How to Invest More Outside of Retirement Accounts, 529 Strategies, & Dividend Growth – Money Q&A

Transcript:

On this episode of money, Q and a, how to invest more outside of retirement accounts, five 29 strategies and dividend growth. Whoa, what's up

everybody. And welcome to the personal finance podcast. I'm your host, Andrew founder of master money. co and today on the personal finance podcast, we're going to be diving into another episode of money. Q and a answering your questions. Questions. If you guys have any questions, make sure you join the master money newsletter by going to master money.

co slash newsletter. And you can respond to any of our newsletter issues that come out every single week, and you may get your question answer on the show. And don't forget to follow us on. Spotify, Apple podcasts, YouTube, or whatever podcast player you love. Listen to this podcast on. And if you're getting value out of the show, share it with a family member or a friend, and consider leaving a five star rating and review on Apple podcasts, Spotify, or your favorite podcast player.

Now, today we're going to be diving into four of your questions on this money. Q and a. And the first one is going to be how to invest more outside of retirement accounts. This person is maxing out their retirement accounts. So they want to talk about how to invest more, which we will get into using the five 29 plan for studying abroad is going to be the second question.

The best accounting software for small business is the third one. And then lastly, how do dividend investors pay taxes? So this is going to be one where we are going to be talking through a bunch of different subjects. So if that's something you're into, Let's get into it. All right. So question number one is I am approaching 40 and I have done very well with traditional 401k Roth IRA route to retirement.

I have done very little investing outside of that and I'm wanting to get more aggressive in that aspect of wealth building. So this is an awesome question because I'm going to go through some of your options that you have available. Okay. And I actually am going to go through maybe in the order of operations that I am personally doing it.

And the reason why I'm doing that is just to kind of give you the argument of exactly how I think about this process. So here's how I do it is outside of those retirement accounts, the next place I go. Typically is I go to my taxable brokerage account. Now this is for a number of different reasons.

Number one is my taxable brokerage account is going to give me liquidity. Liquidity is incredibly important when it comes to wealth building. If you don't know what liquidity is, it's basically how fast you can liquidate your money. In order to turn it into cash. Okay. That's the simplest way to explain this and the speed at which you can get to liquidity is very, very important on your wealth building journey.

And this can be for a number of different reasons. Number one is you want to get there really quickly in case an emergency happens in life outside of your emergency fund, maybe some big giant emergency happens and you want to make sure that you can get to liquid cash in case your emergency fund is not large enough.

That's number one. Number two, though, is liquidity helps you have the ability to take advantage of opportunities that come up. So one example of this is we had an opportunity to come up to buy a certain business over the course of the last couple of years, and I save cash on hand typically on the side for buying businesses.

But if you don't have enough and you have the ability to liquidate a part of maybe one of your brokerage accounts or something like that, then having that liquidity available to take advantage of opportunity is very, very important. And then number three is you can also earmark some of this cash for liquidity to be able to go out there and Maybe you want to buy a business.

Maybe you want to buy real estate, those types of things. And so if you have a longer term play, that is another thing that you can do with these accounts. So I put money into the taxable brokerage account first, a for that liquidity B for flexibility. So when I start to reach retirement age, I want to have some additional flexibility.

I will have the ability to retire. You know, if I want to retire, I can go ahead and retire early, and I want to have that flexibility to have some money not locked into retirement accounts. Now, the tax that you pay inside of a brokerage account, as long as you have long term capital gains taxes, is going to be significantly lower than what you would pay on income tax.

Usually around, for most of you, it'd be around 15 percent. And so because of that, it's only on the gains of your money. As long as you hold those investments for one year or longer. So number two is I just want to have that flexibility in retirement. That's a huge, huge deal to me is to have liquidity and to have flexibility.

