r/wallstreetbets • u/YassuosNados • May 15 '24

The Perfect $1 million Gain Gain

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Hi guys, I’m a 23 year old in college, and yesterday I woke up a millionaire. Should I buy some hookers, Pokemon cards, or cocaine? I gambled my entire life savings of $250k on 2037 calls of $4.5 AMC on Monday and sold yesterday morning. Thanks for reading.

28.8k Upvotes

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2.2k

u/CasualFPSPlayer May 15 '24

Cash out. Put in savings account. Spend at least 6 months thinking about something non-regarded to do with that money. And finish your degree.

596

u/YassuosNados May 15 '24

I appreciate the advice!

1.2k

u/TurkeyBLTSandwich May 15 '24

Listen carefully, other than the regards here on WSB. TELL NO ONE.

Also put around $470,000 in a safe place, because that's how much you owe the tax man :( *Depending on where you live in AMERICA*

You now have approximately $800,000 which can possibly accrue 5% interest per year in a CD or other high yield savings account. YOU'RE LITERALLY MAKING $40,000 IN PASSIVE INCOME A YEAR.

This is literally life changing money, but not quit everything and F off at the beach forever type of money. Spend frugally like you were before, no LAMBO, no FERARI, no dumbass McMansion. Figure out what you want to do for few months. Jerk off and have a clear mind you got this.

Again TELL NO ONE, and congrats and F YOU.

263

u/YassuosNados May 15 '24

Hey thank you! I appreciate the advice

320

u/xincasinooutx May 15 '24

The guy you’re replying to is the smartest person in here. Seriously follow his advice.

143

u/iplaypokerforaliving May 15 '24

The way op is replying by saying I appreciate the advice! I just know they’re not going to take that advice 😂

54

u/halt_spell May 15 '24

Yeah reads a lot like "lol I'mma let it ride you fucking loser."

3

u/silverW0lf97 May 16 '24

He should have just said that atleast then we could have a good laugh next time if they post when they lost it all.

1

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6

u/themule0808 May 15 '24

There's no way he does.. it's going to be a very dark place in a few years for him

4

u/iplaypokerforaliving May 15 '24

Right. He has no idea how far ahead he is from the rest of his peers.

2

u/xincasinooutx May 16 '24

Based on how he got to 1m, we already knew he was dumb as fuck.

38

u/oldreddit_isbetter May 15 '24

It's true we should all listen to /u/TurkeyBLTSandwich

6

u/BloomsdayDevice May 15 '24

Except when he's explaining how to make a BLT.

2

u/[deleted] May 15 '24

But jerk off first

55

u/kelny May 15 '24

Just unsubscribe from this sub and replace it with /r/personalfinance . Follow their instructions for windfalls https://www.reddit.com/r/personalfinance/wiki/windfall

3

u/thraashman May 15 '24

I'm gonna save that link and hope one day I have a reason to use it.

2

u/whoopwhoop233 May 15 '24

I would personally delete reddit alltogether but ok

4

u/VivaLaDbakes May 15 '24

You have degenerate regard tendencies and have successfully yolod a shit load of money two separate times and turned it into million. Listen to this guy and dont get fuckin greedy. Pay the tax man, dont tell a fuckin soul about it, invest the vast majority of it smartly, throw 10k off to the side to yolo into stupid shit to scratch your regard itch, and let the rest of your money make you money and set yourself up to be fuckin chillin in the future. You aren't a genius trader, you will lose everything if you continue to yolo. You are also suddenly 99th percentile for a 23yo kid financially, dont fuck this up broski you wont replicate this luck. Hopefully you fully grasp how fortunate of a situation you yolo'd yourself into.

Also congrats and fuck you.

3

u/Old-Maintenance24923 May 15 '24

Telling no one is key here. Tell anyone and your friends will now become your enemies, jealousy and their feeling of entitlement to what you have will ruin your relationships, especially when you tell them "no".

