1 00:00:28,350 --> 00:00:34,780 Suze: February 19th 2023. Welcome everybody to the Women and Money 2 00:00:34,780 --> 00:00:39,100 Suze: Podcast as well as everybody smart enough to listen. Suze 3 00:00:39,110 --> 00:00:45,620 Suze: O here and KT and I are back on the 4 00:00:45,630 --> 00:00:49,900 Suze: island and we're so excited to be. So in fact, 5 00:00:50,130 --> 00:00:56,110 Suze: I actually taped what it was like to land on 6 00:00:56,120 --> 00:00:59,639 Suze: this little island. Remember this island is only 2.5 miles 7 00:00:59,640 --> 00:01:02,730 Suze: long that we live on, a half a mile wide 8 00:01:02,730 --> 00:01:04,610 Suze: at its widest point 9 00:01:05,190 --> 00:01:11,540 Suze: and the runway is 1995 ft. That's it. So no 10 00:01:11,540 --> 00:01:15,480 Suze: big planes at all. So we get on a little plane. 11 00:01:15,580 --> 00:01:18,420 Suze: The two of us, two pilots, we load it up 12 00:01:18,420 --> 00:01:21,140 Suze: with as much stuff as we can bring back because 13 00:01:21,150 --> 00:01:23,290 Suze: you have to bring everything back to be able to 14 00:01:23,290 --> 00:01:26,070 Suze: live here, to eat and do everything 15 00:01:26,740 --> 00:01:29,800 Suze: and I wanted you to see what it was like 16 00:01:29,800 --> 00:01:35,850 Suze: flying over the water approaching the runway and landing. It's 17 00:01:35,850 --> 00:01:36,940 Suze: quite something. 18 00:01:37,100 --> 00:01:39,660 Suze: So if you want to see that, check it out 19 00:01:39,670 --> 00:01:43,190 Suze: on the Women and Money community app that you can 20 00:01:43,200 --> 00:01:48,290 Suze: absolutely download on Apple Apps or Google Play. It's free. 21 00:01:48,300 --> 00:01:51,780 Suze: I post many things there that I don't post on 22 00:01:51,790 --> 00:01:55,120 Suze: instagram or anywhere else. I kind of like to keep 23 00:01:55,120 --> 00:01:58,010 Suze: it in the family. 24 00:01:58,900 --> 00:02:04,360 Suze: Suze School today is going to answer the question about 25 00:02:04,370 --> 00:02:10,280 Suze: I bonds. What question is that Suze? The question is 26 00:02:10,290 --> 00:02:15,290 Suze: should we continue to invest in I bonds. So let's 27 00:02:15,290 --> 00:02:17,770 Suze: go back a little bit in time. 28 00:02:19,160 --> 00:02:26,690 Suze: I was absolutely I bond crazy a few years ago 29 00:02:26,700 --> 00:02:31,970 Suze: because it was obvious that inflation was going up and 30 00:02:31,980 --> 00:02:37,230 Suze: up and up and when inflation goes up that is 31 00:02:37,230 --> 00:02:40,470 Suze: the time that you really want to buy Series I 32 00:02:40,470 --> 00:02:47,799 Suze: bonds because remember a Series I bond stands for inflation 33 00:02:48,330 --> 00:02:51,760 Suze: And there are two parts to a Series I bond 34 00:02:51,770 --> 00:02:55,910 Suze: one is they give you an inflation rate that changes 35 00:02:55,919 --> 00:03:02,810 Suze: every six months every November and May that rate changes. 36 00:03:02,850 --> 00:03:06,620 Suze: But in I bond also has what's known as a 37 00:03:06,620 --> 00:03:12,560 Suze: fixed rate, a rate that never changes and I think 38 00:03:12,560 --> 00:03:15,560 Suze: the highest the fixed rate ever was... 39 00:03:16,330 --> 00:03:18,950 Suze: Alright was back let's hope I get this right was 40 00:03:18,950 --> 00:03:24,830 Suze: back at about 2000 when it was at 3.6%. I 41 00:03:24,830 --> 00:03:29,410 Suze: started buying I bonds around then but my fixed rate 42 00:03:29,410 --> 00:03:34,120 Suze: was at 3%. So on that I bond that I 43 00:03:34,120 --> 00:03:40,350 Suze: purchased no matter what inflation did, I would always get 44 00:03:40,360 --> 00:03:44,290 Suze: minimum 3% on that bond. 45 00:03:44,810 --> 00:03:46,869 Suze: As years went on, 46 00:03:47,500 --> 00:03:54,060 Suze: I bond stopped giving fixed interest rates, they were at 0%. 47 00:03:54,470 --> 00:03:59,510 Suze: So I bonds because inflation was also very low. There 48 00:03:59,510 --> 00:04:03,090 Suze: were years that they didn't really give any interest whatsoever 49 00:04:03,100 --> 00:04:07,210 Suze: which is why you weren't interested most likely in buying 50 00:04:07,210 --> 00:04:12,540 Suze: them years ago then as inflation started to ramp up 51 00:04:12,550 --> 00:04:13,940 Suze: a few years ago 52 00:04:14,600 --> 00:04:17,539 Suze: and started to go off the charts really. 