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Author: warlord Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121187  
Subject: What do I do?! Date: 8/14/1997 9:48 PM
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Hiya.. Im a new investor.. only 25. I make aprox 30k.. near 40k with overtime :) I want to invest in a company I think will be BOOMING within 4 years..<Loral space communications> but I dont wanna buy the stock for 16 now and then when it goes to $100 a share I lose 30k in taxes when I cash out. Id like to cash out in aprox 5 years and put the money towards a new house or condo. What do I do?
How can I protect my money from being bombed by taxes? I know I will definately need the money in aprox 5 years.
I read the new tax laws, im so confused my head is going to explode, please help :)

PS- Remember, im new.. Be gentle :)
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Author: JeanDavid Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 184 of 121187
Subject: Re: What do I do?! Date: 8/15/1997 8:08 AM
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<Hiya.. Im a new investor.. only 25. I make aprox 30k.. near 40k with overtime :) I want to invest in a company I think will be BOOMING within 4 years..<Loral space communications> but I dont wanna buy the stock for 16 now and then when it goes to $100 a share I lose 30k in taxes when I cash out. Id like to cash out in aprox 5 years and put the money towards a new house or condo. What do I do?
How can I protect my money from being bombed by taxes? I know I will definately need the money in aprox 5 years.
I read the new tax laws, im so confused my head is going to explode, please help :) >

First thing to do is go to the Motley Fool home page and read the 13 Steps. Also read the Motley Fool's Investment Guide, available from the FoolMart or your local deep-discount book store. (The millenium will have arrived when the full-service brokers really provide full service and hand out free copies of the book, as they now do with the S&P stock guide.)

The main trouble with the advice I have given is that the MF deals mainly with long-term investing. And 5-years is at the bottom end of what they consider to be long-term. If you are willing to risk it a little, I would suggest investing in the Foolish Four or UV4* portfolio. Since you are young and in it only for the short-term (so-to-speak), I would seriously avoid the UG approaches and using an IRA (which avoids taxes, in a way, but not suitable for withdrawals until you are 59 1/2). If possible, invest the money you will need in the next few years in something relatively safe, such as a money market, and try to invest something in a longer-term IRA or 401(k), realizing that you cannot take the money out before 59 1/2 except in unusual circumstances.

Bear in mind that if you end up paying high capital gains taxes, it is because you made high capital gains. For every $1 you pay the IRS in capital gains tax, you get $4 of your own, if you held the stock over 18 months.

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Author: indinvestor Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 189 of 121187
Subject: Re: What do I do?! Date: 8/17/1997 10:10 AM
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I understand there are provisions in the new Roth IRA that allow penalty free withdrawals for two reasons - the first time purchase of a home or for education. You might consider placing your investment under the umbrella of a Roth IRA for the next five years if this works out to be true. Then, your gain will be tax free and you'll be able to withdraw for a down-payment on a home without penalty or taxes regardless of your age. Attractive benefit for someone your age. Hope I'm right. Check it out.

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