Taxes & Strategy
Taxes & The Long Game
Uncle Sam wants his cut. Here is how to pay him less legally.
1. Capital Gains Tax
When you sell for a profit, you owe taxes. The amount depends entirely on Time.
Short-Term
Duration
< 1 Year
Tax Rate
High (Same as Salary)
10% - 37%
10% - 37%
If you trade frequently, you pay the highest taxes.
Long-Term
Duration
1 Year +
Tax Rate
Discounted Rate
0%, 15%, or 20%
0%, 15%, or 20%
Holding for 366 days can save you thousands.
2. The Winning Strategy
90% of active traders fail to beat the market. The boring strategy wins.
Active Trading
- High Stress & Taxes
- High Fees
- Usually Loses to S&P 500
Buy & Hold
- Set it and forget it
- Lowest Taxes
- Historically ~10% Annual Return
"Time in the market beats timing the market."