53 00:04:18,700 --> 00:04:24,180 Suze: We all got interested. Alright so as inflation was going up, 54 00:04:25,160 --> 00:04:32,180 Suze: The interest was 7.1% then it went to 9.62% and 55 00:04:32,180 --> 00:04:37,130 Suze: now it's at 6.89% 56 00:04:37,920 --> 00:04:44,839 Suze: When I say those percentages, those are annualized yields. 57 00:04:45,740 --> 00:04:52,350 Suze: So you don't get that 9.62% for the entire year. 58 00:04:52,580 --> 00:04:56,860 Suze: You get it for a six-month period of time on 59 00:04:56,860 --> 00:05:02,060 Suze: an annualized basis. So you would divide that by two 60 00:05:02,160 --> 00:05:06,620 Suze: to be able to know exactly the interest rate you 61 00:05:06,620 --> 00:05:09,060 Suze: would get for that six months. 62 00:05:09,470 --> 00:05:13,370 Suze: Now it's important to know that because as all of 63 00:05:13,370 --> 00:05:16,630 Suze: you know, but in case for those who don't, when 64 00:05:16,630 --> 00:05:20,520 Suze: you purchase an I bond that's issued by the United 65 00:05:20,520 --> 00:05:24,339 Suze: States government and you can only buy them on Treasury 66 00:05:24,339 --> 00:05:29,520 Suze: direct dot gov minimum is $25 and then you can 67 00:05:29,520 --> 00:05:33,660 Suze: buy them as an individual all the way up to $10,000. 68 00:05:33,720 --> 00:05:36,370 Suze: There are other ways though to buy additional 69 00:05:36,640 --> 00:05:40,650 Suze: I bonds to get close to 30 or $35,000 a 70 00:05:40,650 --> 00:05:45,659 Suze: year into them. However, just let's stay simplistic for this 71 00:05:45,870 --> 00:05:50,960 Suze: Suze School. When you buy an I bond for the very 72 00:05:50,960 --> 00:05:55,760 Suze: first year, you cannot sell it no matter what happens 73 00:05:55,760 --> 00:06:00,880 Suze: to you. They are locked years two through five. 74 00:06:01,480 --> 00:06:06,219 Suze: There is a three month interest penalty if you happen 75 00:06:06,220 --> 00:06:07,109 Suze: to sell. 76 00:06:07,710 --> 00:06:12,560 Suze: After five years you can sell any time you want, 77 00:06:12,560 --> 00:06:15,960 Suze: the official name is called, you redeem them and you 78 00:06:15,960 --> 00:06:19,960 Suze: can redeem any amount of money you want. If you 79 00:06:19,960 --> 00:06:23,659 Suze: happen to put in $10,000 and you only want to 80 00:06:23,660 --> 00:06:30,990 Suze: redeem 2000 you can do so. That's essentially how Series I 81 00:06:30,990 --> 00:06:34,990 Suze: bonds work. Also the interest on a Series I bonds 82 00:06:35,000 --> 00:06:36,890 Suze: is tax deferred. 83 00:06:37,350 --> 00:06:40,960 Suze: So when you do redeem them, that's when the majority 84 00:06:40,960 --> 00:06:46,740 Suze: of you will pay taxes on that money as ordinary income. However, 85 00:06:47,270 --> 00:06:50,169 Suze: you also have the choice if you're going to keep 86 00:06:50,180 --> 00:06:54,130 Suze: your I bonds for really long term to pay the 87 00:06:54,130 --> 00:06:56,720 Suze: taxes annually anyway, 88 00:06:57,310 --> 00:07:02,180 Suze: even though you didn't get the interest because, like me 89 00:07:02,190 --> 00:07:04,630 Suze: and it was truthfully, I think a mistake I have 90 00:07:04,630 --> 00:07:08,299 Suze: to tell you I've had I bonds for so long 91 00:07:08,300 --> 00:07:12,220 Suze: now I have a serious amount of money in there. 92 00:07:12,270 --> 00:07:17,990 Suze: Some that are over 20 years old and when they 93 00:07:17,990 --> 00:07:21,010 Suze: do cash out, because they're only good for 30 years. 94 00:07:21,010 --> 00:07:22,600 Suze: So when I do redeem them 95 00:07:23,030 --> 00:07:26,410 Suze: they will have a whole lot of interest that I 96 00:07:26,410 --> 00:07:28,120 Suze: will owe on that. 97 00:07:28,720 --> 00:07:32,340 Suze: So should I have paid income taxes on it as 98 00:07:32,340 --> 00:07:36,550 Suze: I was going on? In retrospect, I probably should have. 99 00:07:36,560 --> 00:07:40,420 Suze: But hey, what to do? I'm still happy I purchased them. 100 00:07:40,940 --> 00:07:47,450 Suze: So now the question becomes, what's happening in the economy, 101 00:07:47,460 --> 00:07:53,140 Suze: what's happening with interest rates and therefore what do I 102 00:07:53,140 --> 00:07:57,530 Suze: think is going to happen with Series I bonds 103 00:07:58,080 --> 00:08:02,850 Suze: Now as I said, they changed the interest rate every 104 00:08:02,860 --> 00:08:07,750 Suze: May and every November if you happen to have purchased 105 00:08:07,750 --> 00:08:11,760 Suze: an I bond November 1st or after all the way 106 00:08:11,760 --> 00:08:16,800 Suze: up to April 30th of this year. Your annualized interest 107 00:08:16,800 --> 00:08:21,300 Suze: rate will be 6.89% 108 00:08:22,170 --> 00:08:25,450 Suze: But that 6.89% 109 00:08:26,370 --> 00:08:33,990 Suze: is made up of .40% which is fixed. 