down, direct indexing is the door then to take advantage of that and get those, capture those tax savings.
Richard Taylor, Founder of Plan First Wealth:
[00:22:01 – 00:22:37]
Historically this was not an option at all. But this is now because of the advent of fractional shares and free trading essentially on these different platforms. It’s now available to us regular folk. And it’s something that a lot of, if you’ve got a sizable brokerage account, this is something I think you should be considering, is a way to reduce your, your tax bill. It’s a way to defer taxes into the future and then you can argue that you benefit from, from compounding on that. But it’s something that sizable brokerage accounts should be considering doing.
James Boyle:
[00:22:38 – 00:23:24]
It’s such a key point because sometimes people think all of these tax strategies have this, this mystique associated with them. Right. And they’re thinking, people think, you know, is this some kind of trick? Is this not legitimate? These are really the natural evolution of just what you said, frictionless trading, low cost trading. If you’re not implementing these things, you really should be because the nature of portfolio management has changed so much in the last five, 10 years. And these are really tools that if they’re not being implemented and implemented properly and efficiently, you’re leaving money on the table. Right. Ultimately that’s what it translates to. So you do meet, you do descale. Right. You need a meaningful positions in a brokerage account. We talked about that.
Richard Taylor, Founder of Plan First Wealth:
[00:23:24 – 00:23:24]
Right.
James Boyle:
[00:23:24 – 00:24:32]
You want to make sure that you can replicate the index where you need to. There may be slightly higher costs associated with. Right. A lot of that, again, like we’ve said, has been mitigated. But if there is higher cost, then you need to know that the tax savings are paying for it. Right. Or justifying it and you’re getting some benefit above and beyond that. I think it’s worth highlighting another point here because our audience and obviously the people we work with are cross border by nature, are expats. In the US we spent a lot of time the last few months talking about the increased desire or conversations we’re having about leaving the US maybe retiring back to the UK or wherever else these people are coming from or traveling to. There can be a benefit. There is an added level of flexibility in holding individual stock positions as opposed to collective funds, as opposed to ETFs or mutual funds. So that’s a cross border benefit. Explicitly sort of wouldn’t be a concern to a, to a sort of normal American domestic investor. But for our audience in particular, you want to keep that in mind. There’s more flexibility. There benefits to you if you do happen to go back or leave the U.S. nice.
Richard Taylor, Founder of Plan First Wealth:
[00:24:33 – 00:25:18]
Well done for you for tying this back to cross border. James. We actually, we wanted to do obviously we’re a cross border firm and this is a cross border podcast. So everything we do is to some extent cross border. But so much of what we do is cross border. But also so much of what we do is just regular, you know, prudent. Applies to all financial planning, investment management, tax planning, whatever you want to call it. Now I say, I say applies to all with a caveat because that is something that applies to all. But there’s always, when you crossbow, there’s always like a little last. You need to just double check, right? What if this person leaves? What if this person has another citizenship, you know, what, what if they go back to uk? What if they go somewhere else? You just need, there’s always an added, there’s always an added, a double check in the cross border space. Yeah.
James Boyle:
[00:25:18 – 00:25:53]
And it’s something that, you know, cross border people we work with or expats in the US they don’t want to have to think about that. Right. It sounds like such a headache. But, but in some ways, number one, that’s, that’s why we exist, right. This is how we, we help our clients manage these things and it makes things interesting. Right? If, if I could be selfish for a minute, we have to be thinking about these secondary tertiary downstream effects that come with. Inherent to being an expat. Inherent to having to straddle two different tax jurisdictions and UK rules or elsewhere. Such a key, such a key part of investing as an expat.
Richard Taylor, Founder of Plan First Wealth:
[00:25:53 – 00:26:56]
I met with a client yesterday and they said, oh listen, you’re going to hear from a friend of ours. We were with them at the weekend and their Brit probably going back to the UK on a green card. 20 Years on a green card. Had no idea about exit tax, had no idea about long term residency, had no idea there was a process for giving it up. That we sent them your podcast and you’ll expect to hear from him. This guy had no idea. And although I’m sure that came as a shock, like holy heck, he like thank goodness he met them and was made aware because leaving the UK without giving up your green card as a long term resident and being subject to the, without doing any planning. Catastrophic, potentially catastrophic. So I’m sure this guy is reeling right now and thinking, oh my goodness, this is way more, there’s way more to this than I thought there was. He should be hopefully super grateful that this is. This has been brought to his attention with. With plenty of time for planning and avoiding the landmines that could blow up in his face if he did. If he just left.
