What Are Tips | How To Buy Tips Fidelity & Treasury Direct (Treasury-Inflation Protected Securities)

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  • Опубликовано: 3 окт 2024

Комментарии • 101

  • @DiamondNestEgg
    @DiamondNestEgg  2 года назад +12

    Thanks for visiting our personal finance channel! We hope this free content will help fast-track your financial journey! Please note that there are questions/ comments which I will not be able to answer without fully understanding your financial, personal & other circumstances. Everyone's financial journey is different. If you wish to set up a consultation call & discuss whether we can help you on an individual basis, please complete the Work With Us form on our website: www.diamondnestegg.com
    👉👉 UPDATE/ CORRECTION 15:55 - 17:20: "YOU NEED TO PLACE YOUR ORDER BETWEEN THE ANNOUNCEMENT DATE & THE DAY BEFORE THE AUCTION DATE"
    >>>> WATCH NEXT >>>>
    ⭐ Buy I-Bonds Now Or Wait Until Oct OR Nov: ruclips.net/video/raZIRFVA_5k/видео.html
    ⭐ 2022 November I-Bond Rate Prediction: ruclips.net/video/G82l2ZTpd-c/видео.html
    ⭐ How To Buy An I Bond (step-by-step tutorial) via TreasuryDirect: ruclips.net/video/adzmox__2zM/видео.html
    ⭐ How Is I-Bond Interest Formula Calculated & When Does It Show Up In Your Account: ruclips.net/video/9hfHoSijJEk/видео.html
    ⭐ I-Bonds 9.62% Confirmed: How Much Could You Earn: ruclips.net/video/zwNtVNj-4P4/видео.html
    ⭐ How To Buy More/ GIft I Bonds (For Spouses & Marred Couples): ruclips.net/video/bSoZJJypSAQ/видео.html
    ⭐ I-Bond Gifting Tips, Restrictions & Limitations: ruclips.net/video/2UBXXQUxJ4M/видео.html
    ⭐ I-Bond Beneficiary vs. Secondary Owner: ruclips.net/video/510Y0D5hoVo/видео.html
    ⭐ How To Buy I-Bonds For Kids (step-by-step tutorial): ruclips.net/video/YlE3Uxoeah4/видео.html
    ⭐ How To Buy I-Bonds With A Trust (step-by-step tutorial): ruclips.net/video/7OWgbccetv8/видео.html
    ⭐ How To Create A Revocable Living Trust To Buy More I-Bonds: ruclips.net/video/jcKJQjtMud0/видео.html
    ⭐ How To Buy I-Bonds For Business (step-by-step tutorial): ruclips.net/video/4f-ZIoiOFt0/видео.html
    ⭐ I Bonds vs TIPS: ruclips.net/video/bIq8XXo4Vfo/видео.html
    💎 Subscribe to our channel for all things inflation, I-Bonds, TIPS, Treasury Bills & long-term sustainable wealth!!

  • @DaniElle-di4ho
    @DaniElle-di4ho 2 года назад +38

    Even though I already knew enough about TIPS to know they are not for me, I watched the entire video because I like how thoroughly you explain everything. More videos please!

  • @R.and.R.
    @R.and.R. 2 года назад +29

    Your videos are legendary! Thanks so much for the thorough explanation!

  • @TheDealHunter
    @TheDealHunter 2 года назад +19

    Wow! Every time I think your videos can't get any better, I am proven wrong. Thank you for the great content.
    I will say that for us, the fact that the new issue TIPS can be purchased in our Fidelity retirement accounts makes this VERY appealing. Something I did not know until you released this video.

  • @eddieloujones2673
    @eddieloujones2673 Год назад +5

    I have had a hard time understanding TIPS for a while now. I think the lightbulb FINALLY went off in my head. Thank you for taking the time to explain them and how to purchase them.

  • @rpadpva2
    @rpadpva2 2 года назад +11

    It's pretty cool that you purchased tips for the purposes of this video. Great content as always.

  • @peipeitan7557
    @peipeitan7557 Год назад +2

    It's June 2023, and I just purchased my very first TIPS (5-year) via TD Ameritrade (Roth account), thanks to this video! I apparently viewed this video back when it came out nine months ago, but sadly, I have zero recollection of any of it. Thank you for the tutorial!

  • @terrywawro2951
    @terrywawro2951 10 месяцев назад +1

    Thank you for this detailed but easy to understand lesson on investing in TIPS.

