I wonder how many are in my position where they believe in what they have bought in terms of mutual funds and stocks in the tech, internet and growth sectors and still feel that they have the years to grow until retirement ie. for me, 20 years and then feel, hey... wait a second. I'm putting good money in there and the market is doing a collapse. Well, I realize that these sectors and indices do turn around but I also have learned through other people's 20-20 hind sight how important it truly is to buffer your losses as well as to be realistic with long term saving and investing. I spoke to a very nice and informative lady today and asked her to explain the difference in the returns betweens I Bonds vs. EE Bonds. These two are definitely different and from what I gather, it appeared to me that she felt that loading up on those I Bonds wouldn't be such a bad idea at all. The idea of being able to hold them for 30 years really does make sense and also, the idea that you can buy up to $30,000 per year which is quite a bit and as I would call it, "stash the cash" would most definitely make sense. I know that there are many millionaires who do not have a 6 figure income by any means and have acquired their good retirement money by the Bond Market exclusively. I truly want to learn all I can. I am hopeful that someone out in this board could recommend a book, a web site that might help me to understand this better. I tried to understand the Bonds that are being floated per the newspaper and it's all "Greek" to me. I live in Florida and I understand that I can buy MuniBonds without any taxable consequence because there wouldn't be taxes due to the State hat I live in. I thought that that would also be worth looking into as well. Stacy
ummm...an advertisement for bonds is atwww.investinginbonds.comYou typically don't pay tax on Muni Bonds, but unless you're in the 39.8% bracket, it's probably more lucrative for you to buy regular bonds. Muni bonds have a lower return; it's only worthwhile to buy them if you'd lose half your return to taxes.
Try www.publicdebt.treas.gov for information aboutI bonds.blv
For a couple of years I had felt somewhat foolish (small f) for having my portfolio 75% equity funds, 25% other (mostly bond funds), contrary to the message being promoted on most areas of The Motley Fool that one should be in stocks for the long run. However, with the 10% drop of the S&P500 and about 60% drop of the Nasdaq composite over the past 12 months, it doesn't seem so foolish after all to have multipe asset classes (stock funds, bond funds, a real estate investment account). I am down about 12% (about 10% numerically, but part of that is new money being added to the portfolio), which seems reasonable considering market conditions. New money is going to the funds that are under-represented in my asset allocation plan, which happen to currently be growth funds.I have changed my emergency fund, however. Half of my emergency fund (the equivalent of 3 months of living expenses) is in my credit union's money market account. The other half of my emergency fund (an additional equivalent of 3 months of living expenses), thinking I very infrequently access that half of my money, was in CDs, but I have since moved that over to I-Bonds, which currently have better yields than my credit union's CDs even before considering the difference in tax treatments. (My state marginal tax rate is 9%.)
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