FINANCIaL
FIELd NOTES
How to Pay 0% Capital Gains Tax
When you sell an investment for a gain outside of a retirement account, you typically pay “capital gains tax.” For example, if you bought an index fund for $10,000 and sold it for $15,000, you would have to report the $5,000 gain as income on your tax return.
There are only 3 main federal tax brackets for capital gains. You are either taxed at 20%, 15%, or even 0%…
7 Strategies For Lowering Investment Taxes
A friend of mine was recently complaining to me about a tax bill coming their way from the sale of investments. I joked that I would gladly pay his tax bill if he gave me his investment gains…he declined.
Taxes are an inevitable part of investing but generally, it is a good problem to have since it means you made money. However, there are several strategies to consider to make sure you don’t pay more than your fair share to Uncle Sam.
Roth Conversions When The Market Is Down
When I evaluate Roth conversion plans, I typically wait until the end of the year to complete the conversions so I can ensure that income actually ended up being what was projected.
However, if there is volatility in the stock market, it can be a great benefit to convert while the market is down…
Mixing Investing With Entertainment Is A Bad Idea
I worry that the young adults who are dipping their toes into the investing world for the first time this year will associate investing with a gambling sort of rush.
But I also can understand where they’re coming from. It is exciting to see small investors make out like bandits in companies like GameStop, AMC, and others. But take caution – this has ended badly before…
Why Losing Feels Worse Than Gaining Feels Good
This idea that we feel losses more than we feel gains is commonly referred to as “loss aversion.” Renowned Psychology and Economist Daniel Kahneman says “losses loom larger than gains.”
Here are a few real-world examples…
Why Picking Stocks Is So Difficult
Very few businesses will survive over a lifetime and yet Warren Buffet says that “Benign neglect, bordering on sloth, remains the hallmark of our investment process.”
I wrote recently about how owners of Amazon had to experience a 90%+ decline in order to get the tremendous returns they did.
The only way I could have held a stock down 90% would have been to completely ignore it as Buffet advises. Otherwise, I’m sure I would have thought it was doomed to fail - as is the fate of so many companies.