dealing with the low interest rates

[Boompa]

Originally Posted by MadManofBethesda

Well, let's see.

You don't like the FED.
You don't like politicians.
And, you don't like Real Estates (sic).

How do you feel about corporate entities?

You can switch your TSP from the G Fund to the F Fund and invest in corporate bonds instead of government securities.

Over the last 12 months (Aug - July), the F Fund returned 7.87%, as opposed to the G Fund's 3.19%.

Of course, historical returns don't guarantee future etc. etc.

But this way, you won't have to worry about the FED. (Or have it as a convenient bogeyman.)

If you look at what the FED has done to the Actuarial Requirements for a Retirement Income you might understand. If I needed an income of $4,000 a month how much money do I need in CDs rather than the amount needed at the 5.3% I could get 2 years ago. As for the TSP, I am already retired and will be required to start pulling money out in a couple years.
It's not that I dislike Real Estate's but they don't seem to have learned a thing from the Calamity they brought upon this nation. Sorry if I offended you

[Gandalara]

mathjak107, I like most of your posts, but your continual use of ellipses ( ... ) drive my poor old eyes NUTS.

[thrillobyte]

So why do retired folk who rely on CD's as income even bother at 1.5%? Apt. units would be a better investment at this point. And why aren't the banks losing deposits hand over fist at these ridiculous rates?

[MadManofBethesda]

Originally Posted by thrillobyte

So why do retired folk who rely on CD's as income even bother at 1.5%?.... And why aren't the banks losing deposits hand over fist at these ridiculous rates?

Because people have an irrational fear of investing their money in any product that is not 100% guaranteed and insured by the U.S. government.

It is the same reason that at the height of the financial crisis people were actually buying Treauries with a zero return just to have a safe place to keep their money.

[MadManofBethesda]

Originally Posted by Boompa

If you look at what the FED has done to the Actuarial Requirements for a Retirement Income you might understand. If I needed an income of $4,000 a month how much money do I need in CDs rather than the amount needed at the 5.3% I could get 2 years ago. As for the TSP, I am already retired and will be required to start pulling money out in a couple years.

It's not that I dislike Real Estate's but they don't seem to have learned a thing from the Calamity they brought upon this nation. Sorry if I offended you

The FED has done no such thing. You are just afraid to invest your money in instruments that carry a higher rate of return. (And whose rate, by the way, is not impacted by FED action or inaction.)

You did not offend me. If you had, I simply would have ignored your post rather than try to assist you by pointing out how you could increase the rate of return in your TSP account by investing in corporate bonds.

[Tesaje]

Originally Posted by MadManofBethesda

Thanks for posting that link (although I think that it may eventually be removed as a TOS violation). I've already perused several threads over there this morning, although I'm not to the point of passing judgment on their collective intellect yet.

Me too - very interesting reading on many topics. Thanks

[mathjak107]

Originally Posted by MadManofBethesda

Because people have an irrational fear of investing their money in any product that is not 100% guaranteed and insured by the U.S. government.

It is the same reason that at the height of the financial crisis people were actually buying Treauries with a zero return just to have a safe place to keep their money.

forget the interest rate at the height it was all about the capital gains.... the long bond fund i had was paying 2.87 % .... that was nothing compared to the over 28% in capital gains i made on them.... i actually started to speculate with TLT the fund.... every time the stock market rose they would fall 2 or 3 % ...id buy them and wait for a down day in stocks which was easy since the treasuries moved the opposite and make 2-3% every trade..... i must have done it 16 times in a year .....

foreigners bought them up as weak dollar currancy plays.....


alot was bought just because a foreigner who is awaiting re-investment something in the american exchanges needs a place to just store it.... dont forget money markets had trillions in money...they also had to buy them since no one trusted other banks



little was about the interest rate i think, those were horrible . most of the big money was in for other reasons or by default and thats why even at almost zero the us treasuries market is still so strong

just look at our 30 year bond... 4-1/2% its priced at looking 30 years out.... it averaged 5-6% almost for ever .... its amazing even with all this spending the bond market dosnt fear this hyper inflation we all see....

[mathjak107]

Originally Posted by Boompa

If you look at what the FED has done to the Actuarial Requirements for a Retirement Income you might understand. If I needed an income of $4,000 a month how much money do I need in CDs rather than the amount needed at the 5.3% I could get 2 years ago. As for the TSP, I am already retired and will be required to start pulling money out in a couple years.
It's not that I dislike Real Estate's but they don't seem to have learned a thing from the Calamity they brought upon this nation. Sorry if I offended you

after taxes and inflation cd's are a guaranteed loss, and thats true at almost every interest rate . everything is proportional and related.... a 4-5 % return in 3% inflation is still a loss after taxes for most ... cd's are not for generating income unless you are very wealthy, they are merely holding places for the money you need to spend in the short term... your growth for spending money down the road should be generating elswhere in higher return investments .... if your to chicken to do it then you have to accept the low return not being invested gives you as well as run the risk of spending down your principal and not being able to inflation adkust your nest egg..

your 4,000 a month you need now has to be able to become 8,000 in 20 years at 3% inflation , can you get 8,000 out of your nest egg in 20 years? if not you got a real problem...