7 ms·

Peter Thiel Turned a Retirement Account into a $5B Tax-Free Piggy Bank (2021)

77 points by nabla9 4y ago

golergka 4y ago
Taxation is theft, and any time somebody manages to get out of it, we should celebrate it. Especially as it contributes to breaking up the system based on violence and theft and paves the road for the rest of us to do the same.
rssoconnor 4y ago
People in this thread tend to be supportive of the idea that he is simply playing by the rules. While I have no reason to doubt the legality of this strategy, I question whether it ought to be legally appropriate for Peter Thiel to decide the valuation of his own investment (more or less) by himself. His initial deposit into his Roth IRA doesn't strike me as an arm's length independent valuation. It was simply the par-value of the stock, which AFAIU is a valuation for accounting purposes and not at all an independent appraisal of the stock's value. That said, when this topic came up last year on Hacker News, it did make me rethink my own personal tax-sheltered strategy. (I'm in Canada, so I'm thinking about TFSA instead of Roth IRA). Before I had been following the advice to shelter my high-tax items, which for Canada would be bonds. But after reading about this, I've rearranged things to instead shelter (hopefully) high growth items (e.g. VTI). The idea being that by growing room in my sheltered accounts I can eventually save more on taxes than I would by sheltering bonds I'd be interested in other people's comments on tax-sheltered-account strategies for tech workers.
gumby 4y ago
I've tried to do this with founder stock over the years and my tax advisors (I switched at one point) both discouraged me from doing so. Not that I would have ended up with billions, but still, a big chunk of change. The nice part is if you do this when your stock is worth pennies you can still make (almost) the entire normal cash contribution, so the risk is low. Congress keeps threatening to stop this by forcing accounts over some limit to make an immediate withdrawal, with all the negative tax consequences that would result. This pro publica piece implies that they don't think it will ever happen.
dang 4y ago
Discussed at the time: Peter Thiel turned a Roth IRA into a $5B tax-free piggy bank - https://news.ycombinator.com/item?id=27616090 https://news.ycombinator.com/item?id=27616090 - June 2021 (775 comments) Peter Thiel Has Accumulated $5B in a Roth IRA - https://news.ycombinator.com/item?id=27675736 https://news.ycombinator.com/item?id=27675736 - June 2021 (56 comments) Peter Thiel’s $5B Roth IRA Tax Haven Is the Hottest New Investing Tip - https://news.ycombinator.com/item?id=27743427 https://news.ycombinator.com/item?id=27743427 - July 2021 (68 comments)
lotsofpulp 4y ago
Title should be “US leaders passed legislation that allowed for limitless future tax free earnings if redeemed after age 59.5”. Propublica does good work, but they reduce their credibility when they put out clickbait to induce rage at a single person playing by the rules. Guess it is easier to get people riled up against one “evil” person than the myriad representatives the populace voted for.
- jrochkind1 4y ago
  I mean, I agree, and think the law should be changed to have some limits, but I wouldn't have enough info to think the law should be changed if I didn't know specific details about how some individuals are using it. (Also, what this article only briefly touched upon but others get into more details of -- the way people like this get hundreds of MM in IRAs is by buying early stage stakes that aren't generally available to the public at "pennies per share". Banning these from IRAs would be one way to end this sort of thing).
  - lotsofpulp 4y ago
    >the way people like this get hundreds of MM in IRAs is by buying early stage stakes that aren't generally available to the public at "pennies per share". Banning these from IRAs would be one way to end this sort of thing). They are pennies per share because they are huge gambles worth approximately nothing right now. Anyone can make their own LLC and contribute the max equity into their IRA right now. It just does not make sense for most since it will probably perform worse than buying SP500.
    - jrochkind1 4y ago
      If it's such a gamble, how do these already really wealthy people wind up with hundreds of millions in their IRAs? There was an article about how it's pretty typical for the mega wealthy. They would seem to have access to something others don't. Anyway I'd say turning $6000/year into hundreds of millions or billions tax-free is not the policy purpose of a Roth IRA.
- 4y ago
boringg 4y ago
Old news.
siva7 4y ago
Thiel is like a super villain straight from a comic. His own republic somewhere in the ocean, his blood boys, his disdain for democracy, where does this end?
- dools 4y ago
  All economic libertarians are super villains, but think that they're champions of freedom. What's interesting is that, imho, the entire concept of "super heroes" is actually fraught with libertarian ideology. In super hero narratives you have super powerful individuals battling each other, with incompetent governments unable to intervene to keep anyone safe.
  - rayiner 4y ago
    Social libertarians are villains too. Both are antisocial, just in different ways. Society decides your role in it and what you owe it and how you can work for its benefit.
    - dools 4y ago
      In as much as "left-libertarianism" is a vehicle for anarchism, I agree with you. In practise I find most left-libertarians actually just want liberty from puritanical or religious morality, and/or "nanny state" restrictions. For most left libertarians (in practice), if you let them smoke weed and ride a bike without a helmet, they're good. The problem is that left libertarians are captured by economic libertarians who pitch their policies as anti-authoritarian, but who are actually fascists.
