Avoid Tax Hits, Grow Portfolio: Wealth Experts' Advice

0:00It's April 28th, Durham News Today starts now, AI-powered and ready. Selling investments to cover big expenses like a car or college tuition might seem smart, but Wells Fargo wealth experts say it hits your wallet. Twice. First, you pay capital gains taxes on profits, which can run from zero to 20% plus extra for high earners. Second, that money stops growing in your portfolio, missing out on compound returns around 10% a year from something like the S&P 500. Think about pulling $100,000 today. Taxes alone could eat up nearly $24,000, and over 10 years, that cash could have grown to over $259,000. Dollars. Repeated sales make it worse, shrinking your portfolio's base and slowing recovery, especially of market's dip. Wells Fargo pushes securities base borrowing instead. You keep your stocks, bonds, or funds as collateral for a line of credit, borrowing up to 50-95%

1:01of their value. Your investments keep earning dividends and growth potential while you pay lower interest rates than credit cards with no set of fees or credit. Report hits. But it's not risk-free. Market drops can trigger margin calls, forcing sales at bad times and those same tax hits. Rising rates high costs too, and you can't pick which assets get sold. Plus, rules ban using the cash to buy more securities. Bottom line. If you got idle cash sitting around or hate dead, just pay straight up. Either way, chat with the financial advisor and tax pro-first to weigh your goals against taxes, growth, and risks before hitting sell.