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Cash bucket options (short term needs). CD tents, Bond tents etc. dynamic situation.

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  • #16
    Originally posted by Harry Sit View Post
    If you're considering CDs, also consider Treasuries. You can buy Treasuries in your Vanguard account for free. Here are the rates:

    https://home.treasury.gov/resource-c...e_month=202205

    Rates are higher than CDs at this moment and they're also exempt from state and local taxes.
    Are you talking about short term treasury bond funds at Vanguard? I don't know a way to buy individual treasuries on the Vanguard site. I know you can buy CDs.

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    • #17
      Originally posted by Hatton View Post

      Are you talking about short term treasury bond funds at Vanguard? I don't know a way to buy individual treasuries on the Vanguard site. I know you can buy CDs.
      no, individual treasuries. You can buy Treasuries directly at all the major brokerages, and also on Treasury Direct. On brokerage you can buy directly at auction, or on secondary market.

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      • #18
        Originally posted by jacoavlu View Post
        could put a small portion in stablecoin interest account
        I knew you would say that! Very cool! Yeah..................I don't know.........I am a little bit of a chicken. Will read more.......sorry for being a wuss.

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        • #19
          Originally posted by Harry Sit View Post
          If you're considering CDs, also consider Treasuries. You can buy Treasuries in your Vanguard account for free. Here are the rates:

          https://home.treasury.gov/resource-c...e_month=202205

          Rates are higher than CDs at this moment and they're also exempt from state and local taxes.
          Fantastic! from the man himself! Thank you sir! will check it out!

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          • #20
            there is of course trade off if considering treasuries vs CDs. CD presumed to have risk of loss essentially zero. Treasuries will fluctuate in value as interest rates change, if you hold until maturity you get the prescribed rate, but in the meantime if interest rates rise your treasury decreases in value and if you want or need to sell maturity you could earn a lower rate of return than the prescribed rate or even lose money.

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            • #21
              Originally posted by Harry Sit View Post
              If you're considering CDs, also consider Treasuries. You can buy Treasuries in your Vanguard account for free. Here are the rates:

              https://home.treasury.gov/resource-c...e_month=202205

              Rates are higher than CDs at this moment and they're also exempt from state and local taxes.
              Welcome to the forum. For those who don't know, Harry pens The Finance Buff, which helped inspire the creation of WCI. He has also been a WCICON keynote speaker.

              https://thefinancebuff.com/
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #22
                Update on what I did and/or will do:

                1. I-bonds. last fall I purchased 20k (10k for me 10k for wife), Then in Jan I purchased another 20k, then today I used my 3 business entities (LLC x 2 and LP) to buy another 30k so that is a total of 70k of I-bonds earning roughly 7-9% for the next 6 months. That feels pretty solid. Lucky to have all these EINs. Another way the system benefits business ownership over W2 employment.

                2. I transferred roughly 167k out of Ally bank HY savings and will deploy this into a few different locations: 1. CDs, 2. HY savings (probably SoFi) and possibly bonds or bond funds.

                3. Reading and trying to learn. Need to read more about individual bonds and bond funds. CDs seem pretty easy to understand. I sorta understand bonds and bond funds but I am no expert. Also, Jacoavlu, I promise I will read about your stable coins but I might not put any money in there. I know that makes me a bit of a wuss, but this is money I want to understand how/where it is and I want it to be relatively low risk........I know.......I know.....sorry.

                Goal is to have roughly 200-500k in stuff that is relatively free from Stock market volatility and to have at least 200 of that fairly liquid for use if needed.

                Thanks again for all the help. I am learning a lot from you guys.

                Special thanks to Mr Sit for being so kind to comment. Certainly honored to have both WCI and Mr Sit enter the conversation.

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                • #23
                  Harry Sit i would be interested in comment around this concept of people buying more than 20k ibonds/yr by using LLCs related to sole prop income. Definitely a new thing. I haven’t researched in depth and haven’t done it even tho I have sole prop. There are people I respect smarter than me that have concerns about legitimacy of this tactic

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                  • #24
                    I wonder if in an age of rising interest rates and high inflation, people early in their career should use i-bonds as the bond portion of their portfolio. It is frustrating how you can only put some 10K per person in it, but I imagine that if someone would have started off using it at an early age, it could amass to a significant amount by retirement. It would always protect the retiree against high inflation as well.

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                    • #25
                      Originally posted by nephron View Post
                      I wonder if in an age of rising interest rates and high inflation, people early in their career should use i-bonds as the bond portion of their portfolio. It is frustrating how you can only put some 10K per person in it, but I imagine that if someone would have started off using it at an early age, it could amass to a significant amount by retirement. It would always protect the retiree against high inflation as well.
                      i have been on an island telling people here to brainlessly buy their ibonds right along with doing their backdoor Roth every year. But people wanna over analyze it

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                      • #26
                        Originally posted by jacoavlu View Post
                        Harry Sit i would be interested in comment around this concept of people buying more than 20k ibonds/yr by using LLCs related to sole prop income. Definitely a new thing. I haven’t researched in depth and haven’t done it even tho I have sole prop. There are people I respect smarter than me that have concerns about legitimacy of this tactic
                        It helps if you register a DBA for the sole prop and get a business license from the city or county when it's required. It makes it clear the sole prop is separate from the owner even if it uses the owner's SSN as its tax ID. It can hold assets separately from the owner. The investment income is passed back to the owner for tax purposes.

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                        • #27
                          Originally posted by jacoavlu View Post

                          i have been on an island telling people here to brainlessly buy their ibonds right along with doing their backdoor Roth every year. But people wanna over analyze it
                          If there were no limits per year how much in ibonds would you buy?

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                          • #28
                            Originally posted by Turf Doc View Post

                            If there were no limits per year how much in ibonds would you buy?
                            my answer isn’t very meaningful bc everyone situation is unique and I value short term liquidity. But to give you an honest answer if there was a one week window now with no limit I’d probably buy 250k

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                            • #29
                              Originally posted by Harry Sit View Post
                              It helps if you register a DBA for the sole prop and get a business license from the city or county when it's required. It makes it clear the sole prop is separate from the owner even if it uses the owner's SSN as its tax ID. It can hold assets separately from the owner. The investment income is passed back to the owner for tax purposes.
                              curious what do you mean “it helps” ?

                              is there particular language in rules and regs that you think such actions would help with the legitimacy of this tactic?

                              im an ibond maxi and would happily own more, but I find myself wondering why other people haven’t been doing this before

                              Comment


                              • #30
                                Originally posted by jacoavlu View Post

                                my answer isn’t very meaningful bc everyone situation is unique and I value short term liquidity. But to give you an honest answer if there was a one week window now with no limit I’d probably buy 250k
                                250 and then youre done for a while right?

                                I'll admit that ibonds only became interesting because of the crazy interest rates now, but whats most interesting to me now is the possibility that youd have a ton as a hedge all getting really good guaranteed returns during future times of high inflation. I wonder if ibonds are going to be more popular now for people to hold in the long-run, even if inflation goes back down to like ~2, because people didnt realize how desirable they would be during times like these.

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