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In order to understand EXACTLY what’s going on, AND how some people are able to make a LOT of money, tax free…we need to talk about one of my ALL TIME FAVORITE investment accounts, and that would be: A Roth IRA, which stands for Individual Retirement Account.
You’re able to open up one of these accounts and deposit up to $6000 PER YEAR if you’re under the age of 50…and if you’re over 50, you can contribute $7000 per year, if you fall within the certain income brackets. The MASSIVE advantage to doing this is that ALL the money you deposit into this account will grow entirely tax free, after the age of 59.5.
In Peter Thiel’s case, you’re allowed to set up what’s called a SELF DIRECTED Roth IRA…which means, YOU get to invest your money however you want. In 1999, he opened up a Self Directed Roth IRA when he was 32 years old, making very little money, and starting a brand new, tiny company that you may have heard of…called PayPal. He then invested $2000 of his own money within that Roth IRA to buy PayPal shares, valued at 1/10th of 1 cent each…and that, in turn, gave him 1.7 MILLION SHARES to grow tax free within the account. Within 2 decades, that $2000 turned into $5 Billion.
HOWEVER…once news started getting out that people were able to accumulate HUNDREDS OF MILLIONS and BILLIONS of dollars tax free…that inevitably drew criticism from congress, who’s now moving to REMOVE certain aspects, and change the way the Roth IRA is structured.
The first would “limit the total amount of money that can be saved in tax-preferred retirement accounts,” meaning – once your account reaches beyond a certain point – anything ABOVE that amount would be taxed normally.
The second proposal would PROHIBIT the purchase of privately held companies within a Roth IRA, which would eliminate the strategy that Peter Thiel used while making BILLIONS OF DOLLARS.
In fact, congress is “considering reforms, such as banning the use of IRAs to purchase nonpublic investments,” calling it “a good starting point while protecting IRAs for every day Americans to save for their retirement.
Other members of congress say that this is the very spirit of the Roth IRA…and that “Earning a return is exactly the intention of making any investment, and if you can do this in a tax-free account like a Roth IRA, that’s even better. That’s just good tax planning and all perfectly legal.”
There’s no easy “solution” around this, but – from the way I see it – these accounts are far from the norm, very few of them exist – and I’m sure FAR MORE people have done something similar and LOST MONEY, than have blown up to the level where we read about them on the cover of Forbes.
So, I would say – we should do MORE to encourage people to save and invest for their retirement, there should be more education and awareness to incentivize people to take advantage of the resources available to them, and understand that Peter Thiel’s $5 billion account balance doesn’t take away from the average American saving for retirement.
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It's just basic market psychology, eventually there will have to be a run on pensions (when enough people realize they're going to get shafted and decide to try to get it out early with a penalty, which is still better than losing it all)…..SOOOO, they're getting ahead of the curve.
This video just helped me stack some C L O U T 😲😲😲
Fucking EVIL
The government is ruining everything. What’s the point of even trying anymore?
Yet congress cannot be punished for insider training and they continue to make millions while normal American keep being limited.
Congress is really evil but I stopped caring after I realized this wouldn't affect me cuz I ain't using the roth in that type of way
Tax-free. Don't forget to add that in too. Comments are part of the video right?
Headline is misleading. They want to limit investment in IRA to $10 million. With a max contribution of $5000 per year, ira should never reach $10 million.
We're all slaves
I really wanna see how these fuckers would handle living on a minimum wage with their housing and possessions stripped from them. Also more importantly how many of them play the rules to their hand.
But THEY get a pension?
The price you pay when you want no mean tweets.
since i don't know ira or have ira…so does it concern me if it tax so high ???
congress want tax the ira ….and i want that as well while you want us to ban you that what your thinking to me
Taxation is theft. When will people realize the government is all greedy liars and scumbags
If I win that Porsche, I'm calling Akira Nakai
They dont need to steal my money. They have a printing press.
Its not about taxes, its about keeping you from becoming a threat to them. Luckily for me, gold and silver isnt printable..
How do you do the Roth back door and the Mega Roth?
They should just put a cap on millionaires and billionaires investing in one of these.
I just opened my Roth IRA today 😭 I hope they don't do this. I come from the poverty line and learning about retirement and investing.
Is this the part where people water the liberty tree.
Biden voters where y'all at? Miss Trump yet?
You should check out a CVLI under north western mutual.
So…… do this for 800+ years until I get 5mil in? Seems legit.
Graham said tax-free 25 times
Skip to 7:22 if you already know what a ROTH IRA is and how it works and want to get to the point. (Watch from the beginning if you don't, it's a good summary.)
If they make us rely on the goverment we wont get rid of the government. Thats all it is. They wanna breastfeed the people. Otherwise, what is the point?
in australia, we have superannuation. its where when we get paid, the government sets aside money for our retirement
So boomers get SS, affordable housing/college, 401k, pension, Roth IRA. Average people these days can't even get a break or decent tax breaks.
The founding fathers SHOT THE BRITISH for far less than what these treasonous imbeciles are doing in Washington. At what point will people say we have had enough and show up in Washington? Throw out every single politician and start over. They clearly do not represent the people.
No surprise they try to keep us down. I hope this does not happen. There aren’t many choices for retirement as is. Pensions are gone for the most park most jobs do not match 401k. And interest from bank accounts give very little
That’s what happens when you have a bunch of radicals in office
So let me get this straight the “founding fathers “ dressed up as the very people they killed offed and moved to the far side of the continent just to dump tea in the water over a 4% tea tax and here we are years later getting taxed by 70% of everything we do? Am I missing something here?!
who are we really making money for?
Taxed on interest
Soooooo…… where does one find the actual text of these rules on what investments you can make in a self directed roth ira? I have wanted to do one for a while, but have not figured out where pr what the rules are yet. Also, are the rules different for self directed iras?
The baby hedgehog got me.
Nope. Wrong. Congress loves the tax dollars the Roth brings in, they are more likely to make every IRA a Roth to get the tax money up front
Nice clickbait
Pelosi talked about taxing IRAs years ago. Real world consequences are never considered. If you make someone's retirement investment worth less (or worthless) their response will often be to not retire. "Thought you were going to move into my job when I retired? Well, son, I decided to add two more years to your wait".
What’s the difference between a roth ira and something lime the S&P500? isn’t the sp better since you can just take it away whenever you want?
Edit: I’m 20 and dont want to wait till 65 to get my money back is the thing. Never invested, really new to this
0:01 "What's you up, Graham? It's guys here!" – love it.
I don't understand why people think that other people paying more in taxes are going to make their life better.
Defending Peter Thiel isn't a good position to take.
I was told by cs that I could not withdraw my contributions without a 10% tax unless under certain corcumstances