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How Peter Thiel Turned a Roth IRA into $5B

Billionaire Peter Thiel turned his Roth IRA into a jaw-dropping $5 billion. Now he’s looking at zero taxes when he cashes out in retirement. How? Let’s unpack his playbook and see how you could apply some of his strategies with your own Roth IRA.

Wait, zero taxes? Yes, you read that right.

The magic of a Roth IRA is that you pay taxes on your contributions upfront, but then watch your investments grow tax-free, with tax-free withdrawals in retirement.

Sounds easy right?

Well, now the IRS adds some income limits into the mix for high-earners. If that’s you, there is a nice loophole you can take advantage of called the “Backdoor Roth IRA”, so you can still get in on the action. You can learn more about Backdoor IRAs here.

Now back to Peter Thiel.

Back when he wasn’t earning that much income, Peter Thiel contributed $2000 into his Roth IRA. He spent $1700 of that and bought 1.7M Paypal founder shares. Which is about $0.01 per share.

He sold those for roughly $28.5M. But he didn’t stop there. He strategically invested that amount into different startups like Facebook’s seed round, growing his Roth IRA into $5 billion.

“Wait, but my brokerage only allows me to invest in stocks and ETFs…”

What Peter Thiel did is all technically legal. If you follow the rules you can invest your Roth IRA into a variety of assets beyond just stocks and ETFs. Most big brokerages don’t allow beyond that, which is why you may or may not be aware of more alternative assets. (As you can see by row 6 in the chart below).

However, you can actually invest in assets like real estate, startups, or possibly crypto! On Carry you can set up a self-directed IRA (learn more here).

But tread carefully — avoid “prohibited transactions” which prevent using Roth IRAs for personal gain beyond investment returns. Peter Thiel likely had expert guidance to structure his investments. Consult a financial advisor.

Feeling inspired and ready to unlock the power of a Roth IRA? Carry empowers investors to invest in everything from stocks and ETFs to real estate and startups through Solo 401ks or IRAs.

Peter Thiel’s story is a great reminder that sky’s the limit with your retirement savings.

Of course, every financial journey is unique and this is not financial advice. Consult with an expert advisor to make sure do this properly. 

Happy investing!

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If you want more resources on building wealth as a solopreneur/entrepreneur, check these out:

• The Solo 401k handbook 

• The Roth IRA handbook 

• The Self-Directed IRA handbook 

• The Guide to Paying Less in Taxes

• What is a Solo 401k?

• How to Open a Solo 401k