|
|
Best no-income investments?
10-11-2014, 06:21 AM
|
#1
|
Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,083
|
Best no-income investments?
To keep the highest health subsidies one should have low income, this can be a problem if someone has a decent amount of money. What is the best method of showing no current income, yet getting a decent return? The idea is to get to 65 to reap the income then.
Cash in mattress (Not a great return)
Physical Gold (Risky)
I-Bonds (Limited to $10,000 a year, too small)
Non dividend stocks (BRK-B set and forget?)
Land (Expensive with taxes)
Bitcoin (Risky)
Art (Not liquid)
Deferred Annuity (Inflexible, risky)
Any other ideas?
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
10-11-2014, 06:30 AM
|
#2
|
Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
|
Marijuana business, where legal.
All transactions are cash, in those businesses you can't even open a bank account to put it in. You run cash.
I have a friend who invested in one, he gets a FedEx package every month with his return on investment.
I am not sure how you go about investing in one.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
|
|
|
10-11-2014, 08:10 AM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Jan 2010
Location: dubuque
Posts: 1,174
|
be interesting to know about marijuana investment. How are they taxed? is it legal?
|
|
|
10-11-2014, 08:14 AM
|
#4
|
gone traveling
Join Date: Sep 2013
Posts: 1,248
|
BRK-B looking at past. Who knows what future will bring.
|
|
|
10-11-2014, 08:51 AM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,372
|
Quote:
Originally Posted by eta2020
BRK-B looking at past. Who knows what future will bring.
|
I was just going to say that. We know Warren Buffet won't last forever but Apple seems to have done OK post- Steve Jobs. Our Berkshire-Hathaway just sits there and (mostly) appreciates. No dividends, and when we sell it will be at long-term capital gain rates. Bonus: we're 3 hours from Omaha and occasionally attend the Annual Meeting just for fun. Great way to get Justin Boots at a substantial discount!
|
|
|
10-11-2014, 09:09 AM
|
#6
|
gone traveling
Join Date: Sep 2013
Posts: 1,248
|
Well we know that something that emulates BRK will do great. So if you can find some stocks like Amex and Coke and Gillette. That is boring reliable stocks that grow 7-10 annually for decades then you will make killings....If you are patient.
Buy them and hold them like Buffet (forever). But this has two problems: it will generate dividend income and even bigger problem is to find Next Coke
|
|
|
10-11-2014, 09:15 AM
|
#7
|
Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
|
Don't many ETFs have the sweet advantage of being able to 'exchange' shares with large capital gains out to large investors who convert their ETF shares into the individual securities, thereby raising the effective cost basis of the ETF's shares, and greatly reducing any capital gain distributions?
Various Vanguard ETFs have yields that aren't enormous (maybe 1.8% or so). Most of those dividends are qualified, so you'll pay just 15% tax (20% if highest bracket) on a smallish yield, leaving most of your return hopefully in the form of capital gains at a later date.
Then there are MLPs - but each MLP is different, as some companies have different types of income that you share in each year on the K-1s, which would show some small partial taxable income (less than the distributions from an ETF).
__________________
Dryer sheets Schmyer sheets
|
|
|
10-12-2014, 11:41 AM
|
#8
|
Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
|
I'd try a total US or Global ETF/fund (itot is one) if you can deal with the dividends.
If not, try something like jke, jkh, and/or jkk, large, mid, and small cap growth ETF's. They have lower yields than value funds. They are about as tax efficient as you can get without getting fairly specialized or buying your own non-dividend growth stocks.
|
|
|
10-12-2014, 12:03 PM
|
#9
|
Thinks s/he gets paid by the post
Join Date: Jun 2010
Posts: 2,301
|
Quote:
Originally Posted by MooreBonds
Various Vanguard ETFs have yields that aren't enormous (maybe 1.8% or so). Most of those dividends are qualified, so you'll pay just 15% tax (20% if highest bracket) on a smallish yield, leaving most of your return hopefully in the form of capital gains at a later date.
|
Bogleheads wiki Tax-managed fund comparison - Bogleheads has a summary of various tax managed funds. They get down to about 1% dividend yield compared with 2% for S&P 500.
Personally I'd be very hesitant to do drastic shifts in my allocation to reduce dividends unless perhaps I was coming up against a very large subsidy cliff (i.e. I wouldn't do it for just a few k).
|
|
|
10-12-2014, 12:18 PM
|
#10
|
Thinks s/he gets paid by the post
Join Date: Dec 2005
Location: Lake Livingston, Tx
Posts: 4,204
|
So let me see if I have this right. You want to know the best way to invest your money so you can spend other peoples money until you reach 65 and then you will spend your money. Have I got that right?
__________________
If it is after 5:00 when I post I reserve the right to disavow anything I posted.
|
|
|
10-12-2014, 12:44 PM
|
#11
|
Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,083
|
I am taking advantage of the legal framework to maximize my results. No different than taking steps to minimize taxes or increase benefits where possible.
I look at it as recovery of stolen property, since they have been stealing (taxing) me for 30 years I am totally justified in getting whatever I can back from them.
|
|
|
10-12-2014, 03:02 PM
|
#12
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
|
If you have a small business legitimate busines expenses are deductible from your gross income, which may include items like your ISP cost, a home office, business phone, business travel and the unsubsidized portion of health insurance premiums. Many types of retirement contributions can reduce your MAGI and tax defer ongoing income.
