$27,400 of taxes on more than $1.5 million of investment gains. Here's how:

Assume you invested $10 million in an S&P 500 index fund at the beginning of 2025.

Total return: ~15.44%
Total gain: ~$1.54 million
Dividend yield: ~1.15%
Dividends received: ~$115,000

At the top federal tax rate, qualified dividends are generally taxed at 23.8% (including NIIT).

$115,000 × 23.8% = ~$27,400 of federal tax.

That's it!

Over 92% of your return came from appreciation that wasn't taxable unless you chose to sell.

I spend so much time trying to push tax-aware portfolio design to it’s upper bound, but every once in a while, it's worth stepping back and appreciating just how tax-efficient (and simple) a broad-market index ETF can be.

If you need liquidity, you may not even need to sell. You could extract that $1.5m gain tax-free by borrowing against it with something like a box spread loan.

If you are someone that values simplicity, it’s pretty hard to beat this set up.