Ask Rande 10,000+

http://www.nbc.com/nbc/other_nbc_shows/u...

Top 386. Nov 4, 2001 9:05 AM

» Rande - Must-see TV:

Must-see TV: Uprising tonight at 9:00 on NBC.

The story of the Warsaw Ghetto uprising in 1942, starring Hank Azaria, Donal Sutherland, David Schwimmer, Jon Voight and Cary Elwes.

Jacqueline Cutler of TVData Features Syndicate says, "These days, except for the news, there is little on television people need to watch. However, the new NBC movie "Uprising" is not to be missed....The philosphoical question posed throughout the movie is: Can a moral man maintain his morality in an immoral world?"

From the NBC site:

"They did the one thing the Nazis ever expected. They fought back."

More history on the Uprising:

http://www.ushmm.org/outreach/wgupris.htm

-- posted by Rande

Top 387. Nov 4, 2001 2:06 PM

» David_Korn - I-Bonds October v. November

Hi Rande. Could you clear up something for me. I have read (and heard) conflicting information on the rate you get for the I-Bond you purchased in October. Here are the questions:

1) If you purchased I-Bonds with October Issue, do you lock in the 3% fixed rate portion for 30 years?

2) If you purchased I-Bonds with October Issue, do you lock in 2.92% Variable Rate for only October, or do you get it for six months? Or, since the 2.92% variable rate changed in November to 2.4%, would you get a total return of 5.92% for October, but from November through May, 2002, the total rate would be 5.4%. What do you think? Thanks

-- posted by David_Korn

Top 388. Nov 4, 2001 2:28 PM

» David_Korn - I think I got the answer

I was listening to Brinker who I think got it wrong. One of my subscribers just sent me the announcement:

I BONDS TO EARN 4.40% WHEN BOUGHT FROM NOVEMBER 2001 THROUGH APRIL 2002

FOR IMMEDIATE RELEASE
November 1, 2001
I BOND EARNINGS RATE: 4.40%
The earnings rate for I Bonds is a combination of a fixed rate, which will apply for the life of the bond, and the inflation rate. The 4.40 percent earnings rate for I Bonds bought from November 2001 through April 2002 will apply for the first six months after their issue. The
earnings rate combines the 2.00 percent fixed rate of return with the 2.38 percent annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 176.2 to 178.3 from March 2001 to September 2001, a six-month increase
of 1.19 percent.

-- posted by David_Korn

Top 389. Nov 4, 2001 7:59 PM

» Rande - Re: I think I got the answer

In response to message posted by David_Korn:

David,

The way I understand it, if you bought an I-Bond anytime in October and received an October issue date then you will get interest for the month of October at an annual composite rate of 5.92%. That rate was a combination of the fixed rate in effect at the time, 3%, and the inflation rate of 1.44%. The fixed rate portion is in effect for the life of the bond (the fixed rate for I-Bonds issued from the beginning of Nov. 2001 to the end of April 2002 being 2%), but the inflation rate changes every six months. Here's the calculation for the period prior to Nov. 1st:

Fixed rate = 3.00%
Inflation rate = 1.44%

Composite rate = [Fixed rate + 2 x Inflation rate + (Inflation rate X Fixed rate)] X 100
Composite rate = [0.0300 + 2 x 0.0144 + (0.0144 X 0.0300)] X 100
Composite rate = [0.0300 + 0.0288 + 0.000432] X 100
Composite rate = [0.059232] X 100
Composite rate = 0.592 X 100
Composite rate = 5.92%

Here's the calculation for the six months from Nov. thru next April, if your bond is dated Oct. 2001:

Fixed rate = 3.00%
Inflation rate = 1.19%

Composite rate = [Fixed rate + 2 x Inflation rate + (Inflation rate X Fixed rate)] X 100
Composite rate = [0.0300 + 2 x 0.0119 + (0.0119 X 0.0300)] X 100
Composite rate = [0.0300 + 0.0238 + 0.000357] X 100
Composite rate = [0.054157] X 100
Composite rate = 0.542 X 100
Composite rate = 5.42%

If you're I-Bond is dated Nov. 2001, the rate for the next six months would be as follows:

Fixed rate = 2.00%
Inflation rate = 1.19%

Composite rate = [Fixed rate + 2 x Inflation rate + (Inflation rate X Fixed rate)] X 100
Composite rate = [0.0200 + 2 x 0.0119 + (0.0119 X 0.0200)] X 100
Composite rate = [0.0200 + 0.0238 + 0.000238] X 100
Composite rate = [0.044038] X 100
Composite rate = 0.440X 100
Composite rate = 4.40%

Again, the 3% fixed portion never changes for I-Bonds bought in Oct., just as the 2% fixed portion for Nov. 2001 bonds will remain in effect for the next 30 years, even though the inflation rate component changes every six months. And not to worry if we ever get serious deflation -- the government has promised your I-Bond can't go below 0%. In other words, you won't have to give back previously accrued interest. You're bond will just stop earning for that six month period.

-- posted by Rande

Top 390. Nov 4, 2001 9:42 PM

» Karin_ - I-Bonds

Unless you use the I-Bonds for your kid's college
expenses, so they will be tax-free when they are cashed, I do not think, that I-Bonds are such a great investment at this time.

In the future, when the fixed portion of the I-Bond will go to 4% or 5% plus the inflation rate bringing the Bond's return to 6% or 7% total,
I would consider a 30-year I-Bond.

Until that time I have to stick to my Stocks and Mutual Funds.

We used to have a great return investing in Treasury Notes. The rates were 7 1/2%.
Now they are down to 2.75%. All "save" investments are unpopular.

-- posted by Karin_

Top 391. Nov 4, 2001 10:22 PM

» David_Korn - Re: Re: I think I got the answer

In response to message posted by Rande:

Thanks Rande (and Karin). Rande, you are going to get quoted tonight by an obscure writer of an e-mail subscription service. Thanks for helping out!

-- posted by David_Korn

Top 392. Nov 4, 2001 10:34 PM

» pjstack - Emergency cash stash.

I Bonds still seem like a good place for an emergency cash stash. They earn more than many money market funds (right now) and they are liquid (on the days the banks are open, anyway).
If you have an emergency, losing 3 month's interest probably will be the least of your concerns. Sorta like interest bearing travelers checks!

JMHO

-- posted by pjstack

Top 393. Nov 4, 2001 10:49 PM

» Kirk - Re: Emergency cash stash.

In response to message posted by pjstack:

Why not use a credit union CD? If you need the money sooner the the CD term, you can use a short term loan until the CD is due and the lost interest is even less and not much hassle.

-- posted by Kirk

Top 394. Nov 5, 2001 3:18 AM

» pjstack - Re: Re: Emergency cash stash.

In response to message posted by Kirk:

That's a good suggestion, Kirk. As usual, it depends on your goals and station in life. I'm in my mid-sixties, don't have a credit union (but am still eligible to join one), single, but have a girl friend who will (probably) be around to bury me.

I Bonds can be titled as "POD" (pay on death) which means my girlfriend will have to come up with a death certificate, OR they can be titled "OR", i.e.Pjstack OR "girlfriend", in which case they can be cashed "without the knowledge or permission" of the principal bondholder. This makes things very simple for the person who needs $$$ to take care of the incidentals that occur after death.

As you can see, I am thinking differently at 66 than you are at 40(something).

That's why I look at I Bonds as interest-baring travelers checks, rather than an investment.

-- posted by pjstack