Capital Gains Strategy

When you sell investments for a profit, you owe capital gains tax. But the rate depends on how long you held the investment.

Short-term (held less than 1 year): Taxed as ordinary income — up to 37%.

Long-term (held 1+ years): Taxed at 0%, 15%, or 20% depending on income. Most people pay 15%.

This difference is massive. On a $50,000 gain, short-term tax at 24% costs you $12,000. Long-term tax at 15% costs $7,500. You save $4,500 just by waiting 12 months to sell. This is why buy-and-hold investing isn't just a strategy — it's a tax advantage. Every trade resets the clock.