110 00:08:34,750 --> 00:08:37,790 Suze: So .40% 111 00:08:38,410 --> 00:08:40,980 Suze: of that annualized yield 112 00:08:41,550 --> 00:08:44,220 Suze: of 6.89% 113 00:08:45,050 --> 00:08:48,250 Suze: will be with you for the rest of the time 114 00:08:48,250 --> 00:08:55,450 Suze: that you own this I bond. So 0.40%. Annualized is the 115 00:08:55,450 --> 00:08:59,530 Suze: least you will ever earn on the I bond that 116 00:08:59,530 --> 00:09:06,150 Suze: you purchased either November 1st or until April 30th of 117 00:09:06,150 --> 00:09:08,420 Suze: this year. Okay? 118 00:09:09,150 --> 00:09:12,510 Suze: So that gave you an annualized yield, 119 00:09:13,120 --> 00:09:16,900 Suze: like I said of 6.89%. 120 00:09:17,809 --> 00:09:22,569 Suze: So half of that is what you will actually be 121 00:09:22,580 --> 00:09:28,510 Suze: earning for the six months that you own that I bond. 122 00:09:29,920 --> 00:09:34,120 Suze: wWhen you're six months is up. Whatever they reset the 123 00:09:34,130 --> 00:09:40,130 Suze: interest rate, May 1st at that will be your next 124 00:09:40,140 --> 00:09:44,679 Suze: annualized interest rate and you will get half of that 125 00:09:44,690 --> 00:09:47,239 Suze: and then you will be able to figure out what 126 00:09:47,240 --> 00:09:50,880 Suze: you've earned for the entire year. 127 00:09:51,820 --> 00:09:54,300 Suze: Now the question becomes 128 00:09:55,220 --> 00:09:58,570 Suze: for six months because let's just look at this for 129 00:09:58,570 --> 00:10:02,510 Suze: six months. And why do I say that? Because have 130 00:10:02,510 --> 00:10:07,219 Suze: I not been telling all of you that I only 131 00:10:07,220 --> 00:10:08,520 Suze: want you in 132 00:10:09,240 --> 00:10:16,820 Suze: 3 to 6 months - either Treasury bills or certificates of deposits. 133 00:10:16,880 --> 00:10:20,429 Suze: If you live in a state that has high state 134 00:10:20,440 --> 00:10:24,630 Suze: income taxes. T bills are better for you. If you 135 00:10:24,630 --> 00:10:29,360 Suze: live in a state that your income tax is tax free, 136 00:10:29,360 --> 00:10:33,530 Suze: there is no state income tax, certificates of deposit can 137 00:10:33,530 --> 00:10:36,630 Suze: serve you just as well 138 00:10:37,100 --> 00:10:40,600 Suze: For those of you who find it complicated to buy 139 00:10:40,600 --> 00:10:46,380 Suze: T bills. Then again, certificates of deposits will actually serve 140 00:10:46,380 --> 00:10:51,709 Suze: you better than just leaving your money in a savings account, 141 00:10:52,220 --> 00:10:56,310 Suze: especially given what interest rates are doing. And now that 142 00:10:56,309 --> 00:10:59,330 Suze: I brought up certificates of deposits, I just want to 143 00:10:59,330 --> 00:11:03,820 Suze: tell you very shortly here like we promised you 144 00:11:04,450 --> 00:11:08,300 Suze: and hopefully that will be in a week or a 145 00:11:08,309 --> 00:11:13,069 Suze: little bit more than that. Three month and six month 146 00:11:13,070 --> 00:11:19,770 Suze: certificates of deposits will be available via Alliant Credit Union 147 00:11:19,880 --> 00:11:23,900 Suze: and we are doing everything we can to match the 148 00:11:23,900 --> 00:11:28,990 Suze: current three and six month Treasury Bill rate, which will 149 00:11:28,990 --> 00:11:29,660 Suze: mean 150 00:11:29,910 --> 00:11:33,179 Suze: that most likely the interest rates on the three and 151 00:11:33,179 --> 00:11:37,140 Suze: six month certificates of deposits, that you're gonna be able 152 00:11:37,140 --> 00:11:41,770 Suze: to buy with absolutely no commission via alliance are going 153 00:11:41,770 --> 00:11:42,900 Suze: to be higher. 