Peter Thiel has been making headlines the past couple of weeks over leaked data obtained by ProPublica.
ProPublica’s report claims Thiel’s Roth IRA was worth less than $2,000 in 1999, which then increased to more than $5 billion at the end of 2019.
When Thiel turns 59 ½, he can withdraw all of the money tax-free.
Thiel used his Roth IRA to buy 1.7 million shares of PayPal in 1999 at $0.001 per share ($1,700 total) – a few years before the company went public in 2002.
Although it may seem unfair, there is nothing illegal about this strategy, and there is nothing to say other startup founders can’t do the same.
We previously detailed how founders can utilize a ROTH IRA last year with our blog: How one founder could pay no taxes on a $196M gain with a ROTH IRA.
In that blog, you’ll find more information on what a ROTH IRA is, potential pitfalls, other examples of success stories, and things to consider before investing.
Additionally, below you’ll find some more reading on the Thiel situation and what it means for your ROTH IRA:
- Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank – via ProPublica
- How Peter Thiel turned $2,000 in a Roth IRA into $5,000,000,000 – via MarketWatch
- I asked financial advisors how everyday people can build wealth in a Roth IRA, the account PayPal founder Peter Thiel used to turn $2,000 into $5 billion – via Insider
- What Peter Thiel’s Roth IRA means for yours – via Fox Business
Photo of Peter Thiel courtesy Inc.