<h1>3 Investments to Never Keep in a Taxable Brokerage Account</h1>
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<h2>1. Covered Call Funds</h2>
<p>If you think that annual <strong>12% return</strong> is sustainable, you might want to look up <strong>net asset value erosion</strong> and learn that most of that return is actually your own money. Not to mention, if you do get <strong>12%</strong>, it's taxed.</p>

<h2>2. REITs (Real Estate Investment Trusts)</h2>
<p>These are required to pay out <strong>90%</strong> of net earnings. If I wanted to invest that money on my own, I wouldn't have given it to somebody to invest for me. I don't want it back, and I definitely don't want it taxed in my 20s.</p>

<h2>3. Dividend Funds</h2>
<p>Dividend funds are only amazing if you can reinvest the dividends or if you need the cash flow. But if it's in a taxable account and you don't need the cash flow (and you're in your 20s), even if reinvested, those dividends are taxed annually. Goodbye advantage!</p>

<h2>Conclusion</h2>
<p>So in my 20s, in a taxable account, there is no better wealth-building tool than a low-cost tax-efficient index fund or ETF. If any of this is helpful, tune into my new podcast, <strong>Your Money Guide on the Side</strong>, by clicking the link in my bio.</p>