In 2020, I did active stock trading (mostly swing trading) and made ~$67,000 in total, which comes out to ~$5580/month on average.
As I am filing my taxes, I realize I will have to pay ~40% of my stock trading profits to IRS for income tax or ~$26,800 + other taxes. In total, I have to pay over $50k taxes to IRS by tax deadline.
On the contrary, my unrealized long term gains due to buy + hodl in 2020 was $600K+. I will be paying ~$0 taxes on my unrealized gains.
Because I have a full time job with income in 6-figures, its disadvantageous for me to increase my active income as I end up paying ~40% of it in taxes. It’s far better for me to focus on long term gains (unrealized especially) to continue building my wealth.
As such, I have decided to stop active stock trading and going forward will focus on buy and hold long term high quality asset/stocks and only sell long term gains (which triggers ~20% income tax).