by William Neikirk
Now here’s a twist: A Republican Treasury Department appears to be looking out for the truly small investor.
The question is: What took them so long?
The answer might be: The government has a bigger debt to cover and wants to expand the list of people who want to buy government securities directly.
On Monday, April 7, all marketable Treasury bills, notes, bonds and the Treasury Inflation-Protected Securities will be available for sale in minimum (and multiple) entries of $100. The figure was last changed in the Clinton administration, when the minimum purchase was dropped to $1,000.
You could blow $100 eating at a baseball game or taking your family to the movies. It wouldn’t buy a good opera seat anywhere. You could also put $100 in your bank savings account, but be turned off by the interest rate you’d receive. A government note would seem to have a higher level of security.
For those with tight budgets, here's a few suggestions on how to save $100. Stop driving. Forego two tanks of gas. Stop eating a few days a week. Or, just drop your health care, as long as you feel healthy.
"U.S. Treasury securities, the world's safest, most liquid investments, should be accessible to the broadest universe of investors- large and small. The new, lower minimum Treasury amount will put marketable securities within reach of more savers and investors in the United States and around the world," said Anthony Ryan, Assistant Secretary of the Treasury for Financial Markets. "In addition, being able to buy securities in $100 increments adds a new degree of flexibility for all market participants.''
You can buy directly from the Treasury (and non-competively) if you set up a Treasury Direct Account at www.treasurydirect.gov or a Legacy Treasury Direct account. You can buy them competitively (and non-competitively) by using bond brokers. The Treasury routinely auctions off its various securities competitively. You can find information at the above website.
Doesn't it make you feel richer already?
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Comments
I don't know much about investing, but with the dollar at an all time low, the deficit on the rise, up to our ears in debt to China, hemorrhaging billions on an ill-conceived war with sights on yet another...why would I want to put 10 CENTS into a government bond?
Of course, maybe the buy low strategy would work and just wait till we have a Democrat President in January who work with Congress to repair the incredible damage done to this country the past 8 years.
Posted by: DD | March 22, 2008 8:42 AM
With the way interest rates are going for those few remaining people foolish enough to save, this will soon be something along the lines of loan us $100 and we'll pay you back $100 in 10 years. Such a deal. With 30% a year hyperinflation soon to be here, this will be the best era since those wonderful James Earl Carter Jr. years.
Posted by: Dave | March 22, 2008 11:11 AM
Oh yeah- I can't wait for the democrats to come and save the day on the economy. First- Gov's role is limited (thankfully)- Two- either one of the dems will raise taxes and increase spending- so good luck.
Dont worry as for the terrorist- we can just ignore them and they will go away
Posted by: Mike | March 22, 2008 11:39 AM
That is insulting. Offering to have the small investor pay full price and get the lowest return on his loan to his government without giving him the benefit the big investors get by knowing enough to buy through the auction. If you want to give the "average citizen" a chance to help float the federal debt then create a new kind of loan where they get the benefit of the rate realized in the market auction or a stated rate, which ever is better and limit the amount that any individual could own to keep the institutional investors from participating.
Posted by: PartTime | March 22, 2008 1:33 PM
It's not easy in today's economic meltdown to figure out what investmemts make any sense. It all comes down to the amount of risk you are comfortable with! Warren Buffett understands investing for the long haul and most investors have no idea what that means. Years not months and patience and don't panic when the stock market starts acting crazy. Treasury bonds do make sense for people who don't want much risk!
Posted by: William Dollar | March 22, 2008 5:22 PM
It's not easy in today's economic meltdown to figure out what investmemts make any sense. It all comes down to the amount of risk you are comfortable with! Warren Buffett understands investing for the long haul and most investors have no idea what that means. Years not months and patience and don't panic when the stock market starts acting crazy. Treasury bonds do make sense for people who don't want much risk!
Posted by: William Dollar | March 22, 2008 5:23 PM
Treasury Direct offers 4 week, 6 month, 1 year or longer bonds that pay 3 1/2% annually -- much better than most savings accounts. Very short term and very liquid.
Posted by: momcool23 | March 22, 2008 5:36 PM
Ooopps! I forget to mention in my last post that these bonds are not state taxed
Posted by: momcool23 | March 22, 2008 5:39 PM
Mike wrote: "Dont worry as for the terrorist- we can just ignore them and they will go away"
Maybe. Or maybe we can start a war in another country they are NOT in, inviting them to create a resistance. Or maybe we can shift resources away from a fight we are winning, allowing them to get stronger than they were when we got there.
Posted by: Dan | March 23, 2008 9:05 AM