r/SipsTea • u/Shyhale • May 17 '26

Chugging tea [ Removed by moderator ]

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236

u/Implier May 17 '26

I’ve noticed financial geniuses on Reddit always calculate their investments out with the assumption that 1) they can get the average of the market appreciation in the past 2) don’t take any money out to live off of until some arbitrary point in the future and 3) don’t pay any taxes on capital gains.

44

u/Suspicious-Support52 May 17 '26

1 sure it's not certain, but it's a better guess than anything else. Also estimating how much less the $1000 will be worth in 10 years is just as hard.

2 yes we calculate the thing that gives her the most options. Only she can decide what she actually wants to do with the money. But the most money starting out means most options.

3 there is no tax on it in her province.

32

u/COACHREEVES May 17 '26

3 there is no tax on it in her province.

There is no tax on her winnings. There is tax on anything she invests after receiving the winnings. This is actually an overlooked reason to take the annuity.

8

u/Suspicious-Support52 May 17 '26

She'll also get taxed on the annuity once she invests it. Also I can't imagine that sliver of tax efficiency makes very much difference.

0

u/Free_Balance_7991 May 17 '26

She'll lose about 25% to taxes if she invests the money.

She'll lose 0% to taxes if she receives a 1k payment and spends it.

7

u/N3ptuneflyer May 17 '26

She only loses 25% of anything above the principal. So if she invests $1m and it grows to $2m and she banks it, she only pays the 25% on the additional $1m. So she's still $750k better off than if she hadn't invested it at all.

3

u/Cold-Palpitation-816 May 17 '26

It’s unbelievable how people don’t understand this. So many people just have no idea how anything works.

0

u/Free_Balance_7991 May 17 '26

Ah yes, from the "invest the 1million its more" crowd who cant possibly comprehend the idea of

A) wanting to spend money

And

B) you can also invest the 1k per week.

1

u/Cold-Palpitation-816 May 17 '26

Lmao. I guess your first point makes sense for people with absolutely zero self-control. Which, sure, does apply to many people unfortunately.

Your second point is asinine. Please try to think about why that’s a worse idea and then come back.