19. Warren Buffett’s 2nd Rule – Understanding Capital Gains Tax
Preston Pysh is the #1 selling Amazon author of two books on Warren Buffett. The books can be found at the following location:
In this lesson, students learned the importance of buying an asset that they can hold for ever. Buy purchasing a company that has long term prospects, the owner (or stock holder) doesn’t have to continually pay capital gains tax. When comparing the capital gains tax of a person that trades in the short term, it becomes very obvious that it’s not advantageous.
By purchasing a company with long term prospects, you’re not only minimizing your capital gains tax, but you also enjoy the sustained earnings through time.