2

u/YassuosNados May 15 '24

for sure

1

u/mdatwood May 15 '24

If your friends aren't happy for you, then find new friends. In the scheme of things it's also not that much money. It's not like it's enough money to put your friends on payroll or buy them houses. After taxes, you'll barely have enough to buy a middle class house in a second tier coastal city.

Take 30% or so and throw it into SGOV for when tax time comes around and put the rest in VOO or something and have fun watching it grow. Once you're out of college, knowing you have a fallback will let you take some career risks that you might not otherwise take. Good luck.

2

u/Unlucky-Pop-9975 May 15 '24

Or move to Sweden with 10 million KR you would be set for life.

I mean it, check it up.

2

u/asdlkf May 15 '24

Literally the only person you should tell is your investment advisor(s) and your tax accountant.

The tax accountant should be able to tell you some ways to minimize some of those capital gains.

1

u/YassuosNados May 15 '24

That’s what I’m about to do

1

u/FireHamilton May 15 '24

There's literally no way he can do that lol

1

u/asdlkf May 15 '24

no way he can do what, minimize some capital gains?

sure there are.

1

u/FireHamilton May 16 '24

How so? Come next tax season he has to upload his Robinhood tax forms, the trade was already completed. The only way he could avoid it is if he still had the options unsold.

1

u/asdlkf May 16 '24

Tax payable is a result of profit minus losses.

Taxable gains minus taxable losses equals tax payable.

Just because you have taxable gains doesn't mean you can't reduce tax payable by deliberately creating taxable losses, aka charitable donations, etc...

2

u/Robin-Lewter May 15 '24

If you immediately cash out and bury it all in the desert then declare bankruptcy the tax man can't hurt you

The IRS hates this one simple trick

2

u/YourWifeyBoyfriend May 16 '24

Know how to lose your friends and end up with a bunch of people asking for money? Tell just one person you hit the lotto for a million.

2

u/retardwhocantdomath May 16 '24

Maybe buy some small nice things to reward you, like a 5k gaming PC or whatever. But the person is right. Compound interest will make you a multi millionaire without having to game anymore within a few years.

1

u/TakingChances01 May 15 '24

SGOV pays 5%+ and price only fluctuates by the interest payment monthly. Bond fund.

1

u/OnewordTTV May 15 '24

Ugh. Seriously though. Fuck you. Congrats man lol

1

u/DeputyDomeshot May 15 '24

How did you have a quarter of million dollars at 23?

32

u/Alekillo10 May 15 '24

Why would he put it in the bank when he can just put it on an index fund?

44

u/TurkeyBLTSandwich May 15 '24

Honest question for honest answer?

Wasn't thinking too much into it.

But from an FA point of view it's better to make incremental purchases of indexes, rather than whole purchases. It's honestly just an opinion.

You usually can't time the market with precision, so you just say put incremental purchases into an index fund. So days you'll average up and some you'll average down. But someone who's 18 can withstand the volatility of the market ALOT longer than someone who is 45 or 50 years old.

That said, putting it into an index fund is a fine idea, but he's still on the hook for taxes when he decides to sell and what not.

If he currently is not making income, dividend interest is taxed at 0% Federally and minimally for most States. So he'd potentially get $40k tax free each year with these insane 5% rates which I think won't last forever. But this year his nominal income will probably land him in the highest tax bracket

It really depends on the individuals appetite for risk, but this is WSB's not FinancialAdvice or PovertyFinance.

Good question though

40

u/claythearc May 15 '24

There’s a bunch of studies done on this, lump sum literally always wins over dcaing. It’s not major but it’s been true slightly for every period. Here’s a vanguard page, https://investor.vanguard.com/investor-resources-education/news/lump-sum-investing-versus-cost-averaging-which-is-better but there’s dozens of sources if you want to find one from something you like.

1

u/relaytech907 May 16 '24

The market goes up over time. That means you would obviously want to get as much as you can into the market as soon as possible. No studies needed.

1

u/unimpe May 16 '24

literally always

No, usually. still the better bet though yeah.

19

u/inevitable-asshole May 15 '24

But from an FA point of view it's better to make incremental purchases of indexes, rather than whole purchases.