      - deleted 4y ago
        [deleted]
- andsoitis 4y ago
  > his blood boys The desire to use blood transfusions from the young for life extension is very old. The Ancient Greeks and Leonardo da Vinci wanted to do it too.
luciusdomitius 4y ago
“Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State's inhabitants, or subjects.” M. Rothbard :)
- JaimeThompson 4y ago
  It's also, in part, what we pay to have a modern society.
  - SuoDuanDao 4y ago
    There's a relevant quote about society being a parasite on the man with the hoe. Though I suspect it was coined by someone who's never tried to build a hoe without a society to help.
- bryanlarsen 4y ago
  "Property is theft". - Proudhon Both statements have equal validity.
  - vidarh 4y ago
    And indeed, the first person to use libertarianism as the name of a political ideology, Joseph Dejacque, vigourously agreed with Proudhon on that, while he described Proudhon as "moderate anarchist, liberal, but not libertarian". Rothbard coopted the term, which was then long established.
- TheLoafOfBread 4y ago
  Well maybe you would change your opinion if private firefighters would arrive to your burning house and told you that they will buy it for 50 EUR, or they will let it burn to the ground. You will lose your hose in both cases.
  - luciusdomitius 4y ago
    I think you need to sign a contract with the firefighters before shit starts burning. Car insurance, health insurance, any similar market driven service would not let you insure AFTER the accident either.
louwrentius 4y ago
- dools 4y ago
  I think that it would be pretty easy to solve with 2 rules: 1) Private companies can have a maximum of, say, $1m in revenue per employee before they have to list 2) One individual or entity can own a maximum of, say, 5% of any publicly listed company So when your company goes well, you have to IPO, and when you IPO, you have to sell most of your shares.
  - deleted 4y ago
    [deleted]
  - cinntaile 4y ago
    So certain solo entrepreneurs now need to be publicly listed and then they have to give away 95% of their company? Defining rules like these is far from trivial.
    - dools 4y ago
      Not that hard if you have access to all the stats, but yeah not far off. Make it $5m then.
  - MerelyMortal 4y ago
    I think that would stifle a lot of innovation. Some people are not going to take risks if you cap the reward. Others just won't put in the work if they know that it will be taken/forced away from them.
    - dools 4y ago
      I don’t think so. Selling 95% (or whatever) percent of a company with $5m revenue per employee is not exactly a bad result. It might stifle the type of megalomania that passes for innovation these days though, and would prevent concentration of wealth that stifles innovation through anti competitive behaviour.
prepend 4y ago
Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. It will be interesting whether this is investigated because buying founder shares for a penny with your $5k/year limit is not supposed to be allowed. It’s more interesting the people who actually publicly traded with their small inputs and now have millions per year that they can withdraw tax free.
- astura 4y ago
  >Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. False, I have no idea where you got that impression- self directed IRAs exist. I actually have one. https://en.wikipedia.org/wiki/Self-directed_IRA https://en.wikipedia.org/wiki/Self-directed_IRA
- sokoloff 4y ago
  > Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. Citation needed. Investopedia (and the widespread and open existence of self-directed IRAs) disagrees with your claim. https://www.investopedia.com/articles/retirement/11/impermissable-retirement-investments.asp https://www.investopedia.com/articles/retirement/11/impermis...
  - ramraj07 4y ago
    As Bill Burr said, “a few decades back you could legally bust your wife’s jaws open”. There’s “it’s legal” vs. “it’s the right thing”
- jandrewrogers 4y ago
  > Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. This is false. A very wide range of investments are allowed, including real estate and derivatives.
sokoloff 4y ago
Half of the text in the article feels like whining that someone followed the laws, in many cases (Roth conversions) paid their taxes early and then, in direct exchange, got tax-free treatment on withdrawals. Imagine a series of multiplications, one of them being 0.80 to the taxpayer and the other 0.20 to the government. Then a series of transactions multiplies that account value by a value less than 1 (for losing investments) or greater than 1 (for winning investments). Multiplication is commutative. Whether the 0.20 to the government is paid at the start or the end, it seems fair to me. The fact that the government got their money early and did not invest it as well as the Roth account holder is not a tax policy concern in my view. For every case where a taxpayer invested well and won big, there are thousands of people who made a Roth conversion, paying taxes at that moment, and made investments that went to zero. In those cases, the government got paid more taxes than they’d have gotten without the Roth conversion.
rwmj 4y ago
There's a bit of kerfuffle in the UK about "ISA millionaires"[1]. ISAs are similar to US IRAs (Roth? the stocks and shares ones). Basically since they were created in the 1980s, even with the annual investment limits and a boring index fund it has been possible to accumulate over £1 million tax free. You're only allowed to invest in listed companies and there are small annual limits so it's highly unlikely anyone could have made "billions" this way. For example you absolutely could not use this for founder shares. Everyone expects that one day a total fund limit will be introduced, but not so far. [1] https://www.hl.co.uk/news/articles/isa-millionaires-how-did-they-do-it-and-what-can-we-learn https://www.hl.co.uk/news/articles/isa-millionaires-how-did-...
