December 19, 2019

Appreciating Income is the Thing To Do

18 minutes

Topics discussed:

The end of the year is a season when I conduct a lot of review meetings with clients. Along with discussing holiday plans, sharing updates on our families, and so on, it’s the perfect opportunity to do some year-end tax planning, review how investments have fared over the year, and to catch up on any other planning items we are working on. It’s also a great opportunity to itemize our goals and notate tasks that we’d like to get completed in the coming year.

While these client meetings are never exactly the same, some themes come up time and time again like that of the math behind “total return.” I’ve found myself writing this equation down with a sharpie in numerous client conversations: Total Return = Appreciation + Income.

I know, it’s simple. It almost seems silly to mention, but there is so much behind this simple equation that I think it’s worth discussing. I’ll use the example of three areas most people are familiar with as it relates to their assets and the value they derive from each of them – Real Estate, Stocks, and Bonds.

Links mentioned in this episode: