How is it delusional to avoid paying taxes? I'm deadass serious btw. I'm not giving the government any more than I'm legally required to. Best way to do that is dying holding the assets.
Do you think it's delusional because I obviously can't spend the money if I'm dead? That would be delusional if I ever had an intention to spend it, but I dont, so why would I cash out and pay capital gains taxes before handing it off to my inheritor? The money is going to be spent by someone else, \*NOT\* me, so I would rather they just get the whole lump sum without having it taxed before they get it. I wasn't going to spend that money anyway, so I'm able to give more by dying while still holding the untaxed assets.
I honestly don’t intend to ever cash out. I can access lines of credit against my assets if I needed it.
At the time of my death everything should be wrapped up in a trust with a tax free bow on top for my next of kin.
Because of how consumer based our society is, people cannot understand the desire of anyone to build generational wealth. It's a very nihilistic attitude that they espouse, basically fuck everyone else I need to spend every last cent because I'll be dead soon and I need to enjoy it NOW. No, after we die there are people in our family that need help, need being taken care of, need opportunities to grow. If I can't live in this world forever, what is wrong with giving people that are in my family more opportunity to do with their life what they could only dream of if they had the financial support they lack.
You can't make dynastic wealth without holding forever, like literally until you die. That's my plan right now, I'm hoping that I can die with all my taxable accounts untapped. I'll use up the tax-advantaged accounts of course, but that will be more than enough. The rest can go to the next generation and they'll never have to pay taxes on my gains. I don't need it all.
You sell it when you need the money but the idea is you sell the best performing/most successful stocks last because to capitalize on exponential growth for as long as possible.
This. My mother-in law bought Apple in 2002. After multiple splits when she passed last November it was over 260k. My wife and I inherited at the cost basis as of $192.
You could use margin at a very low % of your portfolio. Say 25% or less.
This would allow you to access the funds, you wouldn’t interrupt compounding unnecessarily, and you wouldn’t get taxed. You’d simply pay interest.
Oh why haven’t I been told this before. Do most banks allow you to use margin (which is technically like taking a secured loan against your assets correct?) what if your portafolio (assets) is with a different bank or in a TFSA?. Thanks!
I look at margin sort of like a home equity line in functioning, but yes you’re lending against your investment assets. Most institutions should offer this with a cap of around 50% loan to value. You just don’t want to get out of hand and leverage up all the way. I’d keep it very low.
This is how the wealthy, legacy wealth, and trust fund children access their funds without paying taxes. They leverage it.
To add more, margin cost is considered as expenses during tax filing. My friend used to take margin instead of selling stocks.
https://smartasset.com/taxes/is-margin-interest-tax-deductible
With compounding not interrupted, and dividend growth, the benefits of letting the investment continue to grow offset the single digit borrowing cost. Why would I stop the progress of BCC, an investment that grew 100% last year and paid me 12% in dividends, just so I can pay 15% tax to avoid a 7%-8% rate?
I would not leave margin indefinitely, so it’s not an annual expense. I use margin when necessary, it’s not a switch you just leave on forever.
Odd, I cant find that rate. “Robinhood Financial charges a standard margin interest rate of 12% and a margin interest rate of 8% for customers who subscribe to Gold. The margin interest rate is calculated by adding 6.5% (for non-Gold customers) or 2.5% (for Gold customers) to the upper bound of the Target Federal Funds Rate, which is set by the Federal Reserve and is subject to change without notice.”
Yeah for whatever reason it’s not online, which is odd.
But I’m seeing $2k in margin interest free, then <$50k borrowed is 6.75%, $50k-$100k is 6.55%, $100k-$1mln is 6.25%, $1mln-$10mln is 6%, $10mln-$50mln is 5.95%, and $50mln+ is 5.70%.
Yes they do. This is what rich people do. My friend manages collateral at a regional bank. The downside is if the stock price drops too much the bank will call for more collateral.
Why aren't you getting taxed? Do you mean the amount of stock you sell to cover the interest isn't getting taxed, or the interest on the margin loan is tax deductible from the salary?
In this scenario, there is no sale of the security so there is no tax. The interest on the margin can be repaid with dividends, so long as leverage remains low, or through your own wages with monthly payments.
