This investor is leaving $37m on the table

The “plan” (if you can call it that) looked like this:

• 90% equity portfolio with active management and high turnover
• Taxable Roth conversions totaling $375k last year alone, with zero offsets
• Private equity and real estate accessed through a direct‑to‑consumer website

Here’s what I recommended instead:

• Without tax‑aware management, a high‑turnover equity strategy is a recipe for underperformance – often 1–2% per year quietly lost to taxes and friction.
• Use a tax‑aware long/short equity approach to improve both pre‑tax and after‑tax returns – money you actually keep.
• Diversify risk by adding tax‑aware hedge funds with no equity beta, so not everything depends on the same market outcome.
• Pair Roth conversions with ordinary income deductions so conversions are tax‑shielded.
• Never do private investing on your own through a website that doesn’t require an advisor. That’s usually a fundraising channel for managers who can’t access institutional capital – and they’re betting you won’t know the difference.
• In private markets, fee‑obsession is the wrong hill to die on. You want durable, institutional‑grade managers built to compound capital over decades.

If all of these changes together can lift your after‑tax compounding by just 2% per year, the difference is enormous.

This person is 57, and their #1 goal is to leave as much as possible to kids and grandkids.

Assume they get 30 years to compound a $5M portfolio:

• At 8%, it grows to about $50.3M
• At 10%, it grows to about $87.3M

That’s roughly $37M of additional legacy from a “small” 2% improvement in after‑tax return.

We can’t control actual returns, but we can control how diversified we are and how tax‑efficiently we structure the portfolio.