At 63 you are still a long term investor. Anything over 3 years is. Therefore the volatility doesn’t matter in any 5 to 10 year period. All experts will tell you = You need to get into stocks 70%

Totally agree!

About to jump into them myself. To clarify the 4% apy you mentioned -is it 4% total or if (1/12) of 4%. Or am I totally missing the math on this (totally possible as well).

@@teddavis1689 Yep, the 4% is an annualized rate

@@teddavis1689 Yeah it's 4% if you took it out to a year and that figure would be a lot less if you figured it just for 1 month.....Just to give you an example I just did one for 8wks for 95K at 4.5% APY and will make $655 interest in those 2 months.

@@Riley_1955 shouldn't it be around 712$ in interest in that example?

Glad it was helpful!

@@JayFairbrother 5% of 95.00 is not 5, hence does not equal 100. 5% of 95 is 4.75 which equals 99.75.

@@TravisMcGee151 its 5% of 100, which is 5$. So you’d buy it for $95. When it matures in 52 weeks they give you $100. The “interest” is the discount you are getting off the face value of the security.

@@TravisMcGee151 in the scenario provided in the video the effective interest earned would be 5.26% ($5 earned off of a $95 investment). 5 / 95 = 0.0526

Awesome! (well, not for the other channel I guess) Glad I could help!

Schwab 5.35 % on 18 month. 👍👍👍👍

fingers crossed on the "zero risk" part..... 😵‍💫

Immigrants?

​@commonsenseisntcommon1776 yes. You think immigrants don't invest in stocks etc?

I appreciate that! Thanks for the kind words!

Thanks! I've been trying to get better at that part of making videos !

@@JayFairbrother It shows! Let's get you some more subs :)

My pleasure, thanks for watching!

Stupid question. If one were to purchase a 4 week TBill through an online brokerage (like fidelity), at maturity, its the US treasury paying you face value, not a sale on the secondary...right? Just want to make sure face value is face value and shifting rates/yields dont change the amount paid at maturity...Thus going 4 weeks rather than longer.

@@TylerBrownT3Homes I honestly don’t know how they work behind the scenes. I imagine the brokerage makes the purchase with the treasury but I don’t know 100%. From what I have seen so far the rates are consistent with the fed and there are no fees.

@@yonallb From what I understand, I buy from secondary (my brokerage acct website), then on the maturity date the money (face value) goes back into my bank and the face value gets auto reinvested in more tbills:) My concern was that if bought through my brokerage (secondary) that I would have to sell the bonds on the secondary (subject to losses) rather than just turn in to the US Treasury for payment.

@@TylerBrownT3Homes okay, I think I understand a bit more now. I personally don’t ever buy or sell on the secondary market. I only purchase at auction. You can purchase at auction through third party brokers like fidelity, vanguard etc. When you purchase at auction your money minus the interest is locked up. You get the interest immediately. Ex. You buy 45k worth of bonds and they only ever take 44829 of your money. You can sell on the secondary at anytime if you would like. I just keep it to maturity and get the full amount back (45k from my example). I use vanguard and they don’t auto re-invest. The money ends up sitting in a settlement fund for a week between auctions. The fund actually has really good rates so it isn’t a big deal.

@@TylerBrownT3Homes and just to clarify a bit more. A brokerage and the secondary market are not synonymous. At a brokerage you can buy at auction and wait until maturity, just like the fed. You can also buy on a secondary market and sell on the secondary market on a brokerage. You may be able to sell on the secondary with treasury direct but is much more of a hassle.

Glad it was helpful!

Glad to hear it! Thanks for watching!

Does that mean that in order to get the full 5% then you have to keep your money in there for the full 12 months?

Glad it was helpful, thanks for watching!

Glad it was helpful, thanks for watching!

If you're selling early & rates have since increased someone will be willing to pay less for your old t-bill than a new one that gives them a higher interest rate.

Thanks, I appreciate it!

1. It's taxed as ordinary income just like any interest you'd receive from a bank account (though only at the federal level, no state/local taxes on T-Bills). If you're buying and selling Tbills on the secondary market (through a brokerage, not holding to maturity) and you profit on your buy/sell, THAT is taxed a a capital gains. 2. There is an option in TreasuryDirect where you can tell them to withhold up to 50% of the interest you earn for taxes.

Thanks! I really appreciate that!

Thank you, I'm glad it helped!

There's an auto-reinvest option for the same type of Tbill, but if you want to change lengths you have to do it manually

5.24% is the annual yield and you only invested for 1 month, you did not get scammed.

I’m not concerned with it…yet. It comes up every few years when they want to play political games but always gets worked out in the end

Yeah that's why I mentioned if you weren't going to hold till maturity you'd want to buy through your stock brokerage, not treasury direct

You mean no State Tax?

where are you trying to buy them from? you should be able to see the different interest rates and time period offerred. pick the one with the highest rate.

You have to do it through two separate transactions, but yes, you can hold as many different issue dates of 4 week tbills as they have available whenever you're in treasury direct

@@JayFairbrother Perfect, thanks Jay. Loving your content.

Thanks, yeah...I don't think it's the mic...I have some compression and EQ on the audio...still a beginner and learning when it comes to sound editing!

Yes its US gov't debt.

Tbill will usually have a higher rate than a money market fund, but a money market fund will keep your cash more liquid than a tbill.

If interest rates were to fall, you'd lock in the higher rate for a longer period on your money with the 8 or 12 week.

They’re both extremely safe, pros to Tbills are likely a slightly higher return and no state/local taxes…cons are they’re not as liquid as a MM acct

The interest rates are annual rates. The benefit to longer tbills would be if you think the rate will drop, you'd have the higher rate locked in for longer

You buy at a discount. So depending on the interest rate at the time you'd purchase for something like $975 and receive $1000 when the Tbill matures

high rate is calculated on a 360 day term, investment rate is the annualized rate (idk why they give two different ones). The stated interest rate is annualized though, so yes you're earning 17 weeks worth of an annual interest rate.

My bank saving account is paying 4.25% monthly so how are T-bills worth my time/money? What am I missing here?

Longer dates usually pay higher rates but we’re in a weird interest rate situation right bow

I appreciate it! Thanks for watching!

@@JayFairbrother I came across i-bonds about 2015. Bought a bond and converted many EE bonds. Would you still recommend EE bonds for long term?

@@mattw785 I'm not a big fan of EE bonds, I just think there's so many better options that accomplish the same goals

@@JayFairbrother yah.. im convertng the ones i got..

Yeah I screwed up the math, but the point is still correct

You don’t need to do anything when it matures. The money will automatically be deposited back right into your account

Thats what I was thinking but I think the interest rate is a yearly interest rate so 4 week you wouldn’t earn 5% you would earn .41%. (5% divided by 12 months)

the return after one month would be about $4.17 as 5% is the annual rate, not the monthly rate.

I'm pretty sure the money comes out of your account on the issue date, but to be honest I've never watched it that closely. I wouldn't risk overdrawing an account just to earn another day or two of interest in a high yield account if that's not where the Tbill $$ will be drawn from though

Maybe? I'm generally not a fan of investing in precious metals because they're quite volatile and unpredictable. I'm also not worried about hyper inflation, I think we've already seen the worst of the inflation we're going to experience for the near future