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When considering investing in tax free investment policies such as Private Placement Programs, the first thing to do is to be clear about the taxable-equivalent yield. The taxable-equivalent yield is the pre-tax yield required from any taxable investment policy. This figure is required to compare between the yield of a taxable investment and that of a tax free investment. Here is how it works. How to Calculate Taxable-Equivalent Yield To calculate the Taxable-Equivalent Yield, you need the following information: 1) Your state. 2) Your filing status (joint or single). 3) Your income range. This information is necessary when you want to obtain the prevailing federal and local tax rates for the state that you reside in. If in doubt, consult your tax advisor on your tax rate. With your tax rate, you may then apply the following formula: Tax-Free Yield / (100 - Your Tax Rate) = Taxable-Equivalent Yield For example, if your tax rate is 30%, and assuming that the tax free yield is 5%, then your taxable-Equivalent yield would be: 5 / (100 - 33) = 7.46% That means you would have to earn 7.46% from a taxable investment to match a hypothetical tax-free yield of 5%. So you now have some figures at your finger tips to help with your investment decisions. To gather more information to make right investment decisions ask experts at investment forums. Of course, the next thing to do is to ask yourself these questions: 1) What are your existing taxable investment options? And what is the expected yield? 2) What are the chances of your Private Placement Program matching or exceeding this yield? 3) Does it make sense for Private Placement Program investments in the current economic climate (in both the short, mid, and long term)? 4) As a high-net-worth individual, how can I benefit from Private Placement Programs? (There are substantial risk and tax management benefits.) 5) Can a Private Placement Program provide a more balanced investment portfolio? These are just some questions that all savvy investors should ask. Remember that the key benefit to Private Placement Investments is that it's highly customization. Chances are, if you are a high-net-worth individual (HNWI) with an existing sophisticated investment portfolio, a Private Placement Program will still be flexible enough to cater to your needs. Besides seeking professional advice from tax and investment advisors, you may also want to participate in investment forums. Often, you may be able to get a good feel of the market just be reading some forum posts. By participating actively in online communities, you will also be able to stay on top of the latest investment trends. It is not uncommon to learn about the newest investment products from forums, and how the market is responding to these products. Ultimately, your improved knowledge will help you make better investment decisions, and help you build a highly profitable investment portfolio. For USA stock market news, visit StockMarketsReview.com and register at stock discussion forum
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