Uncategorized
Inflation is so bad in Zimbabwe that the country is now issuing gold coins to its citizens

As a global inflationary wave continues to send costs soaring for everything from fuel to groceries, some governments are getting creative in reining in prices.
Zimbabwe, a country of less than 15 million people in southern Africa, will begin issuing gold coins to its citizens as a hedge against inflation later this month, the country’s central bank announced this week.
The gold coins will be introduced as a “store of value,” according to a statement by the central bank governor John Mangudya, meaning that Zimbabweans can exchange them in the future without worrying about the coins deteriorating in value as has happened with the local Zimbabwean dollar, which has been devalued by over 40% since the beginning of the year. They will be available to the public starting on July 25, and will be sold “based on the prevailing international price of gold and the cost of production.”
The public will be able to buy gold coins using both Zimbabwean dollars as well as the U.S. dollar, and other foreign currencies. The Zimbabwean dollar is the official currency in the country, but the U.S. dollar and other foreign currencies were considered legal tender between 2009 and 2019, and the greenback is still widely used and accepted.
Buyers can either hold on to the coins or place them in the custody of a bank. Holders can trade the coins for cash at any point, although Mangudya’s statement says that the coin can “also be used for transactional purposes.”
The gold coin’s introduction comes as the Zimbabwe central bank attempts to control soaring inflation in the country, where the annual rate hit 192% last month.
Ever since the 1970s, gold has been one of the most popular commodities used to hedge against inflation and war, as the metal tends to rise in value as the purchasing power of currencies decline, although this is the first time Zimbabwe has turned to the commodity as a potential currency replacement.
Investors tend to turn to gold in times of market uncertainty and rising inflation, as happened last February shortly before Russia’s invasion of Ukraine, when skittish investors sent the metal’s value soaring to a two-year high.
Gold’s status as a long-term hedge against inflation has come into question in recent years, with several experts pointing out its history of rare positive returns for investors since the 1970s. But in Zimbabwe, which has been dealing with inflation for years, any hedge that can minimize the impact of high prices is sorely needed.
This is not the first time that Zimbabwe has suffered from out-of-control inflation. In 2007, Zimbabwe’s economy entered a period of hyperinflation, a term used to describe very high, accelerating, and generally out-of-control price increases in an economy, usually when the inflation rate exceeds the 50% mark.
The global economic crisis of the late aughts forced Zimbabwe to drastically increase its money supply in response to rising national debt. Hyperinflation in the country led to the introduction of the world’s first and so-far only 100-trillion-dollar note in 2009.
The turn to using the U.S. dollar and other foreign currencies as legal tender in 2009 and the reversion back to the Zimbabwean dollar in 2019 did little to quell the country’s inflation, which hit an annual high of 557% in 2020.
Since reintroducing the Zimbabwean dollar, the currency has plunged again. To help stabilize the economy from rising inflation, the government announced in June that it would be keeping the U.S. dollar and other foreign currencies as legal tender for at least the next five years.
This story was originally featured on Fortune.com
Uncategorized
American Weed Stocks Are Cheap. They’re About to Get a Sales Bump.

However bad the year has been for most stocks, it has been especially harsh for state-licensed cannabis sellers.
In just the past month, the
AdvisorShares Pure US Cannabis
exchange-traded fund (ticker: MSOS), which tracks America’s multistate operators—or MSOs—fell 25%, while the
S&P 500
dropped 7%.
Uncategorized
How Do Mega Backdoor Roths Work?

A mega backdoor Roth is a unique 401(k) rollover strategy that’s designed for people whose incomes would ordinarily keep them from saving in a Roth Individual Retirement Account. The advantage of using a Roth IRA to save for retirement is being able to make tax-free qualified withdrawals. But not everyone can contribute to these accounts; higher-income earners are excluded. That’s where the mega backdoor Roth comes into play. If you have a 401(k) you’d like to roll over, you could use this strategy to enjoy the tax benefits of a Roth IRA without having income be an obstacle.
Make sure you’re taking advantage of every opportunity to maximize your retirement assets by working with a financial advisor.