Health savings accounts are deductible. Complete list here:
http://laborcenter.berkeley.edu/pdf/..._summary13.pdf
Most travel rewards are not considered taxable income.
Updating with sweat equity and flipping your personal residence usually is untaxed income, but it can be taxable. Tax implications here:
https://turbotax.intuit.com/tax-tool...tml#reportsale
I bonds are limited per unique tax id. Businesses can have their own tax numbers as can trusts, spouse if you are married, etc. plus 5K on tax returns.
|
|
|
10-12-2014, 04:19 PM
|
#13
|
Administrator
Join Date: Jul 2005
Location: N. Yorkshire
Posts: 34,124
|
Quote:
Originally Posted by MooreBonds
Various Vanguard ETFs have yields that aren't enormous (maybe 1.8% or so). Most of those dividends are qualified, so you'll pay just 15% tax (20% if highest bracket) on a smallish yield, leaving most of your return hopefully in the form of capital gains at a later date.
|
This is the tactic I am trying, but for a different reason. We are moving back to the UK in a couple of years and Vanguard ETF's are treated by HMRC as regular funds, unlike US mutual funds which are treated as PFIC's. Dividends from stock etf's and any capital gains from sales of etf's are each tax free to the tune of ~$17k each, then taxed at 15% above that. I'll still be paying 15% in the US, as US citizens have to file taxes regardless of where they live, but I'll be avoiding additional taxes due to owning PFIC's.
Consequently my regular MF's (ie Wellesley and Wellington) are in my ROTH and IRA since they receive the same treatment as in the US. (ie IRA's are tax deferred and ROTH's are tax free)
__________________
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
|
|
|
10-12-2014, 04:33 PM
|
#14
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,409
|
Quote:
Originally Posted by Rustic23
So let me see if I have this right. You want to know the best way to invest your money so you can spend other peoples money until you reach 65 and then you will spend your money. Have I got that right?
|
That's the name of the game, isn't it?
__________________
Living well is the best revenge!
Retired @ 52 in 2005
|
|
|
10-12-2014, 05:16 PM
|
#15
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
|
Quote:
Originally Posted by marko
That's the name of the game, isn't it?
|
The subsidies are technically tax credits. Why would it be okay to minimize taxes owed, but not maximize tax credits due? I have never seen a forum post here on how to maximize one's taxes owed, though I admit I don't read every thread, so maybe they are here and I just missed them.
|
|
|
10-12-2014, 06:01 PM
|
#16
|
Dryer sheet wannabe
Join Date: Oct 2014
Location: Puget Sound Area
Posts: 19
|
Quote:
Originally Posted by jim584672
To keep the highest health subsidies one should have low income, this can be a problem if someone has a decent amount of money. What is the best method of showing no current income, yet getting a decent return? The idea is to get to 65 to reap the income then.
Cash in mattress (Not a great return)
Physical Gold (Risky)
I-Bonds (Limited to $10,000 a year, too small)
Non dividend stocks (BRK-B set and forget?)
Land (Expensive with taxes)
Bitcoin (Risky)
Art (Not liquid)
Deferred Annuity (Inflexible, risky)
Any other ideas?
|
I'd say a small cap index tracking mutual fund or ETF would give you growth over the long term and - last I checked - small cap index tracking securities didn't pay dividends.
-Jon
|
|
|
10-12-2014, 06:19 PM
|
#17
|
Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
|
Quote:
Originally Posted by frank
be interesting to know about marijuana investment. How are they taxed? is it legal?
|
It is a legal Colorado dispensary, I am not sure about anything else...
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
|
|
|
10-12-2014, 09:58 PM
|
#18
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
|
Quote:
Originally Posted by Rustic23
So let me see if I have this right. You want to know the best way to invest your money so you can spend other peoples money until you reach 65 and then you will spend your money. Have I got that right?
|
Him along with a lot of other people. There has never been a group too dumb to jump through some hoops to be on the receiving end of meaningful transfer payments. It is socially and psychologically debilitating, but is gives more power to politicians who have never been shy about accruing power.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
|
|
|
10-12-2014, 10:19 PM
|
#19
|
Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: South central PA
Posts: 3,486
|
Quote:
Originally Posted by Senator
Marijuana business, where legal.
All transactions are cash, in those businesses you can't even open a bank account to put it in. You run cash.
I have a friend who invested in one, he gets a FedEx package every month with his return on investment.
I am not sure how you go about investing in one.
|
You have to report income and pay taxes, cash or no cash. This is tax evasion, not tax avoidance. The first is a crime, the second is perfectly legal. I hope you're kidding.
Sent from my iPhone using Early Retirement Forum
|
|
|
10-12-2014, 10:22 PM
|
#20
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
|
Quote:
Originally Posted by EastWest Gal
You have to report income and pay taxes, cash or no cash. This is tax evasion, not tax avoidance. The first is a crime, the second is perfectly legal. I hope you're kidding.
Sent from my iPhone using Early Retirement Forum
|
Maybe I misunderstood, but I thought the cash was explained by the fact that the dispensaries are having trouble opening bank accounts, not because they are trying to launder money?
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|