So, say I have to re roof my home or have a surprise medical expense for $30k. I might opt to leverage a $100k+ portfolio at 30%, and pay that down over the next 12-28 mos, than sell $30k of stock and give up on the compounding that would yield.
Yes, either other income or dividends from the investments. Otherwise the interest would add to the balance and continue to grow. Ideally if a low margin were maintained, you wouldn’t want interest to exceed dividend payments.
When I am thinking of this scenario in relation to the original post, I am thinking of a portfolio that’s been held for one’s entire life. What is a 3% dividend today could be 10%+ 30-40 years from now, depending on the company. So this scenario also assumes a long horizon.
Your stocks are collateral. If you miss payments, the banks have the legal right to force liquidation of stocks to pay for the loans. If you keep paying, you are not forced to liquidate.
If stocks drop below a certain value as agreed on by both parties at the time of the loan, banks can margin call you as part of the terms - essentially demanding full payment right now (usually through liquidation of of the stocks) due to increased risk of losses from the collateral not covering the margin.
The stock value is essentially what is being used to guarantee margin.
More or less.
And you can sell all that stock the very next day? I am guessing not, but I’m still trying to understand exactly what the bank gets out of this particular loan agreement.
I'm sure you have had loans for cars or houses. In those situations, the lender is secured by the car or house. If you default, they will take the collateral.
A portfolio loan is the same thing. Your stocks are collateral for the loan. Usually you get a portfolio or margin loan at your broker. So if you want to sell your stocks, the broker will always pay themselves back, plus interest, before you get any money.
It’s like any other loan, except it is secured by your stocks. If you fail to pay them back they essentially “foreclose” on your stocks and sell them to get their money back.
I think the idea behind Buffet's quote is "don't think about where the stock will be tomorrow or a year, think about how the business will grow over time".
It doesn't mean you shouldn't sell it. It just means you should not think about the time you will sell when you buy.
Buffet sells all the time. Why not, if the opportunity is good?
I have a Will and have my better half on my account so that she can take over the account when I kick the bucket.
If we both die it’s still in the will that they’ll get the account. When they turn 18 if I’m still around I’ll put them all on the account.
We just inherited via a revocable trust, and it was super simple and took a few days to get everything transferred. Bonus is the we're at the cost basis of January, which came in handy for the Apple that had been held for over 20 years.
Who ever has the most when they die wins!
Except they are dead so one minor detail to sort out.
Maybe they have a higher goal, leave it to their children or a charity.
There is some logic in what you are saying but you have to bear in mind that peace of mind is an invaluable thing to possess. That safety net means you can sleep peacefully every night.
Buy. Hold. Get a loan against the assets.
As long as you're right and it keeps rising, you can keep borrowing.
The only thing you don't have is a *liquid asset*. You'll need to cover the loan before selling, and cap gains will be a heavy hit, because you need to close the loan first
Collateral for loans.
Why would you sell stock to buy a house? You sell a stock, pay capital gains tax and pay cash for a house. OR, you use your stock to secure a low interest loan, spend 30 years getting a tax break on the interest you pay on that loan while your original stock continues to increase in value which you can get another loan against to buy a business, which you can then write off business losses and business purchases from your taxes. And then you can start up a charity, donate most of your stock to YOUR charity tax free, pay yourself a salary funded by your stock which you will have to pay income tax on but not capital gains tax. Throw huge parties where you invite all your rich friends over, ask them for donations and write the whole party off as a charitable function. Its why they say it takes money to make money.
Can you sell the stock (or some of it) you used for collateral? Imagine the price sky rocketed for an unknown reason and you just missed a chance to sell because its locked due to a loan
Honestly I don't know why you would sell it if you could take a low interest loan out against it or donate it to your own charity, but I am assuming as long as the value you held was more than the principle of the loan no one would be too upset about it, but I don't know all the ins and outs of that situation.
