We're Dumping I Bonds (and Not Buying Again til October 2024)

In recent years, I Bonds saw a lot of adoption because inflation was high, and interest rates on other investments were pretty low. But in 2023 and 2024, the outlook for I Bonds is mediocre at best. With today's higher interest rates, other investments are looking more attractive.
In this video, we share the guaranteed return you'll get if you buy Series I Savings Bonds in October 2023, and we discuss why it's not very exciting. Then, we explore the option of buying I Bonds from November 2023 through April 2024 - and why October 2024 will be particularly interesting to look at later.
Finally, we talk about why we're redeeming all of the I Bonds we own right now, and what investments we're buying instead.
Where to buy I Bonds: treasurydirect.gov
More info on I Bonds: treasurydirect.gov/savings-bo...
How to invest in index funds (which is a lot easier): www.tripofalifestyle.com/mone...
Best FDIC-insured high-yield savings accounts as an alternative to I Bonds: www.tripofalifestyle.com/mone...
0:00 - Introduction
01:25 - Don't Buy I Bonds in October 2023
02:50 - Why We're Probably Not Buying I Bonds through September 2024
03:54 - Dumping Our I Bonds (and What We're Buying Instead)
#investing #finance #inflation
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We're Lauren and Steven, and we followed some simple financial guidelines that allowed us to quit our full-time jobs forever by age 29. We created Trip Of A Lifestyle to share the knowledge that changed our lives for the better. All of our content is free.
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www.tripofalifestyle.com

[@TripOfALifestyle]

We just dropped a summary of our entire experience with I Bonds (with final numbers) on Instagram: instagram.com/p/C1szOj1N7hj/

[@rebekkasmith6612]

Will you guys let us know when the best time to buy iBonds will be? Is it also a good thing to max out on them? Why did you guys decided on iBonds over just sticking with the good old stocks?

[@TripOfALifestyle]

Here's a detailed explanation of why we bought the maximum amount of I Bonds possible in April 2022 (and what conditions to watch for in the future): th-cam.com/video/jkpTlGmQ9go/w-d-xo.html
There is a special window during April and October of every year when it's possible to evaluate I Bonds with 12 months' worth of information instead of the normal 6, and sometimes they're an unusually great deal. We usually post an update video about I Bonds every April and October for this reason, but it looks very unlikely that April 2024 will be exciting for I Bonds, so we may wait to do our next update video until October 2024. We have no idea what conditions will look like at that time.

[@JosephDickson]

The current fixed rate ending Oct 23rd 2023 is 0.9%. I decided to buy a little bit over the last six months with a portion of my emergency fund simply to get the fixed rate. I anticipate it will be a good cash alternative.

[@TripOfALifestyle]

We actually expect the I Bonds fixed rate to increase slightly in November 2023 (potentially to as high as 2%), but we still do not recommend buying I Bonds during 2023 or early 2024.

[@JosephDickson]

I agree, as an investment I Bonds suck. I consider it a cash alternative, nothing more.

[@rebekkasmith6612]

@@JosephDickson How is it a cash alternative if you pay penalties for early withdraws?

[@JosephDickson]

@@rebekkasmith6612 you don't get penalized on the cash you deposited. Just 3 months interest if you withdrawal before 5 years. So at worst it's still better than cash.

[@stevenhaller2387]

It doesn't make much sense to buy ibond the last week in October for the 4.3% composite rate when we know the Treasury will be raising the fixed rate in November. If the US treasury sets the fixed rate at 2% (being very optimistic) in November your looking at a composite rate of around 5.94% for ibonds.

[@AkashG-gr5dk]

You're calculating these returns as if you intend to sell them at 12 months. I bonds are designed to be held on to for a long term as a hedge against inflation. They're actually a great purchase right now with the 1.4% fixed rate and 5.3% composite rate. That 1.4% real yield is locked in for 30 years.

[@TripOfALifestyle]

Our preferred long-term investment vehicle (for money we can afford not to touch for decades) is a broad stock market index fund. While riskier, stocks have dramatically outperformed I Bonds over the long run and have every reason to continue to do so in the future. More info: www.tripofalifestyle.com/money/how-to-invest-in-stocks/
We view I Bonds as a fun, exploitable government program for short-term plays when conditions are favorable. Here are the exact conditions we look for and when: th-cam.com/video/jkpTlGmQ9go/w-d-xo.html