That's going to give you options. So I like to bridge into a taxable brokerage account and invest those dollars into low cost ETFs typically is where I put those dollars. So I like VOO. I like VTI. All of those are great. And there's some great other ETFs out there. We will have an episode actually.

coming out soon where we're going to be talking about some of our favorite index funds and ETFs upcoming for next year. It's doesn't change a lot for me usually, but uh, it's very simple the way I invest, but we will go through some of my top favorite ones coming up on a future episode. So make sure you're subscribed if you're not, uh, if you want to hear that episode.

So taxable brokerage account is where it kind of all starts because you can funnel cash in there. If an opportunity comes up, I can use that cash a to take advantage of some of these other opportunities that I'm going to talk about. And then B. If not, then I leave it in there for retirement and it's investing and growing and outpacing inflation and all those fun things that we talk about all the time and reasons why we want to invest.

The number two is the second bookmark arm used to be real estate investing. It used to actually be real estate investing, but now it is actually buying businesses. So right now, at the point in time that I am in life, I see more opportunity for me personally to invest in businesses while I still have energy and I'm driven and there's a lot of things that I want to do.

So I like purchasing businesses. I enjoy the process and it is something where I like to buy them and then grow them. And it is something I have the skill set that I've developed over time to do that may not be for everyone. But for me, my second option is going to be buying businesses. So. Originally, the way I learned this process was through reading books and kind of ignited the fire and the spark to learn more.

So buy them, build is a great starting point. And you can start to read a bunch of different things coming out. But outside of that, you can invest in a buying small businesses. You know, there's different areas that you can look at from laundromats all the way up to buying physical businesses to, you know, you could buy a florist, but there's all kinds of stuff to outfits you could buy.

Another option there is if you're interested in franchising. Now, franchising, I am less interested in only because I think that you have to own a couple of different franchises. Just to make some real, real cash. Uh, but for some people, franchising is a better route because it's a business done for you in a box that can help you through the bat process.

And if you have a couple of them, uh, you could do really well. For example, I recently spoke to a guy who owns a bunch of Jersey mics. And he does really well with those jersey mics and, but he has a bunch of different locations. I've spoken to people recently who own a crumble cookie franchise and they own one franchise and they're hoping to buy some more.

I've spoken to people all over the place who love the franchise model. And so that could be another option for you. If you're really looking to do wealth accelerators in this way, uh, and really trying to accelerate your path to wealth. But if you have a nine to five, if you're working a full time job and you're not an entrepreneur.

This can be a difficult endeavor to work through. I own businesses, so I have the flexibility to kind of make my own schedule. My schedule is jam packed every single day, but it is something where I have time to make that schedule, and I am in charge of that schedule. If you're not in charge of your schedule because you're working a nine to five, it's a little more difficult to do this model.

So That leads me to number three, which is real estate. And real estate is something that I absolutely love. I've invested in real estate. I started in 2017 was the first year I started to invest in real estate outside of obviously my personal residence or anything like that. And real estate is a fantastic wealth building vehicle.

You can do it and have a full time job. In fact, I read a book. I can't remember what the name of it is, but this police officer owned 82 different rental properties and still worked as a full time police officer. And he was talking about how he managed those rentals and in the entire process that he utilized.

So you can definitely. Invest in real estate and have a full nine to five jobs. Your job is actually going to dictate a lot of this. And when you invest in real estate, what is the number one thing we want to make sure that we do correctly is run the numbers correctly. And so we have a rental property calculator that you can go out there and buy.

I think it's 19 bucks or 17 bucks. Uh, that helps you run the numbers. It takes you through each of the steps that we talk about on this show to run the numbers. If you are ever interested in that, uh, please let me know. And it's usually in the too. So those are some of the ways that I would look to invest.

If you're looking for major wealth accelerators, it'd be a tax or brokerage account, investing in small business and investing in real estate. Now, outside of those different avenues, you could do things like diversified bond investments. If you want some lower growth stuff, uh, outside of your tax, If you do have a high deductible health plan, uh, you can do an HSA if you are not already doing that.

