5 ms·

Headline could be "Person uses retirement account to save money for retirement."

• _jal 5y ago
  Why not? Similarly, another of today's headlines could also be 'Property damage inconveniences some in Florida'.
• sushid 5y ago
  The intent of the article is to point out how the rich truly take advantage of existing tax laws/loopholes to stay even more rich. No one is claiming Thiel did anything illegal. But it does seem a bit preposterous that billionaires can amass $5B Roth IRA accounts.
  • ne0flex 5y ago
    I'm curious how he was able to get a Roth IRA in the first place. Apparently Roth IRA began in 1997 and there's a contribution limit if you make above a certain amount.Given that Thiel started "Thiel Capital Management" in 1996, I'm willing to bet he was above the earning limit.
    • xkjkls 5y ago
      Probably by a traditional IRA to Roth IRA conversion.
    • hammeiam 5y ago
      Anybody can have a Roth IRA. Even if you're over the income limit for a Roth, you can still convert a traditional to a Roth IRA after you pay taxes on the amount. These conversions are pretty common and well known.
    • anonAndOn 5y ago
      Like every other SV startup, he was paid a decent salary with lots of stock and thus qualified under the income limits.
    • lordnacho 5y ago
      Says in the article he was below the limit. If you're reasonably wealthy and you start a firm, there's no problem just taking a smaller salary. It's a little bit surprising that the rules don't address this though. Why not just say Roth IRA is for people with net worth under some figure? Or as mentioned in the article, put a cap on the amount of tax exempt money?
  • jppope 5y ago
    The intent of ProPublica's entire series of articles is to imply that wealthy Americans are immorally building their wealth. They are taking advantage of the fact that the public doesn't have basic financial literacy to turn the public against wealthy Americans and some of our most important systems in America (Entrepreneurship, Joint-stock companies, etc). Thiel bought a lotto ticket in his Roth IRA, after which he invested the earnings into other high-risk ventures which also worked out.
    • nickpp 5y ago
      It is fascinating how the ProPublica articles are redistributed in mainstream media (BBC, CNN, etc) even though they are obviously wrong, biased and even based on stolen private data. It’s almost as if someone is having an agenda…
    • medvezhenok 5y ago
      The big argument was whether it was a true lotto ticket (say buying Bitcoin at 1 cent, where everyone accepts it's valued at 1 cent), or whether it was actually self dealing (real best-estimate value of shares was maybe $0.10 a share, and he bought in IRA for $0.001 a share). That means the true value of his IRA "contribution" becomes $170,000 instead of $1,700, which is clearly tax evasion. Still a lotto ticket, but that first transaction becomes a lot less innocent.
    • FabHK 5y ago
      I have basic financial literacy, and found that article insightful and alarming. Maybe your political views coloured your dismissal of the article series and “the public”. I don’t think tax shelters for retirement accounts were designed to let financiers such as Thiel and Romney buy undervalued promising lottery tickets from themselves or their buddies, or should be used as such.
      • jppope 5y ago
        The (self directed) Roth IRA was "designed" to let people invest their money into assets that they choose.
  • NonEUCitizen 5y ago
    He wasn't a billionaire when he started the IRA account.
• xkjkls 5y ago
  The fact that someone used a vehicle that limits your yearly contribution to $5500 a year to amass $5 billion is worth investigating. The investment return needed for that is close to 60% annually, an inconceivably high rate of return for any long period of time.
  • seafoam 5y ago
    "an inconceivably high rate of return" I don't think that word means what you think it means
    • medvezhenok 5y ago
      I mean, considering no-one has achieved that rate of return (in the public markets) with compounding ever, that's probably a fair observation. The closest was the Medallion Fund, but that's a non-compounded return at $10B AUM. But also somewhat irrelevant as the main point of the article focuses on that first investment ($2K -> $33M in 2-3 years via private Paypal shares).
      • gravypod 5y ago
        I have no skin in the game but "in the public markets" is a very key part of this discussion. If he did purchase his stock allocations from founding PayPal (regardless of of if this was legal) this would have not been in the public market. This is an extremely high risk time and money investment that could have been worth $0 the next day. This is why a lot of people end up trying to start a startup. To get huge financial gains for themselves.
        • xkjkls 5y ago
          Yes, this is what is being criticized. Other investors have no ability to do this, and there is little to know what to verify that the stock that was purchased was actually fairly evaluated. If it wasn’t then he was able to invest far more money tax free than should be allowed.
• crispyambulance 5y ago
  > "Person uses retirement account to save money for retirement." ... with a few extra "twists" that utterly subvert the intention of the Roth IRA, making it possible to accumulate an astronomical dynastic fortune without having to pay taxes on it like normal people.
• shanecleveland 5y ago
  ... in ways that are not accessible to the everyday person.
• deleted 5y ago
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