from Hacker News

Peter Thiel Has Accumulated $5B in a Roth IRA

by codesternews on 6/29/21, 1:49 PM with 56 comments

  • by adolph on 6/29/21, 2:43 PM

  • by Moodles on 6/29/21, 2:30 PM

    I think Mitt Romney famously has a lot in his Roth IRA in a similar way [1]. As others have said, it's not actually illegal so I think pointing fingers at individuals who do it (for themselves, their families, etc.) is wrong. If you think it's immoral, go after the people writing the tax codes because 100% if I had the option I would do the same. You'd honestly be a fool to not shelter your millions from taxes if you could. Worst case, you could donate it to the government anyway. Or, donate to a charity of your choice. Or, give it to your kids. Why on Earth wouldn't you legally avoid tax if you could?

    Also, if you think this should be changed, what should the law be, exactly? You're not allowed to make insane profits in a Roth IRA? Why? Or you're only allowed certain types of investments (like index funds?) in a Roth IRA? In my opinion (and it is an emotional judgement), I think America is based on freedom, and Roth money is money you already paid taxes on, and you should be allowed to invest it however you want. It's your money after all. And I say this as someone who literally only invests in boring index funds myself.

    [1] https://www.theatlantic.com/politics/archive/2012/09/whats-r...

  • by ethbr0 on 6/29/21, 2:34 PM

    Good for him.

    Of all the US retirement schemes, Roth seems like the simplest promise. Put after tax money in, and we promise not to tax it on the way out. And we'll limit some obvious loopholes to abuse Roth investing (e.g. UBI).

  • by nikanj on 6/29/21, 2:20 PM

    I’m annoyed that the articles make it sound so easy. ”Just start a company and take it to the moon!”

    The article makes it sound trivial to reliably and repeatedly catch lightning in a bottle like Paypal and Palantir did

  • by gdsdfe on 6/29/21, 2:25 PM

    They keep pointing fingers at the guy but he did nothing wrong. What needs to be changed is that access to this type of investments, i.e private equity, should not be only accessible to accredited investors and the untaxed amount in an IRA should be capped.

  • by IncRnd on 6/29/21, 2:28 PM

    Taxes are paid prior to depositing into a Roth IRA. So, what additional taxes would you expect to be paid if there were no Roth IRA involved? Taxes were already paid.

  • by skeeter2020 on 6/29/21, 2:34 PM

    A government program with unintended consequences? What are the odds? There are a lot of things to dislike about Peter Thiel, maybe even enough to dislike the person, but this is not one of them.

  • by HWR_14 on 6/29/21, 2:49 PM

    If I buy a house with my Roth IRA and fix a window the whole thing loses tax-exempt status. You're not supposed to able to have your Roth benefit from your labor - just capital investment. Thiel invests in PayPal as a Roth IRA at a founder-level price as it's starting up, and that seems equivalent to me.

    If I use non-Roth funds to pay someone to a fix a window, I also lose tax-exempt status. Even if the Roth pays it back it's a loan. Thiel had already loaned $100,000 to PayPal.

    Given that shortly after Theil's Roth's investment they closed funding with multimillion dollar valuations (instead of the tenth a cent a share he paid), I'm not sure that valuation really was a fair market value. Especially since they were priced as "founder's shares".

    So how did Thiel not do something wrong with a retirement account legally required to be conducted at arms-length from him?

  • by dna_polymerase on 6/29/21, 2:28 PM

    The accounts are capped at a contribution of $6000 to $7000 per year. Thiel turned $2000 into this amount. I don't see the systemic problem here. And I see the government's entitlement to taxes on that even less.

    Whatever Thiel is like as a person, as a businessman he has been connected to the big things in the past two decades like no one else. Give the man a break.

    Also, I love these hit pieces on Forbes and the other news sites, followed by a native advertisement. "F! the capitalist for making money, but really give us money"!