And then lastly is you can always just start to increase your savings rate and then put it towards different investments in that route. Now is crypto in my portfolio? Not really. I mean, I have a very small portion, uh, early on of, of Bitcoin and Ethereum. Bitcoin would probably be the only one that I'd even be interested in right now.

Uh, if you want to have 5 percent or less of your portfolio in crypto, you know, that's more power to you. That is something that you can definitely do. I would not have 50 percent of my net worth in crypto, but if you want a smaller portion of your net worth in crypto, that is completely fine to me. As long as it's Bitcoin or or one of the major ones, Bitcoin or Ethereum.

Preferably just, you know, keep it within Bitcoin. We at least know Bitcoin is something that has some value. And again, the reason why I don't invest a ton into it is it has no intrinsic value. It's similar to gold. It's worth whatever somebody else is willing to pay for it. It doesn't have a cashflow statement.

It doesn't have a balance sheet. But at the same time, I understand why crypto is valuable to a lot of people, uh, and it's something probably that's going to continue to grow over time. It's just not something I put a lot of my dollars into. I do get all our cost average into it slowly, but it's just something I don't put a lot of dollars into.

It's not a major part of my plan whatsoever right now. So Those are some other areas that you can look into, but really business something that I can control that I can touch real estate. Another thing that I can control a touch outside of those retirement accounts is going to be very big. Um, in addition to the taxable brokerage account, I'd like to beef up that taxable brokerage account as big as I can possibly get it.

I really, really think that is a great place to keep cash as well. So that's In any event, this is some great spots to put and park those money. And you can also do things like real estate notes and those types of things. But really, I like businesses. I like real estate. Those are my two favorite places to park that money.

Let me know if you have any other questions and congratulations on maxing these out. That is absolutely amazing that you are doing that. That means you are really accelerating your path to wealth. Uh, and I cannot wait to see what you do, especially That you're approaching 40 and you're knocking out those retirement accounts.

That's absolutely fantastic. All right. So the next question is hi, and thanks for your advice. I've listened to a few episodes and one of them was about the five 29 plans. You mentioned that the parent of the account could use the funds to go abroad and study if they sign up for a classic college, I looked at this information up and it looks like this isn't true.

I think it's important to correct that because I got excited when I heard about it. Please let me know if I'm wrong, though. I'd love to be wrong. Haha. Okay, so this is a great question. And this is something that they also clarified kind of what they meant by this. And I think their clarification is on the right track here, but you are wrong.

So you can actually Transfer unused funds from a 529 plan to yourself and use them for qualified education expenses. So this includes studying abroad as long as the institution you plan to attend is eligible. And so kind of what you clarified here is, hey, qualified expenses include tuitions and fees, books, supplies, equipment required for enrollment, computers, internet access, and related software, uh, room and board.

But only if the student is enrolled at least half time and up to the amount determined by the school. And then what are non qualified expenses? Non qualified expenses are transportation, travel related expenses, health insurance, lodging outside of the school's approved room and board costs, and entertainment.

So yes, what I assumed is that people would also assume That you have to use the 529 for the qualified expenses. And that's the reason why you can get that deduction. So if that was unclear to anybody listening to the show, you have to use the 529 plan funds. If you're going to study abroad for room and board, that is approved as an education expense.

So you can still do it for a room and board studying abroad. That's absolutely true. But it has to be room and board. That is part of those qualified education expenses. Now, this is not a business, so it should never be assumed that travel is included in something like a five 29 plan that would never be included, uh, in something like that.

So transportation or travel related expenses, health insurance would never be included. And I'm not sure why that was assumed. Lodging outside of the school's approved room and board would never be included in entertainment. Obviously would never be included. The government's not going to give you a tax breaks on entertainment.