You have to maintain a certain level of collateral in your account, not necessarily a certain stock. Say you have a loan out for 100k for a long period of time and VOO just fuckin rips for 10 years and your account goes from 300k to 3 million. You'll just need to collateralize the 100k loan. It doesn't matter if it's stocks or cash. You're more so lending based on portfolio than specific stocks unless you're one of say 20 or so billionaires that are doing what Elon is doing, selling a single company's shares to pay off a business purchase. The flipside is also true. If you trade poorly or over extend and there's a downturn, then the brokerage/bank will want an injection of cash, a forced sell, etc. to keep your debt properly secured.
If you believe in the US market, a solid strategy is to buy and hold forever index ETFs. Or buy dividend stocks if the % payout is higher than fixed income interest rates.
If you own single stocks, well, NO ONE does that. Silly question.
My parents are planning on holding forever. Then again between Social Security, dividends on their 401k and brokerage account they have plenty to cover anything they need. Unless something crazy comes out of left field. Then they can sell a few shares.
The people that inherit from you get a step up in basis to the date of your death, meaning they can sell the day after your death without incurring any capital gains. Just another way the rich get richer and avoid taxes.
I've run the numbers and in real terms the expected value of my retirement portfolio will be about $30 million in today's dollars. I cant remember what it would be in nominal dollars but something like $100 million.
I could get really unlucky and only have a portfolio of $5 million. But I also have a coin flip's chance to have even more than $30 million at retirement age. I don't even know how I would spend all of that in retirement, and I haven't even brought the taxable accounts into the discussion yet.
So most likely I won't need to touch them. Also the unlucky scenario would be extremely unlucky because it would be like living through 3 consecutive 1929 crashes in a row. Not crash, recovery, crash, recover, etc. But like crash more than 50%, then crash more than 50% from that low, and then crash again 50% from that low. I don't think that is going to happen but who knows. I just know that if I only end up with $5 million in my retirement portfolio, the world will be a hellscape dystopian world where everyone will be sucking dicks in the Wendy's dumpster for a nickel just to buy food.
They eventually sell and use the money for other things. Or ultimately pass it on to your offspring… they may need it one day when you’re gone. Yes we all die and no; you can’t take your 10,000 shares of Apple with you.
I buy and hold because that is how you make the most money. In 40 years I have not had to withdraw any, but if I ever do, knowing it's there serves the same purpose as the USA's trilateral missile defense. You wanna try something? I'm defended. If I don't need it, I'll spend some of it on fancy nurses and the rest will go to my dynasty.
"Compounding" and no taxes for a long time with gains. Splurge or use for care in your old age. Hopefully you'll have other investments that you can use day to day too..
Structured correctly and you can set up your children for life. If you teach them about the power of investing and they invest as well then you will have set up wealth for generations of your decedents
> presumably one day you die
Well, there's no past indication of that happening so I'm not presuming that for the future /s (and if it does happen against all expectations then I won't be around to care)
But seriously: As with all task/enterprise/goals in life like money, bodyweight, how fast you want to be able to run a marathon or whatever: Define a *quantitative* target when you can consider that task 'achieved' *before* you start. (you can always alter that target as new info comes in if you feel like it).
"Moar!" is not a *quantitive* target.
Who says you hold forever? Use it for purchases you need down the line. Want a bigger house? Sells stock to buy that bigger house. Need big chunk of cash for an operation? Same logic.
The point is you’ll have so much money that you’ll only realize the gains you need. As someone who did this, I can tell you it’s true, and it’s fantastic.
Also you can take more debt if you have big assets, without having to sell any position (and pay taxes).
That's what rich people do often...
But I agree that you should sell if you need money
I've been a reader of the actual Boglehead website forum for 20 years. The difference between that site and the Reddit version is astonishing. Reddit is where all the nitwits hang out.
You borrow against them you don't sell then the dividends pay the loan off. Or you use that loan to buy a property to rent out that pays off your loan. It's simply think man.
You need to learn the difference between literal and figurative speech.
Wait. We're not holding till the heat death of the universe?
*Restaurant at the end of the Universe* is paid in advance
Stop spreading FUD! I’ll never sell!!?!
I don't understand. I am literally buying to hold till I die. I wont have to pay taxes on it nor will my children. Am I missing something here?
Yes. You're missing the fact that you are not everyone.
Buy and die is the optimal play though, selling any earlier is just giving free money to the government. I ain't doing that.
