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| Name | Long Term vs Short Term Investing | Pros and Con |
| Video Uploader | Video From TommyBryson |
| Upload Date | This Video Uploaded At 03-08-2020 20:56:30 |
| Video Discription | So for this video, we are going to talk about long term investing and short term investing without taking any side and just talking about the facts. For example tax benefits, risk management, and also long term profits. 1. First of All, let's define long Investing and short term investing by the Facts - This definition is according to the Internal Revenue Service, Aka the IRS Definition: - Long Term Investing: are considered investment held for more than 1 year and 1 day. - Short Term Investing: Investment held for than a year For Example: - Warren Buffet, who tends to hold his investments for a lot longer than 1 year is a long term investor - The day trader that tend to hold their investments for minutes and days sometimes are short term investors - Then people that just invest to make some quick money and take it out before one year, then that’s also short term investing. 2. What are the Pros and Cons of Short term and Long term Investing - Capital gains Tax: this only happens when you sell an asset that you bought for more than you paid, whatever profit you made, is what's going to get tax. Either with long term capital gains tax or short term capital gains tax. This includes Real estate, stocks, bonds, jewelry, and more. The Details: - If you are a short term investor and you made some money by selling asset and you did not hold it for more than a year, then all the profits you make will be taxed as ordinary income. And here is the tax bracket. So if you are a single person earning between 40k-85k you'll get taxed around 22%. And if you make more money, then you’ll pay even more. - However, for long term investors, they get tax with long term capital gains tax, which is fixed that rate based on how much money you make. So if you make less than 40k income, you don’t pay any tax. More than 40k-441k then you pay 15%, and if you make more than that then you get 20%. ( but its a lot better than short term ordinary tax) - So it saves you more money because you will pay less in taxes. But this difference for dividends, those get taxed at ordinary income either way. Why: Does the Government over this tax break - It means people hold on investment for longer that is less risky - Also means the stock market is more stable 3. Pro and Con: Predicting the Market and getting a good return - Now usually people want to make quick money and they want to double their money overnight - and as warren buffet and the stats tell you, that’s very unlikely to actually happen - but so is winning the lottery and people still play it Here is the truth: - its easier to predict what the market is going to do over a 20 year period than in a short period - because we know that over time the economy will continue to grow - and returns will average out over a long period of time For example: - if you look at the s&p 500 over a 50 year period from 1957 to 2018, the average return has been around 8% - but the short term in 2008 it crashed and recovered by 2012 ( literally 4 years later) - And in 2020, it crashed because of the pandemic, and 3-4 months later it went back to normal - Imagine if you sold 2008 or in March of 2020, the answer is don’t worry about the term worry about the long term that’s way more predictable. On the other hand: - With short term investor, we know that 80% of day traders lose money, around 36.3% - And then 17% of the other that make money, make a normal salary of less than 70k - And the very successful ones that 3% or 1%, they sell courses and diversify their income. If you ask me: its not the type of game I want to play. How I invest: https://www.youtube.com/watch?v=bSFwHSrq4Lw&t=14s * PRO TIP* INFORMATION IS EVERYTHING 💲My Budget + Stock Investments💲 https://www.patreon.com/tommybryson 👕Merch👕 https://teespring.com/stores/tommybryson ✅2 FREE AUDIOBOOKS✅ https://amzn.to/2Enayo8¬¬¬ 🎁ACORN FREE $5🎁 Link: https://acorns.com/invite/38EYSU ⚡FREE KINDLE UNLIMITED⚡ (traditional reading) Link: https://amzn.to/2VGbxt9 👨🏽💻DISCORD PRIVATE GROUP👨🏽💻 https://discord.gg/EcZEHpA My Camera Gear: https://amazon.com/shop/tommybryson ✔ Help Us Reach 250,000 Subscribers: https://goo.gl/0wvm6w 😎All My Social Media😎 Link: https://linktr.ee/tommybryson *Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor. |
| Category | Education |
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