
346 | How Do I Figure Out the Taxes on This?
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Youo Twou Make Two Per Centit Sounds Good
If you put money in a bank and earn interest, that interest is income. You're not going to get rich on the one per cent at most banks. So let's see, you put 20 thousand dollars into that bank, right? That's the money youve already paid tax on. In subsequent years, you're paying tax on the income you earn on that. We got to always think in this way. I'm drilling down into it's the income that you earn. Let's contrast that with, ok, we decided to invest this in mutual funds. Down the road, if you sell all of your shares - what's your tax on that? Your tax is zero, because
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