10x Your I-Bond Returns (Or More) Using This Little Understood Strategy

welcome to richtheon i'm rich founder adam taggart here with a brief and i think quite interesting follow up to the explainer video i posted in july about series i savings

bond

s, also known as i

bond

s, if you haven't seen it yet . video. I'll put the link here and again at the end of

this

video. It explains what bonuses are and how they work, but I'm releasing

this

new video because ibonds continue to be one of the best deals out there. They now come with all the security and guarantee of return of principal of a standard treasury bill, except that they currently yield almost three times current income.

The bonds are paying interest at a phenomenal rate of 9.62 percent, a free yield of 9.62 percent, who wouldn't? I want that, especially in today's uncertain markets, with reported inflation persisting stubbornly above eight percent. I think almost all of us would and in most cases we should take advantage of this. I certainly have been this year, although I must specify here from the beginning that only those with the US social security number can purchase ocular bonds, sorry international friends, if you don't have one, you can't take advantage of what I'm about to share here now, of course, the problem with i-bonds is that the government limits us to only buying ten thousand dollars per person in a given calendar year, so if you have a lot of cash to protect from inflation, ocular bonuses are usually discarded, considered a nice shield but too small and insufficient because people get obsessed with it.

Limit of 10,000 I think thinking this way is a mistake here in September 2022 because there is a

strategy

that today will allow you to invest

more

than ten times that value. In fact, I'll show you how the average family can protect themselves. up to one hundred and fifty thousand dollars and in some cases even

more

value of

your

purchasing power over the next year

using

ocular bonds that yield around 11,000 and possibly even more in interest earned, plus getting the security of having the principal guaranteed by The US government, that's a good deal for the conservative investor. If you can find a better one, let me know now.

Let me explain how to do it. The

strategy

I am going to share with you takes advantage of the current high interest rate on i bonds. qualifies the current favorable timeline for how these rates are set and exploits the

little

-known gift box benefit offered by the US Treasury. In fact, very few understand this gift box resource that I contacted when I made the research for this video. I didn't even know, in the end I had to explain to them how it works, but once they

understood

what I'm about to tell them, they thanked me for letting them know and they think it's worth seriously considering and now that I know, they are advising their clients to Take careful advantage of this opportunity.

Okay, so what's all the fuss about? Well, first, as I mentioned above, the maximum number of i-bonds a person can purchase during a given calendar year is 10,000, now remember. that's per person, so let's look at a standard family of four, two parents, two children, our first priority is to make sure that each person in the family maximizes their own allocation of ten thousand dollars in eye bonuses for twenty-two ten thousand dollars multiplied by four people. That's forty thousand dollars placed in ocular bonds as of today, now companies and trusts that a family controls can also purchase ocular bonds, so let's assume our family has a trust that adds an additional ten thousand dollars to its purchases for the year 2022, which raises the total. up to fifty thousand dollars now, how much will that fifty thousand dollars earn in interest over the next year?

Well, when you buy an i-bond, you lock in its interest rate for the next six months at this time the interest rate offered by the US treasury. i-bonds, as I said, are 9.62 per hundred, so that's what our families will earn fifty thousand dollars in capital for the first six months, which is about two thousand four hundred dollars. Well, what will they earn over the next six months? We won't know for sure until the US Treasury adjusts the i-bond interest rate again, which it does twice a year, the next time it will change will be in November, but while we can't know by what certainty what the new interest rate will be.

We will know that it is linked to the official rate of the consumer price index, which currently stands at 8.3 percent at the time of this video recording, inflation still remains elevated and supply chain problems still persist, for which even though the economy is slowing down, the federal reserve is actively working. to reduce inflation, the CPI will most likely decline slowly rather than suddenly fall in the coming months, so assuming the new i-bond interest rate is adjusted downwards to something like, say , seven percent in November, that will be the interest rate our family's ocular bonds earn for the second six months and fifty thousand dollars, which is equivalent to approximately seventeen hundred and fifty dollars, so combined, our family should expect earn about four thousand one hundred and fifty dollars in the first year of having the five. thousand the fifty thousand dollars worth of i bonds that they bought today, that's now 4150 earned without risk guaranteed by the US government.