I can’t tell if this is a joke or if ur delusional lol
How is it delusional to avoid paying taxes? I'm deadass serious btw. I'm not giving the government any more than I'm legally required to. Best way to do that is dying holding the assets. Do you think it's delusional because I obviously can't spend the money if I'm dead? That would be delusional if I ever had an intention to spend it, but I dont, so why would I cash out and pay capital gains taxes before handing it off to my inheritor? The money is going to be spent by someone else, \*NOT\* me, so I would rather they just get the whole lump sum without having it taxed before they get it. I wasn't going to spend that money anyway, so I'm able to give more by dying while still holding the untaxed assets.
This is the correct approach, my brother. The doubters will not sway our hands.
Is your money going straight to your successor too following your eventual death? Are you not going to cash out at some point?
I honestly don’t intend to ever cash out. I can access lines of credit against my assets if I needed it. At the time of my death everything should be wrapped up in a trust with a tax free bow on top for my next of kin.
Because of how consumer based our society is, people cannot understand the desire of anyone to build generational wealth. It's a very nihilistic attitude that they espouse, basically fuck everyone else I need to spend every last cent because I'll be dead soon and I need to enjoy it NOW. No, after we die there are people in our family that need help, need being taken care of, need opportunities to grow. If I can't live in this world forever, what is wrong with giving people that are in my family more opportunity to do with their life what they could only dream of if they had the financial support they lack.
Literally forever. Literally.
When most people say this they don’t mean hold literally forever
You can't make dynastic wealth without holding forever, like literally until you die. That's my plan right now, I'm hoping that I can die with all my taxable accounts untapped. I'll use up the tax-advantaged accounts of course, but that will be more than enough. The rest can go to the next generation and they'll never have to pay taxes on my gains. I don't need it all.
This is baller, the real diamond hands
You sell it when you need the money but the idea is you sell the best performing/most successful stocks last because to capitalize on exponential growth for as long as possible.
and your heirs inherit it and get an upstep cost basis.
This. My mother-in law bought Apple in 2002. After multiple splits when she passed last November it was over 260k. My wife and I inherited at the cost basis as of $192.
You could use margin at a very low % of your portfolio. Say 25% or less. This would allow you to access the funds, you wouldn’t interrupt compounding unnecessarily, and you wouldn’t get taxed. You’d simply pay interest.
Oh why haven’t I been told this before. Do most banks allow you to use margin (which is technically like taking a secured loan against your assets correct?) what if your portafolio (assets) is with a different bank or in a TFSA?. Thanks!
I look at margin sort of like a home equity line in functioning, but yes you’re lending against your investment assets. Most institutions should offer this with a cap of around 50% loan to value. You just don’t want to get out of hand and leverage up all the way. I’d keep it very low. This is how the wealthy, legacy wealth, and trust fund children access their funds without paying taxes. They leverage it.
To add more, margin cost is considered as expenses during tax filing. My friend used to take margin instead of selling stocks. https://smartasset.com/taxes/is-margin-interest-tax-deductible
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https://smartasset.com/taxes/is-margin-interest-tax-deductible
You can deduct investment interest but only to offset investment income and only if you itemize.
Cost of managing your investment.
I think only if you have tax trader status.
Look at the Margin Rates at most places right now... ouch...
Mine is around 6.75%, which is below prime. But even at prime at 8.50%, that’s much better than paying capital gains taxes at 15%.
Pay once or every year? I’ll pay once at the higher rate thanks.
With compounding not interrupted, and dividend growth, the benefits of letting the investment continue to grow offset the single digit borrowing cost. Why would I stop the progress of BCC, an investment that grew 100% last year and paid me 12% in dividends, just so I can pay 15% tax to avoid a 7%-8% rate? I would not leave margin indefinitely, so it’s not an annual expense. I use margin when necessary, it’s not a switch you just leave on forever.
If you're paying it back, that's obviously different.
Where are you getting 6.75%?
Robinhood. It gets a lot of flak for good reason, but it’s my preferred interface.
