Finances for addicts

[Hunt30]

A moron who doesn't understand these things completely. A couple of Q's

1. Can I myself start these funds, or do I have to find a investor and they do it?

2. Are there penalties for pulling out in a certain time frame, and is there a cap on how much you can invest each month or yearly?

Lastly, is there a calculator that one can see the growth of the investment over time if you give it a generic percentage for return?

1. You can easily start these funds yourself. I would recommend a low fee Vanguard index fund purchased directly on Vanguard.com. You will need to create an account, but once started, you can manage all of your money from your phone.

2. General investments have no yearly cap on contributions and no penalty for early withdrawal. You will simply pay capital gains tax on your investments upon withdrawal. Retirement accounts, IRA and Roth IRA, are tax advantaged either on the front end or back end. There is also a yearly cap on the amount you can invest. The cap for 2023 was $7k or $8k depending on your age. There is also significant penalties for withdrawals before age 59 1/2.

Investment calculators are a dime a dozen.

Investment Calculator

Free investment calculator to evaluate various investment situations considering starting and ending balance, contributions, return rate, and investment length.

www.calculator.net

 

[DroppedZ32]

These threads with guys chasing there dreams is awesome, pretty cool to see guys with some guts go out and do it

But incase your not digging the risks there is another way..while finances are a touchie subject, I think if anyone is considering these hunts it's kinda par for the course.

Either way heres a simple chart showing 200 a week into a simple index with 4% returns and how much you can with drawl and still keep climbing..obviously depending your age and income you can tweak it

That's a 10k towards a trip on year 4
20k towards a trip on year 7
30k towards a trip on year 10
And then you can pretty much do 30k trips every 2-3 years after that pluss some

If you have the time, this would be a pretty decent way to live a heck of a life if you can carve out the weekly $

Damn this is super interesting! thank you for sharing!

 

[TX_Diver]

Do capital gains apply to all withdrawals or just within the first year? I had thought withdrawals after a year were just taxed as income? I have not looked recently though as I don’t have any imminent withdrawals

 

[Hunt30]

Short term, less than 1 year, taxed as regular income. Long term taxed a percentage based on your income bracket.

Capital Gains: Tax Rates and Rules for 2024 - NerdWallet

Capital gains taxes are levied when someone makes a profit from the sale of a capital asset, such as a stock or a bond. Taxes apply to assets that have been realized, or sold, and the rate depends on a few factors.

www.nerdwallet.com

 

[WDO]

I think this is a great concept and do this myself, but not exclusively as a hunting account.

That said, I think you'd be hard pressed to find the average bear who can fund $800 a month to a recreation account. With credit card debt as high as it is, and inflation, I think the only reason most people **seem** to have recreational money is because they are putting it on cards.

I mean I do this type of investing, but I'm a single dude who was taught early on to save every penny. I just dovetailed that into the type of investing you describe.

 

[dirtshooter]

I put $250/week into a tax free savings account (canada) but I don't really play with it as I'm the sole income provider for my family so it just kinda sits there for a rainy day. It sure does add up over time though.

 

[Hunt30]

I also think that how and when you spend your money are very personal decisions. I spend a considerable amount of money each year on hunting. I firmly believe in enjoying life as it happens instead postponing until the end. The Dave Ramsey way of thinking has no interest to me. That said, the thought of sacrificing my future financial freedom, for indulging in hunting experiences today that I truly couldn’t afford is absurd to me. I save a minimum of 30% of my income for the future, pay all my bills, treat my wife and kids to good experiences, play a bunch on golf, and use what’s left over on few hunts each year.

 

[fwafwow]

1. You can easily start these funds yourself. I would recommend a low fee Vanguard index fund purchased directly on Vanguard.com. You will need to create an account, but once started, you can manage all of your money from your phone.

Correct.

2. General investments have no yearly cap on contributions and no penalty for early withdrawal. You will simply pay capital gains tax on your investments upon withdrawal.

Correct - except for a slight clarification with respect to the bold portion. See below.

Retirement accounts, IRA and Roth IRA, are tax advantaged either on the front end or back end. There is also a yearly cap on the amount you can invest. The cap for 2023 was $7k or $8k depending on your age. There is also significant penalties for withdrawals before age 59 1/2.

Exactly. Just note that there are income limitations on the ability to qualify for contributing to a Roth.

Do capital gains apply to all withdrawals or just within the first year? I had thought withdrawals after a year were just taxed as income? I have not looked recently though as I don’t have any imminent withdrawals

If you are in the US and not talking about a tax-advantaged account, the concept of a "withdrawal" doesn't necessarily fit for purposes of determining whether you have a liability. Assume you invested in both stocks and bonds and didn't withdraw any cash for years. You could still have both capital gains income and/or ordinary income, in any of those years. If you but one stock, later sold it at a gain, and reinvested the proceeds in another stock (or anything) - even within the same account - you may have taxes due on those capital gains. Not withdrawing cash doesn't impact that result. Similarly, if you own stocks that produce dividends, or savings accounts or bonds that produce interest payments, those dividends and interest will be taxable income even if you don't withdraw any cash. The tax rates on dividends and interest depend on your bracket and the nature of the dividends and interest.

I said above that withdrawals don't "necessarily" dictate the tax results. The time that it might is if you are withdrawing and you do not have cash in the account to meet the withdrawal, in which case you could have to sell something, which may result in a gain, to make the withdrawal.

Short term, less than 1 year, taxed as regular income. Long term taxed a percentage based on your income bracket.

Capital Gains: Tax Rates and Rules for 2024 - NerdWallet

Capital gains taxes are levied when someone makes a profit from the sale of a capital asset, such as a stock or a bond. Taxes apply to assets that have been realized, or sold, and the rate depends on a few factors.

www.nerdwallet.com

Yes in that short term is taxed as ordinary income and LTCG are taxed at capital gains rates. There are brackets for both, and the LTCG rate isn't likely to be the same as your ordinary income tax bracket/rate.