  • @sandiegosunshine8006
    @sandiegosunshine8006 2 года назад +5

    I clicked like before even watching it cuz I know it will be good 👏

  • @dshaheen6914
    @dshaheen6914 10 месяцев назад +1

    I was intrested in purchasing TIPs via my brokerage account. Thanks for a clear and to the point video. Excellent presentation.

  • @marcuspaz24
    @marcuspaz24 11 месяцев назад +1

    The TIPS purchase examples and pros/cons were very helpful, Jen. Thank you!

  • @jimclark5037
    @jimclark5037 Год назад +3

    very clear and detailed explanation, just what I needed, thank you

  • @barbaraclark6107
    @barbaraclark6107 Год назад +5

    I bought a $100 tips just to watch it- kind of a 5 year experiment. I had to pay $1.48 for it ?? I put in the order on 10/30 and it was purchased 12/30. It’s very confusing. But I’ll get back to you in 5 or so years to update 😅😅😅. I had a tips etf but all it did was go down!

  • @lydialee5444
    @lydialee5444 2 года назад +5

    You’re the best as always ! Well explained. Thanks a bunch❤️

  • @BorisLikesBonds
    @BorisLikesBonds 7 месяцев назад +1

    Jennifer,
    I came to this video from your Bond Masters course. It looks like I somehow skipped or missed this video when it originally came out! 😯
    This was a great overview of how the principal and interest work in a TIPS. The "phantom income" literally sounded scary to me because I didn't understand it as well before. Your chart cleared it up.
    I'm looking forward to watching your video on taxes in the TIPS playlist! 👍

    • @DiamondNestEgg
      @DiamondNestEgg  7 месяцев назад

      Hi Boris - I'll pass this onto Jennifer! We see that you signed up for Bond Beginners as well. Jennifer is just wrapping up an ENTIRE module on TIPS that we're really excited about. Stay tuned - it should be coming out in the next 2 - 3 weeks. Best - Eva

  • @Hope1079
    @Hope1079 2 года назад +4

    Great video. So well explained. Thanks for all the detailed information.

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад

      Hi Carol. Thanks for the follow-up email! Any updates from TD about Mom's I-Bonds?

  • @nirben-zvi5292
    @nirben-zvi5292 4 месяца назад

    Great video - thank you very much for the detailed information - very helpful - I'm now TIP ready.

  • @geraldf.1222
    @geraldf.1222 2 года назад +1

    Thank you for your clear and concise step-by-step primer....

  • @dname1802
    @dname1802 8 месяцев назад

    Great video. I learned something new today. And step by step explanation is great!!! 👍

  • @BryanHall8266
    @BryanHall8266 2 года назад +3

    Thanks for the very detailed and clear video explanation. Someday consider doing a follow up on how to buy tips from Fidelity on the *secondary* market.

  • @sleepnomore6065
    @sleepnomore6065 8 месяцев назад

    Great vid! Please do one on T-notes/bonds vs I bonds. Which typically give better APY? Does neither have compounding interest?

  • @tudeanimation
    @tudeanimation 2 года назад +8

    Been wondering about TIPS. Thank you. I'll stick with I-Bonds.

  • @rodneyrchicago
    @rodneyrchicago 2 года назад +3

    Welcome back!

  • @Rebellovw
    @Rebellovw 2 года назад +8

    Fantastic video - I've been dreading TIPS for the longest time and I should have really got on board a long time ago. For the last two weeks I've been looping on the complexities of tips - buying at auction is definitely the easiest way. Your video really helped confirm all my ideas - I'm doing iBonds but for my Fixed Asset - I do want to move away from Total Bond Market as it has been a very rough ride - so new money will like go to TIPs. I'll check out your other videos as well.

  • @davidchen2898
    @davidchen2898 Год назад

    Thank you for making the video! Super helpful with clear explanations and detailed step by step instructions! More importantly it opened my eyes for a very good alternative to I-Bond, in some sense even a better one. Will definitely buy TIPs in the coming auctions.

  • @stonemdrmdr8315
    @stonemdrmdr8315 2 года назад +1

    Great explanation and must see again and again…..thank you

  • @akzoc
    @akzoc 2 года назад +3

    Very helpful. Thx.

