[Warfish]

Originally Posted by Winstonbiggs

If you took a million dollars of invested money in stocks before the crash of 2008 and put it under your mattress instead of a bank that would have been a very prudent investment.

Except there is no situation where the ONLY two options were "invest in stocks" or "put under mattress".

Under literally every circusmtance, "under mattress" is a poor investment, as the value of that money dimished over time.

The only exception would be a severe and long-lasting period of monetary deflation, so string that it overcome the inherant loss in the time value of money for money not invested in a vehichle that offered some form of return. The Financial Crisis of 2007/2010 did indeed have deflationary effects, primary due to enegery costs falling, but it was not long lasting enough or strong enough to overcome the loss incurred by a conscious non-investment of funds into a safe investment vehicle over the same period.

Sorry fish you have failed the basic sell high and buy low. Like most people they buy high and sell low. There are times in life the mattress is most certainly a great investment and we just went through a short period where that was proven out and may well go through it again.

I too am sorry, but thats simply not correct. "Under Mattress" may have been a better decision than say, shoving it down stripped panties or buying Enron stock, but it was not and is not a good investment, and it has nothing to do with buy/sell high/low.

Money under mattress is an almost 100% losing decision. While it may be a safer decision that strippers or stocks, it's still a net loser outside of very breifs period in U.S. financial history. There is no shortage of safer and safe options that exist. It is not a two-option-only scenario.

You fail to understand that investing has risk and risk tollerance is part of investing.

I'm well aware of the fact, which is why I do not personally waste my own money in investing. As you've seen with most of my predictions over the years, I'm quite poor at it, and would lose money.

This is not, IMO, relevant to the question of taxation on investment income.

If Banks aren't safe and we are seeing a full boat deflation like we just went through a few short years ago when you were most certainly an adult with some cognitive recognition, you would get it. You aren't as dumb as you are acting here for the sole purpose of being argumentative.

Banks were never "not safe". Not a single person lost money from an FDIA insured bank. And your era of deflation was not long enough or strong enough to warrant a "sit on your money" investing tactic.

I'm not trying to be argumentative with you Winston, you're clearly VERY angry about something at current, and think you need to put me in my place to vent it. But you're simply incorrect with your under the mattress analogy. It does not meet the common finance definition fo an investment, and over almost any period it is a net loser when many net winner investments existed.

In any event, we're well derailed from a moral question of taxation principles and if/why labor income should/should not be taxed at a different rate (and if so what rates) from investment/capital gains income.

Originally Posted by parafly

Just playing devil's advocate here ... what if your expectation is monetary deflation? Then putting your money under the mattress would indeed be an investment even in the financial sense.

Indeed. In the same sense that buying a lottery ticket and winning would be a betetr investment, but just like deflation, it is not something that could in any form be counted upon and certainly is not something that was indicated to be a long-term situation in the United States. It also ignores the fact that "under the mattress" returns 0% outside of deflation, while any number fo other safe investments return deflation+ a return during the same period, even the dreaded 2008 Winston is harping on.

By all means, if all of you wish to "invest" by sticking your money under your pillow, by all means do so. If you think thats the ebst investment, who am I to tell you otherwise.