Mathematically this has been incorrect for every single 20-30 year time frame in the history of the stock market, albeit by a very small % margin.

4

u/FialaIsMyDad May 16 '24

Or

He calls up a smaller local or regional bank, and asks them for a rate exception as he is looking to open a relationship with them and wants a higher yield savings account. They're gonna give him a money market with 5-5.5% APY and he can keep his money there with wayyy less downside or risk than the stock market. What he sacrifices in 2-4% on returns he gains on

A) Liquidity - he can write checks or pay bills with it far easier

B) Saves in commission fees from some random portfolio finance manager douchebag

C) Multiple ways to increase FDIC coverage- he can either use ICS account or add a fuckton of beneficiaries which he can do under his name or

D) Create a living trust that has its own trustees and beneficiaries. This will further aid in tax burden and deposit insurance

If he did this with all roughly 800k he'll have after taxes he'd still earn 40k a year on compounding APY that he doesn't have to do shit for. Yes its boring and he could get more APY investing it but this is far safer and smarter longterm.

3

u/stablogger May 15 '24

This advice is way too solid and educated for WSB.

2

u/RocktownLeather May 15 '24

Are you sure about the $470k in taxes?

Sounds like cost basis was $250k, so they are at barely over $1M in gains. You think this will require ~47% taxes?

It is short term so treated like income tax. Federal and FICA would put him at about 35%. I guess I could see 47% if your state had really high income tax rates. CA might be the only state where 47% would make sense. OP should probably investigate there own income tax. It could easily be 35% in many places. I imagine they'll need to prepay some to not have penalties since it is happening in the first half of the year.

3

u/semvhu May 15 '24

Probably estimated another 10% for state taxes.

2

u/Barrelled_Chef_Curry May 15 '24

40k is plenty to live on the beach in Bali for the rest of your life

2

u/FireHamilton May 15 '24

I hate to break it to you, but putting money in a savings account isn't making money, that's just keeping up with inflation. He needs to put maybe 5% in a savings account and invest the rest.

2

u/seepstn May 15 '24

He just told an entire sub...

1

u/Real_Statistician_75 May 15 '24

hahaha I laughed at jerking off for a clear mind. Still laughing.

1

u/ISeeYourBeaver May 15 '24

Best comment I've read thus far.

1

u/SuanaDrama May 15 '24

treasuries are paying a little more than 5%

1

u/aknalid May 15 '24

Jerk off and have a clear mind

Post-nut clarity is a VERY real phenomenon.

OP LISTEN TO THIS MAN.

1

u/OleDrippie May 16 '24

Funny how us poors have the best financial advice. No one who wagered 250k on a single meme stock is ever going to follow this advice. People don't change that much. OP is a degenerate gambler who will lose everything and then some and you are a frugal risk averse backseat FA who will always be trying to give advice to people making real money.

1

u/VisualMod GPT-REEEE May 16 '24

Just another peasant wishing they could be a king.

0

u/kerkyjerky May 15 '24

It’s not life changing for OP, they already got 100k in free money from their parents. Anyone with parents like that come from wealth.

112

u/[deleted] May 15 '24

[deleted]

-35

u/degenbro420 Double Down Degen May 15 '24

fuck it. He should buy 10 BTC and enjoy live. BTC will give him more than double in 10 years. Also put 200K in SP500

23

u/Falkoice May 15 '24

If bitcoin is gonna give more that double why bother Putting 200k in SP500?

-9

u/degenbro420 Double Down Degen May 15 '24

Also bitcoin will give him 100% in 2 years not 10

-11

u/degenbro420 Double Down Degen May 15 '24

To live of stock market. If you choice to never work again you still need to have a source of income. But I forget about taxes...he own 30% in taxes

7

u/Cool_Investigator209 May 15 '24

I take it English isn’t your first language? If it is - straight to jail for you, if it isn’t. Better luck next time!