Roth Account Basics
Before diving into the specifics of a mega backdoor Roth, there are a few things to know about Roth accounts, including Roth IRAs and Roth 401(k)s.
First, these accounts are both funded with after-tax dollars. That means when you make qualified withdrawals later, you won’t pay income tax on the money since you already paid it upfront. This is the key characteristic of Roth accounts and what makes them so appealing to investors who anticipate being in a higher tax bracket at retirement.
Next, your ability to contribute to a Roth 401(k) is not restricted by your income. But it is for a Roth IRA. For the 2021 tax year, you must be within these modified adjusted gross income limits to make a full Roth IRA contribution:
-
Single filers: MAGI of $125,000 or less
-
Married filing jointly: MAGI of $198,000 or less
-
Head of household: MAGI of $125,000 or less
You can make partial contributions above those income limits. But your ability to contribute phases out completely once your MAGI hits $140,000 (if you file single or head of household) or $208,000 if you’re married and file a joint return. For 2021, the full contribution allowed is $6,000 with a $1,000 catch-up contribution for savers aged 50 and older.
Finally, Roth 401(k) accounts are subject to required minimum distribution rules just like traditional 401(k) accounts. This rule requires you to begin taking money from your 401(k) starting at age 72. A Roth IRA, on the other hand, is not subject to RMD rules.
What Is a Backdoor Roth?
A backdoor Roth offers a work-around for people whose incomes are above the limits set by the IRS. When you execute a backdoor Roth, you roll money over from a traditional IRA to a Roth account. This way, you won’t have to pay taxes on your retirement savings in the Roth IRA when it’s time to make withdrawals. And you’re not subject to required minimum distribution rules either.
But there is a catch. You have to pay income tax on the money you roll over to a Roth account. So while you could save money on taxes in retirement, you’re not escaping the tax liability of a traditional IRA altogether.
How a Mega Backdoor Roth Works
A mega backdoor Roth is a backdoor Roth that’s designed specifically for people who have a 401(k) plan at work. This type of backdoor Roth allows you to contribute up to $38,500 to a Roth IRA or a Roth 401(k) in 2021. This is in addition to the regular annual contribution limits the IRS allows for these types of accounts. To execute a mega backdoor Roth, two conditions have to be met. Your 401(k) plan needs to allow the following:
You can ask your plan administrator whether your 401(k) meets these criteria. And if your plan doesn’t allow for in-service withdrawals or distributions, you could still attempt a mega backdoor Roth if you plan to leave your job in the near future.
If your plan meets the criteria, then you can take the next steps to execute a mega backdoor Roth. This is typically a two-step process that involves maxing out after-tax 401(k) contributions, then withdrawing the after-tax portion of your account to a Roth IRA.
Again, whether you can follow through on the second step depends on whether your plan allows in-service withdrawals. If it doesn’t, you’ll have to wait until you separate from your employer to roll over any after-tax money in your 401(k) into a Roth IRA.
You also need to watch out for the pro rata rule. This IRS rule says you can’t only withdraw pre- or post-tax contributions from a traditional 401(k). So if you’re completing a mega backdoor Roth, you couldn’t just withdraw post-tax contributions if your account holds both pre- and post-tax funds. In that case, you may have to roll over the entire balance to a Roth IRA.
Benefits of a Mega Backdoor Roth
There are three key benefits associated with executing a mega backdoor Roth. First, you can contribute significantly more to a Roth IRA upfront this way. For 2021, the contribution limit is $38,500 on top of the regular annual contribution limit and any catch-up contribution limits that may apply.
You’ll need to know the maximum amount you’re allowed to contribute to the after-tax portion of your 401(k). So for 2021, the IRS allows a maximum contribution of $58,000 or $64,500 if you’re 50 or older. You’d subtract your 401(k) contributions and anything your employer adds in matching contributions to figure out how much you could add to the after-tax portion.
Next, you can enjoy tax-free withdrawals in retirement. This is a benefit you may otherwise not being able to get if your income is too high to contribute to a Roth IRA. By reducing your tax liability in retirement, you can help your investment dollars go further. And you may have a larger legacy of wealth to pass on to future generations.
