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sschullo

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How much do you anticipate making on your $10k investment? What timeline are you looking at? 1 year? 15 months? 5 years? It's an interesting opportunity for a brief period.

It doesn't fit into our current investment plan for the remainder of 2021. The "don't just do something, stand there," boglehead credo makes me hesitant to add another investment to our mix. (Another article referenced a net gain of $530 for all the effort.)

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12 hours ago, ScottO said:

Additional links:

How much do you anticipate making on your $10k investment? What timeline are you looking at? 1 year? 15 months? 5 years? It's an interesting opportunity for a brief period.

It doesn't fit into our current investment plan for the remainder of 2021. The "don't just do something, stand there," boglehead credo makes me hesitant to add another investment to our mix. (Another article referenced a net gain of $530 for all the effort.)

Hi Scott,

I have had a tiny position in treasury direct since 2005. I don't anticipate making any more than the inflation rate. My strategy is to reduce risk that's all and diversify among the bonds. My iBonds allocation is tiny. Timeline? Interesting question to a 74 year old who has got about a decade left of quality life IF I am lucky. 

I have a ton of money sitting on the sidelines because of a recent sale of my home, and this is one place to DCA into my current portfolio. I am not adding any more investments. Ill let my descendants decide on what they want to do with it. In the meantime, there are no costs and my initial $10,000 grew to $16,512 in the last 16 years. According to my calculation the annual return is about 4.1% before taxes.  Its a 30 year bond but I can cash it out after five years to get the full return without 3 month interest penalty. I don't intend on cashing it out as I will have to pay ordinary income taxes. 

Steve

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I've recently bought some ibonds for the first time, though I'm contributing so heavily to tax-favored retirement accounts this year that I won't be able to find the full $10,000 for the year, unless I liquidate an investment.

These have become interesting to me in a way that they would not have been in the past, because  I'm on the verge of retiring.  Available cash that will not decline at the whim of markets becomes much more attractive when planning to draw income from the portfolio rather than add to it. 

Scott, one reason you might consider these is as an emergency fund. I Bonds seem like a great option for that, safe and separate from other assets, and they can be built to a substantial amount over a few years.  (As you know, one can't withdraw anything for the first twelve months.  After that, the 3-month interest penalty through year 5 would be a non-issue in an emergency.). 

 

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@sschullo Very cool - thank you for sharing your mindset and approach to utilizing i bonds as a part of your portfolio. Sounds like it has been a beneficial toward meeting your investment return goals 👍

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