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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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The Millionaire Mindset on Tax-Advantaged Investing

Mega millionaires are adjusting their portfolios in anticipation of tax increases. What’s the current millionaire mindset on minimizing taxes?

| BY Adriana Reyneri

Tax increases are on the way, according to the current millionaire mindset, and higher taxes call for tax-advantaged investment strategies.

Three-fourths of America’s richest investors are worried that their taxes are likely to go up in the current economic environment, according to a new Millionaire Corner study examining the attitudes and behaviors of investors with a net worth of $25 million or more.  What’s the millionaire mindset on reducing the impact of taxes on investment gains?

The majority of mega millionaires, generally savvy and active investors in their own right, are calling in the big guns. More than half (55 percent) are meeting with tax planners and tax attorneys to devise strategies to reduce the amount they pay in taxes. Close to 60 percent are revising their estate plans, a reflection of the millionaire mindset preoccupation with the financial well-being of future generations. Our research shows that most mega-millionaires worry about the legacy they will leave their children and grandchildren.

What other tax-advantaged strategies resonate with the millionaire mindset? Investors in the $25 million plus club say their plans include investing in tax-free bonds (60 percent) and increasing their charitable contributions (47 percent). A smaller share (28 percent) plan to purchase tax-advantaged life insurance and 24 percent are considering changing their legal residence to a state that does not impose income taxes.

Older investors are more likely to be restructuring their estates, while younger mega-millionaires are more likely to be purchasing life insurance and investing in tax-free bonds. Municipal bonds are one of several tax strategies favored by high net worth investors , who also show a preference for tax-sheltered retirement accounts, 529-college savings plans and annuities.

The millionaire mindset on with tax increases relates to widespread concern over the overall economic environment and prevailing pessimism over the U.S. economy. More than three-fourths indicate the economy has been a “major concern” over the past two years and only 38 percent believe the economy will improve in the next six months to a year. Given this less-than-optimistic millionaire mindset, it follows that America’s wealthiest individuals describe themselves as a largely moderate to conservative group of investors.