20% T-Bill Strategy that Beats Stocks

Step-by-Step Tutorial: Investing in T-Bills for 20% Returns

Step 1: Understand T-Bills

• T-Bills are short-term debt securities issued by the US government with maturities ranging from 4 weeks to 1 year.
• T-Bills are popular due to their low risk nature and guaranteed returns, typically over 5%.

Step 2: Benefits of T-Bills

• T-Bills offer a risk-free investment with a return of over 5%.
• You can invest in T-Bills with as little as $100 through Treasury Direct.
• Interest on T-Bills is exempt from state income taxes in some states.

Step 3: How to Invest in T-Bills

• You can buy T-Bills directly from the Treasury Direct website or through brokerage platforms like Fidelity, Vanguard, or E-Trade.
• Treasury Direct allows you to schedule investments in T-Bills in advance and offers automatic reinvestment options.
• Brokerage platforms offer a convenient way to buy T-Bills but may have a higher minimum investment requirement compared to Treasury Direct.

Step 4: Considerations When Investing in T-Bills

• T-Bills offer lower yields compared to corporate bonds, but they provide a safer investment option.
• Shorter maturity T-Bills require more frequent rollovers, while longer-term bonds may be subject to interest rate risks.

Step 5: T-Bill ETF Options

• T-Bill ETFs like the iShares TLT and SPDR 3-Month T-Bill ETF provide exposure to T-Bills with dividend yields.
• ETFs offer a convenient way to invest in T-Bills but may have slightly lower returns compared to investing directly in T-Bills.

Step 6: Implementing a 20% T-Bill Strategy

• Consider using options trading on T-Bill ETFs to enhance returns.
• Selling call options on T-Bill ETFs can generate additional income and potentially increase returns to 20% or more.
• Understand the risks associated with options trading before implementing this strategy.

Step 7: Monitor and Manage Your T-Bill Investments

• Regularly review your T-Bill investments to assess performance and adjust your strategy if needed.
• Consider the liquidity needs and investment goals when deciding to hold or sell T-Bills.

By following these steps, you can effectively invest in T-Bills to potentially earn a 20% return while minimizing risks associated with other investment options. Remember to conduct thorough research and consult with a financial advisor if needed before making investment decisions.