Best Practices for Investing and Minimizing Taxes When Possible

Investing wisely takes time, knowledge, and a detailed strategy in order to reap the best rewards for your efforts. Just like any major commitment in life, best practice investing requires putting a plan in place that includes setting goals, monitoring progress, and when necessary, making modifications. When you hear a seasoned investor boasting about successful results, just remember they most likely started with a few investments and grew them over time.

Here are a few tried and true “best practice” tips for investing wisely and minimizing related taxes along the way:

1. Timing

When it comes to investing, sooner is better. Starting a small investment for a child or teenager is a great way to introduce the concept of consistent investment. As an adult, you will need a more detailed plan to meet your goals. Younger adults may feel they can make more risky investments earlier in life. Older investors usually feel the need to invest in less risky options since recovery time from a loss decreases with advanced age. A knowledgeable financial advisor can help make the process smooth and successful. The main thing to remember is that the timing is always right for starting some kind of investment and a financial professional can help you find the right choices for your situation.

2. Creating a Plan

Before meeting with a financial advisor, investment counselor, or personal banker it is important to clarify your goals for the investment. Best practice suggests that you should consider your short-term, intermediate, and long-range goals; it
is a great idea to list them and take the notes with you to your first investment meeting. Different investment vehicles will serve a variety of needs; it will help the meeting go more smoothly if you are clear about what you are expecting out of your investment. Finding the right match with an advisor that you feel comfortable with may take a couple of tries. It is fine to shop around to be sure the person you choose to work with is someone you feel best understands your goals and has the knowledge to help you achieve results. As your investment grows, you may needto consult a CPA to be sure you are taking advantage of all possible tax breaks.

Most financial planners work closely with a CPA who has successfully passed the CPA exam. Sometimes students in the CPA Exam review process may offer their services which are then reviewed by a licensed CPA; if your investments are few and your questions are simple this may be one way to save a little money.

3. Be Consistent

Whether you choose to invest bi-weekly, monthly, or quarterly, the point is to be consistent. This is a great habit to build in children and teens, as well. Long term fiscal responsibility and long term financial planning is a learned behavior.
Today, investors of any age can take advantage of many affordable investment services that exist to make the process both understandable and rewarding. If your investment is growing regularly it is easier to maintain the commitment and feel great about your choice to invest in your future. In lean times, the investment amount may need to decrease, but the important thing is to keep making regular deposits into your investment accounts, even if they are small at first (or need to fluctuate over time).

4. Utilize Investments that can Minimize Tax considerations

Because older adults are more often in a lower tax bracket than younger adults, investing in a Roth IRA can allow you to put money away during your highest earning years and withdrawal it when you will owe less taxes on it. A skilled
investment planner can help you to avoid rookie mistakes like forgetting to subtract your reinvested dividends from your total taxes owed. For more seasoned investors whose investments in municipal bonds help build large ticket items like schools, there are several tax deductions available that a certified financial planner can help you sort through to get the most from your money.

5. Diversify with Top Choices

While the best investment options will vary based on the amount you have to invest, your age, your goals, and the advice of a seasoned financial professional, some of the most popular investment options include:

  • Roth IRA – tax structure advantages
  • Mutual Funds – packaged investment with varying degrees of risk
  • Individual Stocks – online or direct purchase plans are generally most affordable
  • Municipal Bond – low risk, long-term

A reputable financial advisor should be able to go over a comprehensive selection of investment products and help you choose a well-diversified set of investments that best fit your life situation and goals.


For many people who have never invested in anything but a savings account, meeting with a financial planner or hiring the right CPA may seem intimidating at first, especially if your budget is already stretched. Today, there are a wide range of investment options and financial professionals who can help you set goals and achieve progress along the way. Many credit unions have low-cost financial planners; another place to find a certified financial planner is through their professional website at: No matter how much you have or don’t have to invest, the important thing to remember is to just make a plan and get started – you just might be surprised how much your money will grow over time with a little careful attention and some skillful planning along the way.


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