154 00:11:43,440 --> 00:11:47,719 Suze: We'll see if that's true but higher than any other 155 00:11:47,720 --> 00:11:51,560 Suze: three and six month certificate of deposit that you can 156 00:11:51,559 --> 00:11:57,150 Suze: find anywhere. Check it out when it happens. And I 157 00:11:57,150 --> 00:12:00,309 Suze: think you are going to be so pleased when you 158 00:12:00,309 --> 00:12:05,160 Suze: see especially the rate on the six month certificate of deposit. 159 00:12:05,160 --> 00:12:09,439 Suze: I can't even tell you. So you might wanna just 160 00:12:09,440 --> 00:12:12,600 Suze: now go to my Alliant dot com, 161 00:12:13,090 --> 00:12:17,599 Suze: to become a member of Alliant Credit Union, deposit some money, 162 00:12:17,610 --> 00:12:21,179 Suze: whatever you want. The minimum will be $1000 to buy 163 00:12:21,179 --> 00:12:25,260 Suze: these certificates of deposit So deposit any amount of money 164 00:12:25,260 --> 00:12:29,020 Suze: you want. However into the Ultimate Opportunity savings account that's 165 00:12:29,020 --> 00:12:31,410 Suze: currently giving 2.95% 166 00:12:31,860 --> 00:12:34,540 Suze: and there are other offers with that as well, but 167 00:12:34,540 --> 00:12:39,890 Suze: get ready for hopefully next Sunday or a few days 168 00:12:39,890 --> 00:12:42,260 Suze: after that. But it is coming soon. 169 00:12:43,910 --> 00:12:46,800 Suze: Now... I just got myself off track because I really 170 00:12:46,809 --> 00:12:50,260 Suze: didn't mean to go there. But anyway, the point that 171 00:12:50,260 --> 00:12:53,300 Suze: I was trying to make is that 172 00:12:54,330 --> 00:12:59,380 Suze: I want you to stay short term. Now there may 173 00:12:59,380 --> 00:13:03,010 Suze: be other certificates of deposits that are out there for 174 00:13:03,010 --> 00:13:07,890 Suze: 11 months possibly giving you 5% or whatever. But given 175 00:13:07,890 --> 00:13:12,819 Suze: that I really believe that interest rates are going to 176 00:13:12,820 --> 00:13:18,140 Suze: continue up and they're going to continue up because inflation 177 00:13:18,140 --> 00:13:23,050 Suze: did not come in as low as the Feds wanted 178 00:13:23,050 --> 00:13:23,809 Suze: it to. 179 00:13:24,160 --> 00:13:28,390 Suze: So therefore they're going to continue to raise the Fed 180 00:13:28,390 --> 00:13:32,110 Suze: funds rate probably to about 5% or more. And that 181 00:13:32,110 --> 00:13:38,180 Suze: means most likely interest rates on savings accounts, treasuries and 182 00:13:38,179 --> 00:13:42,360 Suze: certificates of deposits are going to continue to go up. 183 00:13:42,390 --> 00:13:47,330 Suze: So why lock yourself in at 5% for 11 months 184 00:13:47,330 --> 00:13:49,000 Suze: on a certificate of deposit? 185 00:13:49,210 --> 00:13:53,210 Suze: When probably you're going to be able to keep fingers crossed, 186 00:13:53,309 --> 00:13:58,479 Suze: maybe lock yourself in for 5% on a six-month certificate 187 00:13:58,490 --> 00:14:01,360 Suze: of deposit or treasury bill 188 00:14:01,820 --> 00:14:05,790 Suze: and then six months from there, maybe lock yourself into 189 00:14:05,790 --> 00:14:10,030 Suze: even a higher rate or maybe the three month will 190 00:14:10,030 --> 00:14:15,130 Suze: be even higher, just stick with three and six month 191 00:14:15,190 --> 00:14:20,290 Suze: maturities no matter what you're doing at this particular point 192 00:14:20,300 --> 00:14:21,640 Suze: in time. 193 00:14:22,190 --> 00:14:26,610 Suze: So that's my advice to you there. Back to Series 194 00:14:26,620 --> 00:14:27,580 Suze: I bonds. 195 00:14:28,290 --> 00:14:31,250 Suze: Boy... see what happens when you go to Florida and 196 00:14:31,250 --> 00:14:34,810 Suze: you go to a Jimmy Buffett concert, you're like in Margaritaville, 197 00:14:34,810 --> 00:14:37,150 Suze: you're all over the place. But I know you can 198 00:14:37,150 --> 00:14:40,980 Suze: follow me Series I bonds. 