Picking up Nickels

Friday, April 13, 2018

March CPI-U numbers released: April 2018 issue I Bonds are compelling

The U.S. Bureau of Labor Statistics released the March 2018 Consumer Price Index (CPI-U) inflation data yesterday, which increased by 0.23% last month.

As always, now (along with the release of the September CPI-U) is one of the best times to consider purchasing I Bonds. The reason for this is that we now know what the rate of return for April 2018 I Bonds will be for both the first and second six month periods, which is important since I Bonds must be held for 12 months before they can be redeemed.

Using the CPI-U data from September 2017 (246.819) and March 2018 (249.554) (courtesy of inflationdata.com), we can calculate the variable rate for the second 6 month period for April 2018 issue I Bonds.

That means these bonds would earn a composite rate of 2.58% (using 0.1% fixed & 1.24 variable) for the first 6 months and 2.32% (using 0.1% fixed & 1.11% variable) for the second 6 months. Based on this, April 2018 issue I Bonds are worth considering when compared to something like the 12 month CD @ 2.25% APY currently being offered by My eBanc.

I personally maxed out my 2018 annual I Bond allotment in January and have elected to take the bulk of my 2017 Federal tax refund in the form of April 2018 issue paper I Bonds, so I'm personally out of ammo at this point.

Wednesday, April 11, 2018

April 2018 Financial Asset Roundup

Here are my current financial assets as of the market close on April 10th, 2018:

Asset Mar
Checking 366 216 -150
Money Market 53,626 60,664 7,038
Savings Bonds 148,363 153,537 5,174
Treasury Bills 0 0 0
CDs 42,244 42,363 119
Brokerage 168,360 151,373 -16,987
401k 170,799 174,174 3,375
Roth IRA 155,871 151,064 -4,807
SEP IRA 751,588 724,160 -27,428
529 Savings 174,121 174,147 26

Total Assets $1,665,338 $1,631,698 -$33,640

And down we go. As the POTUS decided it was a good idea to start a trade war with China and threaten Russia with a missile attack, the S&P 500 has dropped 4.53% since the last update:

(chart courtesy of nasdaq.com)

On the jobs front, the unemployment rate for March remained at 4.1% for the sixth month in a row, with a much weaker than expected 103,000 jobs created. Oil prices have continued to rise to the $66 level (up from $61).

On the financial front, I've had a busy month. I bit the bullet and changed my S Corp retirement plan from a Vanguard SEP IRA to a Fidelity Solo 401k, which will allow me to increase my retirement savings since I will be able to make employee contributions and employer profit-sharing contributions. I also finished my 2017 personal tax returns and received the majority of my Federal refund in the form of paper Series I savings bonds. Another large task has been helping my Mom (Grandma Frugalson) deal with the financial fallout of my father's death, which covers investments, pensions, taxes, Social Security, estate planning, and more. Grandma Frugalson's financial situation has also motivated me to further simplify and consolidate my own finances, which includes closing and combining accounts, simplifying investments, and making sure things like account beneficiaries are all in order. Finally, the March 2018 CPI-U number is out this morning, which is a useful measure for evaluating Series I savings bond purchases (post coming).

As for the non-financial, I've been looking forward to putting the winter snow behind us and getting going on lawn season. I'm also going to be having a child graduating from high school soon, which is a whole other ball of wax. :p