Disclaimer: do not gamble with money you set aside for retirement. But if you’re going to gamble, do it in a smart way.
That first sentence was tough to type out because I don’t believe in retirement.
However, I do think it’s wise to do some prep, because you don’t know what your future holds in terms of health, family needs, etc.
If nothing else, you have retirement accounts you can withdraw from at 65, and you don’t actually have to retire to use them.
Now, are you interested in day trading? Or are you doing it already?
When learning a new day-trading strategy, try it out in a retirement account.
Do this to avoid wash sales.
Wash Sales Can Kill You If You’re Not Careful
A wash sale is when you sell and buy back the same stock or security within 30 days.
It’s called a wash because the government hates you and wants to tax you as much as possible, so they think that if you’re selling and buying something back within an arbitrary 30 days, the money you may have gained or lost shouldn’t matter and they’re just going to tax you on whichever amount you gained (even if you lose money on your investment eventually).
RELATED: wash sale rules don’t yet apply to Bitcoin.
Whatever, I’m not a CPA, this is not financial advice, yadda yadda. You are responsible for your own choices. Income tax just seems fundamentally immoral to me (sales tax is fine though).
You can avoid that if you’re trading in your retirement accounts. You’re not paying taxes on any of that anyway (until you withdraw) and it’s not based on what the stock does anyway—just what you withdraw.
It’s the perfect training ground to avoid taxable events.
If you hate day trading, at least write covered calls in your retirement. It’s literally free money if you’re going to sell on jumps anyway.
Do with this info what you will. Trade at your own risk, etc.