Finally, a mega backdoor Roth IRA would allow you to sidestep required minimum distribution rules. This means that you could retain control over when you choose to take distributions from a Roth IRA.
So who is a mega backdoor Roth right for? You may consider this move if you:
-
Have an eligible 401(k) plan at work
-
Have maxed out traditional 401(k) contributions
-
Are not eligible to contribute to a Roth IRA because of your income
-
Have additional money that you want to invest for retirement
-
Want to leverage the higher Roth IRA contribution limits allowed by a mega backdoor rollover
Talking to your financial advisor can help you decide if a mega backdoor Roth makes sense. And your 401(k) plan administrator should be able to tell you if it’s possible, based on your plan’s guidelines.
Mega Backdoor Roth Alternatives
If you can’t execute a mega backdoor Roth because your plan doesn’t allow it, there are other ways to increase your retirement savings. For example, you could try a regular backdoor Roth instead. This might be something to consider if you still want to enjoy the tax benefits of a Roth IRA but your plan doesn’t fit the criteria for a mega rollover. You could also elect to make Roth 401(k) contributions to your retirement plan at work. This way, you still get the benefit of contributing after-tax dollars and making tax-free withdrawals. You’d be subject to the regular contribution limits and you’d still have to take the required minimum distribution. But that may outweigh the value of tax savings in retirement.
Investing in a Health Savings Account (HSA) is another option. While these accounts are not specifically designed for retirement, they can yield multiple tax benefits. Contributions are tax-deductible and grow tax-deferred. Withdrawals are tax-free when used for eligible healthcare expenses. And at 65, you can take money out of an HSA for any reason without a tax penalty. You’ll just owe ordinary income tax on any withdrawals that are not used for healthcare expenses.
Finally, you could open a taxable brokerage account to invest. This doesn’t necessarily save you money on taxes since you’ll owe capital gains tax when you sell investments at a profit. But it could help you to diversify your investments and there are no limits on how much you can invest in a brokerage account annually.
Bottom Line
A mega backdoor Roth strategy could work well for higher-income earners who want to take advantage of Roth account benefits. There are certain rules that need to be followed to make it work, however, so you may want to talk to your plan administrator or a tax professional before going ahead. Keep in mind also that even if you can’t complete a mega backdoor Roth rollover, you still have other options for growing retirement savings.
Tips for Retirement Planning
-
If you’re saving for retirement in a 401(k) or IRA, pay attention to the fees you’re paying. For instance, check the expense ratios for each fund you’re invested in to understand how much you pay to own that fund on an annual basis. You can then compare that to the fund’s performance to determine whether the fees are justified. Also, consider any administrative fees you might be paying and how those affect your net returns.
-
Consider talking to your financial advisor about a mega backdoor Roth and whether it could be right for you. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s financial advisor matching tool makes it easy to connect with professional advisors in your local area. You can get your personalized recommendations in minutes just by answering a few simple questions. If you’re ready, get started now.
Photo credit: ©iStock.com/designer491
Uncategorized
Alibaba Is Tumbling. Chinese Tech Stocks Have a New Headache.

Chinese tech stocks were tumbling on Monday as two of the embattled sector’s leading players faced fresh fines from market regulators over disclosure rules.
China’s State Administration for Market Regulation announced Sunday a wave of penalties for improperly reporting past deals, in breach of competition law.
Alibaba
(ticker: BABA) and
Tencent
(0700.H.K.) were among the companies fined as a result.
-
Forex8 months ago
Forex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
-
Forex4 months ago
Unbiased review of Pocket Option broker
-
World5 months ago
Why are modern video games an art form?
-
Forex8 months ago
How is the Australian dollar doing today?
-
Cryptocurrency8 months ago
What happened in the crypto market – current events today
-
Stock Markets3 months ago
Amazon layoffs news: company announces record layoffs
-
Forex7 months ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
-
Stock Markets8 months ago
Morgan Stanley: bear market rally to continue