I am very interested in looking in to these. But for that much cash put there, the profit seems very low. 20k could buy me 2 vehicles that need light work, and have that 10 k profit in a few weeks.
Again I don’t know the investment world but am very interested in learning. I enjoy fixing and flipping bikes and cars. Lots of cash to be made with very little effort. especially if you have 20k to throw around
There’s an old adage about people working hard to make money…people getting others to work for them to make even more money….and people getting their money to work for them to get rich.
^I Bonds aren’t going to make anyone rich, but they are a safe way to make a little money without doing anything. An I Bond can make you money while you are also making money in other ways simultaneously whether it’s flipping things, putting in hours at your job, etc. Whether or not they are better than stocks/mutual funds is debatable.
I purchased some earlier this year. We are using them as a portion of our emergency fund. Yes the money is tied up for a year, but we have the rest of the emergency fund amount in liquid savings in high yield savings accounts. The treasury direct website is pretty terrible, but it was not too much of a hassle to purchase them. The way I see it I am getting a lot better return on that 20k than I would if it was just sitting in the high yield savings making less than 1%
I am very interested in looking in to these. But for that much cash put there, the profit seems very low. 20k could buy me 2 vehicles that need light work, and have that 10 k profit in a few weeks.
Again I don’t know the investment world but am very interested in learning. I enjoy fixing and flipping bikes and cars. Lots of cash to be made with very little effort. especially if you have 20k to throw around
Personally, this wouldn’t be my first move in the world of investing, but to each there own.
If you are new and want to learn, read up on “Roth Ira” and “target date fund” or “total market Fund”. If I recall you are union and have a pension, so this would be secondary. Many ways to make it easy to funnel money into it, so that you wouldn’t even notice probably, and you would keep your 20k liquid to use for your flipping projects.
I know it all can seem intimidating, but it really doesn’t have to be. As mentioned above, the more streams of income in retirement, the better.
lots and lots of good information to be learned from various FIRE bloggers and websites out there. My personal favorite is Mr. Money Mustache (link below). This would be a great source for anyone looking to educate themselves on various investment strategies as well as the basics for getting started. the MMM forums are another great resource beyond MMM’s own posts on his website.
Thank you gentlemen for the good reads. I will look in to those this evening.
I’m very interested in making my money make money.
trying to research more on the I-bonds. Does anyone know if it is $10k max in total you’re allowed to invest? Or just max $10k increments?
trying to research more on the I-bonds. Does anyone know if it is $10k max in total you’re allowed to invest? Or just max $10k increments?
10K max per person per year. Buy in any amount you want at any time up to the 10k. I think there is a 25$ minimum per purchase.
thanks dirk. I wasn’t sure if you could do more than 10k/person/year or not. I’m aware of the smaller increments.
For those that are curious, the 7.12% return that was previously mentioned in this thread has now been increased to 9.62% May – October 2022. It is very enticing for a semi-liquid ST investment, especially considering the market volatility as of late.
i think i need help understanding this. please correct me where i am wrong
so i invest 20k (10 for me and 10 for the wife). i need to leave it in for a minimum of 1 year max 5. if after 1 year i take it out before the 5 years is up i lose 3 months worth of interest. the interest rate is set for 6 months and can change after that. the interst is paid out every 6 months which means for this cycle of 9.62% rate investing 20k would net a return of $962 after 6 months. We know the rate will not remain this high for the duration of 5 years but for the sake of simple math lets assume it does. that means that after 5 years of investing 20k your net return will be $9,620?
Crappie, not entirely correct or I am misunderstanding. You don’t have to cash the I-bonds after 5 years. You can with no penalty. But I think you can leave untouched and then after 30 years you have to cash them.
There is also a fixed rate and variable rate. The fixed rate is where you can make money over 30 years.
i think i need help understanding this. please correct me where i am wrong
so i invest 20k (10 for me and 10 for the wife). i need to leave it in for a minimum of 1 year max 5. if after 1 year i take it out before the 5 years is up i lose 3 months worth of interest. the interest rate is set for 6 months and can change after that. the interst is paid out every 6 months which means for this cycle of 9.62% rate investing 20k would net a return of $962 after 6 months. We know the rate will not remain this high for the duration of 5 years but for the sake of simple math lets assume it does. that means that after 5 years of investing 20k your net return will be $9,620?
