[Kona]

I'm getting conflicting, and confusing answers from both that which I google, and a few financial/banking type people I associate, and have invested, with.

Mahalo in advance, I'm sure some of you whiz kids can clear this right up. Here goes:

How much can one American, hypothetically a Polynesian, buy in US Savings Bonds per year?

Is it 10k to themselves?

Is the limit only 10k if bought from treasurtydirect.com? Can I still buy more for myself from the bank?

What about those that I gift to various nieces and nephews? That can only be from treasurydirect.com. But does that count to my limit?

If I buy the EE vs. the I does the limit change?

I want to make some long-term investments that are "cash in hand style" as opposed to the other stuff I do. I have paper ones I cashed at the bank that was fully mature. Since its all this digital shit now I'm skeptical.

But I still love America. In fact, I swore to the bank people, I got a bit of a discount when I bought the paper ones because I was active duty. Does anyone know if theres a discount on them for veterans?

Was that just a little bonus from Uncle Sam for all the terrorists I killed?

Please give me some advice, my wise brothers.

Aloha!

[renotime]

Savings bonds? Grandpa, is that you?

I'm guessing treasury direct can answer these questions, but 10k appears to be the max. Municipal bonds, however, have no max.

https://www.investopedia.com/articles/in...ilable.asp

[Salesian]

Fuck bonds!

Buy gold and put it in the gold!

[Jetset]

It's $10k per taxpayer. If you want cash in hand, it actually would not be the worst idea to buy a small amount of gold and put it in a safety deposit box, either. If you're talking about larger amounts, gold becomes impractical to physically own and keep safe until you're at warehouse-scale and you're going to be looking at "digital" to do anything cost-effective.

With that said, if you don't mind wading into a brokerage, brokered CDs (purchased in bulk through a fixed income broker, not the ones you buy over the retail counter at the bank) and municipal bond funds are serious considerations depending on your tax situation.

If your main concerns are stability and leaving something to family, you could also consider lifetime income annuities - most are available with 2-3% annual increases to help with inflation and in a 'my life + someone else's life' package, so you can transfer the benefit to your nieces and nephews upon your death - or whenever. The upside here is that you're offloading the risk onto what is essentially an insurer. The big providers might well outlast the United States. The downside is that there is no other upside - MetLife, Fidelity, Vanguard, whoever is on the hook, but if their investments outperform, they win.

Those annuities don't sound exciting, but "Uncle Kona left me a lifetime of beer money" is actually not a bad deal.

[Hypno]

Don't put liquid valuable s in a bank safety deposit box. They will go missing.

[Jetset]

(11-01-2018 09:06 AM)Hypno Wrote:  

Don't put liquid valuable s in a bank safety deposit box. They will go missing.

If you're going to own physical gold, you've got to insure it one way or another and while I've never shopped around, I'm guessing your homeowner's insurance will write a better rider for gold in a bank vault than gold under your floorboards. They'll also be much louder and scarier than you can be if the bank "mistakenly" drills out the box.

Gold is fun, it's liquid, and there's a reasonable case for it as a store of value in an income portfolio, but it's a pain in the ass.

[Hell_Is_Like_Newark]

Check your state tax rules in regards to buying bullion / coins. Many states charge sales/use tax on bullion purchases. I got around this by buying bullion funds that holds assets in tax friendly locations. Made a nice return on platinum & palladium when i bought when Russia was dumping both into the market to raise $$$.

[Jetset]

(11-01-2018 09:27 AM)Hell_Is_Like_Newark Wrote:  

Check your state tax rules in regards to buying bullion / coins. Many states charge sales/use tax on bullion purchases. I got around this by buying bullion funds that holds assets in tax friendly locations. Made a nice return on platinum & palladium when i bought when Russia was dumping both into the market to raise $$$.

On that note, I would never advise anyone to not report sales of gold bullion on their income taxes.

I'm just saying that the reporting rules are kind of neat.

[rosario]

Kona:

You can also use treasury direct to purchase US Treasury Bills and Bonds. https://www.treasurydirect.gov/indiv/pro...oducts.htm . The interest rates change based 2,3,5, 7 and 10 year maturity.