The way to do this, though, is this is the cool thing, okay? And for those of you who didn't hear the episode, what we talk about here is if your child does not use their 529 plan, one of the creative options that I've heard people do is they take their 529 plan and they transfer it to their name. And I'll talk about the steps on how to do this in a second.

They transfer it to themselves. And then from there, They go and study abroad and take a few classes abroad, and they have free room and board on campus of those schools. And they are able to go and live abroad for a couple of months. And you can utilize that money in a creative way without incurring the penalty.

Or you could also just take the penalty that comes along with the 529 plan. And now you can roll about 35, 000 into a Roth IRA into your kid's name also. But that's If you wanted to transfer it into your name and you wanted to do some continuing education things, you could do it for all kinds of different types of education.

So it doesn't have to be studying abroad, but studying abroad is a cool way to be able to travel. You just got to get yourself there. And so to get yourself there for free, one of the ways to do that is to travel hack, which we have episodes on that. Uh, but outside of that, you can also just kind of pay for the flight.

Obviously you fly over for a thousand bucks to France. For example, you pay a thousand dollar ticket to fly over to France. And now you're there. You take the room and board at the school offers, which a lot of times they will have apartments, things like that. And you are in that location and you can pay for it through your 529 plan.

Now, the way that you transfer it to yourself is a you can change the beneficiary of a 529 plan to yourself or another family member. This can be done without taxes or penalties as long as the new beneficiary is a qualifying family member, which includes yourself. And then qualified expenses. So the 529 funds can be used for qualified educational expenses.

This means it's tuition, it's fees, it's books, it's room and board. If enrolled at least half time and even if studying abroad and then the international school must be eligible for federal student aid programs. That's a big key there. And then lastly, if you use it for non educational expenses, you're going to be subject to the income tax and a 10 percent penalty.

So you'll be taxed and you'll get the penalty, which can be something that you want to make sure that you watch out for. So people who do not want to get taxed on that, that still want to study abroad, you know, they take some classes abroad. And again, there are classes abroad that are a lot easier than other classes that are abroad.

So you can take classes abroad, live in one of the, you know, school approved apartments. And you can be traveling and, you know, learning some stuff at the same time. So people do that. It is an interesting way to use the 529 plan, especially if like your kids get scholarships, for example, and now you have all these 529 funds locked up.

You know, you and your spouse can go travel abroad, spend some time in different areas if you are retired. So it's a really cool, interesting, unique way to be able to use these funds. So I appreciate you sending this question again. Yes, to clarify, you are correct, but this would never be approved for anything.

You cannot use it for things like airfare, train tickets, that kind of stuff. You cannot use it for travel related expenses. You cannot use it for health insurance. You cannot use it for lodging outside the school's approved room and board costs, and you cannot use it for entertainment. So if that was a discrepancy for anybody else, you cannot use it for that.

But you can use it for again, Tuition and fees, books, supplies, and equipment required for enrollment, computers, internet access, you can use it for related software, and you can use it for room and board, but only if the student is enrolled at least half time and up to the amount determined by the school.

So, simple, you. Rules, they are rules that have to be followed in any education environment. And I think it is a really, really cool and interesting way to be able to study abroad. So awesome. Thank you for sending that in and helping us go through this. We could clarify it for everybody else if there was any questions there and appreciate the question.

Andrew, I love your show and thanks for the great content you put out there. I am regularly sharing episodes with my kids and friends. My question for you, I am acquiring a new business and recently sold one of 17 years. Absolutely awesome. Congratulations. I historically used the desktop version of QuickBooks, but now that they are pretty much forcing you to use the online version, which I dislike for a couple of reasons, I am hoping you might be able to suggest a different accounting software for a small business.

It's a simple retail service business with limited labor, no invoicing required. Or limited invoicing. I would love an interface with our bank and credit card and ideally our POS at some point and something that doesn't have a high ongoing fee. Any suggestions and thanks and keep up all the great work you are doing.

