Lagarde's Son Ignored Her Advice About Crypto Investing
The president of the European Central Bank (ECB), Christine Lagarde, recently shared that her son went against her advice and invested in cryptocurrency. Lagarde revealed during a town hall with students in Frankfurt that her son experienced a loss of approximately 60% on his investment. Despite this setback, Lagarde expressed that her son reluctantly admitted she was right about the risks involved in crypto investing.
Lagarde's skepticism towards cryptocurrencies is well-known. She has consistently voiced concerns about the potential risks and dangers associated with crypto assets. Last year, Lagarde warned that decentralized finance (defi) and crypto assets could pose significant threats to financial stability. Additionally, she has criticized cryptocurrencies, stating that they are "based on nothing" and are being used for illicit activities like evading sanctions.
The ECB president did not disclose the specific cryptocurrencies her son invested in or the amount of his investment. However, she emphasized her disapproval of cryptos and expressed her belief that people should not be allowed to engage in criminal activities or trades facilitated by cryptocurrencies.
The European Central Bank has been advocating for global regulations in the crypto space to safeguard uninformed investors and prevent illicit activities such as terrorism financing and money laundering.
In a recent development, the ECB has decided to progress its central bank digital currency (CBDC) project to the next phase after conducting a two-year investigation. This "preparation phase" will involve finalizing the digital euro rulebook and selecting providers to develop a digital euro platform and infrastructure.
It remains to be seen whether Lagarde's son's experience will impact her stance on cryptocurrencies and influence future ECB policies regarding digital assets.
What are your thoughts on ECB President Christine Lagarde's son disregarding her advice and investing in crypto? Share your opinions in the comments section below.
Frequently Asked Questions
Is gold buying a good retirement option?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
The most popular form of investing in gold is through physical bullion bars. You can also invest in gold in other ways. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.
If you don't want to keep your wealth safe, buying shares in companies that extract gold and mining equipment could be a better choice. If you require cash flow, gold stocks can work well.
ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs may include stocks that are owned by gold miners or precious metals refining companies as well as commodity trading firms.
How is gold taxed within an IRA?
The fair value of gold sold to determines the price at which tax is due. When you purchase gold, you don't have to pay any taxes. It is not considered income. If you decide to make a sale of it, you'll be entitled to a taxable loss if the value goes up.
Loans can be secured with gold. Lenders try to maximize the return on loans that you take against your assets. This often means selling gold. There's no guarantee that the lender will do this. They may just keep it. They may decide to resell it. The bottom line is that you could lose potential profit in any case.
If you plan on using your gold as collateral, then you shouldn't lend against it. You should leave it alone if you don't intend to lend against it.
What amount should I invest in my Roth IRA?
Roth IRAs let you save tax on retirement by allowing you to deposit your own money. These accounts are not allowed to be withdrawn before the age of 59 1/2. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. You cannot touch your principal (the amount you originally deposited). This means that no matter how much you contribute, you can never take out more than what was initially contributed to this account. If you take out more than the initial contribution, you must pay tax.
The second rule is that you cannot withdraw your earnings without paying income taxes. So, when you withdraw, you'll pay taxes on those earnings. Let's assume that you contribute $5,000 each year to your Roth IRA. Let's also assume that you make $10,000 per year from your Roth IRA contributions. Federal income taxes would apply to the earnings. You would be responsible for $3500 You would have $6,500 less. Because you can only withdraw what you have initially contributed, this is all you can take out.
The $4,000 you take out of your earnings would be subject to taxes. You'd still owe $1,500 in taxes. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). So even though you received $7,000 in Roth IRA contributions, you only received $4,000.
Two types of Roth IRAs are available: Roth and traditional. A traditional IRA allows you to deduct pre-tax contributions from your taxable income. Your traditional IRA allows you to withdraw your entire contribution plus any interest. There is no limit on how much you can withdraw from a traditional IRA.
Roth IRAs won't let you deduct your contributions. Once you are retired, however, you may withdraw all of your contributions plus accrued interest. Unlike a traditional IRA, there is no minimum withdrawal requirement. It doesn't matter if you are 70 1/2 or older before you withdraw your contribution.
Is gold a good investment IRA option?
If you are looking for a way to save money, gold is a great investment. It can be used to diversify your portfolio. But gold has more to it than meets the eyes.
