Viewing a single comment thread. View all comments

6BigAl9 t1_itze6ki wrote

Reply to comment by kiamori in Treasury Direct log in issue by Mrs_WorkingMuggle

Cool, so where do you suggest I put my house downpayment savings that I’ll need in 1-5 years for a higher guaranteed rate?

2

kiamori t1_iu1qwfs wrote

You do realize that the I bond rate changes every 6 months and it will likely be less than 6% 6 months from now. So you'll be stuck earning those lower rates for the full 5 years unless you take the early redemption penalty.

I would invest in land before i would put it into US bonds, especially with a major economic crash potentially coming. People always need land, it's a finite resource and the price will always go up especially so for strategic land. Safest is farm land that you can rent out, inflation rate is fairly common for farm land value plus you get a bonus of rent. Something simple like hay fields is good.

0

6BigAl9 t1_iu1xpk0 wrote

I…don’t think you understand how ibonds work. You get 6 months of the current rate from date of purchase and then 6 months of the next rate. Since I bought this month I’ll get 6 months of 9.62% and then in May I’ll get 6.48% for 6 months. You only have to hold for a year after which point if HYSA is higher I’ll gladly take the 3 month penalty, move it there, and still come out way ahead of any savings account.

I’m not buying them as a long term investment, I’m literally putting property downpayment money there since I’m not yet ready to buy.

0

kiamori t1_iu253ge wrote

Isn't that exactly what I said?

6 months good interest and then in 6 months you get whatever that rate is... You lose 3 months interest if you sell before 5 years.

What did I state incorrectly?

2

6BigAl9 t1_iu25o0q wrote

I guess I misunderstood you. We know the next 6 month rate is going to be around 6.48%. I consider 9.62% really good and 6.48% good as well. That averages out to a little over 8% over the year. Let's say I hold 15 months to take into account the 3 month penalty, I'm getting that rate (minus federal taxes). And even if I don't, it's beating any other guaranteed investment.

1

kiamori t1_iu2hdwx wrote

so max contrib is 15k asuming you do 5k with your return. 15k for 15 months will net you about 16020 after federal taxes.

another option would be to sell "safer" puts, for example lets take tsla, what is the lowest you could see tsla stock in 15 months? lets say 180.00 that would give you a gain of $3500 less $500 after tax and you would need $14,500 to cover the margin balance. You could also close the position at any time if needed.

2

6BigAl9 t1_iu2jn4e wrote

Are you really comparing Tesla puts to ibonds? I’m talking about a safe place to put money I will need in the medium term.

1

kiamori t1_iu2mshv wrote

If you wanted to compare the same earnings with tesla puts you would have to go all the way down to a $100 tsla put, tesla going down to $100 is as likely as the fed declaring bankruptcy.

1