Oops, I didn't think there was a 'penalty' for withdrawing money from an IRA. I thought that you just paid the regular tax rate on the money that you withdraw. I would gladly defer my income tax ( and my spending money) for several years if it meant building my account. Am I wrong?
The point of my thought is - in the early stages of your trading career, the tax bite would prevent you from building your account at any decent APR that would allow you to quit the day job.
You see, I thought if you could just leave your money in there, and be patient, without paying any income taxes or capital gains taxes or whatever, it would grow more quickly to a point where you didn't care if you were paying taxes or not. Granted, the account would need to be pretty frickin' big, but what's the rush? Nobody ever got rich in a day, give it 5-8 years and you should get there.
Example- if you were good - I'm not, YET !! - and you had built your IRA to 500k and could generate 50% a year from that - or 250k- withdraw say, 150k a year, pay your tax, end up with 100k to live on , and build up your account by 100k a year to account for inflation, bad years, etc. Does that work? Granted, not very sophisticated, but as the account amount goes up, and your experience grows you could withdraw more and more and care even less about the tax paid.
Maybe I'm missing something here.
Steve
The point of my thought is - in the early stages of your trading career, the tax bite would prevent you from building your account at any decent APR that would allow you to quit the day job.
You see, I thought if you could just leave your money in there, and be patient, without paying any income taxes or capital gains taxes or whatever, it would grow more quickly to a point where you didn't care if you were paying taxes or not. Granted, the account would need to be pretty frickin' big, but what's the rush? Nobody ever got rich in a day, give it 5-8 years and you should get there.
Example- if you were good - I'm not, YET !! - and you had built your IRA to 500k and could generate 50% a year from that - or 250k- withdraw say, 150k a year, pay your tax, end up with 100k to live on , and build up your account by 100k a year to account for inflation, bad years, etc. Does that work? Granted, not very sophisticated, but as the account amount goes up, and your experience grows you could withdraw more and more and care even less about the tax paid.
Maybe I'm missing something here.
Steve
