Fri May 03 2024, by Tyler Gardner

Hedge FundsTaxationCarried InterestInvestment ReturnsHigh Earners

Hiler? Yep.

Looks like you made $5 million last year? Yep.

Okay, so we'll take our 37% of most of that. 20%! You might be rich, but you can't just make up the rules.

Oh, no. I manage a hedge fund, and that $5 million of compensation is actually considered carried interest because it comes directly off the investment returns of my clients.

Okay, so you're clearly in the highest tax bracket. Oh, yeah.

And you're being taxed at a lower rate than most teachers and nurses? That's right.

What a guy. I didn't make the rules. You did.

Touche.

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