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I bonds

April 25th, 2008 at 09:52 pm

I bought $5000 in Treasury I bonds today.

You can read about why at this link

Basically they are an inflation hedge and I'm using money that I don't forsee needing for at least a year and probably not for many years.

I will make 4.28 between now and Oct after which I will make 6.06%. No taxes until I cash them in and no State taxes ever.

Lot's of articles on food rationing and inflation in the news right now. People are doomed to repeat the past. This is the same cycle from the 70's. We all made it thru then, we'll make it this time too. I know gloom and doom sell, but we need some perspective. We get regressions every few years, then we get good times. If you only pay attention to the news you would think we are constantly in a state of crises. That the world as we know it is going to end.

Yeah it is, just look at your own life. The world is completely different than it was in the 60s, 70s, 80s or 90s. So what? It didn't end, it's just different you adjust and move on. Some things are better, some things not. A lot depends on your attitude. I want to be prudent and save money, food etc for bad times. But I don't want to go overboard and become a hoarder or be constantly depressed because - hey! the world's going to end Smile

Finished reading my book Dawn's Awakening by Lora Leigh. Romance. Very good.

7 Responses to “I bonds”

  1. Petunia Says:

    LOL - I remember feeling a sense of doom during the early 80's, sure that a nuclear war would start and that would be The End. Well, the cold war ended, and if you read history there's been lots of bad times, and people still make it through. It's always a help to look at things in perspective!

    Interesting article.

  2. GaelicWench Says:

    I read that buying I Bonds prior to May 1st meant retaining the fixed 1.20%? Is that how you'll be getting the 6.06% after October?

    I know the fixed will more than likely drop to 1.0%......

  3. klbb90 Says:

    Its easy to get caught in the circle of scarcity, that there is never enough feeling. Recessions, depressions and good times come in pretty regular cycles. Keeping that in mind, of course, is easier said than done. I love the feline breed books by Lora Leigh.

  4. disneysteve Says:

    I currently own $25,000 in I Bonds that I bought back in 2003. Some have a fixed rate of 1.6%, others at 1.1%. So I'll be earning 6.43% shortly on some of them, 5.93% on the others. Nothing wrong with that. I was actually planning on cashing them out to pay for our daughter's Bat Mitzvah celebration this fall, but with the rates that high, I'm going to pull out as much as I can from other sources and not touch the bonds if I don't have to.

  5. baselle Says:

    I've done a similar thing - I usually buy 100$ or so of I-bonds each month, getting a fixed rate between 1.0% and 1.4%. This month (Monday 4/28) I bought $400 to make it an even $10K. I also own $16K in T-bills. Lately, the auction interest on those has been poor, so if the new I-bond fixed rate is linked to Tbills, those new fixed I-bond rates after May 1 should be low. I'm be taking a wait-and-see-attitude on buying new ones, based on the fixed rate. Also noticed that the Treasury Dept is restricting the amount you can buy per year - now its 5K. It used to be 30K.

    And as I get older, I know that most frugal people are the most optimistic in the world. Prepare for the worst so when it comes you can await the best. I'm looking forward to not hearing the deafening drumbeat of buy-buy-buy.

  6. Joan.of.the.Arch Says:

    I take recession and inflation less in stride than you suggest Retire@50. "So What?....Adjust and move on," is not what I recall doing during the 70's recession. It was more like "Get knocked over by a kick to the solar plexus, then get stomped in the belly on while you are down." For some people recession and inflation will mean real hardship, not just missing a luxury or two. I was a teenager in the 70's recession, but I remember going from poor to desperate. Being cold with inadequate heat, eating a lot of meals of potatoes or beans only, my mother walking miles each day to & from a busline into the city to get to inadequate work, selling her blood to put food on the table. All of us trying to find jobs, willing to do anything.

  7. retire@50 Says:

    Joan.of.the.Arch I'm sorry your family had such a hard time in the 70s, hopefully things got better for you after that recession. My point is according to the media it's always a bad time. There are never any good times. It's always some crises or another for some group or another and it's easy to get drawn into a feeling of paranoia or depression. That life is hard and will never get better, the world is coming to an end. It's people's attitudes and willingness to do what it takes to make things better that matters and improves their lives. We can't let the media make us think recessions and bad times last forever.

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