If you double your money thrice a year in the markets, how much do you have after 3 years?

[RunMaker]

Say you start with $10,000. Each year you double your money three times. How much do you have after 3 years?

 

[RenoChazz]

$5,120,000

 

[RunMaker]

And if we account for taxes?

 

[SECplayer]

Reno is correct. 5,120,000. No way to account for taxes without knowing details (tax brackets, long term or short term capital gains., etc).

The more realistic answer is you'd lose $10,000 to whoever is promising those returns.

 

[RenoChazz]

Is your broker named Steve Stevens?

 

[RunMaker]

My broker's name is Jesse.

But the max "takeout" would be around 33%, no?


Just a trader.

 

[RenoChazz]

I'm no tax guy but I think 20% is the max, plus another 3.8% for Obama care, Federally.

 

[SECplayer]

I'm no tax guy but I think 20% is the max, plus another 3.8% for Obama care, Federally.

Thats the max long term capital gain.

But in this hypothetical about doubling your money three times a year, it would have to all be short term capital gains which is essentially the same as your marginal tax rate. So could be as high as 39.6% plus state taxes (and even city taxes in some places).

 

[MattyMatt]

Reno is correct. 5,120,000. No way to account for taxes without knowing details (tax brackets, long term or short term capital gains., etc).

The more realistic answer is you'd lose $10,000 to whoever is promising those returns.

Yep yep.

 

[RunMaker]

Thats the max long term capital gain.

But in this hypothetical about doubling your money three times a year, it would have to all be short term capital gains which is essentially the same as your marginal tax rate. So could be as high as 39.6% plus state taxes (and even city taxes in some places).

Thanks for the info, SEC.

But, Jesus Christ, >40%.... what kind of robbery is this?


Well, then let's rephrase the question. 10K doubled 3 times a year minus Uncle Satan's share at 40%.... What would it be at the end of each year, giving the final result at the end of the 3rd year?

 

[PatsFan1283]

Everyones tax situation is different.

Your $ would grow about 5fold a year instead of 8fold per year.

It's like 1.35mill

Didn't feel like doing it all out.

 

[RunMaker]

3.3 mil after factoring out the government's cut? That doesn't sound right. 40% is massive.

(And I apologize. I am lazy right now. Besides, I know there are some traders here who can calculate this with their eyes closed.)

 

[RunMaker]

Okay, let's see here.

____________________________

.....10,000 -----> .....20,000
.....20,000 -----> .....40,000
.....40,000 -----> .....80,000

80,000 - 32,000 = 48,000 (END YEAR 1)

____________________________

.....48,000 -----> .....96,000
.....96,000 -----> ...192,000
...192,000 -----> ...384,000

384,000 - 153,600 = 230,400 (END YEAR 2)
____________________________

...230,000 -----> ...460,000
...460,000 -----> ...920,000
...920,000 -----> 1,840,000

1,840,000 - 736,000 = 1,104,000 (END YEAR 3)
____________________________

 

[PatsFan1283]

You did it wrong...The entire 80k isn't taxable, just 70k of it.

Same with the original 48k (would be 52k) the 2nd year, etc

 

[Illini]

That's only 700% a year. Sounds easy enough lol.

 

[MattyMatt]

So where do I sign up?

 

[RunMaker]

Did this and I just realized I calculated the 40% tax off of the year end finishing value.


Year 1: Should be 70,000 x 40%.


So the start of Year 2 should read 52,000... if I'm not messing that shit up as well.




So 5.2 a year. Thus: 10,000 ---> 52,000 ---> 270,400 ---> 1,406,080



This has to be somewhat close.

 

[RunMaker]

You did it wrong...The entire 80k isn't taxable, just 70k of it.

Same with the original 48k (would be 52k) the 2nd year, etc

Exactly right. I realized it right after I messed it up.

 

[Jstack34]

What about state taxes?

 

[RunMaker]

Well, shit, Jstack... Wtf? Isn't 40% enough?

Greater than a 40% cut is ridiculous. I was trying to overestimate it. Any finance guys able to correct my numbers on this?