Here’s how you build a portfolio that reduces taxes instead of creating them

The typical portfolio:

• Bonds → taxed as ordinary income
• Trading stocks → capital gains taxes
• Public REITs → ordinary income taxes
• Private credit → ordinary income taxes
• Hedge funds → ordinary + capital gains taxes

The tax-aware portfolio:

• Private real estate → no taxable income + passive losses that offset other passive income
• Tax-aware hedge funds → realize ordinary losses to reduce W-2 income
• Long/short SMAs → capture market exposure while realizing capital losses to offset gains
• Private municipal bonds → double-digit tax-free yields

And if you already have allocations to private equity or tax-inefficient hedge funds you love - hold them in your retirement accounts where taxes don’t matter.

This approach doesn’t just remove the drag of taxes - it turns your portfolio into a tax-reduction machine.

Imagine:

• Offsetting the gains from your private equity investments
• Reducing the income taxes you pay every year
• Keeping more of the value you created when selling your business