Beyond the Binder: Modernizing Your Wealth and Estate Strategy for the Digital Age

Assumes the following:

1. Initial investment of $1MM.
2. Farther’s tax alpha is calculated by adding cash equal to 1% of the previous month’s benchmark (non-tax-aware) portfolio value, while ensuring both tax-loss harvesting (TLH) and benchmark portfolios receive identical contributions.
3. Tax rates used are 40.8% for short-term gains (under one year) and 23.8% for long-term gains (over one year).
4. Harvested losses generate immediate tax credits that are reinvested.
5. The process involves harvesting losses, blocking wash-sale securities, selling overweight positions to restore portfolio balance, purchasing new positions, and repeating the cycle when those new positions later decline in value.
6. Calculations assume a 10 year time horizon and 8% average market return.
7. 2.55% additional return received from tax-loss-harvesting based on Farther Asset Management research. This assumes there will be portfolio fluctuations including losses within the portfolio (losses can cause the value of the portfolio to be less).
8. 0.27% additional return for tax-aware investing in tax-efficient accounts (when available) based on Farther Asset Management research. This also varies based on individual tax rates.
9. 0.46% additional return due to inclusion of alternative investments, based on Conversus Stepstone Private Markets research.
10. Additional 0.35% for regular rebalancing of the portfolio to achieve the desired allocation, based on Kitces Daily Review: “Finding The Optimal Rebalancing Frequency – Time Horizons Vs Tolerance Bands”.
11. The subtraction of a 0.10% portfolio management fee.
12. This does not include any transaction costs or advisory fee. A model fee should be used if applicable. The additional fee will cause the portfolio value to be lower.