As an investor, you must be particularly concerned about the effects of taxes, because taxes are one of the largest expenses you will have to pay when you invest. To invest in a tax-efficient manner, you must understand how taxes influence your returns (capital gains, dividends, and interest). You can use the following formula to calculate your after-tax return: 

Return _{after tax} = Return _{before tax} * (1 – marginal tax rate)

Your after-tax return is equal to your before-tax return multiplied by the result of one minus your marginal tax rate. Your marginal tax rate is the tax rate you pay on your last dollar of earnings (See the section on Tax Planning). Your marginal tax rate encompasses your federal, state, and local taxes. It is important for you to know your marginal tax rate. Remember that different types of earnings are taxed differently. Bond interest is taxed at your marginal tax rate (as high at 35 percent), stock dividends are taxed at 15 percent, and unrealized capital gains (the capital gains on an asset that has not been sold yet) are not taxed at all until the asset has been sold.  To understand the impact of taxes, you must calculate the estimated after-tax return of each asset you are considering. 

Remember that just because an asset has some tax advantages, it still may not be the best asset to invest in for future missionary expenses.  You want to invest in assets with the highest after-tax return.