James Boyle:
[00:26:57 – 00:27:03]
Catching it, you know, earlier or before he’s left. Right. There is a ton of work that could be done to manage and mitigate, you know, those.
Richard Taylor, Founder of Plan First Wealth:
[00:27:03 – 00:27:58]
There you go. There’s something. Podcast. It’s. It’s. Hopefully it’s. It’s working. So moving on. Pick a mix. So I’ll start because I read a book you recommended, and I read it in about three days, London Falling. Absolutely loved it, especially the first half. The first. I could not put the foot. I could not stop reading for the first half, partly because it’s a London I’m kind of. I’m not familiar with, but I have friends there. I have friends going through the private school scene in London and that first, that, that, you know, obviously when I was growing up, I became very aware of the. The Russian money flowing into London and Abramovich taking over Chelsea. And that was woven throughout the book. And that was just fascinating, the impact that has had not just on, like, the ownership of apartments, but on the. The social fabric and experience of schools.
James Boyle:
[00:27:59 – 00:27:59]
Yeah.
Richard Taylor, Founder of Plan First Wealth:
[00:28:00 – 00:28:25]
And I’ve got. I’ve got a friend going who’s got young kids in the private system and agonizing schools right now, and I want to know if they read it and they hadn’t. So they’re reading it now, and I want. I want their intake. Like, is it. Is it like this. Is this really what you’re worried about? Is this really this influence? This, let’s be honest, malign influence? Is this something you’re taking into account? Couldn’t. The first half could not stop reading.
James Boyle:
[00:28:25 – 00:29:02]
It’s. It’s so well written. It reads like a thriller, it reads like fiction, and it’s a true story. It’s Patrick Radden Keefe. I’ve talked about him a couple times in the past. If, if, if any relation, however distant, to London. Listening to this, I would recommend looking at it. It’s a fascinating look into sort of how the city has shifted and this almost eerie, like you say, a kind of eerie, underlying, malign sort of creeping influence that comes from oligarch money flowing, I mean, wholesale into the city over a decade or more. Yeah.
Richard Taylor, Founder of Plan First Wealth:
[00:29:02 – 00:29:06]
Yeah. Super interesting. Thank you for the recommendation. Thoroughly enjoyed that.
James Boyle:
[00:29:06 – 00:29:06]
Good book.
Richard Taylor, Founder of Plan First Wealth:
[00:29:06 – 00:29:07]
What about you?
James Boyle:
[00:29:07 – 00:29:33]
I am reading. Let’s see. I’m reading a book called Unscripted Writers. James B. Stewart and Rachel Abrams. I think it Came out about not quite a decade ago, maybe 2018. 2019. Basically surrounds Sumner Redstone and the sort of waning days of his empire in control of CBS and Viacom. If you like succession.
Richard Taylor, Founder of Plan First Wealth:
[00:29:33 – 00:29:35]
I love succession.
James Boyle:
[00:29:35 – 00:29:39]
I would say this, it’s very succession like it’s a true story. Right. It details.
Richard Taylor, Founder of Plan First Wealth:
[00:29:40 – 00:29:43]
Was he the guy you love sailing? Oh, no, that’s Ted Turner I’m thinking of love sailing.
James Boyle:
[00:29:43 – 00:30:51]
Sorry, Redstone. No one in this book comes out looking good. I’ll say this. It is a collection of the most heinous. Yeah. The most heinous people on the planet in a lot of ways. And just as his sort of mental acuity declined, he was into his 90s at the end of this. A sort of cacophony of greedy vultures, leeches, trying to pick the bones of the media carcass. And a lot of it dovetails into the MeToo movement and certain CBS executives that were taken down hard. And just like I say, in some ways a heavy read because it’s some of the most heinous behavior that was allowed to go completely unchecked for, you know, decades and decades and decades and this sort of ill begotten wealth that, that then is subject to this recommend or I’m about halfway through. It’s, it’s very well written, very well researched. It’s a heavy read. It’s not a fun read because you’re reading about, you know, pretty heinous.