So, first of all, congratulations. Thank you for sharing the show. Congratulations on selling your business and acquiring another one. QuickBooks has made a lot of changes over the course of the last year. A lot of people who are used to the desktop version are definitely complaining that they are only going online.

I personally, uh, still use QuickBooks. So I use it for most of my businesses. And the reason for that is it's just easy, it's cheap, uh, and it's something that I'm just familiar with. Now, most of it, I've handed it off to my CPA as a recent, and they kind of handle most of those transactions for me. But at the same time, You know, there are some great options out there and some that I have been told are even better than QuickBooks, and I'm going to kind of run through some of those today and see what you like.

Now, when it comes to POS systems, one of our business spends a lot of money on our POS system and fees, and it is one of the most frustrating systems. Now, the ways to save on POS systems is one. You can find a local person that can probably save you some money. And if you don't have a lot of ingrained transactions, like into your website or things like that, this can be a great option for us.

It's much harder to change because we have so many different offerings in this specific business. I'm thinking about right now. We have so many different offerings that it's very difficult for us to change. But if yours is simple, like you're talking about here, You can find a P. O. S. System that could be cheaper.

I would just kind of price those out. We use Square, but there's a bunch of other ones out there that you can use that I think are a lot cheaper. I know Square is not the cheapest. That's for sure. But Square does make it easy to kind of go through the process and integrate with some of the other things that we need that kind of helps us through that process.

So accounting software wave accounting is one. So wave is only cloud based accounting software that offers a Definitely a simple interface. It is actually free to use, uh, and it has paid add ons like payroll, things like that. If you are looking for payroll and you can have bank and credit card integration, and it's got a pretty simple interface.

So that is a really good one. Now it has limited features. It doesn't have inventory management and it has limited integrations with POS systems. But if you're looking for the cheapest option, Wave is very cheap. Another one that's affordable is Zoho Books and Zoho Books is part of The Zoho suite of business apps, if you've ever seen those, they have a lower cost compared to QuickBooks.

And it does support bank integration, expense tracking, and user friendly interface with POS integration. So that is another one. I think it's 15 bucks a month starting off. And so it can be cheaper than QuickBooks is. Zero, which is moderate cost, X E R O. Zero is one that I know a lot of people love. It is also cloud based.

Um, And it has really great features that I know people love and P. O. S. Systems of payroll add ends are all on there too. There's one I've never really used that I've seen people recommend called manager dot I. O. That is one that does have a desktop version that might be appealing given your preference for desktop software.

It is simple to use, but it's about 39 bucks a month, but they do have a desktop version. So if you're looking for that, uh, manager. io is a great one. And then FreshBooks is one I know a lot of people love. And FreshBooks is more user friendly than QuickBooks by far, but it has less in depth functionality for complex accounting.

It sounds like you don't have complex accounting, but it's good for businesses that prioritize simplicity. FreshBooks start at 17 bucks a month. It is one I've heard some wonderful things about also, if you're trying to just simplify everything. I've heard some great, great things about FreshBooks have not used it personally, but those are like the five I would look into outside of QuickBooks.

Again, I use QuickBooks, you know, just because I'm familiar with it. I understand where it's going. I can produce the reports I need. I can do, um, corporate financials, those types of things. And so QuickBooks helps me with that process. But if you don't need all that stuff, if you don't need all the advanced payroll stuff, if you don't need all the extras, uh, Um, then go in and just grab one of these.

And I think they can help you kind of reduce some of those costs without any add ins. So I know there are a lot of experts out there that can also help you with this. Like if you go to upwork. com, if you want people to manage your books a little bit, or just help you with some of the transactions, you can find people on there for like 10 bucks an hour who will help manage your books.

And I know there are a lot of zero experts and fresh books experts out there. So those two, if you're looking for an expert to help you, cause QuickBooks has a million experts. Um, but those other two options do have. A lot of experts out there as well. So hopefully that helps. I think that there's a ton of great options out there in accounting is just going to continue to advance.

