Goverment T bills
Hi Terry,
I took your advice and bought the government T bills. I’m highly disappointed that you never get ahead (make money) on this purchase. Wanted to invest $6000 to get 5.33% interest and all I got was the exact same amount of money whe it matured. This makes absolutely no sense to me. If I would have put this in a money market account I would have ended up with $6000 + the interest. Which would be more money than I started with. Can you explain why buying these make sense?
Terry Says
You completely misunderstood how T-bill interest is paid! Go back to your original purchase price. You’ll find that the full $6,000 was NOT removed from your account. Instead, the interest was paid UP FRONT, because slightly less than thefull amount was withdrawn. That’s a benefit to you — because you earned interest on the interest that was left in your account!
Read this: https://www.terrysavage.com/t-bills-beat-cds-2/