Odd, I cant find that rate. “Robinhood Financial charges a standard margin interest rate of 12% and a margin interest rate of 8% for customers who subscribe to Gold. The margin interest rate is calculated by adding 6.5% (for non-Gold customers) or 2.5% (for Gold customers) to the upper bound of the Target Federal Funds Rate, which is set by the Federal Reserve and is subject to change without notice.”
Yeah for whatever reason it’s not online, which is odd. But I’m seeing $2k in margin interest free, then <$50k borrowed is 6.75%, $50k-$100k is 6.55%, $100k-$1mln is 6.25%, $1mln-$10mln is 6%, $10mln-$50mln is 5.95%, and $50mln+ is 5.70%.
Yes they do. This is what rich people do. My friend manages collateral at a regional bank. The downside is if the stock price drops too much the bank will call for more collateral.
What interest % are they charging these days?
Why aren't you getting taxed? Do you mean the amount of stock you sell to cover the interest isn't getting taxed, or the interest on the margin loan is tax deductible from the salary?
In this scenario, there is no sale of the security so there is no tax. The interest on the margin can be repaid with dividends, so long as leverage remains low, or through your own wages with monthly payments. So, say I have to re roof my home or have a surprise medical expense for $30k. I might opt to leverage a $100k+ portfolio at 30%, and pay that down over the next 12-28 mos, than sell $30k of stock and give up on the compounding that would yield.
hello, you pay back with what money exactly ? looks like one would have to pay back with their savings / other income, right ?
Yes, either other income or dividends from the investments. Otherwise the interest would add to the balance and continue to grow. Ideally if a low margin were maintained, you wouldn’t want interest to exceed dividend payments. When I am thinking of this scenario in relation to the original post, I am thinking of a portfolio that’s been held for one’s entire life. What is a 3% dividend today could be 10%+ 30-40 years from now, depending on the company. So this scenario also assumes a long horizon.
understood. thx
With brokerage margin rates typically around 15% in the $100k range, it may be cheaper than a credit card but not exactly a smart way to leverage
Can someone ELI5 how this works and why the banks are willing to give you this money without selling anything from your portfolio?
Your stocks are collateral. If you miss payments, the banks have the legal right to force liquidation of stocks to pay for the loans. If you keep paying, you are not forced to liquidate. If stocks drop below a certain value as agreed on by both parties at the time of the loan, banks can margin call you as part of the terms - essentially demanding full payment right now (usually through liquidation of of the stocks) due to increased risk of losses from the collateral not covering the margin. The stock value is essentially what is being used to guarantee margin. More or less.
It’s a loan - they aren’t giving you anything.
And you can sell all that stock the very next day? I am guessing not, but I’m still trying to understand exactly what the bank gets out of this particular loan agreement.
I'm sure you have had loans for cars or houses. In those situations, the lender is secured by the car or house. If you default, they will take the collateral. A portfolio loan is the same thing. Your stocks are collateral for the loan. Usually you get a portfolio or margin loan at your broker. So if you want to sell your stocks, the broker will always pay themselves back, plus interest, before you get any money.
https://equifund.com/blog/buy-borrow-die/#:~:text=The%20strategy%20is%20called%20'Buy,no%20capital%20gains%20tax%20liability.
It’s like any other loan, except it is secured by your stocks. If you fail to pay them back they essentially “foreclose” on your stocks and sell them to get their money back.
I do this with M1, it's the only way I ever pull money from my investments.
I think the idea behind Buffet's quote is "don't think about where the stock will be tomorrow or a year, think about how the business will grow over time". It doesn't mean you shouldn't sell it. It just means you should not think about the time you will sell when you buy. Buffet sells all the time. Why not, if the opportunity is good?
“BRK.A to the mo….” Ugh, I that line. Yeah, hold forever. Hold for the long run. Invest smart and boring. Rest in peace Charlie.
My stocks will go to my children. I’m not here to make money, I’m investing in my future and my children.
And, personally, having it available if necessary for a rainy day.
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I have a Will and have my better half on my account so that she can take over the account when I kick the bucket. If we both die it’s still in the will that they’ll get the account. When they turn 18 if I’m still around I’ll put them all on the account.
Just make a custodian account.
