Lux Investing
Can you make money investing in mutual funds?
I have money in a 529 plan and an IRA. I understand those and their tax implications. I don't understand how you make money from investing in mutual funds just normally and the tax implications. If a mutual fund sells something... then you have to pay taxes on it? I am not quite sure how that process works. I know Vanguard has funds, but I'm not sure how investing in them without the tax benefits from the IRA and such can help me. Thank you.
Public Comments
- Mutual funds are a long term investment. You as an individual can deposit up to $4000/ year tax free into your IRA. Vanguard is a good fund group. Hypothetically if you made $50,000/ year and you deposited $4000 into your IRA, you would be taxed on $46,000/yr. Hence, the $4000 tax free. You can withdraw this money out of your IRA but you pay severe tax penalties. if you need other info email me
- you can make anywhere from 10 % to 50%. best thing to do is invest in intervals. if you have roth ira then there won't be any taxes. check your portfolio regularly and sell some when there is a gain and buy in downturn. never buy fund based on their past. try to buy at low price.
- I don't think those three people understood your question...or else I didn't. What you want to know is : can investing in mutual funds still be profitable if it's not tax deferred, right? Certainly it can... you DO have to give the government a cut, but you can still come out wayyyy ahead. The Mutual Fund is your investment...whatever trades they make , gains, losses, etc, mean nothing during the year...at the end of the year , your money, your " portion" of the fund has made some money...and THAT is what you pay taxes on... The fund sends you a 1099 form , it shows the amounts of capital gains and dividends that you have earned...there are simple lines for those entries on your tax form... enter them, do the math ... and you 're ahead a certain amount. Most of the taxes paid in cap gains and divs are at a lower rate than your normal earned income...( at least right now they are...may change with a full- blown Dem government...still...no problem...the funds can make you money..( you just have to give some of it to politicians to spend on what THEY think is important) ... but no matter what they take..you have still added money to YOUR own account...and the mere fact that you have, increases the amount you will add in the next year...if your fund earns the same percentages...( Surely, you've seen that result in your retirement accounts)
