Pages

Saturday, July 28, 2012

I Just Bought a 13% Guaranteed $5000 bond that Pays $120 per month Tax Free

Can you believe that I just bought a 13% guaranteed $5000 bond that pays $120 per month tax free for 5 years? And it's guaranteed by a major US bank.

Here is what it is. About a year ago, I got a 'special deal' on a credit card, interest free for one year on purchases and balance transfers. I took advantage of it.

The year is up, and now a 13% interest rate kicks in. So by paying off the credit card, I am saving about $120 a month for approximately five years, in essence generating a 13% return (as the alternative is not paying it off and paying the high interest). And of course, there is no taxation on the $120 per month savings. Such a deal.

This is obviously a very simple 'investment' or money management technique. Just wanted to reinforce the benefits of credit card payoffs, especially to those who are getting credit cards for the first time.

No comments:

Post a Comment