- sokoloff 4y ago
  £1 million isn't some staggering or offensive sum, IMO. As a retirement account, that will throw off £40K/yr with a 4% chance of failure (going broke) in 30 years or maybe £60K with 10% of going broke in 15 years and a 40% chance in 30 years. £1 million is a completely reasonable retirement savings balance to target (and is lower than my family's own target), especially if you lived your life and want to retire in the most populated urban center in the UK.
deleted 4y ago
[deleted]
ethagknight 4y ago
"confidential Internal Revenue Service data shows" I am most curious about this little detail they just gleeful dropped in. I want THAT thread pulled. Who bribed who to leak this data?
stevespang 4y ago
henvic 4y ago
Good for him. Creating wealth making everyone's life better and avoiding his money is used in murdering people overseas in wars or sending people who committed victimless 'crimes' such as trading marijuana to the prison for life.
- ramraj07 4y ago
  It’s more likely than not his investments directly cause more deaths than they would through wars or whatever the American government you allege is doing you disagree with. Saying “I won’t pay taxes because I don’t agree with the government” is sovereign citizen level inanity. Especially because this dude has the power to move to another country anytime but chooses to abuse the system in this country. The least we can do is be objective about it and try to minimize such abuse.
  - henvic 4y ago
    1. Thinking avoiding (legally or not) paying taxes) for not agreeing with what the state does makes you someone who identifies as a sovereign citizen makes no sense. There are more than enough sane moral/ethical reasons why someone might want to avoid that... while still living in society and being a productive member of it. We're constantly sold the statism Kool-Aid that paying taxes is sacred and to turn a blind eye to how the money is used, but this is just not right. 2. He isn't even abusing anything. The state is abusing people's wealth, on the other hand.
jwie 4y ago
All you need to pull this off is ground-floor access to a unicorn startup. The IRA rules are the minor term here. Anyone could, provided they had an investment that gained as much as Thiel’s, do this. Maybe there should be lifetime caps on tax protected withdrawals to prevent this kind of edge case, but that’s not how the laws were written. There are other ways for wealthy to dodge taxes. Invest, borrow, die works slightly worse since you’re paying loan interest instead of capital gains taxes. But it’s still not paying taxes. So yes, this is kind of interesting, but not that much more effective than the current tax dodging strategies.
- jrochkind1 4y ago
  Or just ban putting those kinds of investments into IRAs. "ground-floor access to a unicorn startup". Nobody that actually needs an IRA to fund a retirement has those kinds of vehicles in them (the vast majority don't have access to such if they wanted to), only really wealthy people using IRAs for a purpose they weren't intended for.
- onetimeusename 4y ago
  how is this done? I looked into the rules and you can't sell options or stocks from companies you have a controlling stake in into your own Roth. Friends and family can't either. I feel like you would have to be in a pretty special and unlikely situation to actually pull this off not even assuming the stock price actually increases much. I could be wrong about that.
  - jwie 4y ago
    I believe you could open a Roth, put dollars in it and buy anything your Roth broker would sell you in that tax protected container. Exotic offerings are not going to be available to regular people, but if you could get access to bespoke financial product, like some exotic swap or derivative, or something else that would increase in value 1000000% or something else crazy, and you’re all set. There are specific restrictions to what can go in a Roth, but I think all financial products are allowed. You can’t put “a lottery ticket” in the IRA and win the lottery with that ticket and have it be tax protected, but only because it’s a physical object like a collectible. If you do it through stonks though it’s fine the ways the laws are written.
briHass 4y ago
This is how it starts... Roth IRAs have always been built on a flimsy promise: pay your taxes now, and pay no taxes later. I strongly suspect in the near future, those individuals that were responsible and actually saved for retirement will be seen as 'cheating the system's because they aren't paying taxes on their sizable Roth balance. Articles that cherry pick a rare example to cause outrage are attempting to change the rules. Thiel played by the rules and got lucky with his Roth. That doesn't change the fundamental promise of the account.
projektfu 4y ago
I'd be interested to know if anything was "backdated", where winners were placed in the Roth after they won but with a date before.
Overtonwindow 4y ago
Such as sensationalist, headline, kind of glossing over the fact that it was perfectly legal.
lr4444lr 4y ago
So, super rich guy follows the laws on the books, with no special lobbying to do this and people get upset that this makes him richer. As a great African American poet once said, "don't hate the playa' - hate the game."
deleted 4y ago
[deleted]
- deleted 4y ago
  [deleted]
- deleted 4y ago
  [deleted]
gkfasdfasdf 4y ago
Article from 2021

