Every player who has won a significant sum of money always wonders how to best invest it to make a little extra profit on the side. Before going any further, be aware that, in many countries, including the United States, you must pay taxes on your poker income before investing it. Assuming your winnings are yours, free and clear, this article will teach you how to safely invest your money in a timeless and set-it-and-forget it, liquid stock portfolio.
Many poker players naturally gravitate toward day trading, but this article strongly discourages this approach. It’s not to say that poker players could not be successful at it, simply that they will not have time to be successful at both poker and day trading. One or the other will likely suffer, so this article avoids strategies used by day traders like timing the market or predicting the future.
By far, the safest place to put your money is in bonds. A bond fund like Barclay’s TIPS fund (ticker: TIP) will keep your investment from falling in value, and is extremely liquid in case you need to withdraw the money at a later date. If you do not foresee withdrawing the money until you retire, consider a Roth IRA, available at several online brokers including thinkorswim (a personal favorite, due to their fee structure). Roth money is not as liquid as a generic stock account, so if you anticipate needing the money before you retire, it might be more prudent to simply put your money in an investment account, as withdrawing from a Roth can incur additional fees. Poker players who make significant income from poker (six figures a year or more) will often put their money into a SEP IRA, which is exclusively available for self employed or small business owners.
I any case, this writer advocates safe funds, like bonds or total market ETFs (ticker: QQQ, DJI), as they do not require poker player to focus on how their stocks are doing, instead, allowing them to focus on winning more money playing poker.
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