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  #11  
Old 12-03-2005, 11:33 PM
Scotty O Scotty O is offline
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Default Re: IRA Help for a Professional Poker Player

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What about indivial 401k's?

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I believe this is only open to Companies with a certain amount of employees. I believe the SEP-IRA is other alternative.

I put together a little spreadsheet to show the difference between retiring ages and APR you could get from the market. The spreadsheet assumes Iterest paid yearly with an annual deposit if 10k. You can see the big diffence in 20, 30 and 40 years out of the retirement.

Scotty O
IRA Table
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  #12  
Old 12-03-2005, 11:43 PM
TheMetetron TheMetetron is offline
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Default Re: IRA Help for a Professional Poker Player

[ QUOTE ]
[ QUOTE ]
What about indivial 401k's?

[/ QUOTE ]

I believe this is only open to Companies with a certain amount of employees. I believe the SEP-IRA is other alternative.

[/ QUOTE ]

Indivual 401k's are open to companies with no employees other than the owner's spouse. You can either be incorporated or a sole proprietorship (which I am).

Seems that I would qualify and it's another option to explore. Finances are hard [img]/images/graemlins/frown.gif[/img]
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  #13  
Old 12-04-2005, 01:38 AM
Shoe Shoe is offline
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Default Re: IRA Help for a Professional Poker Player

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In taxable investment accounts you have to pay the taxes every year.

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Is this true for stocks? It was my understanding that If you buy stocks, you will only have to pay capital gains once you sell the stock (but any dividends would be taxable that year), or do you actually have to pay taxes on the amount your stocks increase year over year?

I don't have any yet bet have been looking into start buying stocks once I get my Roth maxed.
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  #14  
Old 12-04-2005, 03:58 AM
Scotty O Scotty O is offline
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Default Re: IRA Help for a Professional Poker Player

[ QUOTE ]
[ QUOTE ]
In taxable investment accounts you have to pay the taxes every year.

[/ QUOTE ]

Is this true for stocks? It was my understanding that If you buy stocks, you will only have to pay capital gains once you sell the stock (but any dividends would be taxable that year), or do you actually have to pay taxes on the amount your stocks increase year over year?

I don't have any yet bet have been looking into start buying stocks once I get my Roth maxed.

[/ QUOTE ]

In a non-qualified account (cash, non-retirement) you are correct about both Gains and dividens. In a qualified account (Brokerage IRA, etc.) you can sell and buy without any consequences (except for fees for the trade)

Scotty
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  #15  
Old 12-04-2005, 09:42 AM
Degen Degen is offline
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Default Re: IRA Help for a Professional Poker Player

your bankroll is also an asset, are you already counting this? if so, you need to learn to live below your means a little...
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  #16  
Old 12-04-2005, 11:35 AM
TheMetetron TheMetetron is offline
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Default Re: IRA Help for a Professional Poker Player

[ QUOTE ]
your bankroll is also an asset, are you already counting this? if so, you need to learn to live below your means a little...

[/ QUOTE ]

I'm 21 and worked for near minimum wage until about March of this year when I went pro. From march to about June, I was a low limit donk. From July to November I made $120,000.

Out of that, I've saved $48,000 for taxes and have another $40,000 in my bankroll/savings. Did you really want me to live on less than $32,000? I had to buy a new car, move into a new place, furnish it, etc during the time as well. I don't think I've done so bad though I do admittedly travel too much. But I wouldn't have it any other way.
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  #17  
Old 12-04-2005, 01:38 PM
DesertCat DesertCat is offline
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Default Re: IRA Help for a Professional Poker Player

[ QUOTE ]

Is this true for stocks? It was my understanding that If you buy stocks, you will only have to pay capital gains once you sell the stock (but any dividends would be taxable that year),

[/ QUOTE ]

This is true, but the problem is most people turn over (sell stocks in) their portfolio too much. If you can hold for a year, you benefit from very low long term capital gains. But even if your holding period is 1 year + 1 day, you essentially are taking an annual 15% + state tax haircut on your gains. That's close to 20% in Arizona. If you hold for two years, you give up the same percentage (and pay close to the same total tax), but the extra year of compounding slightly increases your return. It's still close to a 20% haircut in the short run, but lessens over time.

And if your holding period is less than 1 year, you are paying your total income tax rate (state + fed) which is likely 30% or more.

In my example, I used 20% (10%-2%) as a "blended" rate to cover the gamut. But if you are an active trader, an annual 30% tax obligation means after 20 years you have $154k instead of $270k (by trading in a tax free account). It's the power of compounding.

If you own an index fund in a taxable account, the tax costs should be much less. The index only sells stocks when they "rebalance" and it should be such a tiny portion that you won't end up with much in the way of yearly capital gains. You'll have some taxable dividends, sure, but I'd be surprised if taxable gains and dividends totaled even 2% per year. After tax (mostly 15% divi taxes) that would only lower your 10% gain to around 9.6% or so.
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  #18  
Old 12-04-2005, 02:22 PM
LearnedfromTV LearnedfromTV is offline
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Default Re: IRA Help for a Professional Poker Player

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I make between 150-250k per year.

[/ QUOTE ]

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I'm 21 and worked for near minimum wage until about March of this year when I went pro. From march to about June, I was a low limit donk. From July to November I made $120,000.

[/ QUOTE ]

I made 10K in a week once, I guess my yearly is ~500K.
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  #19  
Old 12-04-2005, 02:23 PM
Scotty O Scotty O is offline
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Default Re: IRA Help for a Professional Poker Player

[ QUOTE ]

Out of that, I've saved $48,000 for taxes and have another $40,000 in my bankroll/savings. Did you really want me to live on less than $32,000? I had to buy a new car, move into a new place, furnish it, etc during the time as well. I don't think I've done so bad though I do admittedly travel too much. But I wouldn't have it any other way.

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Put in the most you can. If you are unsure of it, get yourself a finacial planner, I have one it is the best thing in the world for me. My fees for the planner are made up and a whole lot more throughout the year in returns.

Scotty O
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  #20  
Old 12-04-2005, 03:30 PM
TheMetetron TheMetetron is offline
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Default Re: IRA Help for a Professional Poker Player

[ QUOTE ]
[ QUOTE ]
I make between 150-250k per year.

[/ QUOTE ]

[ QUOTE ]
I'm 21 and worked for near minimum wage until about March of this year when I went pro. From march to about June, I was a low limit donk. From July to November I made $120,000.

[/ QUOTE ]

I made 10K in a week once, I guess my yearly is ~500K.

[/ QUOTE ]

Yeah but I make an easy 20k a month now, with 10k of that being income that is fixed and won't go away for at least a year, if not longer. So my $150k a year estimate for next year is conservative. The reason I've only made $150k or so this year is because the vast bulk of that earn was the last 6 months when I've actually been playing 10/20 and 20/40 short.

It's not like a ran good for a week and extrapolated from that. I've extended my earn for the last 6 months to one year and gone with the low end. Try not to be a dick from now on.
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