It has been used throughout the history of currency and remains a popular payment method. It is often called “the most ancient currency in the universe.”
But unlike paper currencies, which governments create, gold is mined out of the earth. It is very valuable, as it is rare and hard to create.
The supply-demand relationship determines the gold price. The economy that is strong tends to be more affluent, which means there are less gold miners. The value of gold rises as a consequence.
The flip side is that people tend to save money when the economy slows. This increases the production of gold, which in turn drives down its value.
It is this reason that gold investing makes sense for businesses and individuals. If you invest in gold, you'll benefit whenever the economy grows.
Additionally, you'll earn interest on your investments which will help you grow your wealth. In addition, you won’t lose any money if gold falls in value.
What are the benefits of a Gold IRA?
The best way to save money for retirement is to place it in an Individual Retirement Account. It will be tax-deferred up until the time you withdraw it. You have total control over how much each year you take out. There are many types of IRAs. Some are better suited for people who want to save for college expenses. Some are better suited for investors who want higher returns. For example, Roth IRAs allow individuals to contribute after age 59 1/2 and pay taxes on any earnings at retirement. Once they start withdrawing money, however, the earnings aren’t subject to tax again. This account is a good option if you plan to retire early.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA that requires you to pay taxes on the gains you make while you wait to access them, a gold IRA does not have to do this. For people who would rather invest than spend their money, gold IRA accounts are a good option.
Another advantage to owning gold via an IRA is the ease of automatic withdraws. That means you won't have to think about making deposits every month. To make sure you don't miss any payments, you can also set up direct deductions.
Gold is one of today's most safest investments. Its value is stable because it's not tied with any one country. Even in times of economic turmoil gold prices tend to remain stable. Gold is a good option for protecting your savings from inflation.
What is the Performance of Gold as an Investment?
Gold's price fluctuates depending on the supply and demand. It is also affected negatively by interest rates.
Gold prices are volatile due to their limited supply. There is also a risk in owning gold, as you must store it somewhere.
How to Open a Precious Metal IRA
First, you must decide if your Individual Retirement Account (IRA) is what you want. Open the account by filling out Form 8606. Next, fill out Form 5204. This will determine the type of IRA that you are eligible for. This form should not be completed more than 60 days after the account is opened. After this, you are ready to start investing. You can also choose to pay your salary directly by making a payroll deduction.
For a Roth IRA you will need to complete Form 8903. Otherwise, the process is identical to an ordinary IRA.
To qualify for a precious Metals IRA, there are specific requirements. The IRS stipulates that you must have earned income and be at least 18-years old. For any tax year, your earnings must not exceed $110,000 ($220,000 for married filing jointly). And, you have to make contributions regularly. These rules apply regardless of whether you are contributing directly to your paychecks or through your employer.
An IRA for precious metals allows you to invest in gold and silver as well as platinum, rhodium, and even platinum. You can only purchase bullion in physical form. This means you can't trade shares of stock and bonds.
However, investing in precious metals via an IRA has two serious drawbacks. They aren't as liquid as bonds or stocks. They are therefore more difficult to sell when necessary. Second, they don't generate dividends like stocks and bonds. Therefore, you will lose money over time and not gain it.
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Gold IRA – Add Sparkle to Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Do you want to keep your IRA gold at home? It's not legal – WSJ
Guidelines for Gold Roth IRA
Start saving as soon as possible to save for your retirement. Start saving as soon as possible, usually at age 50. You can continue to save throughout your career. It is essential to save enough money each year in order to maintain a steady growth rate.
Also, you want to take advantage tax-free options such as a traditional 401k, SEP IRA or SIMPLE IRA. These savings vehicles allow you to make contributions without paying taxes on earnings until they are withdrawn from the account. They are a great option for those who do not have access to employer matching money.
It's important to save regularly and over time. If you aren't contributing the maximum amount permitted, you could miss out on tax benefits.
By: Kevin Helms
Title: ECB Chief Christine Lagarde Reveals Her Son's Crypto Investment Despite Warnings
Sourced From: news.bitcoin.com/ecb-chief-christine-lagarde-reveals-her-son-invests-in-crypto-despite-her-warnings-he-ignored-me-royally/
Published Date: Fri, 24 Nov 2023 21:30:00 +0000