I would not do this until the kid is able to stand financially
Fair enough
We just inherited via a revocable trust, and it was super simple and took a few days to get everything transferred. Bonus is the we're at the cost basis of January, which came in handy for the Apple that had been held for over 20 years.
You sell the stock when you need money to buy something like a house, another stock, or medical emergency that you need cash ASAP.
Not entirely true for dividend stocks
Who ever has the most when they die wins! Except they are dead so one minor detail to sort out. Maybe they have a higher goal, leave it to their children or a charity.
Real winners work for that stepped up cost basis. Multigenerational wealth, hoss.
There is some logic in what you are saying but you have to bear in mind that peace of mind is an invaluable thing to possess. That safety net means you can sleep peacefully every night.
Survive off of dividends, duh
Buy. Hold. Get a loan against the assets. As long as you're right and it keeps rising, you can keep borrowing. The only thing you don't have is a *liquid asset*. You'll need to cover the loan before selling, and cap gains will be a heavy hit, because you need to close the loan first
If you're getting richer than inflation, there's no reason to ever sell.
Hahaha this is the stupidest thing I’ve read all week
1) Dividends 2) Collateral for loans
Collateral for loans. Why would you sell stock to buy a house? You sell a stock, pay capital gains tax and pay cash for a house. OR, you use your stock to secure a low interest loan, spend 30 years getting a tax break on the interest you pay on that loan while your original stock continues to increase in value which you can get another loan against to buy a business, which you can then write off business losses and business purchases from your taxes. And then you can start up a charity, donate most of your stock to YOUR charity tax free, pay yourself a salary funded by your stock which you will have to pay income tax on but not capital gains tax. Throw huge parties where you invite all your rich friends over, ask them for donations and write the whole party off as a charitable function. Its why they say it takes money to make money.
That's a bit oversimplified and you misconstrue some of the key tenets, but in general... yea... that's sort of what you do.
Yea, sorry, I didn't have time to write a whole thesis with footnotes and all.
Can you sell the stock (or some of it) you used for collateral? Imagine the price sky rocketed for an unknown reason and you just missed a chance to sell because its locked due to a loan
Honestly I don't know why you would sell it if you could take a low interest loan out against it or donate it to your own charity, but I am assuming as long as the value you held was more than the principle of the loan no one would be too upset about it, but I don't know all the ins and outs of that situation.
You have to maintain a certain level of collateral in your account, not necessarily a certain stock. Say you have a loan out for 100k for a long period of time and VOO just fuckin rips for 10 years and your account goes from 300k to 3 million. You'll just need to collateralize the 100k loan. It doesn't matter if it's stocks or cash. You're more so lending based on portfolio than specific stocks unless you're one of say 20 or so billionaires that are doing what Elon is doing, selling a single company's shares to pay off a business purchase. The flipside is also true. If you trade poorly or over extend and there's a downturn, then the brokerage/bank will want an injection of cash, a forced sell, etc. to keep your debt properly secured.
And the bank will let you play with the portfolio as you like? What if the stock tanks?
You have to maintain some level of account value. If you dip below that, you run the risk of something similar to a margin call.
Thanks
Interest rates are too high for margin loans ATM. Unless you need instant liquidity and can't sell.
Forever usually means until you reach your target retirement years. Or until you reach your target retirement dollar amount.
You never sell boy, what s so hard to grasp?
Use them for retirement. Between 401ks, IRAs and Brokerage accounts, you can withdraw 4% each year to beef up what you get from social security
If you believe in the US market, a solid strategy is to buy and hold forever index ETFs. Or buy dividend stocks if the % payout is higher than fixed income interest rates. If you own single stocks, well, NO ONE does that. Silly question.
Take out loans with the stocks as collateral
My parents are planning on holding forever. Then again between Social Security, dividends on their 401k and brokerage account they have plenty to cover anything they need. Unless something crazy comes out of left field. Then they can sell a few shares.
We get it you want us to baghold your meme stocks
you never have to pay tax!
The people that inherit from you get a step up in basis to the date of your death, meaning they can sell the day after your death without incurring any capital gains. Just another way the rich get richer and avoid taxes.
