@sad I mean the short term loan cost $16 so it wasn’t exactly painful. Merely pointing out another way to look at using a taxable account and another way to access your money without having a large portion sitting in cash or cash equivalent.
@takeonme If you hold US stocks long-term and your income isn’t too high then your taxes could be nearly zero or zero. Qualified dividends and long term capital gains have quite low tax rates.
@oceanskk Okay, yeah, I'm well above that. I do see though that the taxes would still be lower than regular income on long-term gains regardless. I do need to figure out what makes a dividend "qualified" or not.
@takeonme Taxable investments make sense when, assuming all other things equal, the alternative is investment returns are less than or equal to the original principle. In other words, I'd rather make $100 on an investment and taxed $99 than make $0 on an investment and taxed $0. Net $1 vs. net $0.
@missmama I get what you’re saying in theory, but what does this look like in practice? Presumably, I’d be investing the same thing, just deciding between a tax advantaged account versus not.
@takeonme Tax deferred not tax free investment. Most people do not realize after retirement the 401K, 529 etc you have to cash out at advanced age. You got to pay tax after you are gone or your benificiaries will.
Real estate is also tax deferred until one needs to sell last property. Often more costly.
@takeonme Any money taken out of IRA/401K is considered income. Stocks sold in post tax brokerage can show up as short or long term capital gains. Dividends can be regular or qualified. Muni's and some types of stocks are tax advantaged. They all get treated slightly differently tax wise ... some better and some worse.
@takeonme If you get stock bonuses from your employer or are enrolled in the company’s ESPP, you will need a taxable brokerage.
I sell a lot of my company stock on a regular basis, so I just buy ETFs with the money I get by selling.
Even if you don’t get stock bonuses, a taxable brokerage might be a good account to have for stuff that you might need after 5 years, but before retirement.
@takeonme If you plan on using any significant chunk of money before age 59.5 for a down payment or otherwise (most people do), taxable brokerage account makes sense.
