When I’m on the radio or TV or speaking at a conference, many people ask me, with inflation at 8% or more, with the stock market crashing, and a recession starting… how do I protect myself?

The usual investment standbys are real estate and the stock market. But all are volatile– real estate and stocks can crash, as we’ve seen too many times in the past.

So, what’s left?

My number one suggestion is investing in I-bonds.

Let me explain what it is and why everyone reading this newsletter should invest in an I-bond in these uncertain economic times.

Even if you have all your money in the bank, you’re not safe. Inflation is eating away at the value of your money. Every month you have your money in a savings account you’re losing at least 8% per month… probably more.

Of course, there are other options like CDs, but if you look at the highest 12-month web-only $25,000 certificate of deposit, it has an annual yield of only 2.75%, losing money every day.

So, the I-bond works out to be a better option.

Investing in an I-bond is the only safe investment option you can invest in to stop the bleeding and make money.

Treasury I-bonds or Series I Savings Bonds are backed by the full faith and credit of the U.S. government — They pay out an interest rate of 9.62%.

Where else could you get a 9.62% return these days?

I-Bonds are a great investment, but they do have some limits. One of the main drawbacks to investing in the I-bond is, sadly, the investment limit. The most you can invest is $10,000 per year, per person. But there are loopholes for married couples, and self-employed allowing them to buy more I-bonds.

The self-employed can buy through their business entity, for up to $10,000 per year.

The business would register with the Treasury department and use its own taxpayer ID number. If you have more than one business with different tax ID numbers, you can purchase more I-bonds under their names.

If you have a living trust, you can also buy an I-bond through the trust (each trust must have a separate tax ID number).

Married couples with separate businesses can utilize the loopholes and purchase I-bonds for each spouse, and I-bonds for each business — that’s $40,000 worth of I-bonds earning 9.62% interest. If they also have living trusts, they can add another $20,000 in I-bonds to their investment. And if they have children, they can buy an additional $10,000 in I-bonds for each of their children.

After 12 months you can cash in your I-bond, but you will forfeit the last 3 months of interest (you must keep it for 5 years to get the full interest benefit).

But keep in mind the rate is expected to change as of November 1st, and many predict that the rate will drop to 6%, so if you’re going to invest in an I-bond, make sure you do it before November 1^st.

If you are keeping large sums of money in a bank account, earning little to no interest, I-bonds are a smart and safe investment.

Individuals can’t buy I-bonds through a brokerage account, only through the U.S. Treasury Department’s website.

You can buy I-bonds by going to the Treasury website: www.treasurydirect.gov

Note: You can buy electronic I-bonds in your TreasuryDirect account (set one up at www.treasurydirect.gov).

You can buy paper I-bonds with your IRS tax refund. All of the instructions are available on the Treasury Departments’ website.

If you’d like to learn more on how to do this, give us a call at 615-933-4647 or email Craig at [email protected]