The Money with Katie Show Investing *Outside* Your Retirement Accounts
25 snips
Aug 30, 2023 Explore the benefits of taxable investing, including favorable tax treatment for capital gains. Discover the significance of taxable brokerage accounts for high earners and the tax breaks from the IRS. Learn about the tax implications of reinvesting earnings and a personal Robinhood horror story. Understand investing rules and tax implications, including taxes on dividends and interest. Consider different options for investing outside of retirement accounts, such as Betterment, Vanguard, and M1 Finance.
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Segment Brokerage Accounts by Goal
- Maintain separate brokerage accounts for different mid-term goals to tailor asset allocation by timeline.
- Opt for conservative allocations for nearer goals and aggressive ones for long-term objectives.
2021 Meme Stock Tax Nightmare
- Many novice investors in 2021 realized big short-term gains but faced huge unexpected tax bills in 2022.
- The IRS requires taxes be paid on gains regardless of subsequent market losses or reinvestments.
Margin Trading Horror Story
- A Robinhood user exploited margin bugs for high leverage and lost $50,000, leading to $75,000 debt collection demands.
- Ignoring debts can result in court action, highlighting risks of margin trading and app issues.