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Business, Economics, and Taxes: Capitalism. Yay? >=(

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Spartanforlife4 said:
Correct. You get six months of that rate from when you buy, then six months of whatever the next rate is. You have to keep it for at least a year and if you cash it before five years you forfeit three months interest. Even with that, tell me where else you can get a guaranteed 7% return and sign me up.
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I read his question differently, so I would have answered “no.” To simplify the math, if you buy a $100 bond with a 10% guarantee for 6 months, that means that after 6 months, it would be worth $105. After that, the rate of return can vary, so there’s no guarantee what it would be worth after 1 year, 5 years, etc. if you put in another $100 3 months from now, you might get a different guaranteed rate for that new investment, depending what markets and rates have done in the intervening 3 months.
 
LynahFan said:
I read his question differently, so I would have answered â??no.â? To simplify the math, if you buy a $100 bond with a 10% guarantee for 6 months, that means that after 6 months, it would be worth $105. After that, the rate of return can vary, so thereâ??s no guarantee what it would be worth after 1 year, 5 years, etc. if you put in another $100 3 months from now, you might get a different guaranteed rate for that new investment, depending what markets and rates have done in the intervening 3 months.
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And, just to add, if inflation goes back to baseline in six months, those bonds will be worth $105 in a year. Or longer.

And since you MUST hold them for a year, you are not really getting 10% annual return. The guaranteed return* is basically half the 6-month guarantee - so 5%. Which still isn't terrible for zero risk to principle.

*During the required holding period
 
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Everyone’s answers were enlightening. Thank you. Glad to have joined the middle class long enough to invest in such a thing.
 
LynahFan said:
I read his question differently, so I would have answered “no.” To simplify the math, if you buy a $100 bond with a 10% guarantee for 6 months, that means that after 6 months, it would be worth $105. After that, the rate of return can vary, so there’s no guarantee what it would be worth after 1 year, 5 years, etc. if you put in another $100 3 months from now, you might get a different guaranteed rate for that new investment, depending what markets and rates have done in the intervening 3 months.
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I would yes you’re correct in the first half of this, but wrong in the second half, but only because ibonds only update every six months. When you buy you get that current rate for six months. So essentially anything you buy from now until October, you are getting six months at 9.62 from whatever month you bought in. Buy now, and you’ll get six months at 9.62, updated to the November rate come November. Buy in August, and you’ll get six months at 9.62 updated to the November rate in February.

So you’re correct that really only that $105 is guaranteed, as we could end up with <0 inflation for the next rate change in November, but based on how ibonds work that 9.62 can be purchased up until October 31st, so in three months psych can still get the same rate.
 
Spartanforlife4 said:
I would yes you’re correct in the first half of this, but wrong in the second half, but only because ibonds only update every six months. When you buy you get that current rate for six months. So essentially anything you buy from now until October, you are getting six months at 9.62 from whatever month you bought in. Buy now, and you’ll get six months at 9.62, updated to the November rate come November. Buy in August, and you’ll get six months at 9.62 updated to the November rate in February.

So you’re correct that really only that $105 is guaranteed, as we could end up with <0 inflation for the next rate change in November, but based on how ibonds work that 9.62 can be purchased up until October 31st, so in three months psych can still get the same rate.
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Yes this is the correct breakdown. Ibonds are not like others that have a variable rate that changes say month to month. The percentage is locked in for 6 months no matter what.
 
Drew S. said:
Who could have seen it coming!?
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lol, yeah, I think the one to watch is Tether. The Luna/UST/whatever was a preview. Tether is going to be the chain around the neck of the rest of crypto. The cracks are showing and it's going to be very fucking ugly for a lot of people left holding the bag.
 
"People argue that you cannot tax billionaires on the shares that they hold in a company because it is an 'unrealized' gain," he said, before adding that he understood the reasoning behind the argument. "So you're worth the money, but you don't have the money…and it could also crash, and then you have nothing, so we can't tax you on it. You can't tax the people on a thing because they don't have it, it's just there," he said. "Okay fine."

He then cited Musk's pending purchase of Twitter and questioned how the oligarch could put up his shares of Tesla stock as collateral when it was, again, an 'unrealized gain.' Noah explained how Tesla is using his Tesla stock as collateral to get banks and investors to put up the cash for him to borrow to buy Twitter. He questioned the hypocrisy of picking and choosing when to give value to stocks. "So you can buy a thing based on what you have, yes. But when we want to tax you, you can say 'I don't have it,'" said Noah. "It's such a fun game that billionaires get to play because all their money is in that."

He pointed out how normal people couldn't fool the IRS in the same manner but the system gives billionaires a pass. "You can't be like, 'That money's in the bank, I don't have that money. What money? It's in the bank. Only when I take it out, then you can tax me. For now, it's in the bank, IRS." He then continued, "But if you have billions in shares, you can then use that as money, to then get more money, but not get taxed on any money, because you 'don't have money.'" Noah argued that billionaires shouldn't be able to an unrealized asset as collateral.
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https://scoop.upworthy.com/trevor-n...2Uoy-IQmITF1TJLtzAwhJbMeiMZsLAbFhVL38vcDNxl68
 
French Rage said:
To play devil's advocate, can't you use your house as collateral for loans, but would be not taxed on gains from its value until you sell it?
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Yes, but not unless the bank appraises your house and certifies that it’s worth what you say it is. Who certifies Tesla’s stock value?
 
French Rage said:
To play devil's advocate, can't you use your house as collateral for loans, but would be not taxed on gains from its value until you sell it?
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My property taxes are taxed at what the house is worth, not what I paid for the house.

So, sorry, this analogy doesn't work for me.
 
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