77 points by nabla9 4y ago

Taxation is theft, and any time somebody manages to get out of it, we should celebrate it. Especially as it contributes to breaking up the system based on violence and theft and paves the road for the rest of us to do the same.

rssoconnor 4y ago

People in this thread tend to be supportive of the idea that he is simply playing by the rules. While I have no reason to doubt the legality of this strategy, I question whether it ought to be legally appropriate for Peter Thiel to decide the valuation of his own investment (more or less) by himself. His initial deposit into his Roth IRA doesn't strike me as an arm's length independent valuation. It was simply the par-value of the stock, which AFAIU is a valuation for accounting purposes and not at all an independent appraisal of the stock's value. That said, when this topic came up last year on Hacker News, it did make me rethink my own personal tax-sheltered strategy. (I'm in Canada, so I'm thinking about TFSA instead of Roth IRA). Before I had been following the advice to shelter my high-tax items, which for Canada would be bonds. But after reading about this, I've rearranged things to instead shelter (hopefully) high growth items (e.g. VTI). The idea being that by growing room in my sheltered accounts I can eventually save more on taxes than I would by sheltering bonds I'd be interested in other people's comments on tax-sheltered-account strategies for tech workers.

gumby 4y ago

I've tried to do this with founder stock over the years and my tax advisors (I switched at one point) both discouraged me from doing so. Not that I would have ended up with billions, but still, a big chunk of change. The nice part is if you do this when your stock is worth pennies you can still make (almost) the entire normal cash contribution, so the risk is low. Congress keeps threatening to stop this by forcing accounts over some limit to make an immediate withdrawal, with all the negative tax consequences that would result. This pro publica piece implies that they don't think it will ever happen.