199 00:14:41,770 --> 00:14:46,740 Suze: I don't love them as much as I used to 200 00:14:47,050 --> 00:14:51,250 Suze: and here is the reason why. See if you can 201 00:14:51,250 --> 00:14:53,280 Suze: follow me on this one. 202 00:14:54,410 --> 00:14:58,780 Suze: Number one, your money has to be locked up for 203 00:14:58,780 --> 00:15:04,760 Suze: the first year. Okay, that's fine. When we were making 9.62, 7.1, 204 00:15:04,770 --> 00:15:07,640 Suze: even 6.89. I don't have that big of a problem 205 00:15:07,640 --> 00:15:08,260 Suze: with that. 206 00:15:09,070 --> 00:15:13,590 Suze: However, since I don't exactly know what's going to happen 207 00:15:13,600 --> 00:15:14,680 Suze: in May, 208 00:15:15,500 --> 00:15:20,560 Suze: I do know that inflation is coming down. 209 00:15:21,470 --> 00:15:25,750 Suze: So I doubt highly that in May the renewal rate 210 00:15:25,750 --> 00:15:30,040 Suze: will be 6.89% or higher. 211 00:15:31,780 --> 00:15:37,380 Suze: Alright, so let's just assume that the renewal rate starting 212 00:15:37,380 --> 00:15:40,290 Suze: May one is 5%. 213 00:15:41,310 --> 00:15:45,850 Suze: That would mean for a six-month period of time you 214 00:15:45,850 --> 00:15:49,620 Suze: would only be getting 2.5%. 215 00:15:50,170 --> 00:15:51,610 Suze: For the year. 216 00:15:52,400 --> 00:15:57,160 Suze: you would have gotten for the first six months, 3.45% 217 00:15:57,420 --> 00:16:01,420 Suze: then you would have gotten 2.5%. So you would have 218 00:16:01,420 --> 00:16:11,080 Suze: averaged about 5.95%. Still fabulous if it's at 5%. That 219 00:16:11,080 --> 00:16:14,700 Suze: I don't have a problem with. But I do think 220 00:16:14,710 --> 00:16:19,020 Suze: as time goes on we're going to see the inflation 221 00:16:19,020 --> 00:16:20,250 Suze: rate go down. 222 00:16:20,750 --> 00:16:24,729 Suze: And the only bad thing about Series I bonds is 223 00:16:24,730 --> 00:16:28,170 Suze: that you can't get at your money without a three 224 00:16:28,170 --> 00:16:33,310 Suze: month interest penalty for years two through five. So let's 225 00:16:33,310 --> 00:16:35,660 Suze: just stick to this example. Did you take out your 226 00:16:35,660 --> 00:16:39,910 Suze: little Suze notebooks and write this down? Let's just say 227 00:16:40,670 --> 00:16:43,440 Suze: you need to take out your money if you're in 228 00:16:43,440 --> 00:16:47,480 Suze: the second year now, you made great money the first 229 00:16:47,480 --> 00:16:50,410 Suze: year great money. maybe even the second year. Maybe you're 230 00:16:50,410 --> 00:16:52,190 Suze: in the third year doesn't matter. 231 00:16:52,820 --> 00:16:56,450 Suze: But you want to take out your money now 232 00:16:57,280 --> 00:17:01,000 Suze: you will have to pay a three month interest penalty. 233 00:17:01,000 --> 00:17:04,010 Suze: Now in this particular situation, 234 00:17:04,790 --> 00:17:09,500 Suze: if they're giving you 2.5% 235 00:17:10,510 --> 00:17:18,899 Suze: on that six months. Three months penalty would be 1.25%. 236 00:17:19,000 --> 00:17:23,020 Suze: That's what it would be. So now you take your 237 00:17:23,020 --> 00:17:27,910 Suze: money out and what's happened is rather for this year then, 238 00:17:27,970 --> 00:17:31,540 Suze: that you earning 5.95% 239 00:17:32,190 --> 00:17:37,139 Suze: With the penalty, you only earned 4.7%. 240 00:17:37,930 --> 00:17:42,210 Suze: And I personally think, still a great interest rate, don't 241 00:17:42,210 --> 00:17:43,570 Suze: have a problem with that. 242 00:17:44,350 --> 00:17:48,420 Suze: But I still think as time goes on 243 00:17:49,250 --> 00:17:54,110 Suze: that if you had done a three month, six months, 244 00:17:54,119 --> 00:17:58,280 Suze: even a year, Treasury or certificate of deposit, 245 00:17:59,730 --> 00:18:04,040 Suze: you probably would have come out even better in the 246 00:18:04,040 --> 00:18:06,690 Suze: long run as time goes on. 247 00:18:07,300 --> 00:18:11,460 Suze: So what do I think? I think, hey, if you 248 00:18:11,460 --> 00:18:15,080 Suze: want to do another Series I bond for this year 249 00:18:15,940 --> 00:18:18,520 Suze: and you want to take a chance as to where 250 00:18:18,530 --> 00:18:22,940 Suze: inflation may go, which is more likely down than up. 251 00:18:22,950 --> 00:18:25,899 Suze: And if you need that money, it's a three month 252 00:18:25,910 --> 00:18:32,300 Suze: interest penalty. Why not just do short term certificates of 253 00:18:32,300 --> 00:18:37,000 Suze: deposits and or Treasury bills depending on your situation, 254 00:18:37,490 --> 00:18:40,830 Suze: knowing that you keep it in there for that three months, 255 00:18:40,830 --> 00:18:43,699 Suze: that six months. You're not locked in for a year. 256 00:18:43,730 --> 