  • @sophiewang123
    @sophiewang123 Год назад +2

    Does TD Ameritrade sell new issue TIPS? I did not find it, but it might also be because there is no auction scheduled right now. And for the tax complications, it is just one more 1099 INT and one more 1099 OID each year? If so it is not terribly difficult as long as Treasury Direct or the brokerage send over those 1099s and I do not need to calculate the principle adjustment and dividends myself...

  • @sudheerk82
    @sudheerk82 2 года назад +2

    Thanks a lot for great video. Are you planning to make a video on treasury bills? With raising interest rates, I think its better invest in treasury bills which are of short term, less than six months.

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +1

      Yes, we're working on it right now.

    • @sudheerk82
      @sudheerk82 2 года назад

      @@DiamondNestEgg Thanks a lot for helping the community, this is the only channel where I go and see if there are any new videos and read comments to see your replies.

  • @falco4489
    @falco4489 Год назад

    -just spectacular explanations.

  • @adlerpaul
    @adlerpaul 9 месяцев назад

    If I buy one10 year tip in the secondary market for $1000 and inflation is -3 every year and the real interest is 2% what will I get at maturity? BTW great video Paul...

  • @alexanderlee6509
    @alexanderlee6509 5 месяцев назад

    Hi. I am here from Bond Masters. I intend to start buying TIPs on Fidelity. I noticed in the tutorial for purchasing on Fidelity that the coupon was 0.625% but the expected yield was 0.600%. Can you tell me why there is a difference? Also, the notion of auctions/bidding makes it seem like that there is some unknown element that we are bidding, so what exactly is it? The coupon rate or the price? BTW, thanks for this amazing video.

  • @snow9566
    @snow9566 2 года назад +2

    Nice job on the video. Can you explain the mechanics of pricing in the secondary market for TIPS? e.g. Why do rising interest rates negatively affect TIPS pricing in the secondary market?

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +4

      That’s a great video idea - we’ll add it to the long list

    • @normangoldstuck8107
      @normangoldstuck8107 2 года назад +4

      Good point. No-one talks about it because very few people trade TIPS. They explain only how the bonds accrue principal and interest which are inflation linked. If you are not going to hold TIPS to maturity you are in for a wild ride. The price of TIPS falls with rising interest rates and rises with falling rates-very dramatically especially at the long end. This means there are wonderul opportunities to make(and lose) a lot.

  • @Happy_Harry
    @Happy_Harry 10 месяцев назад

    Thanks. I think I get how TIPS work, thanks to you. SO if inflation gow up @3% for a couple years, you pay that phantom tax, but if it then goes down 5% one year, your total value will drop. So I'm guessing your OID statement will show a loss of 5% that can be used against other gains? Does that sound correct?

  • @user-sl7ym1zq3n
    @user-sl7ym1zq3n Год назад +1

    i love your lipstick! and your tips!

    • @yungmi1214
      @yungmi1214 Год назад

      yes i agree, Jennifer is very charming and cute

  • @kevink286
    @kevink286 Год назад +2

    So, in the long term, it would appear TIPS are generally superior to I bonds. With I bonds, interest is linked to the CPI-U, but you must pay federal taxes on redemption, so you effectively did NOT keep up with inflation. With TIPS, your principal is linked to the CPI-U, but you also get an interest payment on top of that, which offsets some of the federal taxes you'll need to pay, which makes it slightly better than I bonds. That's how I'm seeing it anyway. Or am I wrong? The drawback is the potential risk of loss if you need to sell early on the secondary market.

    • @DiamondNestEgg
      @DiamondNestEgg  Год назад +5

      TIPS just turned into positive yield territory recently. If they work for you, great. If your goal is inflation-proofing your excess cash with no loss of principal - not necessarily so great in our view. You've already hit on the point - selling before maturity in a rising interest rate environment like we're currently in. Just ask anyone who's trying to sell their "old" TIPS in the secondary market right now.

  • @audreyl704
    @audreyl704 2 года назад

    didnt know what are TIPS - great info

  • @rajk9634
    @rajk9634 Год назад

    How to build a 20 year TIPS ladder from secondary market using fidelity? Time seems to be ripe for locking in duration. Please do a video if possible.

  • @lylibmilano2343
    @lylibmilano2343 2 года назад

    Appreciate your sharing. please add jn your List ** What happens with your IBond when the Inflation rate goes down, govt is working on lowering it.

