The only investing Cliff and I ever did was with 401K, and neither of us worked long enough while we had it to make a big difference in our retirement. We've never really made enough income to have a big savings account, either. We do have savings accounts, but they wouldn't last long in a crisis.
One day I watched two facebook friends in a conversation: Friend #1 mentioned that the money in her savings account was earning a ridiculously small amount of interest. Friend #2 told her that T-bills were doing pretty good at the time. Well, I'm nosy, so I decided to see what these T-bills were about.
Google told me that T-bills were making 6% and more at the time, and was a decent investment. What really fascinated me was that a person can invest as little as $100 and get it back in a very short time. In fact, one year is as long as you can invest your money, unless you decide to give it another turn. You can choose to do that at any time while Uncle Sam is using your money.
I wanted to see how this worked in person, and since I only had to invest $200 to find out, I was willing to risk losing it to my government. First I had to fill out some things for the website, Treasury Direct; I also had to allow them to receive money directly out of our checking account and return it later. I told my husband what I was doing, and he thought I was crazy... but he didn't tell me not to do it; he just worried about it some. The first time I opted for three months, so I wouldn't have to wait long to see how it worked. When that came back to my checking account with a little bit of earnings, I got braver and invested $500 for six months. So $488.32 left my account, and my money returned six months later with $11.68 added to it to make $500.
You can't get your money out early, though, if you're going to Treasury Direct and doing it yourself. If you go through a broker he could get it back for you by selling it to someone else. But what fun is that? Besides, I'm only using very small amounts of money.
It's great fun. I send some money to the government, forget about it, and six months later there is magically $500 in the bank to help us pay for our propane.
This is how low middle-class people invest. We'll never get rich, but we'll have money to pay for the propane.
As long as I have 'enough', I am happy. It has worked out much better than that, and I will never cease to be amazed by that. I would say that compared to most of the world, we are two very lucky women.
ReplyDeleteEasy, simple investing ideas don't get a lot of press because they're not new or sexy.
ReplyDeleteMostly, I think, they don't get a lot of press because everyone wants the big profits. No one pays much attention to the small stuff. I've never quite understood it. If becoming a millionaire was so easy, everyone would be one. But every one of those attention getting on line headlines that promise "big money" and "wealth" and "You can do it, too!" get lots of hits. Those are the things that people click on.
ReplyDeleteThats interesting. I've never really checked into T-bills, but what you did seems fairly easy. I may have to give it a try. Thanks for taking the risk and sharing your story.
ReplyDeleteIt is easy, and I can't see any way you can go wrong. You know at the start what you're going to get for your money. It still pays more than most CDs.
DeleteI like that type of investment which doesn't seem risky to me. I'm no gambler!
ReplyDeleteActually, even quite wealthy people invest in T-bills, especially in their retirement years. It is zero risk and guaranteed income and assuming you are buying inflation protected T-bills, they protect your savings against inflation, which has been a serious thing recently.
ReplyDeleteGood for you for taking advantage of one of these things that anyone can participate in but few ever do.
If I'd had to go to a broker I wouldn't have tried it for such a small amount of money as I have. But it's just me and the government. And if I could figure it out, I think anybody could. I was worried once when I lost my password. But there was a phone number, I talked to a real person who spent a lot of time making sure it was really me, and everything worked out fine.
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