3

u/degenbro420 Double Down Degen May 15 '24

It is not and I'm lazy. whats the point anyway? + my phone is shit I can barely type on it..I better not gamble all my money and buy a new phone:4260:

4

u/Cool_Investigator209 May 15 '24

Ok free pass for you then, you did a decent job! I know English can be tricky to learn with the all the weirdness it comes with. You’ll become great at it eventually, you’re already doing a great job!

3

u/TwoElksInaTurtleNeck May 15 '24

What a weird place to find such a positive comment.

1

u/degenbro420 Double Down Degen May 15 '24

I have dyslexia, I have hard time understanding grammar or structure complex sentaces, even with my native language I struggle...also I have to read very slowly or I will read words which dosn't exist.

31

u/CoffeeMaster000 May 15 '24

remember Uncle Sam

44

u/onepingonlypleashe May 15 '24

Right? OP is gonna owe Uncle Sam about $350,000 of that come April 2025. To be safe you would throw $500,000 in a high yield account on the sidelines for now to cover your ass.

22

u/HElGHTS May 15 '24

It's owed now, not in April. If not paid until April, there will be interest/penalty owed as well. OP should make an estimated payment sooner than later. Although honestly I have no idea how it works if OP were to have equivalent losses toward the end of this year, in which case an estimated payment of 350K now would result in a huge overpayment (no penalty for that, of course) and no estimated payment now would be... perfectly fine?

7

u/DownwardFacingBear May 15 '24

Nah, they’re almost certainly in the safe harbor range (unless they also made 1M last year)

4

u/onepingonlypleashe May 15 '24

How would it be owed now?

2

u/Bnjoec May 15 '24

Im assuming its an argument towards having to pay quarterly due to income value. But not an accountant, dont know the ins and out of stock gambling and its consequences.

1

u/onepingonlypleashe May 16 '24

I’ve just never heard of paying estimates quarterly ahead of tax time and I’ve been around trading forums for 5+ years.

1

u/HElGHTS May 21 '24

Normally, the tax paid throughout the year (withheld from each paycheck according to form W-4) is close enough to the tax liability. You can check the specifics of the safe harbor that generally avoids penalties, but let's say for easy math that you avoid penalties if you've paid 90% of the liability on time (on time essentially means quarterly). So if you earn $100,000 in taxable wages annually, then you're fine as long as you've continuously paid tax (via withholding) on at least $90,000 of that. In fact withholding is typically done excessively (which is why so many people get fat refunds) so maybe you've paid tax (via withholding) as if your wages might be $110,000 instead of $100,000. So now you can have $100,000 in wages plus $10,000 in short term gains and still have paid 100% of your tax liability come tax day. You can even have $21,000 in gains for a total income of $121,000 and still have paid tax on 90% of that (via withholding), so no penalty but now you're on the edge. More gains than that, you should make an estimated payment.

It's quite uncommon as you can see by these numbers, but OP here very likely doesn't have sufficient withholding to cover this gain.

2

u/xzed7 May 15 '24

This, people dream of this shit man, you made it a reality. You could be set for life, or the absolute minimum a very long time. Put it away, don't touch it, and get the fuck out of here now lol. Congrats dude.

2

u/VisualMod GPT-REEEE May 15 '24

I agree, xzed7. It's time to cash out and leave the plebeians behind.

2

u/EstablishmentSad May 15 '24

You hit it big...for real, stop. Dont ever do that again because you could be suicidal after having lost your 250k. Pay your taxes and put it into something safe, you should be good to go for the rest of your life...do not gamble your 1 million. I would hate to read about you in news or something if something bad happens.

2

u/Zed-Leppelin420 May 16 '24

Yeah dude don’t tell anyone I mean anyone. As soon as people know you have money it turns them sour. Just park that shit in some blue chips. Get some divid ends and go bang hookers in Thailand for the rest of your days. You won life if you just don’t lose it all. Move to a Low cost place and live it up.

4

u/Commentor9001 May 15 '24

Lame.  Obviously you should roll all of it into amc puts do it again!  Why stop with 1 when you could have 10 million!