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад

      If inflation goes down, so does the I-Bond rate. We talk about it in our other I-Bond videos if you’re interested.

  • @alanlu2727
    @alanlu2727 2 года назад +1

    Thanks a lot for great video. Is the value of annual inflation rate in Tips same as inflation rate in I-Bond at the same period?

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +1

      Yes, they are both based on the CPI-U, but TIPS & I-Bonds adjust differently for inflation as explained in the video.

  • @sleepnomore6065
    @sleepnomore6065 8 месяцев назад

    So if you open at tips in Jan 2024 you must include it in your taxes? And how about with T-notes?

  • @vencebuchanan
    @vencebuchanan 2 года назад

    Great video thanks for sharing 👍

  • @Iris-CreativePro
    @Iris-CreativePro 2 года назад +1

    Might you cover TIP ETF's and if DRIP on them is wise right now?

  • @f.fatihonol6826
    @f.fatihonol6826 Год назад

    thanks so much for this great video, as always! I'd like to ask if TIPS is a better option than I-Bonds if I intend to keep my TIPS (eg. 5 year) until its maturity and my outlook is that no deflation will happen in the next 5 years. Many thanks!

    • @DiamondNestEgg
      @DiamondNestEgg  Год назад

      November 2023 I-Bond Rate Prediction | Why Buy TIPS Now (Treasury Inflation-Protected Securities)
      ruclips.net/video/2YWluRWk1Nk/видео.html

  • @cjengland2365
    @cjengland2365 2 года назад +1

    This video didn't have an option for close captioning. Can you add it please?

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +2

      RUclips will add this shortly - it can take anywhere from a few hours to a few days.

  • @michaelbrennan2285
    @michaelbrennan2285 2 года назад

    Thank you.

  • @mkayultra999
    @mkayultra999 11 месяцев назад

    Where do you view the TIPS rates???

  • @vivisimonvi
    @vivisimonvi Год назад

    Are the next round of 5-Year TIPS expected to carry the around the 1.65% fixed rate like the last?

  • @GunterandthePenguins
    @GunterandthePenguins Год назад

    Do you have any videos about your background? Did you work in finance/investment? Curious what your story is.

  • @Jupiterplus
    @Jupiterplus 2 года назад

    Good Info!!👍

  • @graceluo642
    @graceluo642 Год назад

    What is inflation factor? How does it play a role on my decision making?

  • @rexliu2334
    @rexliu2334 2 года назад

    Very good education to us! I've learned a lot! questions, the inflation's rate is changed according to the actual rate or it is fixed at 3%? what it is the rate of last month's TIPS if it is changed? Thanks so much!

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад

      Glad to hear. The inflation adjustment is actually more complicated than that. I'll probably need to address this in a separate video at some point. In the meantime, if you want more details, check out this TD link: www.treasurydirect.gov/marketable-securities/tips/#id-how-and-when-we-adjust-tips-for-inflation-892229

  • @brucelaw8574
    @brucelaw8574 Год назад +1

    I would prefer a guaranteed rate of interest of 5 plus percent through a MYGA or 4.5 to 5 percent with a bank CD
    I do like IBonds however

  • @TheDealHunter
    @TheDealHunter 2 года назад +1

    Jennifer - In looking at the auction schedule, I see that some TIPS auctions show an R for reopening. Does this mean that the auctions with an R are just issuing additional TIPS based on the last auction? And does that also mean that the maturity date will be less than the posted amount (by a couple of months)?

    • @shoofly529
      @shoofly529 2 года назад +4

      From the Google quoting Treasury Direct:
      "In a security reopening, the U.S. Treasury issues additional amounts of a previously issued security. The reopened security has the same maturity date and coupon interest rate or spread as the original security, but with a different issue date and usually a different purchase price."

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +2

      SHOOFLY already covered this but as an example, take a look at this video section: ruclips.net/video/ajwb0buoNzE/видео.html. You'll see the 29-Year 6 Month TIPS also on offer (under the 10-Year TIPS) - that is a reopening of the 30-Year TIPS that were newly issued in Feb 2022.
      You can also find more info on the new issues vs reopenings here under "Auction Frequency": www.treasurydirect.gov/instit/marketables/tips/tips.htm

  • @coryjohnson3429
    @coryjohnson3429 2 года назад

    In case anyone is interested, I recently moved some extra cash into a Credit Karma Money (MVB Bank) online savings account while waiting out the first of the year to purchase another I Bond. The interest rate right now is 2.73%... vs the 0.01% I'm getting on my accounts at my regular bank.

