According to personal finance expert Suce Orman, if there is one investment that everyone should have right now, it is a series of bonds.
The variable interest rate on bonds is based on inflation, which means that the asset currently has a high yield. The consumer price index has risen 8.6% in Maythe highest figure since 1981. In annual terms, the rate is I get in touch is a record 9.62% by October 2022.
“It’s a great investment,” said Orman, who began investing in bond I in 2001.
With the support of the US government, the bond does not lose value. Its variable rate is set every May and November. He also has a fixed rate currently at 0%.
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You can only purchase them directly on the U.S. Treasury Department website at TreasuryDirect.gov. Available amounts start at $ 25 and you can invest up to $ 10,000 each year though some exceptionsfor example, the ability to get up to $ 5,000 in paper I bonds as part of your federal tax return.
If you want to buy paper bonds instead of electronic ones, you can buy $ 50 to $ 1,000 a year.
You cannot cash a bond for one year, and if you cash one to five years, you will lose interest for the previous three months.
While it’s best to make a bond for five years or longer, if you don’t think you can do it, don’t let that stop you from buying, Orman said, leading. “Women and money“podcast.
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“Given that inflation is likely to remain for some time, even with a three-month penalty for interest in the years from second to fifth … it’s still worth it, believe it or not,” Orman said.
In addition to a smart investment, consider your current financial situation and whether you can continue to pay your expenses, Orman said.
“People really need to look at what they want to do, not what they need to do? What do they want to buy compared to what they need to buy?” Said Orman.
“If you’re now done where every penny comes out, it comes, you’re in a situation where you need to cut.”
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