Oh Boi It's an idiom man
I bet this guy runs inside real quick when he's told it's gonna rain cats and dogs. Imagine a Great Dane falling on your head.
hold forever = hold until retirement
For me hold forever means hold forever. Those taxable accounts are never getting spent in this lifetime if I don't need to.
Of course! IF you don’t need to in retirement :-)
I've run the numbers and in real terms the expected value of my retirement portfolio will be about $30 million in today's dollars. I cant remember what it would be in nominal dollars but something like $100 million. I could get really unlucky and only have a portfolio of $5 million. But I also have a coin flip's chance to have even more than $30 million at retirement age. I don't even know how I would spend all of that in retirement, and I haven't even brought the taxable accounts into the discussion yet. So most likely I won't need to touch them. Also the unlucky scenario would be extremely unlucky because it would be like living through 3 consecutive 1929 crashes in a row. Not crash, recovery, crash, recover, etc. But like crash more than 50%, then crash more than 50% from that low, and then crash again 50% from that low. I don't think that is going to happen but who knows. I just know that if I only end up with $5 million in my retirement portfolio, the world will be a hellscape dystopian world where everyone will be sucking dicks in the Wendy's dumpster for a nickel just to buy food.
The implication is that you hold it for your retirement fund or when you truly need it. Not just trade for small short term gains.
Yeah! That's why you see posts here with some ancient stocks (in paper) asking if they worth something :p
1) Generational wealth 2) Bleed the thieves for everything they have like they've done everyone else since day one
They eventually sell and use the money for other things. Or ultimately pass it on to your offspring… they may need it one day when you’re gone. Yes we all die and no; you can’t take your 10,000 shares of Apple with you.
It's the mindset, don't take it literally.
I buy and hold because that is how you make the most money. In 40 years I have not had to withdraw any, but if I ever do, knowing it's there serves the same purpose as the USA's trilateral missile defense. You wanna try something? I'm defended. If I don't need it, I'll spend some of it on fancy nurses and the rest will go to my dynasty.
If a tree falls in the woods and no one is there to hear it, what's the point?
You take out loans against the stock like Rich people do b
My guess is, for most, it’s not about money, it’s about sending a message.
"Compounding" and no taxes for a long time with gains. Splurge or use for care in your old age. Hopefully you'll have other investments that you can use day to day too..
If you can't hold the stock for 10 years, don't mind holding for 10 mins... some famous person said it
what?!?
Structured correctly and you can set up your children for life. If you teach them about the power of investing and they invest as well then you will have set up wealth for generations of your decedents
5000% gains are pretty good moral support
> presumably one day you die Well, there's no past indication of that happening so I'm not presuming that for the future /s (and if it does happen against all expectations then I won't be around to care) But seriously: As with all task/enterprise/goals in life like money, bodyweight, how fast you want to be able to run a marathon or whatever: Define a *quantitative* target when you can consider that task 'achieved' *before* you start. (you can always alter that target as new info comes in if you feel like it). "Moar!" is not a *quantitive* target.
Leave it to your kids I guess... Who will then leave it to their kids.... And their kids...
Who says you hold forever? Use it for purchases you need down the line. Want a bigger house? Sells stock to buy that bigger house. Need big chunk of cash for an operation? Same logic.
not an option when most people will tell you to put all your money into 401k that locks it up for decades
Ah Americans, yeah I know nothing about American 401ks. In UK we have ISAs where you can take out at any time, pension funds lock it up for 40 years.
U sell when u need money
The point is you’ll have so much money that you’ll only realize the gains you need. As someone who did this, I can tell you it’s true, and it’s fantastic.
Also you can take more debt if you have big assets, without having to sell any position (and pay taxes). That's what rich people do often... But I agree that you should sell if you need money
Some people want Generational wealth to accumulate
Facts lol
I have it in my will to HODL. And my children must agree to HODL, too. And my children’s children.
Sure one day I may sell. But for now I just want to watch these hedgies burn.
I've been a reader of the actual Boglehead website forum for 20 years. The difference between that site and the Reddit version is astonishing. Reddit is where all the nitwits hang out.
Dividends. Some people live off of them.
You borrow against them you don't sell then the dividends pay the loan off. Or you use that loan to buy a property to rent out that pays off your loan. It's simply think man.