00:18:48,570 Suze: You're not locked in for five years essentially with a 257 00:18:48,570 --> 00:18:53,150 Suze: three month interest penalty as you are with Series I bonds, 258 00:18:53,160 --> 00:18:55,869 Suze: you can choose what you want to do. 259 00:18:56,350 --> 00:18:59,960 Suze: So I think we are absolutely coming to the time 260 00:18:59,970 --> 00:19:05,750 Suze: where Series I bonds are not as attractive, long run 261 00:19:05,750 --> 00:19:13,190 Suze: because of their five year holding period as they once were. Now, 262 00:19:13,200 --> 00:19:16,129 Suze: if the interest rate that they were going to give 263 00:19:16,130 --> 00:19:19,150 Suze: you the inflation weight went down to zero 264 00:19:19,650 --> 00:19:23,280 Suze: then okay. Like it was for years. So then the 265 00:19:23,280 --> 00:19:26,850 Suze: three month interest penalty really doesn't matter. But I don't 266 00:19:26,859 --> 00:19:30,260 Suze: think that's what's going to happen. So to recap very 267 00:19:30,260 --> 00:19:36,540 Suze: quickly on this, we're in an economic environment where 268 00:19:37,510 --> 00:19:43,090 Suze: I personally think inflation has started to come down especially however, 269 00:19:43,100 --> 00:19:46,190 Suze: the way that they're figuring it, but it's not coming 270 00:19:46,190 --> 00:19:49,020 Suze: down as fast as they want it to. 271 00:19:49,770 --> 00:19:54,870 Suze: So that will affect Series I bonds. But to tame inflation, 272 00:19:54,960 --> 00:19:59,560 Suze: they're going to raise the fed funds rate probably the 273 00:19:59,560 --> 00:20:02,920 Suze: terminal rate. The end rate will be 5, 5.5 somewhere 274 00:20:02,920 --> 00:20:07,710 Suze: there which makes interest rates go up. 275 00:20:08,270 --> 00:20:11,720 Suze: I'd rather be in a place where I could get 276 00:20:11,730 --> 00:20:14,840 Suze: more and more money on my interest 277 00:20:15,450 --> 00:20:20,530 Suze: such as certificates of deposits or Treasuries and then once 278 00:20:20,540 --> 00:20:25,460 Suze: interest rates have gone up then we'll start wanting to 279 00:20:25,460 --> 00:20:31,630 Suze: move into longer term certificates of deposits and Treasuries to 280 00:20:31,630 --> 00:20:33,660 Suze: lock in that rate. 281 00:20:33,950 --> 00:20:39,490 Suze: With the series I bonds, we can't lock in any rate. 282 00:20:39,500 --> 00:20:42,830 Suze: And the only rate again on this I bond that 283 00:20:42,830 --> 00:20:48,930 Suze: was issued November of 22 is the .40%. Who cares? 284 00:20:49,750 --> 00:20:50,410 Suze: So... 285 00:20:50,990 --> 00:20:53,930 Suze: I'm not the lover that I used to be of 286 00:20:53,930 --> 00:20:57,690 Suze: Series I bonds. I'm so sorry Series I bonds. But 287 00:20:57,700 --> 00:21:02,030 Suze: for those of you who got into them at 7.1% 288 00:21:02,040 --> 00:21:09,390 Suze: at 9.62%. Remember your money does compound in there. So 289 00:21:09,390 --> 00:21:13,790 Suze: your interest is earning it as well. This last one 290 00:21:13,800 --> 00:21:19,130 Suze: at 6.89% was still a good one because everything is 291 00:21:19,130 --> 00:21:20,830 Suze: compounding for you. 292 00:21:21,100 --> 00:21:24,470 Suze: On the other hand, for those of you who maybe 293 00:21:24,470 --> 00:21:29,439 Suze: have never bought I bonds before and you're thinking about 294 00:21:29,470 --> 00:21:32,740 Suze: should I or shouldn't I? Here's what I would tell you, 295 00:21:32,840 --> 00:21:35,399 Suze: it actually depends on how much money you want to 296 00:21:35,400 --> 00:21:37,149 Suze: keep safe and sound. 297 00:21:37,830 --> 00:21:41,550 Suze: So let's say you have 50,000 or $100,000 that you 298 00:21:41,550 --> 00:21:44,850 Suze: want to earn a good interest rate. Alright. If you 299 00:21:44,850 --> 00:21:48,200 Suze: want to put $10,000 in right now to a Series 300 00:21:48,210 --> 00:21:52,220 Suze: I bonds to lock in that interest rate for six months. 301 00:21:52,320 --> 00:21:55,390 Suze: I don't have a problem with that. As long as 302 00:21:55,390 --> 00:21:58,290 Suze: you know, you're not going to have to touch that 303 00:21:58,290 --> 00:22:04,109 Suze: money for at least seriously, 3,4,5 years from now, preferably 304 00:22:04,109 --> 00:22:05,460 Suze: five years 305 00:22:05,980 --> 00:22:09,070 Suze: Than the other money, the other 40,000 or whatever you 306 00:22:09,070 --> 00:22:12,990 Suze: might have. That then would go where into three month 307 00:22:13,000 --> 00:22:19,429 Suze: or six month, either certificates of deposits or treasury bills. 