Gyroscopic Investing

Xan wrote:Agreed, I consider them cash. Maybe it isn't quite as simple as normal cash, because you have to figure out how much you'd own after taxes if you cashed them out, but that amount is a cash amount.

Xan (or anyone else!),

Isn't that the same for all assets, though? If I sell stocks, bonds or a gold ETF in a taxable account, aren't the gains a "cash amount?"

With almost all of these saving bonds I am looking at about $3 of gains for every dollar invested. I have always viewed PP cash as dry powder for purchasing other assets, an emergency fund, money for paying recurring bills, college tuition, car payments, etc.

Again, I have good problem, but I just don't view these bonds the same as cash.

barrett wrote:

Xan wrote:Agreed, I consider them cash. Maybe it isn't quite as simple as normal cash, because you have to figure out how much you'd own after taxes if you cashed them out, but that amount is a cash amount.

Xan (or anyone else!),

Isn't that the same for all assets, though? If I sell stocks, bonds or a gold ETF in a taxable account, aren't the gains a "cash amount?"

With almost all of these saving bonds I am looking at about $3 of gains for every dollar invested. I have always viewed PP cash as dry powder for purchasing other assets, an emergency fund, money for paying recurring bills, college tuition, car payments, etc.

Again, I have good problem, but I just don't view these bonds the same as cash.

Of course if you were to sell any of those assets, you'd end up in cash. But I don't think that means you can consider the current value you own in dollars as a "cash amount". I think you can do that with these bonds.

Barrett,

You are correct, in the strict sense that savings bonds are not "the same as cash." I love I bonds, but I can't take one down to the grocery store and exchange it for a gallon of milk. On the other hand, the greenbacks in my safety deposit box won't earn interest.

What makes savings bonds suitable for inclusion in the PP Cash quadrant is that they have the same safety, stability, and liquidity as Uncle Harry's proverbial Treasury Money Market Fund. But with much a much better rate of return and unbeatable tax treatment.

Latest paper I-Bonds came 2.5 weeks after my taxes were e-filed !!!

Out the door for electronic conversion in 14 hours!