Measured Stock Analysis to Build Long-Term Wealth.

Should You Use I-Bonds to Protect Your Money?

Picture by Andrey Popov

I-Bonds offer a safe way to protect your money from inflation, however, it is important to understand how they work and to have a plan.

There are generally two reasons to invest your money: 1) To outpace inflation, 2) To build wealth.

If we examine the former, to outpace inflation, we would find that this is an extraordinarily difficult objective with inflation rates at 40 year highs. The most recent CPI reading showed prices rising at a rate of 8.5%, down from 9.1% during the previous reading. This means that in order to see a real rate of return and protect the purchasing power of cash, investors need to find a rate of return in excess of 8.5%. Generally, these returns are unachievable without taking excessive risk.

This is compounded by a tumultuous economic environment wrought with uncertainty, and few typical avenues to find a reasonable rate of return — the stock market is in a bear market, treasury bond rates, though higher, still offer mediocre returns, and the real estate market appears to be peaking.

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Frank Balestriere

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