308 00:22:19,450 --> 00:22:23,800 Suze: If all you have is $10,000 to your name or 309 00:22:23,800 --> 00:22:27,960 Suze: $5000 to your name or whatever amount and you are 310 00:22:27,960 --> 00:22:32,090 Suze: not positive that you are going to need that money. 311 00:22:32,100 --> 00:22:34,419 Suze: You're not positive about that 312 00:22:35,210 --> 00:22:38,230 Suze: and you don't quite know and you really don't have 313 00:22:38,230 --> 00:22:41,800 Suze: an emergency fund or anything else. I'd rather see you 314 00:22:41,800 --> 00:22:47,100 Suze: go into a three month, six month certificates of deposit 315 00:22:47,109 --> 00:22:49,090 Suze: or treasury bills 316 00:22:49,600 --> 00:22:53,490 Suze: or even into a high yielding savings account. 317 00:22:54,250 --> 00:22:57,570 Suze: But be careful when it comes to I bonds because 318 00:22:57,580 --> 00:23:01,210 Suze: of the five year lockup period. 319 00:23:01,859 --> 00:23:05,720 Suze: That is what you have to take into consideration. Now 320 00:23:05,720 --> 00:23:09,570 Suze: you know what I think. I know a lot of you, 321 00:23:09,570 --> 00:23:12,050 Suze: I know you... you're freaked. 322 00:23:12,230 --> 00:23:17,070 Suze: You're absolutely freaked because the last two susie schools were 323 00:23:17,070 --> 00:23:22,070 Suze: about changing stocks buying things for just the dividend. Do 324 00:23:22,070 --> 00:23:25,189 Suze: not buy it for the stock price but all of 325 00:23:25,190 --> 00:23:28,409 Suze: you were so thrilled because two weeks ago when I 326 00:23:28,410 --> 00:23:31,730 Suze: used PXD as an example and I still thought it 327 00:23:31,730 --> 00:23:35,860 Suze: was a good buy their truthfully it was at $220 328 00:23:35,869 --> 00:23:36,710 Suze: a share. 329 00:23:36,990 --> 00:23:39,239 Suze: But I kept saying to all of you you are 330 00:23:39,240 --> 00:23:41,170 Suze: to do it for the dividend. You are to do 331 00:23:41,170 --> 00:23:43,840 Suze: it for the dividend. You are not to buy it 332 00:23:43,850 --> 00:23:47,280 Suze: for it going up going down then of course it 333 00:23:47,280 --> 00:23:49,980 Suze: went up to 231. You all freaked out. You were 334 00:23:49,980 --> 00:23:55,229 Suze: also happy and now it's back at 207. And how 335 00:23:55,230 --> 00:23:58,530 Suze: freaked out are all of you? Oh yes. 336 00:23:59,090 --> 00:24:02,820 Suze: Now what would I do with PXD? What would I do 337 00:24:02,820 --> 00:24:07,420 Suze: with Devon, another energy stock that we have been buying 338 00:24:08,240 --> 00:24:14,659 Suze: Both of those companies... because of weather in December, the 339 00:24:14,660 --> 00:24:20,540 Suze: storms and everything... went through a terrible production time. They 340 00:24:20,540 --> 00:24:25,080 Suze: could not produce the oil barrels they wanted to produce 341 00:24:25,090 --> 00:24:28,070 Suze: because of that they didn't have as much oil to 342 00:24:28,070 --> 00:24:32,190 Suze: sell their earnings therefore went down and when earnings go 343 00:24:32,190 --> 00:24:37,669 Suze: down on a company, analysts freak out and everybody sells them. 344 00:24:39,090 --> 00:24:41,929 Suze: I don't know you're buying it for the dividend. The 345 00:24:41,930 --> 00:24:47,820 Suze: dividend especially on PXD is really solid. They did lower 346 00:24:47,820 --> 00:24:52,810 Suze: the dividend on DVN, but it's still a fine paying dividend, 347 00:24:52,820 --> 00:24:58,330 Suze: and I do think bottom line, that these two stocks 348 00:24:58,340 --> 00:25:02,080 Suze: will recover and go up. But remember what I have 349 00:25:02,080 --> 00:25:08,370 Suze: said to you; you don't buy these stocks for price appreciation. 350 00:25:08,630 --> 00:25:12,650 Suze: I think it's absolutely possible, Devon's back at 50 for 351 00:25:12,660 --> 00:25:15,320 Suze: who knows it could go to 48 it wasn't 48 352 00:25:15,320 --> 00:25:17,920 Suze: this year already. I don't know if you all realize 353 00:25:17,920 --> 00:25:20,490 Suze: that but it could easily go back up to in 354 00:25:20,490 --> 00:25:23,889 Suze: the 70s. It could also stay here. 355 00:25:24,410 --> 00:25:27,990 Suze: But I think as the weather has gotten okay, they 356 00:25:27,990 --> 00:25:32,940 Suze: produce more we'll see what happens. They are solid companies 357 00:25:33,119 --> 00:25:37,400 Suze: now I get the Devon isn't everybody's favorite energy company. 