Take a rish with Roth IRA or Personal Account

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TheQuestionGuy
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Joined: Thu Jun 30, 2016 6:36 pm

Take a rish with Roth IRA or Personal Account

Post by TheQuestionGuy » Wed Oct 10, 2018 5:13 pm

Going to take a small risk on a stock lets say invest only $3,000.

This amount is small enough to put in the Roth IRA and if does well it could result in lots of tax free money during retirement.
If it tanks there is nothing to show for it.

If the stock is purchased via the Personal Account and it tanks there is always a write-off which would be helpful.
If it does well, I will have to share the gains with Uncle Sam.

Any pros/cons for either?

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arcticpineapplecorp.
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Joined: Tue Mar 06, 2012 9:22 pm

Re: Take a rish with Roth IRA or Personal Account

Post by arcticpineapplecorp. » Wed Oct 10, 2018 6:52 pm

you left out another option. If it gains in a taxable (what you call "personal") account, you don't share the gains with Uncle Sam if you donate the appreciated stock.

That being said, it's not wise to gamble. That's what you'd be doing buying an individual stock. If you own the entire market instead...that's investing.

Are you familiar with the Hendrik Bessembinder research? If not, you should probably read it. Your chances of finding the needle in the haystack are not as good as the gains you'd get by owning the entire haystack instead.

https://www.nytimes.com/2017/05/12/your ... -wont.html

And the only reason I clicked on this post is because I wanted to know what a "rish" is.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

livesoft
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Re: Take a rish with Roth IRA or Personal Account

Post by livesoft » Wed Oct 10, 2018 7:03 pm

Don't lose money in your Roth where it won't be tax deductible. Lose money in your taxable account where you can get other taxpayers to help pay for your loss.
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Ron Scott
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Re: Take a rish with Roth IRA or Personal Account

Post by Ron Scott » Wed Oct 10, 2018 7:04 pm

I can agree with arcticpineapplecorp but I'll add that not everything you do with stocks needs to be considered an investment.

The original conception, many years before mutual funds, was that bonds were investments while stocks were speculation. With that view in mind there is no reason not to speculate a little with play money.

And I can agree with livesoft on taxes...but another placement option? You could put it in taxable and never sell it. When your heirs inherit it they get a step up in basis, leaving the taxman to mutter through gritted teeth.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

TravelforFun
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Joined: Tue Dec 04, 2012 11:05 pm

Re: Take a rish with Roth IRA or Personal Account

Post by TravelforFun » Wed Oct 10, 2018 7:08 pm

If you don't touch your your Roth, invest it in 100% stock mutual fund. The reason is the market will rise overtime and your account will gain, and the gain will be tax free.

TravelforFun

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arcticpineapplecorp.
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Joined: Tue Mar 06, 2012 9:22 pm

Re: Take a rish with Roth IRA or Personal Account

Post by arcticpineapplecorp. » Wed Oct 10, 2018 8:12 pm

Warren Buffett says:

"Rule #1: Don't lose money"
"Rule #2: Don't forget rule #1"
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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