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PacketPaul | 5 years ago

The problem I have is pulling my money out immediately reduces it by 15-30% because of taxes. So for every $1000 in stocks gains, I will only have $850 to invest in the future. So taking money out is a guaranteed reduction of your investment portfolio.

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theonlybutlet|5 years ago

That portion is a basically a sunk cost. You don't have that money you're just holding onto it for the taxman. Assuming any future gains will be taxed at the same rate, in effect you are not earning anything more off of it by holding it as the proportion of tax will be the same. The only way it would be different is if you expect the tax law to change in the future in your favour.

naveen99|5 years ago

Your tax bracket could change also if you lose your job or retire, or suffer other losses.

stephen_cagle|5 years ago

Wasn't clear from the article whether he was talking about a tax advantaged account or not. In a tax advantaged account his strategy would have more advantage.