358 00:25:37,780 --> 00:25:41,920 Suze: They do like PXD better but up to you do 359 00:25:41,920 --> 00:25:44,180 Suze: you want to make a change do you not do 360 00:25:44,180 --> 00:25:46,879 Suze: you want to do tax loss selling here and switch 361 00:25:47,390 --> 00:25:50,830 Suze: up to you? I explained all of that. But this 362 00:25:50,840 --> 00:25:52,340 Suze: is the reason 363 00:25:52,560 --> 00:25:57,510 Suze: that you don't buy stocks for the price movement. You 364 00:25:57,510 --> 00:26:00,649 Suze: want to make sure they're good quality stocks you want 365 00:26:00,650 --> 00:26:03,290 Suze: to make sure that they have good cash flow. They 366 00:26:03,290 --> 00:26:08,720 Suze: have good earnings, which these companies still do have. Because 367 00:26:08,720 --> 00:26:13,050 Suze: you want the dividend more than anything and that's what 368 00:26:13,050 --> 00:26:16,850 Suze: we were doing with this strategy because why because they're 369 00:26:16,850 --> 00:26:19,100 Suze: still paying higher dividends especially PXD, 370 00:26:20,150 --> 00:26:24,760 Suze: that you can get anywhere with interest. So if you 371 00:26:24,760 --> 00:26:27,609 Suze: can afford to keep these for a few years and 372 00:26:27,609 --> 00:26:31,930 Suze: remember I've always told you do not invest in stocks 373 00:26:31,940 --> 00:26:36,960 Suze: with money that you will need within at least five years, 374 00:26:36,970 --> 00:26:38,350 Suze: don't do it. 375 00:26:39,020 --> 00:26:42,859 Suze: So I feel okay about it. I'm not worried about it, 376 00:26:42,869 --> 00:26:45,370 Suze: you know will you start to freak if it goes 377 00:26:45,369 --> 00:26:49,899 Suze: down even more? Uh huh. Maybe especially PXD, if it 378 00:26:49,900 --> 00:26:53,830 Suze: goes down more, you know the dividend yield here is 379 00:26:53,830 --> 00:26:58,570 Suze: now a whole lot higher than it was at 231 380 00:26:58,580 --> 00:27:01,850 Suze: you know by a lot it's like a 12% dividend 381 00:27:01,850 --> 00:27:06,280 Suze: right now. So that's my update on that. So stop 382 00:27:06,290 --> 00:27:07,520 Suze: freaking out. 383 00:27:07,830 --> 00:27:13,369 Suze: In terms of the overall markets, I still think in 384 00:27:13,369 --> 00:27:16,810 Suze: the next two or three weeks we could see a pullback. 385 00:27:16,820 --> 00:27:20,530 Suze: I'm still not liking it. So I don't care that 386 00:27:20,530 --> 00:27:23,629 Suze: things have gone up and some things are great. I'm 387 00:27:23,630 --> 00:27:27,510 Suze: still taking a very conservative approach which is why 388 00:27:27,990 --> 00:27:34,010 Suze: I like dividend paying stocks of all kinds. All your money 389 00:27:34,010 --> 00:27:39,600 Suze: should not just be in energy by the way. All right, 390 00:27:40,310 --> 00:27:45,130 Suze: that was your Suze School today on Series I bonds. 391 00:27:45,140 --> 00:27:48,700 Suze: If you're confused, you can always write a question on 392 00:27:48,700 --> 00:27:51,940 Suze: the Women and Money community app and I tend to 393 00:27:51,950 --> 00:27:57,760 Suze: answer them there under this particular podcast when it posts. 394 00:27:57,770 --> 00:28:00,540 Suze: And for those of you who want to see if 395 00:28:00,540 --> 00:28:05,240 Suze: your question can be answered on Thursdays podcast when KT 396 00:28:05,240 --> 00:28:08,990 Suze: always joins me for Ask KT and Suze Anything. 397 00:28:09,359 --> 00:28:12,590 Suze: You can always also send in a question via the 398 00:28:12,590 --> 00:28:18,720 Suze: Community app or to ask Suze S-U-Z-E Podcast at gmail 399 00:28:18,720 --> 00:28:25,310 Suze: dot com. Alright, everybody. So until Thursday, when Miss Travis 400 00:28:25,320 --> 00:28:27,180 Suze: will join me again, 401 00:28:27,700 --> 00:28:34,830 Suze: remember today, wherever we go, we will create a more joyful, 402 00:28:34,840 --> 00:28:43,550 Suze: peaceful and loving world and never forget, you are unstoppable.