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it would not get special capital gains rates . it is in an ira and gets taxed at regular rates. if it is done outside the ira it does not qualify for low or no special tax rates as it is considered a collectable.
now that we are ready to retire i see the importance of organizing things for the lowest or no taxes. being able to sell equities and pay zero taxes from a taxable account or ira is a great thing.
the first 22k in ira money can have zero tax and the first 42k runs about 1800 bucks in taxes.
that leaves room for selling stocks at zero capital gain taxes from the taxable account. as much as 73k in income and about 1800 bucks in taxes.
playing around with gold as your main investment and not just a small piece makes little financial sense.
I think it is a horrible idea. Gold and other precious metals rise and fall in value based on speculation. They are nothing at all like a stock in a company, which rises or falls based on profitability. There are a limited number of custodians who will allow you to buy physical gold, and the custodial fees are quite high. You have to be very careful about taking physical possession of the gold. If I am not mistaken, there are a limited number of gold coins which are OK to hold yourself, but bullion etc. must only be handled by the custodian. Prohibited IRA transactions have very serious consequences, such as losing "IRA" status.
But all of that aside, is your friend even able to roll his 401k money into an IRA? If he is still working for the company, the plan must allow for in-service rollovers. Some plans do, but most do not. He would have to wait until he is no longer an employee of the company.
This one of the dumbest ideas ever right along cashing in and wasting a 401k. At least in the latter you waste it on yourself rather than on other people's fees. You might as well by snake oil.
I think it is a horrible idea. Gold and other precious metals rise and fall in value based on speculation. They are nothing at all like a stock in a company, which rises or falls based on profitability. There are a limited number of custodians who will allow you to buy physical gold, and the custodial fees are quite high. You have to be very careful about taking physical possession of the gold. If I am not mistaken, there are a limited number of gold coins which are OK to hold yourself, but bullion etc. must only be handled by the custodian. Prohibited IRA transactions have very serious consequences, such as losing "IRA" status.
But all of that aside, is your friend even able to roll his 401k money into an IRA? If he is still working for the company, the plan must allow for in-service rollovers. Some plans do, but most do not. He would have to wait until he is no longer an employee of the company.
actually stocks trade on greed , fear and perception of the future of the company, that is why earnings are kept secreat except for some guidance as they call it . the here and now is already known so any investment you make will be based on the above going forward.
they are exctly the same thing commodities trade on . greed , fear and the perception of the future of the commodity.
if the perception of the future was one of high or hyper inflation then commodities would be a better choice. but that is not even on the radar yet so the perception of it happening is quite low.
while most of us like stocks as investments many will not invest in anything they can't pee on. but the things we can pee on seem to need higher inflation to do well.
Last edited by mathjak107; 03-23-2015 at 04:18 PM..
A little simpler way of converting 401k money to gold though than cashing it out. But the fees on it are probably more than cashing it out and buying yourself
that is why earnings are kept secreat except for some guidance as they call it . the here and now is already known so any investment you make will be based on the above going forward.
I'm confused. Are earnings not included in the here and now? All publicly traded companies disclose their earnings periodically, as far as I know.
I think it is a horrible idea. Gold and other precious metals rise and fall in value based on speculation. They are nothing at all like a stock in a company, which rises or falls based on profitability. .
You missed one important determinant of stock price: market expectation. Given the same profitability of a corporation, its stock price can fluctuate based on P/E multiple which is kind of a random number influenced by expectation about the stock market, or as you call it, speculation.
to move a stock up more than it is the moment you buy it , is based on fear , greed and perception of what is down the road for the stock.
the stocks movement 8s based on predicting next quarters earnings.which are kept secreat.
It is not a secret if nobody knows it.
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