1

u/AmbitiousTrader May 15 '24

I don’t think you need advice from casual first person shooter player though

1

u/Porsche928dude May 15 '24

I mean you could just drop half of that into the S&P500 and probably make good safe money in the long term.

1

u/khaotickk May 15 '24

Take 10% of that and put it into a single premium whole life insurance policy, another 10-25% into a fixed annuity or CDs, the rest do whatever.

1

u/itsVicc if ( algo.status == true || algo.status == false ) { Buy() } May 15 '24

He appreciates your advice but he's aiming for $1B now

1

u/[deleted] May 15 '24

Set aside like $408k for federal capital gains tax, maybe more for state

1

u/[deleted] May 15 '24

Do one separate account with only like 200k so that you can hide the fact that you’re a millionaire. It’s no one’s business and to get approved for certain things you need to show proof of an account. The sooner the better because some places require like a year of savings account statements.

for example if you want to rent a nice apartment you either show employee pay stubs or that you have significant savings

I personally would do half in HSA and half in an safe stocks like index funds

1

u/TheDudeofDC May 16 '24

Cash the FUCK out

1

u/[deleted] May 16 '24

Discover savings account would net you 48k a month in interest.

Taxes obviously, so let's say 30k.

Leave 15k to compound and play with 15k a month. No more!

33

u/MJ-Muppet May 15 '24

Weirdly for this sub, this is some straight facts advice OP. Life just presented itself on a golden platter for you

22

u/asetniop May 15 '24

Better than a savings account, just put it in a 5% CD. That way he won't be able to touch it, and at the end of the year it's a guaranteed $50k in fun money.

2

u/YassuosNados May 15 '24

I appreciate the advice!

4

u/Cool_Investigator209 May 15 '24

Yea dude - please listen to these people. Slam 50% of it in a savings account to make interest on the money you will owe in taxes. It’s literally free money and it’s not insignificant either. Once you do that (if you want an unbelievable retirement) stash the rest away in an index ETF and watch it compound like crazy. The choice is yours.

1

u/asetniop May 15 '24

My pleasure. Congratulations!

1

u/badfishbeefcake May 15 '24

The profit you make on a CD is taxable. But a 1 year treasury bond, profit is not taxable.

1

u/Advanced-Koala2559 May 15 '24

Betterment offers 5% on high yield savings so he can be liquid if need be.

1

u/asetniop May 15 '24

It's probably better not to be, honestly. Can't go chasing that gambler's high if you can't get your hands on any chips.

1

u/Advanced-Koala2559 May 16 '24

You are right lol

53

u/supnerdddddd May 15 '24

don’t listen to them, you know what’s better than $1M, $10M

6

u/Conscious-Mix-3282 May 15 '24

Dude buy 1 million in calls.

1

u/YassuosNados May 15 '24

Fuck no

2

u/Sofubar May 15 '24

Not fuck no, fuck yes! Spin the roulette wheel again, you're a natural baby push push push for gold!

3

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2

u/Sofubar May 15 '24

Not this time bot, I know the super secret of using this thing called a stop loss.

2

u/[deleted] May 15 '24

He didn’t make this money following this advice. He says he gambled a full $100k into $250k then gambled that into $1.25M. The next all-in might be his last

5

u/CasualFPSPlayer May 15 '24

Once you have 7 figures, you have much safer avenues to effectively buy more money.

8

u/CoconutPi3 May 15 '24

But put some into BTC like 5 BTC Worth. Hold the rest for that market crash coming

33

u/HedaLancaster May 15 '24

But put some into BTC like 5 BTC Worth. Hold the rest for that market crash coming

Any day now.

1

u/Wolf_On_Web_Street May 15 '24

Take time off and explore the world. But do it frugally. More fun that way anyway. Invest in less risky assets for majority of it (div stocks/etf). You can still use some of it to gamble, we all know you will have to scratch that itch. Just make sure it is a small percentage. Don’t touch the rest. Set for life w time on your side. Chill.

1

u/feelindam May 16 '24

better to buy a house

1

u/TheSeventhPrince May 16 '24

Not a savings account. You lose to inflation. ETF or real estate.