So Mustachians, Are We Still Net Investors?

[EscapeVelocity2020]

Pretty simple question, but I'm hoping for complicated answers.  Personally, given my age, I'm still a net investor because the 'free' 100% return on 401k match, tax free Roth IRA, and 529 incentives.  But if all things were equal, I don't necessarily know that I'd be willing to pay capital gains and work so hard to find marginally better than inflation offsets.  I don't need to work, so why put my capital at risk on Index / equity investments.  I'm personally putting money in VAIPX, just so you know (like, full disclosure and stuff).  Just interested to hear people's discussion.

[Prairie Stash]

You only pay capital gains when you make money. Personally I don't mind paying, since it means I made a lot of money.

The argument against paying gains sounds like a kid saying he doesn't want a dozen cookies cause he needs to share one with his brother.

[Tetsuya Hondo]

I'm with Prairie Stash on this one. capital gains are the easiest type of gains I gain make. I don't have to bust up rocks. I don't have to work in a cubicle all day for it. I don't even have to think about it. I just have to park my money somewhere. Paying 15% of those gains in a stock index fund or ETF should put me well ahead of inflation. That's hardly a disincentive. This seems like cutting off your nose to spite your face.

Am I missing something? And what is your alternative?

[Proud Foot]

Pretty simple question, but I'm hoping for complicated answers.  Personally, given my age, I'm still a net investor because the 'free' 100% return on 401k match, tax free Roth IRA, and 529 incentives.  But if all things were equal, I don't necessarily know that I'd be willing to pay capital gains and work so hard to find marginally better than inflation offsets.  I don't need to work, so why put my capital at risk on Index / equity investments.  I'm personally putting money in VAIPX, just so you know (like, full disclosure and stuff).  Just interested to hear people's discussion.

What do you mean by the bolded part?  The widely recommended VTSAX returns better than inflation by more than just marginally.  As far as capital gains go, currently the tax on those is less than regular income tax rates and you can still get a fairly large amount of capital gains tax free if you do not earn any other income. 

[EscapeVelocity2020]

Pretty simple question, but I'm hoping for complicated answers.  Personally, given my age, I'm still a net investor because the 'free' 100% return on 401k match, tax free Roth IRA, and 529 incentives.  But if all things were equal, I don't necessarily know that I'd be willing to pay capital gains and work so hard to find marginally better than inflation offsets.  I don't need to work, so why put my capital at risk on Index / equity investments.  I'm personally putting money in VAIPX, just so you know (like, full disclosure and stuff).  Just interested to hear people's discussion.

What do you mean by the bolded part?  The widely recommended VTSAX returns better than inflation by more than just marginally.  As far as capital gains go, currently the tax on those is less than regular income tax rates and you can still get a fairly large amount of capital gains tax free if you do not earn any other income.

Shouldn't type these things up right as I'm off to bed.  The thought is that equity investments give better returns because of their exposure to volatility and risk, and I don't need to chase the return anymore.  The risk-free return in 30 year treasuries is hardly worth chasing for a young investor, so my thinking is that inflation adjusted bonds are a better choice.  I'm not looking to outperform treasuries per se, so I am no longer a net equity investor other than for the subsidized choices I mentioned.

[tonysemail]

I care about giving to charity and leaving a legacy for kids.

[Lobo]

your Capital may still be at risk in a rising interest rate environment.

[WildJager]

If you're working I wouldn't expect you to be drawing from your investments and paying capital gains. 

If you're not working, as long as you fall within the 15% tax bracket (75k filing jointly) you also won't be paying taxes (for now at least).

Maybe I'm not understanding the question, but I don't see where the concern is coming from.