Use This Simple Strategy from Paypal's Cofounder That Helped Him Make His First Million

Use This Simple Strategy from Paypal's Cofounder That Helped Him Make His First Million

Peter Thiel did it, famously, and you can too.

This story appears in the May 2024 issue of Entrepreneur. Subscribe »

Yes, you can make a million — and more — without paying taxes on it. The wealthy do it every day, and the formula is simple: Take a business or investment idea that's separate from your "day job," combine it with a Roth IRA structure, give it a little time and sunshine, and voilà!

PayPal cofounder Peter Thiel famously did this, according to ProPublica. He turned a $2,000 Roth into $5 billion, by using his Roth to fund his investment in PayPal, which grew astronomically. He never had to pay taxes on the $5 billion because it was generated from that one little $2,000 Roth (that he'd already paid taxes on when he was contributing to it). Thiel used his Roth profits to buy more shares of other startups at low prices with huge growth opportunities, and the rest is history.

So how do you do something like that? Here's a step-by-step guide.

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