dang 4y ago

Discussed at the time: Peter Thiel turned a Roth IRA into a $5B tax-free piggy bank - https://news.ycombinator.com/item?id=27616090 https://news.ycombinator.com/item?id=27616090 - June 2021 (775 comments) Peter Thiel Has Accumulated $5B in a Roth IRA - https://news.ycombinator.com/item?id=27675736 https://news.ycombinator.com/item?id=27675736 - June 2021 (56 comments) Peter Thiel’s $5B Roth IRA Tax Haven Is the Hottest New Investing Tip - https://news.ycombinator.com/item?id=27743427 https://news.ycombinator.com/item?id=27743427 - July 2021 (68 comments)

lotsofpulp 4y ago

Title should be “US leaders passed legislation that allowed for limitless future tax free earnings if redeemed after age 59.5”. Propublica does good work, but they reduce their credibility when they put out clickbait to induce rage at a single person playing by the rules. Guess it is easier to get people riled up against one “evil” person than the myriad representatives the populace voted for.

jrochkind1 4y ago
I mean, I agree, and think the law should be changed to have some limits, but I wouldn't have enough info to think the law should be changed if I didn't know specific details about how some individuals are using it. (Also, what this article only briefly touched upon but others get into more details of -- the way people like this get hundreds of MM in IRAs is by buying early stage stakes that aren't generally available to the public at "pennies per share". Banning these from IRAs would be one way to end this sort of thing).
- lotsofpulp 4y ago
  >the way people like this get hundreds of MM in IRAs is by buying early stage stakes that aren't generally available to the public at "pennies per share". Banning these from IRAs would be one way to end this sort of thing). They are pennies per share because they are huge gambles worth approximately nothing right now. Anyone can make their own LLC and contribute the max equity into their IRA right now. It just does not make sense for most since it will probably perform worse than buying SP500.
  - jrochkind1 4y ago
    If it's such a gamble, how do these already really wealthy people wind up with hundreds of millions in their IRAs? There was an article about how it's pretty typical for the mega wealthy. They would seem to have access to something others don't. Anyway I'd say turning $6000/year into hundreds of millions or billions tax-free is not the policy purpose of a Roth IRA.
4y ago

boringg 4y ago

Old news.

siva7 4y ago

Thiel is like a super villain straight from a comic. His own republic somewhere in the ocean, his blood boys, his disdain for democracy, where does this end?

dools 4y ago
All economic libertarians are super villains, but think that they're champions of freedom. What's interesting is that, imho, the entire concept of "super heroes" is actually fraught with libertarian ideology. In super hero narratives you have super powerful individuals battling each other, with incompetent governments unable to intervene to keep anyone safe.
- rayiner 4y ago
  Social libertarians are villains too. Both are antisocial, just in different ways. Society decides your role in it and what you owe it and how you can work for its benefit.
  - dools 4y ago
    In as much as "left-libertarianism" is a vehicle for anarchism, I agree with you. In practise I find most left-libertarians actually just want liberty from puritanical or religious morality, and/or "nanny state" restrictions. For most left libertarians (in practice), if you let them smoke weed and ride a bike without a helmet, they're good. The problem is that left libertarians are captured by economic libertarians who pitch their policies as anti-authoritarian, but who are actually fascists.
    - deleted 4y ago
      [deleted]
andsoitis 4y ago
> his blood boys The desire to use blood transfusions from the young for life extension is very old. The Ancient Greeks and Leonardo da Vinci wanted to do it too.

luciusdomitius 4y ago

“Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State's inhabitants, or subjects.” M. Rothbard :)

JaimeThompson 4y ago
It's also, in part, what we pay to have a modern society.
- SuoDuanDao 4y ago
  There's a relevant quote about society being a parasite on the man with the hoe. Though I suspect it was coined by someone who's never tried to build a hoe without a society to help.
bryanlarsen 4y ago
"Property is theft". - Proudhon Both statements have equal validity.
- vidarh 4y ago
  And indeed, the first person to use libertarianism as the name of a political ideology, Joseph Dejacque, vigourously agreed with Proudhon on that, while he described Proudhon as "moderate anarchist, liberal, but not libertarian". Rothbard coopted the term, which was then long established.
TheLoafOfBread 4y ago
Well maybe you would change your opinion if private firefighters would arrive to your burning house and told you that they will buy it for 50 EUR, or they will let it burn to the ground. You will lose your hose in both cases.
- luciusdomitius 4y ago
  I think you need to sign a contract with the firefighters before shit starts burning. Car insurance, health insurance, any similar market driven service would not let you insure AFTER the accident either.

