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NoOneImportant
Just a pawn in the game




Registered: 03/07/09
Posts: 424
Loc: Midwest
Last seen: 3 years, 5 months
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Anyone here buy Treasury Bills?
#14208617 - 03/30/11 10:09 AM (12 years, 9 months ago) |
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Been looking into this for a little while but don't really understand all of it. The "auctioning" of bills and whatnot. It's low risk low reward so I bet there's better ways to make money but oh well. The way I was thinking of doing this was to buy a 4 week treasury bill once a week for a month. That way, each week one of the bills matures and the money can be reinvested, plus I'd be making a little extra money each week from pretty much doing nothing. Would this be a worthwhile endeavor for the little amount I'd make off interest, or would it be better off in Mutual Funds? Anybody that can contribute to this, much thanks.
-------------------- Take when in need. Give when you can.
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ArmFromTheAbyss
Old Hand

Registered: 10/09/02
Posts: 1,368
Loc: Down here in Babylon
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You don't really need to be concerned about auctions for treasury bonds because they are not open to the general public. The "primary dealers," aka the big banks, buy the bonds from the treasury and sell them to the public.
see bloomberg for US bonds rates. Note: coupon=interest earned
Short term bonds will pay literally zero interest, so your idea would have worked better in the early 80's when interest rates were much higher. Right now rates are so low via Fed policy. They simply don't want people to save money or earn any reasonable interest on their savings. 
However, things could change and rates could become favorable again soon. This could give you time to watch the market and see how it works. Bond prices move inversely to yield. The bond market is also influenced by geopolitics and deficits etc.
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Puzzled
Just a guy
Registered: 03/28/11
Posts: 69
Last seen: 12 years, 3 months
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Quote:
Loki570 said:Would this be a worthwhile endeavor for the little amount I'd make off interest, or would it be better off in Mutual Funds? Anybody that can contribute to this, much thanks.
You're going to spend more in gas going to and from the bank than you'll make in interest off of a 4 week T bill. This is the simple version, but right now, the Federal Reserve wants people to spend lots of money so when the government auctions off the T bills, they buy them before the price goes too high. They hope by keeping the rates on them low people will spend their money rather than save it.
If you have any debt: credit card, student loans, mortgage, etc, your best best is to use the money to help pay it off, because the interest on those is going to be higher than you'll get in saving it. Then, you should save up 3-6 months expenses (rent, food, utilities, gas) in a savings account or money market account. If you have 3-6 months expenses and no outstanding debt, you should speak with a professional at your bank about how to handle your money.
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NoOneImportant
Just a pawn in the game




Registered: 03/07/09
Posts: 424
Loc: Midwest
Last seen: 3 years, 5 months
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Re: Anyone here buy Treasury Bills? [Re: Puzzled]
#14225944 - 04/02/11 01:03 PM (12 years, 9 months ago) |
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Ah damn, makes sense. Why would the government want the little man to make money from it? As far as outstanding debt, the only one I currently have is a school loan, but I'm still in school so it shouldn't be collecting interest right now. I plan to pay that one in full whenever I do graduate.
I currently have at least 6 months of expenses in the bank. I work full time, school part time, and live at home, so all my money goes to school or in savings. Figured I'd be able to save enough in a couple years to get a decent place for myself. Looks like I gotta talk to the bank. Thanks for the advice.
-------------------- Take when in need. Give when you can.
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Groovy Grant

Registered: 07/31/00
Posts: 6,635
Loc: TX
Last seen: 16 days, 18 hours
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I'd check those student loans again. Mine accrued interested in college. I had some that were federally subsidized, but most were unsubsidized. Kind of wish I had mailed them a check of the $100 bucks or whatever it was in interest while in school. Would have saved me a ton of interest now.
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Puzzled
Just a guy
Registered: 03/28/11
Posts: 69
Last seen: 12 years, 3 months
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Quote:
Loki570 said:Thanks for the advice.
No problem, and damn, congrats dude on having zero credit card debt and enough to live half a year in the bank. Very few of your peers are that responsible with money.
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Shins
Fun guy



