Why having your own business is better than the money invested in the investment bubble?

Nowadays, a person who would like to invest his money in the stock market doesn’t face the lack of market offers. On the contrary, there is a wide range of them that will suit every person and his preferences. However, there is one negative thing: no one tells a person how difficult achieving a good result here can be, because the trading world has plenty of pitfalls and soap bubbles.


On the other hand, it’s the opportunity to create your own business, and invest money in your own business, where everything depends solely on you and the instruments which you have correctly chosen.


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If I were to earn $50k from a mutual fund, all of that $50k is subject to taxes, and it becomes very hard to tax-shelter that $50k.

If I invest in a business that earns $50k, there will be business expenses and depreciation to tax-shelter most [if not all] of that $50k from being taxed.

I am a farmer and I own apartment buildings. Nearly everything I own is a tax write-off.

I can not swing a dead cat without hitting a tax write-off.

As such I have not paid into Income Taxation since 1983.

No fraud, nothing illegal about it, just following the IRS code. We have been audited by the IRS three times. Each time we walked away smelling of roses.

My wife and I were both certified as tax-preparers for about 15 years, and we were both licensed as budget counselors and taught tax-planning.

391- you make it sound so easy! I have owned my own practice, hired people, fired people, been audited, worked 70 hours week.

It can be rewarding, but is not fun. The biggest item you left out is the human element, people calling in sick, customers mad, trying to get vendors to show up.

I would much rather have my money sitting in the stock market than me running a business where I have to manage people.

Every politician in America has money in the stock market, and if the market starts to correct too much, the politician will throw some money around to stop the correction.

If I invest in a business that earns $50k, there will be business expenses and depreciation to tax-shelter most [if not all] of that $50k from being taxed.

I am a farmer and I own apartment buildings. Nearly everything I own is a tax write-off.

I can not swing a dead cat without hitting a tax write-off.

As such I have not paid into Income Taxation since 1983.

No fraud, nothing illegal about it, just following the IRS code. Originally Posted by RetiredSubmariner

Huh?

Of course you have less income that is taxable, after reducing it by expenses. You post as if expenses are a gimmick in the tax code you figured out, that is not a real hit to your true income.

I can buy stock, hold it for a year+, and pay zero tax on the gain, sitting on my ass the whole time. Not even paying a dime in commissions, to buy or sell. I can sell call options, pocket more money, and not change the Long vs. Short term nature of my original holdings.

and I'm not dealing with Renters, whose kids use crayons on my sheetrock, whose dogs soil my carpets, and who give me sob stories why the rent is late.

Huh?

Of course you have less income that is taxable, after reducing it by expenses. You post as if expenses are a gimmick in the tax code you figured out, that is not a real hit to your true income. Originally Posted by Chung Tran

When I was working I had a much higher personal income. The tax-sheltering provided by my apartment buildings sheltered my earned income from being taxed.

Huh?

Of course you have less income that is taxable, after reducing it by expenses. You post as if expenses are a gimmick in the tax code you figured out, that is not a real hit to your true income.

I can buy stock, hold it for a year+, and pay zero tax on the gain, sitting on my ass the whole time. Not even paying a dime in commissions, to buy or sell. I can sell call options, pocket more money, and not change the Long vs. Short term nature of my original holdings.

and I'm not dealing with Renters, whose kids use crayons on my sheetrock, whose dogs soil my carpets, and who give me sob stories why the rent is late. Originally Posted by Chung Tran

Well Chung, you are right as far as you want to think about it. When I studied stocks every day 7 days a week for about 4 hours per day, I could get a return averaging 38%. I needed the cash, and cash was important to my needs at the time. Now that cash is not important, the development of private businesses will bring a better long term return because of the accumulation of physical assets. Forget big business, the accumulation of vehicles, buildings, land, and old used equipment (think of an old tractor that plows the field better than a new tractor) that we can use is more important than cash. Because cash was not important, I recently had to borrow to buy another commercial building the came up quickly; the only question the bank has was about the amount of inventory. That question vanished when the inspected the warehouses. Inventory can be turned into cash at the appropriate time. I can sit on the inventory, without paying any tax, as I watch the value go up.

It's good if your money in the stock market works. After all, there are many such cases when a person invested money and was left with nothing. Although, there are also consultants who can suggest how best to invest money. But a good consultant is also a cost, his services cost a lot.

Sorry to be trite but it all depends on the business or your job or the market and your ability to pick stock.

Plenty of people 6 months ago had a thriving business going only to have it crater a month after the COVID lockdowns. Millions of people let go from their jobs a couple of weeks after the lockdowns. Stocks tanked but if you timed it right you were in for a hefty profit.

I've been in all three. Sometimes success can be determined by intelligence, hard work, friends and good luck. Sometimes the bad luck can be overwhelming. My advice now is get a good govt job. They rarely lay off.

I don't think I'm smart enough to have my own business so that's why I invest in the stock market.