It may be something that I does some pretty cool stuff with which I'm interested to see. But right now we're still kind of having to do some manual work in accounting, which is just part of owning a small business, which is frustrating. It's probably my least favorite part of it. But at the same time, It is probably one of the most necessary parts as well.

And it keeps you on top of your book. So thank you so much for sending in the questions. Congratulations on your new business. Congratulations on selling your business. Uh, sounds like you are doing some really cool stuff and I appreciate you sharing the show and listening. Thank you so much. And if you have any other questions, please reach out.

All right. So this last question is brought to you by delete me. And if you don't know what delete me is, delete me is by far my favorite way to start your financial protection plan. And it is a service that helps remove your personal information from online data brokers. Now, if you don't know this already, online data brokers are selling your information.

And there's not a lot of laws or regulations around who they can sell this information to. And your information is out there on the internet for a lot of people to find freely. And, or they can also buy your information. If some of these data brokers have your information. And so this is a very frustrating process that a lot of people have to go through, because if you Google your name in quotations or your address in quotations or your phone number in quotations, you're going to see your information.

Every where have you ever tried to Google somebody and when you look them up all of a sudden you see them on random websites all over the place with pieces of their information. The reason for that is because they did not get their personal information removed from some of these data brokers. So it's very important to make sure that you do that and get your personal information removed.

So what delete me does is they go to these data brokers and they say, Hey, Can you please remove this person's personal information from your website and get this data removed from your lists and so they are legally required to if it's requested in the right way and delete me does that. So the first time I did this, I got my personal information removed from over 1000 websites.

It was like absolutely amazing how many websites had my personal information and this is so incredibly important, especially when there's a data breach and people get it. Pieces of your information. They can piece your entire picture together by just doing a quick Google search. So instead, don't give them the authority or the power to do that.

Have your personal information removed by going to join delete me dot com slash P. F. P. 20. That code will get you 20 percent off a subscription with delete me again. It is one of the best Subscriptions that you will pay for because it helps protect your personal information. So go to join, delete me. com slash PFP 20.

It is one of my favorite services over the course of the last couple of years that I have been utilizing. Now on this last question, Hey, Andrew, love your podcast. Spotify recommended it to me and I am very happy that it did. Well, thank that is absolutely amazing. And thank you so much for listening. I'm a relatively new investor and my investing style most closely resembles a dividend growth investor.

I've been wondering why the stock prices and returns look so different on the X date. Can you explain what happens, in general, to stock prices on and around the X dividend dates? Also, I have yet to find a comprehensive rundown on tax implications for taxable brokerage accounts, specifically regarding dividend inding them.

Can you explain what kind of dividend payments are best for retirement accounts and what kind of dividends are good to go in a taxable account? Thanks a lot. Alright, so this is gonna be a couple of parts here that we're gonna go through here and kind of explain all this stuff. So when it comes to stock prices and the X dividend date, so what happens on the X dividend date?

So the X dividend date is the cutoff day to be eligible to receive that dividend. It is the day that's cut off that you have to be invested in the stock to receive that dividend. If you own a stock before this date, you qualify for the upcoming dividend on the X dividend date. The stock price typically drops.

by the amount of the dividend. So this happens because the value of the dividend is essentially subtracted from the company's equity. So let's do an example of this because sometimes these are just easier to think through with an example. So let's say a stock is trading at 50 and announces a 2 dividend.

On the ex dividend date, the stock price might drop to 48 because the company is now worth 2 less after paying that dividend. Now, returns around the ex dividend date might seem off because part of your return is now coming from the dividend payout, which is the cash, obviously, rather than coming from the stock price.

You might see the price drop, but your total return includes the dividend itself. And the dividend and the company's price are interconnected, and they can move separately due to market factors, earning reports, or investor sentiment. So, stock prices and the ex dividend date, that's kind of how they work and operate.