Registered: 09/15/04
Posts: 16,337
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Re: Anyone here buy Treasury Bills? [Re: Puzzled]
#14228529 - 04/02/11 09:48 PM (12 years, 9 months ago) |
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I wouldn't Touch US bonds with a 1000000000000000000000000000000000000 foot pole and neither should you!
They are a loss, you will lose way more value to inflation than you will gain from interest.
No one around the world wants to buy US treasuries that much anymore, the Fed is the biggest buyer, and only because they can print money for free.
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Mr.Al
Alphabet soup


Registered: 05/27/07
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Loc: N.S.A. D.C.
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Re: Anyone here buy Treasury Bills? [Re: Shins]
#14236087 - 04/04/11 01:12 PM (12 years, 9 months ago) |
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Hey, I hear the federal reserve is buying LOTS of treasury bonds!

T-bills are a great way to waste your money guy.
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Shins
Fun guy



Registered: 09/15/04
Posts: 16,337
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Re: Anyone here buy Treasury Bills? [Re: Mr.Al]
#14237522 - 04/04/11 06:03 PM (12 years, 9 months ago) |
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Commodities are a better investment in this type of climate.
If 1 year interest rates go up near 10% you might break near even buying treasury bonds, until then food, energy, and other tangible valuables are the things on the upside right now.
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Puzzled
Just a guy
Registered: 03/28/11
Posts: 69
Last seen: 12 years, 3 months
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Re: Anyone here buy Treasury Bills? [Re: Shins]
#14238719 - 04/04/11 09:25 PM (12 years, 9 months ago) |
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Quote:
Shins said: Commodities are a better investment in this type of climate.
Commodities are for people that know what they are doing. If you're a corn farmer, then yeah, investing in commodities makes sense, but for the average person, it's just way too unstable. Unless you have a lot of tolerance for risk, you're better off with something else, like an index fund.
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ShrewDigsby
Toker



Registered: 01/03/03
Posts: 3,108
Loc: Shrewtown somewhere near ...
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retail investors can buy t-bills either online through treasurydirect or through a bank. a 1yr t-bill is at a .16% so you'd be crazy to do that.
I would not work w/ an investment consultant at a bank. They are sales oriented and will put you in loaded funds.
a 1 yr cd is yielding .60 2yrs 1% 3yrs 1.45 4yrs 1.85 5yrs 2.15 10 yrs 3.25
the 10 yr t-note is below 3%
Ford Motor Credit is offering a 2 yr at 3% to give a little color on a decent short term corporate offering rate of return relative to treasuries.
QE2 ends in a week. It'll be interesting to see who steps in to buy when the fed stops. There's been a lot of speculation and now waiting on this topic.
-------------------- Marijuana is a horticultural plant. Hemp is an industrial weed. I believe they were both provided to us by GOD to use and enjoy.
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Shins
Fun guy



Registered: 09/15/04
Posts: 16,337
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Re: Anyone here buy Treasury Bills? [Re: ShrewDigsby]
#14593882 - 06/11/11 01:11 AM (12 years, 7 months ago) |
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Why would anyone buy T bills right now?
They don't even keep up with inflation BY FAR.
Very bad investment right now.
Unless there is going to be no QE3 or other buyers which i highly doubt, T bills might be worth it in the future.
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Shins
Fun guy



Registered: 09/15/04
Posts: 16,337
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Re: Anyone here buy Treasury Bills? [Re: Puzzled]
#14593898 - 06/11/11 01:15 AM (12 years, 7 months ago) |
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I just realized i already said that stuff above LOL forgot about that.
Quote:
Puzzled said:
Quote:
Shins said: Commodities are a better investment in this type of climate.
Commodities are for people that know what they are doing. If you're a corn farmer, then yeah, investing in commodities makes sense, but for the average person, it's just way too unstable. Unless you have a lot of tolerance for risk, you're better off with something else, like an index fund.
Just buy precious metals! it's not that complicated!
Hold on to them until interest rates go up significantly, then flip back to the other side of the trade. (cash/bonds)
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