Oh, and by the way, it's exempt from state and local taxes, that's not bad at all, but now I'm going to show you how we can double that and that is by

using

the US Treasury gift box feature, you can gift bonds to anyone, the only limitation is if the person you are buying them for has already purchased their limit of ten thousand dollars in ocular bonds for that calendar year the bonds you are giving away go in a gift box maintained by the U.S. Treasury in the name of

your

named beneficiary for future delivery the i-bonds in a gift box can be withdrawn from the fund by the beneficiary in a future year when they are not purchasing any i-bonds for themselves, this is called receiving the bonuses and a beneficiary can receive up to a maximum of ten thousand dollars in eye bonds from the fund. gift in any given calendar year, the key to A note about ibonds that go in a gift box is that they start earning interest on the day they are gifted, so today's tasty rate of 9.62, yes, any ibond What you put in a gift box today will earn that rate for the next six months, so let's go back to our family, if each member and the trust also receive an additional ten thousand dollars each in eye bonuses today, which raises the total principle that The family has now absorbed one hundred thousand dollars, that is the value of fifty thousand dollars they purchased for the 2022 calendar year and the new fifty thousand dollars that went into their gift boxes, this will in effect double the interest they earn during next year, so our four thousand one hundred and fifty dollars multiplied by two comes out again to eight thousand three hundred dollars, all backed by the United States treasury and free of state and local taxes, it's not so bad that the family has to hold these bonds for at least a year because the US treasury will not allow you to sell them before 12 months of purchase, so let's compare our strategy with a A standard one-year Treasury bill now our family could invest a hundred thousand dollars today on a one-year T bill that currently yields three point six seven percent, which is actually pretty good relative to what Treasuries have yielded over the last decade, so in one year our our family will have earned 3,670 in risk-free interest, but following our ibond strategy our family earns around 8,300 during the first 12 months, maybe a

little

less, maybe a little more, depending on how the current interest rate of the i bonds in November, but you can see that it is a much better yield while still receiving the same capital guarantee and tax benefits that the treasury bill offers, okay, but now let me complicate things even more, our family bought fifty thousand dollars in eye bonuses for 2022 and then he gave them away too. another fifty thousand dollars at the same time went into everyone's gift boxes.

Well, here in mid-September we are not too far from the end of the year, what if our family buys another fifty thousand dollars in eye bonds at the beginning of January? for calendar year 2020 2023, that's another year of interest payments running roughly parallel to the numbers we've already calculated, assuming our post-November seven percent adjusted interest rate on i bonds, those new fifty thousand dollars would generate one thousand seven hundred and fifty dollars. for the first six months, okay, now we're starting to get into guess territory, so let's be conservative and assume that the second six months you earn interest of only four percent, which yields a thousand dollars, which It equals two seven hundred and fifty dollars for the year now if we add that to our previous calculations our family has earned more than eleven thousand dollars in interest between now and the end of 2023 now if by then the CPI has fallen enough for the i- bonds are no longer the generous deal that our family can now sell them and put the profits elsewhere selling the i-bonds is simple and only requires a few clicks on the treasurydirect.gov website there are only two things to keep in mind: the The first is to sell the ibots in the gift box that our relatives will need to receive them, that is, take them out of the box in early 2024, that only takes a moment and then the vouchers can be sold immediately after.

The second thing we need to know is that if you haven't owned your i-bonds for five years, the US treasury makes you forfeit interest payments received before the sale date for the previous three months, so in our example it's not a big deal since the ibonder family buys gifts for each other today here in September 2022 they will have accumulated three additional months of interest by January 2024. I had already excluded that additional interest in my previous calculation $11,000 for ibones purchased in January 2023. Our family may want to keep them. for an additional three months until March 2024 before selling them, but whether they do or not doesn't really change much of the math I've shared so far, here's how a typical family can make over 10,000 between now and the end of 2023 with a maximum degree of security using eye links, of course, if your family has more members or more businesses and trusts to exploit well, that number could be even higher, although if you decide to take advantage of the strategy, I highly recommend speaking to your family first. accountant to make sure you understand what you are doing and are comfortable with it, as I mentioned that most CPAs are unaware of gift box options and I am a little surprised at how difficult it has been for me to verify with them.

Everything I have laid out here for you, I have explained everything to the best of my understanding based on researching the treasure guide itself on the treasure direct website and reading numerous related articles, but if you are going to commit your own money For this you should do it under the guidance of your certified public accountant or a good financial advisor, also speaking of financial advisors, if you don't have a good one to consult about whether this ibond strategy makes sense for your personal situation, consider talking to one from rich endorsement advisors to get their opinion, it's completely free and there is no obligation to work with them.

These are the same experts you see on this show every week. To schedule one of these free discussions, simply fill out the short form at richon.com. I really hope you found this unconventional look at ibonds and their gift box benefits useful. If so and you would like to see more such explainer videos on this channel, let me know in the comments section below, feel free to suggest any additional topics you want. I'd like to see me cover it in a future video and if you haven't already, don't forget to watch my previous explainer video on ibonds which details exactly how they work.

You can watch it for free at richyon.com ibons, but first do so, support this channel by hitting the like button and clicking the red subscribe button below if you haven't already, as well as the little bell icon at the bottom. side. Thank you very much for doing that and thank you very much for watching.