$962 would be the return annually I believe.
<div class=”d4p-bbt-quote-title”>crappie55369 wrote:</div>
i think i need help understanding this. please correct me where i am wrongso i invest 20k (10 for me and 10 for the wife). i need to leave it in for a minimum of 1 year max 5. if after 1 year i take it out before the 5 years is up i lose 3 months worth of interest. the interest rate is set for 6 months and can change after that. the interst is paid out every 6 months which means for this cycle of 9.62% rate investing 20k would net a return of $962 after 6 months. We know the rate will not remain this high for the duration of 5 years but for the sake of simple math lets assume it does. that means that after 5 years of investing 20k your net return will be $9,620?
$962 would be the return annually I believe.
No, $962 is not the annual return. That’s the annual return on an original investment of $10K if the rate stayed at 9.62%.
Year 1 = 20k X 9.62% = $1,924
Year 2 = (20k + 1,924 = 21,924) * 9.62% = $2,109
and so on every year.
That is super simplified math since the bonds actually compound every 6 months not every 12 so it’s even more but you get the picture.
So with simplified math not taking the interest into account:
20k * 9.62% * 5 years = $9,620.
Yeah that’s my bad, I was being selfish and thinking of what my own $10k would produce, not the $20k we’re discussing.
Sounds worth while checking into. Question: If I buy $1000 three different times one month apart, do I have three bonds, or one bond worth $3000? If it is one bond, what will the issue date be? Since there are issues about the bond that relate to the age, where does it end up at?
Sounds worth while checking into. Question: If I buy $1000 three different times one month apart, do I have three bonds, or one bond worth $3000? If it is one bond, what will the issue date be? Since there are issues about the bond that relate to the age, where does it end up at?
You’d have three separate bonds.
You can only buy one iBond per SSN each calendar year. The three bonds would have to be in three different names.
With a current 9.6% rate if returb I’d buy more if legally permitted.
You can only buy one iBond per SSN each calendar year. The three bonds would have to be in three different names.
With a current 9.6% rate if returb I’d buy more if legally permitted.
I don’t think that is correct but I don’t have time to look right now. I think you can buy them in as small of denominations as $25 and no more than $10,000 in one year
Sounds worth while checking into. Question: If I buy $1000 three different times one month apart, do I have three bonds, or one bond worth $3000? If it is one bond, what will the issue date be? Since there are issues about the bond that relate to the age, where does it end up at?
The good news is that you can buy I Bonds as often as you’d like! The bad news is that you can’t surpass the limits, and they are pretty tight:
You can buy up to $10,000 in bonds online.
You can buy up to $5,000 additional bonds on paper using your federal income tax return.
How much can I buy?
Individual purchase limits for I Bonds are $15,000 per calendar year—$10,000 worth of electronic I Bonds and $5,000 worth of paper I Bonds. Paper I Bonds can only be purchased using your federal tax refund and cannot be purchased digitally.
So if you chose to buy $5,000 worth of I paper bonds with your tax refund in April 2022, you can still buy up to $10,000 worth of electronic I Bonds throughout the calendar year.[1]
Ya dirk-w, I think you nailed it.
That is what I thought and understood, however I wanted it make sure. I have sent money to them three times, so that means I have three bonds with the total not being over $10,000 for this fiscal year. Thanks all,
Oops, I should of said calendar year, not fiscal year.
Dirk is correct, I should have been clear that $10k was the max cumulative annual purchase. We bought ours in one transaction each for my wife and me. The tax return iBonds don’t work for me, I manage withholding carefully to minimize return/pay in situations.
If you need a store of money, like an emergency fund, these are fine but you need to lock up cash to actually earn the money.
the treasury direct website is pretty terrible but is what it is.
each person can do 10k per year (you and your spouse can contribute 10k)
if you are in your 20’s even into your 40’s, I would not use this as part of your investment portfolio. over the past 13 years, the rate of return on ibonds is under 2%. I think we’ll definitely have higher inflation for the next few years so it may make sense to park some savings there. but for retirment stuff, invest heavily in equities and allocate a portion to bonds at the appropriate risk level.
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