I bonds

[disneysteve]

I was up over 75% before this correction, and now it is nearly 20-25% in the red, thus it is 100% non-realized loss.

That's not how math works.

Let's say you started with 10K. It went up 75% meaning you had 17.5K. Now it has dropped to 25% below the original amount meaning you have 7.5K. That means you have a 25% unrealized loss, not a 100% loss.

[jeffmem]

That's not how math works.

Let's say you started with 10K. It went up 75% meaning you had 17.5K. Now it has dropped to 25% below the original amount meaning you have 7.5K. That means you have a 25% unrealized loss, not a 100% loss.

Well, it may not be how math works, but it is how money and the market works.... I am down 100% from my high... However you look at it 75 + 25 = 100. Notice I use the word down, not loss... anyway.. you get the point...

[jeffmem]

When the Fed drives interest rates up, I-bond interest rates typically also rise. Not necessarily in lock step, but as a correlating factor, the two are comparable.

Your are correct that I-Bonds never go down in value. They earn interest every month, and sometimes that interest will be great, other times it'll be a pittance. However, because they are not marketable bonds (you can't buy/sell them except with the Treasury itself), their value (the absolute dollar figure you can sell them for in any given day) doesn't fluctuate based on interest rates or any other factors. The only thing that changes is how much interest will accrue in a given month.

Well with the way things have been going the last 10-15 years....... I don't expect interest rates to ever get back to 3-4%, but yes you are right with Ibonds, six months could be great, and 5 years could be nothing... so.. yeah it is a risk...

[disneysteve]

Well, it may not be how math works, but it is how money and the market works.... I am down 100% from my high... However you look at it 75 + 25 = 100. Notice I use the word down, not loss... anyway.. you get the point...

I'm really not trying to be a pain, but this is just wrong. You are not down 100%. Being down 100% would mean your balance was now ZERO. If you have even $1 left in your account, you aren't down 100%.

[jeffmem]

I'm really not trying to be a pain, but this is just wrong. You are not down 100%. Being down 100% would mean your balance was now ZERO. If you have even $1 left in your account, you aren't down 100%.

Ok I give up on this.... I know what you are referring to, but, anyway, we can agree to disagree and move on to other bigger fish, like making money?!

[james.hendrickson]

Per the Fed, the I bond rate 7.12 percent. This rate is valid through April 2022.

[LivingAlmostLarge]

9.12% is the new rate?

[Smilinggirl]

So if I understand this correctly, I can invest 10k per calendar year, so if I put in 10k this month, I could also put in another 10k next January, assuming the rates are still good. If I withdraw before 5 years, I forfeit 3 months worth of interest. They are taxable for Federal, but not state. Correct so far? It looks like I need to set up an account on the TreasuryDirect website and go from there. What I couldn't find is a good calculator to explain how the interest rate accrues, that is, if I invest 10k this month, how much will I actually have earned at the end of the year, next May, etc. The more I looked, the more confused I got. Can someone recommend a good calculator for that. Most sites kept redirecting me to the treasury calculator and it was not making sense to me. Thank you!

[rennigade]

I'm really not trying to be a pain, but this is just wrong. You are not down 100%. Being down 100% would mean your balance was now ZERO. If you have even $1 left in your account, you aren't down 100%.

Hmm...this has me wondering. If you invest $100 and it grows to $1000, you're up 900%. Next week your account is worth $700. How much of a percent is that down from the high? I know the answer is -22%, but it is kind of wonky how that works.

Does 100% percentages only work one way? Ive hear people say all the time, the price of bread or eggs is up 200% from a year ago, etc etc.

Percentage calculator

https://www.omnicalculator.com/math/percentage-increase

[disneysteve]

Hmm...this has me wondering. If you invest $100 and it grows to $1000, you're up 900%. Next week your account is worth $700. How much of a percent is that down from the high? I know the answer is -22%, but it is kind of wonky how that works.

Does 100% percentages only work one way? Ive hear people say all the time, the price of bread or eggs is up 200% from a year ago, etc etc.
]

100% works both ways but to be down 100% means it goes to zero. 100% is all of it. If you drop from $1000 to $10 you still haven’t lost everything so it’s not 100%.

[rennigade]

100% works both ways but to be down 100% means it goes to zero. 100% is all of it. If you drop from $1000 to $10 you still haven’t lost everything so it’s not 100%.

I understand that. I also understand what Jeffmem is getting at.

Jeffmem, you cant say you're down 100%, 200%, 300% like you can when your account increases that much. You would have to say, "im only up 200% vs last week when I was up 300%." Or follow that link I posted and let the formula do the work as to how much you're down.

[disneysteve]

I understand that. I also understand what Jeffmem is getting at.

Jeffmem, you cant say you're down 100%, 200%, 300% like you can when your account increases that much. You would have to say, "im only up 200% vs last week when I was up 300%." Or follow that link I posted and let the formula do the work as to how much you're down.

Exactly. If you start with $100 and it goes up to $200, you’re up 100%. If it then goes back down to $100 you’ve dropped 50%. It’s all expressed as a percentage of whatever starting point you’re looking at.

If it drops further to $50, you’re down 50% from the original $100 or 75% from the high.

To be down 100% from the start or 100% from the high, your balance would need to be $0.

[Thrif-t]

So if I understand this correctly, I can invest 10k per calendar year, so if I put in 10k this month, I could also put in another 10k next January, assuming the rates are still good. If I withdraw before 5 years, I forfeit 3 months worth of interest. They are taxable for Federal, but not state. Correct so far? It looks like I need to set up an account on the TreasuryDirect website and go from there. What I couldn't find is a good calculator to explain how the interest rate accrues, that is, if I invest 10k this month, how much will I actually have earned at the end of the year, next May, etc. The more I looked, the more confused I got. Can someone recommend a good calculator for that. Most sites kept redirecting me to the treasury calculator and it was not making sense to me. Thank you!

$10,000 x 9.62% = $962 / 12 = $80.16/month x 6 = $481 1st 6 months earnings. Next 6 months will be $10,481 x whatever the I Bond interest rate is at that time, we'll find out in November.

[MonkeyMama]

So if I understand this correctly, I can invest 10k per calendar year, so if I put in 10k this month, I could also put in another 10k next January, assuming the rates are still good. If I withdraw before 5 years, I forfeit 3 months worth of interest. They are taxable for Federal, but not state. Correct so far?

Correct. & Thrif-t has the math covered for you. The interest compounds every 6 months.

Simpler math: $10,000 x 9.62% x 0.50 (for half year) = $481. Add that to the principal and repeat for the next 6 months (with new rate).

[Smilinggirl]

Thanks!