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Let's say you want to do a 5-year ladder and have $50000 available. You put $10000 in a bond that matures in 1 year (1 year Treasury bill would be fine); $10000 in one that matures in 2 years (2 year Treasury note also fine), $10000 in one that matures in 3 years (can get on secondary market or purchase from broker) $10000 in one for four years and the last $10000 in one for five years. Your mother then collects the interest, and every year a bond matures. You take the principal from the matured bond and buy another 5 year bond.
You may also select bonds that pay their interest in different months, to provide income for every month. This would require 6 rungs on the ladder...
Any more specific questions? Regards, Chris
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