If anybody listening has not seen how those operate. Now, next. Tax implications in taxable versus retirement accounts. So dividends are taxed differently depending on whether they are qualified and ordinary or non qualified dividends and whether they are in a taxable account and or a retirement account.

And we actually did an episode with Rachel Camp from Camp Wealth and she does some great details on this too if you want to go back and check out that episode. But here's the difference here. So we have qualified dividends. If you don't know what a qualified dividend is, these are taxed at a more favorable, long-term capital gains rate.

So 0%, 15% or 20% depending on your income level. And to qualify the dividends must come from US companies or qualified foreign companies. And you must hold a stock for a specific period, which is usually more than 60 days during 121 day period surrounding that X dividend date. Now, qualified dividends are ideal for taxable accounts like a brokerage account because they benefit from that lower capital gains tax rate.

Now, non qualified dividends, these are taxed at your ordinary income tax rate, which could be higher depending on your tax bracket. And typically, non qualified dividends are usually better for retirement accounts. So usually like ordinary dividends are better suited for things like your Roth IRA because your Roth IRA can grow tax free.

So I like to have these ordinary or non qualified dividends In something like a Roth IRA, if you can, this is where your income grows tax free and tax deferred if you're in a 401k. Now dividends in a taxable brokerage account, you're going to owe taxes on dividends each and every year, whether you reinvest them or not qualify dividends again, get the favorable tax treatment.

So prioritize high quality dividend paying stocks in taxable accounts to benefit from that lower tax rate. And then reinvesting dividends is still taxable event. So if you're thinking reinvesting dividends might save you on taxes in that year, that is still taxable. I would advise you to reinvest your dividends, uh, but it is still a taxable event to get a dividend.

And then again, dividends and retirement accounts are going to grow tax free. Now, Schedule K is another question that you had here, because at the end of the question you asked, What is a Schedule K tax form and are they worth the trouble? So typically, A Schedule K 1 tax form is gonna be something, uh, that you receive when you invest in partnerships.

So like I have partnerships that I'm invested in with businesses that I own. So everybody gets a Schedule K 1 during that partnership. But there are other ways that you can get this too, like with MLPs or Master Limited Partnerships, REITs. And real estate investment trust can give you schedule K ones and other business entity structures, if at all possible, I would try to avoid investments that give you schedule K ones only because it just complicates your tax situation.

Now, if you're investing in REITs, I understand why you would invest in REITs, and so that may be one reason to do it, but are they worth the trouble? They can be a big, big hassle in my opinion, because you have to report your share of the income on your taxes. Even if the partnership does not distribute any cash and they are notorious for arriving late, which means it's going to delay your tax returns in a lot of different situations.

So to answer all your questions, the ex dividend date, uh, stock prices usually drop by the dividend amount on the ex dividend date and the difference you see. Is the market adjusting for the upcoming payment? I would use qualified dividends in taxable accounts for lower tax rates and keep ordinary dividends in retirement accounts to avoid that yearly taxation and schedule K ones.

I would try to avoid him as much as possible only because they add complexity to your tax return. That probably is not necessary. So I hope this breakdown helps you that process again. One of my favorite dividend books that I have ever read, by the way, for a dividend growth investor is called the single best investment.

If you have not read that by Lowell Miller. Unbelievable book. It makes you want to go all in on dividend investing, uh, is a really, really fantastic book if you are a dividend investor. So make sure you check that out if you have not already. So thank you again for submitting the question. Absolutely amazing question.

And, uh, really, really appreciate you. And I want to thank everybody else who is listening to this podcast for investing in yourself. It's exactly what you're doing when you listen to the show is you are investing time and energy in yourself. Can I thank you guys enough for joining us today here on the personal finance podcast?

Don't forget to share this with a friend. Don't forget to subscribe to the show. Join us on YouTube, all the fun things. And thank you again. I appreciate you. I will see you on the next episode.