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Peter Thiel put early PayPal shares worth pennies into a Roth IRA, then used it to invest in Facebook. The account grew to $5 billion tax-free. A Roth lets earnings compound untaxed, but the trick is getting enough money in there first.
Peter Thiel put early PayPal shares worth pennies into a Roth IRA, then used it to invest in Facebook. The account grew to $5 billion tax-free. A Roth lets earnings compound untaxed, but the trick is getting enough money in there first.
Peter Thiel, he put his PayPal founder shares in a Roth IRA, sold those for about $27 million, then used this as a supercharged investment account to where it is today, where he has $5 billion in his Roth. He gets all of that with no taxes.
What's a Roth IRA?
Put in after-tax money. All further growth in that account is tax-free.
Why would the government agree to this?
They want to incentivize retirement savings in general. And compared to traditional IRA, this brings tax revenue forward.
What Peter Thiel did, which was great, was he put his PayPal shares in there when they were valued at nothing, and then he used that money to invest in Facebook within his Roth IRA. So then the Facebook gain is why it became billions of dollars.
Exactly. Roth IRA limits are normally $7,000 a year. The whole game becomes how do I get a lot of money? And once you get $20 million, going from $20 million to much more is actually easier. It's how do you get the first amount of dollars in?
