Page 50 - Intelligent Investing (3)
P. 50
Types of Investment Accounts
● Individual Brokerage
○ Money readily available (Liquid) with no time commitment
○ Capital gains + dividends + all profits are withdrawable
○ NO contribution limits
○ Profits taxed as income at 15% unless you are at the top or bottom of earners
○ Brokerages charge a commision to buy and sell securities, however most are free now, still check
○ Losses can be used as tax write off to reduce taxable income up to $3000/year. Losses over $3000
can carry over to the next tax year and written off
● Roth IRA
○ Contributions are after tax allowing distributions to be TAX FREE including ALL PROFITS
○ Contributions can be withdrawn at any time (Interest gained via capital gains/dividends/trades
cannot be distributed until you’ve reached the age limit, 59 ½ yrs old)
○ Any profits (excluding contributions) taken before 59 ½ will incur a 10% penalty fee, income
taxes plus any additional costs with your brokerage provider