  • @davidw1732
    @davidw1732 Год назад

    I don't understand the use TIPS play in an overall portfolio or retirement plan. From 2010 to 2020 the inflation rate was under 2%. That seems like not such a good return on your investment. Am I missing something?

    • @DiamondNestEgg
      @DiamondNestEgg  Год назад +2

      TIPS, like I-Bonds, are the inflation-protected part of your portfolio (if that's part of your financial strategy)

  • @marsha2703
    @marsha2703 2 года назад

    I am a single woman and I bought 10K in I bonds in May. When can I purchase more I bonds? Thank you

  • @robertmiller1501
    @robertmiller1501 11 месяцев назад

    Do you recommend tip ETFs like VTIP 0:02

    • @DiamondNestEgg
      @DiamondNestEgg  11 месяцев назад

      My preference is for individual TIPS/ bonds vs ETFs. Not sure if you've seen this video, but I explain why: ruclips.net/video/EReUe8utwqk/видео.html
      We do have some ETF videos planned, but it will take awhile for us to get to them at this point.

  • @wendelldawsjustagreatinfop1180
    @wendelldawsjustagreatinfop1180 Год назад +1

    made request for 20000 tips treasury direct they withdrew 20500 from my bank then recorded that i had 20000 in tips What do I not understand on this transaction I seem to have lost 500 buck

    • @Dave--gp1qx
      @Dave--gp1qx Год назад

      Did you find out why?

    • @vivisimonvi
      @vivisimonvi Год назад

      What did your initial principal value turn out to be? If it starts at 20500, that should be a good (or fair) thing at least.

  • @RamHaHahehe
    @RamHaHahehe 2 года назад

    I did not understand why the value of TIPS go down when the interest rate goes up. It is a good thing for TIPS, right, if the interest rate goes up, you get more money back. Then, why does its value goes down in the secondary market?

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +1

      TIPS behave - for the most part - like normal bonds. When interest rates go up, their price goes down.

    • @RAAC60
      @RAAC60 Год назад +7

      Pretend you are selling your TIPS with its current interest rate attached to it and you will understand it.
      Say you want to sell me a $1,000 TIPS that pays a 2% interest. But, at this time of your sale, interest rate has gone up, and a $1,000 TIPS pays 4%. So, because your TIPS only pays a 2% (less than in current market) I will buy your TIPS at a "discount", so you will not get the $1,000 your TIPS (initial purchase) was worth. It's easier to understand it when you reason it in terms of bonds, but it's basically the same concept. Hope it helps.

    • @RamHaHahehe
      @RamHaHahehe Год назад

      @@RAAC60 Now it makes sense. Thanks!!!

  • @edtizzard8064
    @edtizzard8064 10 месяцев назад

    Please make a update info for tips I have lost 60000 in tips I hate them

  • @charleslundy7545
    @charleslundy7545 Год назад

    But of you let the TIPS mature then you dont loose principle. So i dont understand why you want to sell them instead of maturing if you are saving. Or is this video more for income on interest? I don't get why you would buy TIPS of you plan on selling the assets outside of emergencies.

  • @phiggnewton5032
    @phiggnewton5032 2 года назад

    The name of the game is the preservation of capital.

  • @aaronquinn311
    @aaronquinn311 Год назад +1

    Am I missing something here? Invest $1,000 to get $5 back a year? You can make a lot more money in the stock market or even a CD.

    • @GunterandthePenguins
      @GunterandthePenguins Год назад

      I'm in the same boat... is the value here the adjustment/protection from inflation. It seems like a good move to preserve capital, but not necessarily grow it.

  • @alleneverhart4141
    @alleneverhart4141 2 года назад

    Just buy the TIP etf. Why go through all of this nonsense on treasury direct!?

    • @DiamondNestEgg
      @DiamondNestEgg  2 года назад +8

      It’s a personal choice - similar to when someone chooses to purchase Apple vs an index fund that contains Apple. We’ll be doing some vids on TIPS ETFs as well, so stay tuned.

    • @hungrybill
      @hungrybill Год назад +1

      The ETF changes price according to overall interest rates, not directly according to the CPI. Please look at a chart of TIP or any other such ETF to see that TIPS ETFs are totally different animals than TIPS themselves.