treasuries

[Whaazup17]

What are treasuries? Are they like cds?

[TNathe]

Treasuries
Negotiable U.S. Government debt obligations, backed by its full faith and credit. Exempt from state and local taxes. Treasuries are issued by the U.S. government in order to pay for government projects. The money paid out for a Treasury bond is essentially a loan to the government. As with any loan, repayment of principal is accompanied by a specified interest rate. These bonds are guaranteed by the "full faith and credit" of the U.S. government, meaning that they are extremely low risk (since the government can simply print money to pay back the loan). Additionally, interest earned on Treasuries is exempt from state and local taxes. Federal taxes, however, are still due on the earned interest. The government sells Treasuries by auction in the primary market, but they are marketable securities and therefore can be purchased through a broker in the very active secondary market. A broker will charge a fee for such a transaction, but the government charges no fee to participate in auctions. Prices on the secondary market and at auction are determined by interest rates. Treasuries issued today are not callable, so they will continue to accrue interest until the maturity date. One possible downside to Treasuries is that if interest rates increase during the term of the bond, the money invested will be earning less interest than it could earn elsewhere. Accordingly, the resale value of the bond will decrease as well. Because there is almost no risk of default by the government, the return on Treasury bonds is relatively low, and a high inflation rate can erase most of the gains by reducing the value of the principal and interest payments. There are three types of securities issued by the U.S. Treasury (bonds, bills, and notes), which are distinguished by the amount of time from the initial sale of the bond to maturity.


There ya go.

[Whaazup17]

thanks ahhh so i need a broker to get it. Idont like that fact.

[moldyhands]

t-bills pay very low interest. without explaining too much in detail (see above by TNathe), you could get a higher interest rate by loaning money to your cat.

[Whaazup17]

t-bills pay very low interest. without explaining too much in detail (see above by TNathe), you could get a higher interest rate by loaning money to your cat.

but it is secure...

[moldyhands]

but it is secure...
a CD is all but secure, so is a bank account. and a CD will most likely net you a higher return. how old are you? you should really do a risk acceptance analysis. rice rocket post up a link to one, you seem to have the financial internet memorized:lol:

[number_2]

:lol:

[Whaazup17]

a CD is all but secure, so is a bank account. and a CD will most likely net you a higher return. how old are you? you should really do a risk acceptance analysis. rice rocket post up a link to one, you seem to have the financial internet memorized:lol:

all but secure? Why you say that?

I am 19 years of age. Why does that matter?

[Amortized]

if you're 19, you have plenty of time for investing, because you aren't trying to retire soon, you can accept more risk. If you're 59 and just started to save for retirement last week, well you can't take much risk. At your age, you need to be investing in penny stocks (not saying your cheap, they're just typically risky), or something else w/ potential for big returns.

[moldyhands]

all but secure? Why you say that?

I am 19 years of age. Why does that matter?
amortized said it right, though i'd disagree about penny stocks. by "all but secure", i meant that a T-bill or a CD will more than likely never default (meaning you won't lose your money). if either of those things defaulted, you'd probably be worrying more about which country is invading US soil than you would about retiring.

[TNathe]

:lol: so true. Inflation would have to come in strong for you to lose money. Might as well put your money in a checking account though for the interest a tbills pay out.

[Whaazup17]

yea... I dont like the risky investments to be honest. I know my savings account rate is low making about 10 bucks a month on 5k. I want more for it but still NOT have the risk of losing it.

-garrett

[jabtay]

yea... I dont like the risky investments to be honest. I know my savings account rate is low making about 10 bucks a month on 5k. I want more for it but still NOT have the risk of losing it.

-garrett

You need to be a little more moderate, low risk gives low return.

[corey r.]

Mutual funds are very risky, you should stay away from those!

[_Charles_]

Mutual funds are very risky, you should stay away from those!

Huh? Care to back that up? There are alot of good mutual fund options, you just have to do your research and understand the concept.

[corey r.]

He said he doesnt like risky investments. I was reminding him that mutual funds are not FDIC insured.

[Whaazup17]

I dont like mutual funds all that much.

[corey r.]

Well, you are never going to make anything over 2% unless you take a risk.

[Whaazup17]

Well, you are never going to make anything over 2% unless you take a risk.

i'm making over 2% as it is now with no risk..

[corey r.]

how much are you making?

[Whaazup17]

2.96

[moldyhands]

2.96
my 401K made 20+% last year, and there will be years when it will lose that... but over the next 10 years, the same amount of money invested by me vs. you, and i end up with a LOT more $$$

[corey r.]

2.96

2% 2.xx% same thing to me.

[Whaazup17]

my 401K made 20+% last year, and there will be years when it will lose that... but over the next 10 years, the same amount of money invested by me vs. you, and i end up with a LOT more $$$

Isn't a 401k set up by your employer? But 20% is a good return.