louwrentius 4y ago

dools 4y ago
I think that it would be pretty easy to solve with 2 rules: 1) Private companies can have a maximum of, say, $1m in revenue per employee before they have to list 2) One individual or entity can own a maximum of, say, 5% of any publicly listed company So when your company goes well, you have to IPO, and when you IPO, you have to sell most of your shares.
- deleted 4y ago
  [deleted]
- cinntaile 4y ago
  So certain solo entrepreneurs now need to be publicly listed and then they have to give away 95% of their company? Defining rules like these is far from trivial.
  - dools 4y ago
    Not that hard if you have access to all the stats, but yeah not far off. Make it $5m then.
- MerelyMortal 4y ago
  I think that would stifle a lot of innovation. Some people are not going to take risks if you cap the reward. Others just won't put in the work if they know that it will be taken/forced away from them.
  - dools 4y ago
    I don’t think so. Selling 95% (or whatever) percent of a company with $5m revenue per employee is not exactly a bad result. It might stifle the type of megalomania that passes for innovation these days though, and would prevent concentration of wealth that stifles innovation through anti competitive behaviour.

prepend 4y ago

Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. It will be interesting whether this is investigated because buying founder shares for a penny with your $5k/year limit is not supposed to be allowed. It’s more interesting the people who actually publicly traded with their small inputs and now have millions per year that they can withdraw tax free.

astura 4y ago
>Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. False, I have no idea where you got that impression- self directed IRAs exist. I actually have one. https://en.wikipedia.org/wiki/Self-directed_IRA https://en.wikipedia.org/wiki/Self-directed_IRA
sokoloff 4y ago
> Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. Citation needed. Investopedia (and the widespread and open existence of self-directed IRAs) disagrees with your claim. https://www.investopedia.com/articles/retirement/11/impermissable-retirement-investments.asp https://www.investopedia.com/articles/retirement/11/impermis...
- ramraj07 4y ago
  As Bill Burr said, “a few decades back you could legally bust your wife’s jaws open”. There’s “it’s legal” vs. “it’s the right thing”
jandrewrogers 4y ago
> Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. This is false. A very wide range of investments are allowed, including real estate and derivatives.

sokoloff 4y ago

Half of the text in the article feels like whining that someone followed the laws, in many cases (Roth conversions) paid their taxes early and then, in direct exchange, got tax-free treatment on withdrawals. Imagine a series of multiplications, one of them being 0.80 to the taxpayer and the other 0.20 to the government. Then a series of transactions multiplies that account value by a value less than 1 (for losing investments) or greater than 1 (for winning investments). Multiplication is commutative. Whether the 0.20 to the government is paid at the start or the end, it seems fair to me. The fact that the government got their money early and did not invest it as well as the Roth account holder is not a tax policy concern in my view. For every case where a taxpayer invested well and won big, there are thousands of people who made a Roth conversion, paying taxes at that moment, and made investments that went to zero. In those cases, the government got paid more taxes than they’d have gotten without the Roth conversion.

rwmj 4y ago

There's a bit of kerfuffle in the UK about "ISA millionaires"[1]. ISAs are similar to US IRAs (Roth? the stocks and shares ones). Basically since they were created in the 1980s, even with the annual investment limits and a boring index fund it has been possible to accumulate over £1 million tax free. You're only allowed to invest in listed companies and there are small annual limits so it's highly unlikely anyone could have made "billions" this way. For example you absolutely could not use this for founder shares. Everyone expects that one day a total fund limit will be introduced, but not so far. [1] https://www.hl.co.uk/news/articles/isa-millionaires-how-did-they-do-it-and-what-can-we-learn https://www.hl.co.uk/news/articles/isa-millionaires-how-did-...

sokoloff 4y ago
£1 million isn't some staggering or offensive sum, IMO. As a retirement account, that will throw off £40K/yr with a 4% chance of failure (going broke) in 30 years or maybe £60K with 10% of going broke in 15 years and a 40% chance in 30 years. £1 million is a completely reasonable retirement savings balance to target (and is lower than my family's own target), especially if you lived your life and want to retire in the most populated urban center in the UK.

