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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (211734)	12/29/2002 3:14:29 PM
From: Tommaso	Read Replies (1) \| Respond to of 436258

Say, I just picked up the latest edition of Tobias's "Only Investment Guide . . ." and found out you can buy Series I inflation protected U. S. Savings bonds using a credit card. Now Fleet bank has given me an interest-free credit line of $20,000 until next August (as long as I make small monthly payments just to prove I am still alive, I guess). The Series I bond is paing better than 4%. You lose three-month's interest cashing it in early. So if I buy $20,000 worth, cash them all in after six months, pay off the credit card, I get $200. What is wrong with this scenario? For that matter, how about I get a 15-year mortgage loan of $100,000 at 5.5%. I deduct $5,500 off my taxes, making it a real interest rate of about 3.5%. I buy $100,000 of Series I bonds and collect better than 4% interest that accumulates tax free. So I get paid $500 to hold $100,000--and if inflation increases, so so my interest payments. At 6% inflation I start accumulatinga profit of $2,000 a year tax free. There ought to be a law against this, and I am sure there is, but it's just fun to think about.