I will use my own case as an example. YMMV depending on what you are trying to do. My mum has dementia and will be going into a home. She will need money on a regular basis. I am using a laddered approach so that the money is available:

10% 6 month US Treasury
10% 1 year US Treasury
10% 18 month US Treasury
10% 2 year US Treasury
10% 3 year US Treasury
10% 4 year US Treasury
10% 5 year US Treasury
10% 6 year US Treasury
10% 7 year US Treasury

This type of setup allows for the money to available when needed and rolled over when expired. We are in an economic environment of rising interest rates. This will allow for repurchases of expired bond as interest rates rise.

[rosario]

Jetset:

I thought US Gold and Silver eagles were tender? They have a face value on them. How do you tax legal tender? And if one were to use a silver dollar to purchase an item, how much is it worth? A dollar ? More?

Putting G and S in an insurance policy defeats the purpose of owning G and S. They are no ones liability and no one has a claim to them. You may be opening yourself up to trouble down the road.

G and S coins are great for inheritance purposes.

[The Beast1]

Kona,

You'd probably be better off buy a stock that pays a quarterly dividend and have it reinvest those dividends into new shares. That would consistently beat out inflation over a savings bond.

It's not sexy, but SPY (S&P500 ETF) pays a 1.32 a dividend. Not bad for an ETF.

[Hell_Is_Like_Newark]

(11-01-2018 09:56 AM)rosario Wrote:  

Jetset:

I thought US Gold and Silver eagles were tender? They have a face value on them. How do you tax legal tender? And if one were to use a silver dollar to purchase an item, how much is it worth? A dollar ? More?

Coins from the Federal Mint are exempt from state & local taxes. Everything else is not.

[Hypno]

Generally speaking, homeowners insurance will not cover gold and silver unless you do two things. First, you have to pay for a rider. Second, it only covers stuff that you've gotten an appraisal on within the last year. Theoretically you could get bullion appraised but generally appraisals are for rare or collectible coins.

It's much more secure to Simply hide it or keep it in a home safe.

You would be amazed at the stuff that goes missing from Bank safety deposit boxes. It's not just that. Think incompetence, bank's closing branches, Etc

Most large banks have closed about 20% of their branches in the last 3 years, and are planning to close another 20%. It's cause pressure in the fact that most people do banking by phone these days

[Jetset]

(Not trying to hijack your savings bond thread, Kona.)

(11-01-2018 09:56 AM)rosario Wrote:  

I thought US Gold and Silver eagles were tender? They have a face value on them. How do you tax legal tender? And if one were to use a silver dollar to purchase an item, how much is it worth? A dollar ? More?

Putting G and S in an insurance policy defeats the purpose of owning G and S. They are no ones liability and no one has a claim to them. You may be opening yourself up to trouble down the road.

An American Eagle has a $50 face value, but contains ~$1,300 of gold.

My understanding is that legally, this will be your cost basis, and when you sell it, any gains will be taxed at your ordinary income tax rate, up to the collectibles rate of 28%.

Since 1972, gold prices have averaged gains of about 7.2%. So, after federal taxes, if you're in the 24% tax bracket today (or last year's 25% bracket - I wouldn't expect today's historic lows to last), you're looking at 5.4%. If this investor's physical gold is lost or stolen (maybe he married badly and thinks he's better at hiding things than he is; maybe he had a fire and a firefighter is not happy with his pension; maybe a meth addict broke into the basement to tear out walls for copper and literally struck gold) and he does not carry insurance, he's wiped out. I'm acquainted with a real life case where a homeowner believed their safe was "too big" for burglars and came home to find their stairs smashed to pieces because the burglars had torn it out, then pushed it down the stairs and somehow gotten it out into the street.

By comparison, American large-cap stocks have averaged 10.4% over the same period. The individual in that same bracket would pay only 15% on the capital gains, so you're looking at 8.8%. If his physical stock certificates are stolen, he is still the owner of record and has lost nothing.

Don't get me wrong, I'm not saying owning physical gold and keeping it at home is "bad". Just that it's inviting a pain in the ass that 80% of investors in 80% of years can forego and come out ahead.

(11-01-2018 11:04 AM)Hypno Wrote:  

Second, it only covers stuff that you've gotten an appraisal on within the last year. Theoretically you could get bullion appraised but generally appraisals are for rare or collectible coins.

This is interesting, but surprising. I would expect that if you buy metal sealed with assays, that those would be insurable at spot indefinitely. I do see, looking quickly, that there's no shortage of specialized bullion insurers out there.