deleted 4y ago

[deleted]

ethagknight 4y ago

"confidential Internal Revenue Service data shows" I am most curious about this little detail they just gleeful dropped in. I want THAT thread pulled. Who bribed who to leak this data?

stevespang 4y ago

henvic 4y ago

Good for him. Creating wealth making everyone's life better and avoiding his money is used in murdering people overseas in wars or sending people who committed victimless 'crimes' such as trading marijuana to the prison for life.

ramraj07 4y ago
It’s more likely than not his investments directly cause more deaths than they would through wars or whatever the American government you allege is doing you disagree with. Saying “I won’t pay taxes because I don’t agree with the government” is sovereign citizen level inanity. Especially because this dude has the power to move to another country anytime but chooses to abuse the system in this country. The least we can do is be objective about it and try to minimize such abuse.
- henvic 4y ago
  1. Thinking avoiding (legally or not) paying taxes) for not agreeing with what the state does makes you someone who identifies as a sovereign citizen makes no sense. There are more than enough sane moral/ethical reasons why someone might want to avoid that... while still living in society and being a productive member of it. We're constantly sold the statism Kool-Aid that paying taxes is sacred and to turn a blind eye to how the money is used, but this is just not right. 2. He isn't even abusing anything. The state is abusing people's wealth, on the other hand.

jwie 4y ago

All you need to pull this off is ground-floor access to a unicorn startup. The IRA rules are the minor term here. Anyone could, provided they had an investment that gained as much as Thiel’s, do this. Maybe there should be lifetime caps on tax protected withdrawals to prevent this kind of edge case, but that’s not how the laws were written. There are other ways for wealthy to dodge taxes. Invest, borrow, die works slightly worse since you’re paying loan interest instead of capital gains taxes. But it’s still not paying taxes. So yes, this is kind of interesting, but not that much more effective than the current tax dodging strategies.

jrochkind1 4y ago
Or just ban putting those kinds of investments into IRAs. "ground-floor access to a unicorn startup". Nobody that actually needs an IRA to fund a retirement has those kinds of vehicles in them (the vast majority don't have access to such if they wanted to), only really wealthy people using IRAs for a purpose they weren't intended for.
onetimeusename 4y ago
how is this done? I looked into the rules and you can't sell options or stocks from companies you have a controlling stake in into your own Roth. Friends and family can't either. I feel like you would have to be in a pretty special and unlikely situation to actually pull this off not even assuming the stock price actually increases much. I could be wrong about that.
- jwie 4y ago
  I believe you could open a Roth, put dollars in it and buy anything your Roth broker would sell you in that tax protected container. Exotic offerings are not going to be available to regular people, but if you could get access to bespoke financial product, like some exotic swap or derivative, or something else that would increase in value 1000000% or something else crazy, and you’re all set. There are specific restrictions to what can go in a Roth, but I think all financial products are allowed. You can’t put “a lottery ticket” in the IRA and win the lottery with that ticket and have it be tax protected, but only because it’s a physical object like a collectible. If you do it through stonks though it’s fine the ways the laws are written.

briHass 4y ago

This is how it starts... Roth IRAs have always been built on a flimsy promise: pay your taxes now, and pay no taxes later. I strongly suspect in the near future, those individuals that were responsible and actually saved for retirement will be seen as 'cheating the system's because they aren't paying taxes on their sizable Roth balance. Articles that cherry pick a rare example to cause outrage are attempting to change the rules. Thiel played by the rules and got lucky with his Roth. That doesn't change the fundamental promise of the account.

projektfu 4y ago

I'd be interested to know if anything was "backdated", where winners were placed in the Roth after they won but with a date before.

Overtonwindow 4y ago

Such as sensationalist, headline, kind of glossing over the fact that it was perfectly legal.

lr4444lr 4y ago

So, super rich guy follows the laws on the books, with no special lobbying to do this and people get upset that this makes him richer. As a great African American poet once said, "don't hate the playa' - hate the game."

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gkfasdfasdf 4y ago

Article from 2021