Who We Are
The BlueCollarDollar was designed as personal finance center where you will find the complicated world of investing and financial planning explained. We take a common sense approach to the money you earn, your investments (mutual funds, bonds, mortgages), retirement planning (IRAs, 401(k)s, etc.), insurance, mortgages, and debt. We want you to have a financially stable retirement, that is both comfortable and healthy.

Money Focus
Mutual Funds

Equity

Bonds
Insurance

Guide

Life

Health

Auto

Home
Mortgages

Buyer's Guide
Taxes

Guide with Calculators
Step by Step
Hot Topics
Contact the Editor

---

Featured Site

TradersDigest
AfterHourTrades.com, Inc.
Featured Columnist:

Tax Mama

The Blue Money Report

---

 

---

---

All content is © copyright (1998-2005)
BonPaulProductions (all rights reserved)

---

What are Treasuries?

There are certain things a bond investor interested in United States Treasury offerings needs to keep in mind.

First: A US Treasury issued security, whether it be a bond, a note, a bill, TIPS, I-Bonds, or EE Bonds, as well as HH Bonds and other securities are all considered a very liquid investment. That means that the difference between the bid and the asking price on the fixed income security you seek, will be very narrow making it easy for investors to find the right security at the right price. The Treasury prices their offerings in 1/32 (or $3.125 per $10,000) which keep price ranges (found most conveniently in the Wall Street Journal) very narrow. This makes their purchase very easy. Folks who want to buy Treasuries can do so directly through the Bureau of Public Debt.

Second:The safety of these offerings, backed by the fill faith and credit of the Federal government is no empty statement. This is the most trusted investment in the world. (There was a time about a century ago, when a private banker, J.P. Morgan had to bail the country out of a financial crisis. Making good on this promise is why managing the economy is so important.

Third:Interest gained from these investments is not taxed on a state or local level. It is however taxed at the federal level in many instances. Exclusion from taxes would include using the proceeds from a Treasury security if it were used for education.

Fourth: Treasuries are used as a benchmark for similar types of securities. Comparing not only the maturity but the yield to other offerings can be incredibly helpful when determining the amount of risk you are seeking.

Fifth: There is a good chance that an investor in Treasuries may be pleasantly surprised in the overall performance of their purchase. The tax advantage helps. The fact that there is no call on the offering (an distinct possibility on some fixed income securities if the interest rate falls significantly and the issuer "calls" back the bond) and no default (a problem of the borrower no longer being able to pay the bondholder). And should there be a financial crisis, a Treasury issued security is usually where other investors turn. This so-called "flight to quality" can also add to the offering's overall yield.



---

Personal Finance and Investing | Privacy Policy | Ad Policy | Contact

All content is © copyright (1998-2005) BonPaulProductions (all rights reserved) The BlueCollarDollar (SM) © copyright 1998-2005 The Blue Money Report(SM) - © copyright (2002-2005) All Rights Reserved