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Old 04-06-2019, 08:27 PM
 
1,106 posts, read 479,343 times
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Quote:
Originally Posted by Taksan View Post
I didn’t... the $50m portfolio myth was nothing to do with me.... what I said was the most personal wealth was closely held and it is ... very few individuals would have a directly held $50m portfolio in fact I’d venture virtually nobody if correctly advised.The $50m portfolio is a hypothetical that doesn’t exist in meaningful numbers in the real world. But tens of thousands of families would have $50m+ net worth. My whole point is that this mythical $50m portfolio isn’t relevant to actual measures of private wealth verses income which it isn’t.
Quote:
Originally Posted by SuiteLiving View Post
Trying to follow this post, are you saying that wealthy people are putting their investment assets into closely held C corporations and then managing their income by what they take out of that closely held C corporation?
Quote:
Originally Posted by Taksan View Post
That’s one very basic method but there are others...


Your opinion of how a portfolio should be structured.

I’m glad you’re doing well in real estate, you’d starve as a tax advisor.
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Old 04-06-2019, 11:29 PM
 
Location: Naples FL
394 posts, read 74,484 times
Reputation: 535
Quote:
Originally Posted by SuiteLiving View Post
Quote:
Originally Posted by SuiteLiving View Post
Trying to follow this post, are you saying that wealthy people are putting their investment assets into closely held C corporations and then managing their income by what they take out of that closely held C corporation?
Quote:
Originally Posted by Taksan View Post
That’s one very basic method but there are others...


Your opinion of how a portfolio should be structured.

I’m glad you’re doing well in real estate, you’d starve as a tax advisor.

Did I bring up the $50mil portfolio? No I didn’t... I probably would starve as a tax advisor but I’d also starve as a stock trader .... I stick to what I know best, structuring portfolios of properties is definitely one of those things.
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Old 04-07-2019, 11:36 AM
 
112 posts, read 57,634 times
Reputation: 337
Good. They should be paying 100% of our taxes since they are thieves. I want a tax cut. I'm not rich. There should be a $25,000 tax exemption and it should be fica tax exempt as well. Stop taxing us poor people and tax the people who are looting our economy.
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Old 04-07-2019, 11:57 AM
 
7,489 posts, read 4,811,055 times
Reputation: 12935
Quote:
Originally Posted by Taksan View Post
Did I bring up the $50mil portfolio? No I didn’t... I probably would starve as a tax advisor but I’d also starve as a stock trader .... I stick to what I know best, structuring portfolios of properties is definitely one of those things.
I am the origin of the $50M rhetorical trope. It was aimed to be extravagant but not ridiculous. Let’s not forget, that a $5M portfolio is near the cutoff of the lower-end of the 1%, and that’s for a solitary individual. It’s presumably much higher for families.

There is evidently a widespread belief, that multiple millions are attained primarily by real-estate barons or business-owners. Maybe so. But consider the example of a well-compensated employee. This person goes to college on scholarship, graduating with top honors. She then gets into a top law school, graduates, and joins a white-show Wall Street law firm. This person eventually starts earning $300K, $400K, $600K/year salary – and I do mean salary, not stock options or company partnership. This persons is consummately frugal, plowing every saved dollar into the US stock market, over decades. At age 50, having worked for 25 years, our hero retires… with maybe not a $50M portfolio, but certainly a $5M one.

But… what about taxes? This person only owns stock… no house, no apartments, no commercial buildings, no farms, no oil fields, no forests, no mineral-rights. Even if she makes zero annual redemptions from her portfolio, instead eking-out a living doing odd cash-jobs in “retirement”, how would she avoid massive taxes on the dividends and capital gains (from turnover) in her portfolio?

See, the mistake made by the “FIRE” community’s principal advocates is that they equate spending with income. One has a certain capital accumulated, and retires. OK, great. Then, goes their reasoning, one withdraws what one needs to live, and accordingly pays taxes on it. Live frugally, and taxes are low. You might even qualify for Obamacare subsidies. But the reality is that the “income” is whatever the portfolio throws off annually, which might be many times larger than the investor-retiree’s annual personal spending. The IRS doesn’t care how much you spend. It cares how much your portfolio earns, that’s annually taxable.

Last edited by ohio_peasant; 04-07-2019 at 12:11 PM..
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Old 04-07-2019, 01:59 PM
 
Location: Naples FL
394 posts, read 74,484 times
Reputation: 535
Quote:
Originally Posted by ohio_peasant View Post
I am the origin of the $50M rhetorical trope. It was aimed to be extravagant but not ridiculous. Let’s not forget, that a $5M portfolio is near the cutoff of the lower-end of the 1%, and that’s for a solitary individual. It’s presumably much higher for families.

There is evidently a widespread belief, that multiple millions are attained primarily by real-estate barons or business-owners. Maybe so. But consider the example of a well-compensated employee. This person goes to college on scholarship, graduating with top honors. She then gets into a top law school, graduates, and joins a white-show Wall Street law firm. This person eventually starts earning $300K, $400K, $600K/year salary – and I do mean salary, not stock options or company partnership. This persons is consummately frugal, plowing every saved dollar into the US stock market, over decades. At age 50, having worked for 25 years, our hero retires… with maybe not a $50M portfolio, but certainly a $5M one.

But… what about taxes? This person only owns stock… no house, no apartments, no commercial buildings, no farms, no oil fields, no forests, no mineral-rights. Even if she makes zero annual redemptions from her portfolio, instead eking-out a living doing odd cash-jobs in “retirement”, how would she avoid massive taxes on the dividends and capital gains (from turnover) in her portfolio?

See, the mistake made by the “FIRE” community’s principal advocates is that they equate spending with income. One has a certain capital accumulated, and retires. OK, great. Then, goes their reasoning, one withdraws what one needs to live, and accordingly pays taxes on it. Live frugally, and taxes are low. You might even qualify for Obamacare subsidies. But the reality is that the “income” is whatever the portfolio throws off annually, which might be many times larger than the investor-retiree’s annual personal spending. The IRS doesn’t care how much you spend. It cares how much your portfolio earns, that’s annually taxable.
While it’s certainly true that business/owners and asset investors have far more options for effective tax planning then salaried employees who build substantial savings there are options that a tax professional could assist with. The simple choice of using a Roth rather then a traditional IRA can result in a huge after tax difference in the retirement phase.
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Old Today, 09:39 AM
 
7,668 posts, read 7,075,392 times
Reputation: 5933
Once people hit the 24 percent income tax bracket, the overall effective tax rate actually starts to fall.

Effective tax rates
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