Author Topic: Savings/investments/bonds Master Thread.  (Read 126917 times)

Offline yesitsme

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Re: Savings/investments/bonds Master Thread.
« Reply #20 on: September 24, 2021, 11:40:18 AM »
whats is I and what is EE and where do you get it?
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Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #21 on: September 24, 2021, 11:50:38 AM »
whats is I and what is EE and where do you get it?
Easiest way is through https://treasurydirect.gov/
EE - https://www.treasurydirect.gov/indiv/products/prod_eebonds_glance.htm
I - https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

I just started with I bonds so ask away and can all learn together.  :)
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Offline yesitsme

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Re: Savings/investments/bonds Master Thread.
« Reply #22 on: September 24, 2021, 12:18:25 PM »
And they're also not taxable
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Offline Euclid

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Re: Savings/investments/bonds Master Thread.
« Reply #23 on: September 24, 2021, 12:19:06 PM »

Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #24 on: September 24, 2021, 12:41:30 PM »
And they're also not taxable
Nontaxable at state and local level but taxable at federal level with exceptions when used for higher education.
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Offline ExGingi

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Re: Savings/investments/bonds Master Thread.
« Reply #25 on: September 24, 2021, 12:50:20 PM »
Easiest way is through https://treasurydirect.gov/
EE - https://www.treasurydirect.gov/indiv/products/prod_eebonds_glance.htm
I - https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm

I just started with I bonds so ask away and can all learn together.  :)

Reading and learning about it (in small bits).

Here are some things that turn me off at first glimpse:

1. While interest can be claimed annually, it seems like the default is to defer it to redemption. I am not a big fan of tax deferral - especially when there's a likelihood that tax rates and brackets might be higher in the future.

2. Non-marketable. I have personally seen some nice Capital Gains on bonds I have owned (and currently own). Not having a secondary market is a drawback.

3. I didn't see anywhere that they can be owned in a tax-qualified account.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #26 on: September 24, 2021, 12:55:24 PM »
Reading and learning about it (in small bits).

Here are some things that turn me off at first glimpse:

1. While interest can be claimed annually, it seems like the default is to defer it to redemption. I am not a big fan of tax deferral - especially when there's a likelihood that tax rates and brackets might be higher in the future.

2. Non-marketable. I have personally seen some nice Capital Gains on bonds I have owned (and currently own). Not having a secondary market is a drawback.

3. I didn't see anywhere that they can be owned in a tax-qualified account.
1 - When you say claimed annually do you mean cash in part of the bond?
2 - These are meant as safe/guaranteed investments. Like instead of parking in a CD your return is better here.
Only on DDF does 24/6 mean 24/5/half/half

Offline yesitsme

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Re: Savings/investments/bonds Master Thread.
« Reply #27 on: September 24, 2021, 01:01:49 PM »
Nontaxable at state and local level but taxable at federal level with exceptions when used for higher education.
what about lower education? for tuition

life is so complicated

you need to calculate the gain against the tax + the risk
« Last Edit: September 24, 2021, 01:07:01 PM by yesitsme »
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Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #28 on: September 24, 2021, 01:08:54 PM »
what about lower education? for tuition

life is so complicated

you need to calculate the gain against the tax + the risk
I don't think so for lower education.

One of the selling points of the bonds is they are risk free or so they say.  :)
Only on DDF does 24/6 mean 24/5/half/half

Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #29 on: September 24, 2021, 01:39:43 PM »
If you are buying I bonds buy them at the end of the month. You get interest from the 1st of the month. They showed in my account the next day.
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Offline Euclid

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Re: Savings/investments/bonds Master Thread.
« Reply #30 on: September 24, 2021, 02:04:30 PM »
If you are buying I bonds buy them at the end of the month. You get interest from the 1st of the month. They showed in my account the next day.
great tip

Offline ExGingi

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Re: Savings/investments/bonds Master Thread.
« Reply #31 on: September 24, 2021, 02:38:07 PM »
1 - When you say claimed annually do you mean cash in part of the bond?
2 - These are meant as safe/guaranteed investments. Like instead of parking in a CD your return is better here.

1 - No. It seems like you can choose when to recognize the interest and pay taxes on it, default is upon redemption, which could be a larger chunk, and sometimes put you in a higher bracket and potentially other effects. I look it at like throwing a dart in the dark. Ideologically I would probably prefer to be taxed as I go (which makes sense since there's no state and local tax), but I know most would prefer to defer.

2 - I am well aware of the safe/guaranteed investment vehicle. My preferred vehicle for that is Paid-up-additions on Whole Life Insurance. There's a sales charge going in, but after that, I think the overall profile is better. It is obviously not as simple as I-bonds, as it requires an underlying Whole Life contract that will allow for the Paid-Up Additions.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline Euclid

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Offline gozalim

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Re: Savings/investments/bonds Master Thread.
« Reply #33 on: October 13, 2021, 07:28:49 PM »
1 - No. It seems like you can choose when to recognize the interest and pay taxes on it, default is upon redemption, which could be a larger chunk, and sometimes put you in a higher bracket and potentially other effects. I look it at like throwing a dart in the dark. Ideologically I would probably prefer to be taxed as I go (which makes sense since there's no state and local tax), but I know most would prefer to defer.
where do you choose that?

Offline gozalim

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Re: Savings/investments/bonds Master Thread.
« Reply #34 on: October 13, 2021, 07:34:13 PM »
https://www.doctorofcredit.com/us-treasury-bonds-rate-set-to-increase-to-7-12-rate-i-bonds/

Huge. The perks of hyperinflation, @Kobe Bryant ;)
interesting debate in comments about wether to buy end Oct or end Nov

Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #35 on: October 13, 2021, 08:38:28 PM »
interesting debate in comments about wether to buy end Oct or end Nov
Where do you think inflation will be in 7 months?
Only on DDF does 24/6 mean 24/5/half/half

Offline gozalim

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Re: Savings/investments/bonds Master Thread.
« Reply #36 on: October 13, 2021, 09:03:58 PM »
Where do you think inflation will be in 7 months?
I last felt comfortable predicting a year in advance, around Jan-Feb 2020
the argument is more: let's assume that 7% won't last more than 1 6-mo period (IMO if it doesn't, it's time to get out of the dollar...) the later purchase will give a slightly earlier "cashout" with less of the 7% lost

Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #37 on: October 13, 2021, 10:56:34 PM »
I last felt comfortable predicting a year in advance, around Jan-Feb 2020
the argument is more: let's assume that 7% won't last more than 1 6-mo period (IMO if it doesn't, it's time to get out of the dollar...) the later purchase will give a slightly earlier "cashout" with less of the 7% lost
I am looking at it as you want 3.5%/6mo and then 7%/6mo or 7%/6mo and take your chances that in 6mo it will be more than 3.5%. Do I have it wrong?
Only on DDF does 24/6 mean 24/5/half/half

Offline Spoon

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Re: Savings/investments/bonds Master Thread.
« Reply #38 on: October 13, 2021, 10:59:55 PM »
I am looking at it as you want 3.5%/6mo and then 7%/6mo or 7%/6mo and take your chances that in 6mo it will be more than 3.5%. Do I have it wrong?


Nope that's exactly the gamble

Offline CountValentine

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Re: Savings/investments/bonds Master Thread.
« Reply #39 on: October 13, 2021, 11:06:31 PM »
Nope that's exactly the gamble
Guess I will roll the dice.  :)
Only on DDF does 24/6 mean 24/5/half/half