Richard Taylor, Founder of Plan First Wealth:
[00:30:51 – 00:30:55]
Dude, I’ve just read two back to back books on Stalin.
James Boyle:
[00:30:55 – 00:30:55]
Yeah.
Richard Taylor, Founder of Plan First Wealth:
[00:30:55 – 00:31:50]
And I tell you what, holy heck, that was the first one. That one Young Stalin was kind of. Was fine, was really interesting. The second one was actually a better book but like was also super heavy because yeah, star, like this styling was so much more complex than I ever gave him credit for. I just saw it some as this late gray blur, which is a famous description I think Trotsky gave him. And you just kind of knew it. Like Hitler’s so much more vivid in our imagination because Hitler did. There’s so much more footage of Hitler. You know, there’s so much footage of it. There’s not really that much of Stalin the terror, the. The original terror in 1937, but also the ones that followed subsequent terrors. He like, he happily took out, murdered, tortured his friends, his wives of his friends.
James Boyle:
[00:31:50 – 00:31:54]
I was just gonna say, do you find that you need a palate cleanser after you read?
Richard Taylor, Founder of Plan First Wealth:
[00:31:54 – 00:31:56]
Well, that’s why I went to London Falling.
James Boyle:
[00:31:56 – 00:31:58]
Yeah, yeah, yeah. Still.
Richard Taylor, Founder of Plan First Wealth:
[00:32:00 – 00:32:01]
Yes. But a much easier read.
James Boyle:
[00:32:01 – 00:32:02]
Much different.
Richard Taylor, Founder of Plan First Wealth:
[00:32:02 – 00:32:42]
Yeah, but yeah, this, the, the styling. It was. I’m so glad I read it. But it really did kind of just you when you’re just reading this continual, like continual cruelty. Unnecessary. And it’s one thing and it’s obviously it’s terrible happened to millions of faceless people. But you read this book and you know these characters who aren’t particularly sympathetic to be honest with you, but they’re still. The idea that someone just happily just liquidates often after torture his. Some of his closest friends. That is unimaginable. That was also a heavy read. But I would, I would highly recommend that an important book. So. Okay. And just before we wrap up, have you seen the Odyssey? I know you’re a film.
James Boyle:
[00:32:43 – 00:32:44]
I, I have, yes.
Richard Taylor, Founder of Plan First Wealth:
[00:32:44 – 00:32:45]
In the imax.
James Boyle:
[00:32:46 – 00:32:52]
I saw it in Dolby. I don’t, I’ll be honest, I don’t fully know the difference. But yeah, we, we, we loved it.
Richard Taylor, Founder of Plan First Wealth:
[00:32:52 – 00:32:53]
And was it, was it good?
James Boyle:
[00:32:54 – 00:32:57]
You have to see in a theater. Put it that way if you get a chance. Okay.
Richard Taylor, Founder of Plan First Wealth:
[00:32:57 – 00:32:59]
Yeah, no, I really want to watch that. Yeah.
James Boyle:
[00:32:59 – 00:33:00]
Okay.
Richard Taylor, Founder of Plan First Wealth:
[00:33:00 – 00:34:17]
James, great to see you as always and thanks for this. And just a reminder everyone, we have a new new mailbox where you can email US expat Wealthland first wealth.com if you have questions or queries, send them to us and we will endeavor to answer them on this show. Alright folks, that’s another episode of Expat wealth under our belts. Thank you for listening. I appreciate it and I appreciate you. If you’re enjoying the show and would like to support the mission which is to help ambitious expats thrive in America and ask you to subscribe to the POD wherever you listen and also consider leaving a rating and review. This stuff really does matter. Please help us get this information to the people who need it. That is to your fellow expats. Just a quick reminder that this show is brought to you by Plan First Wealth. We are a US based financial planner and wealth manager and we help successful American and international families living across the US to make the most of their opportunity and ultimately to retire happier. If you’d like to know more about how we might be able to help you, you can find us on our website, www.planfirstwealth.com or you can look me up on LinkedIn. Do get in touch, we’d love to hear from you. As always, thank you to the podcast guys for their help producing this episode and the entire show. See you next week.
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