I’d rather own a sand castle than Treasuries.
Last week the 52 week T-Bill yield was .18%. In other words…. lend the government $99,820 and they pay you back $100,000 in a year.
You lock in $180 profit on your investment. For almost no risk.
Or… with that same $100k, you could buy a perfectly rehabbed rental house in a nice neighborhood. At the end of the year, after taxes, insurance, maintenance and professional property management, you would passively pocket at least $6,000.
$6k in annual rental income… even if the house never went up in value. With minimal risk.
$6,000 vs $180.
Oh… by the way… did we forget to account for inflation?
Even the most optimistic projections are betting inflation will exceed 2% for the next year.
So your T-bill is really going to lock in a loss of about -$1,820.
That’s right… it’s no risk… but you automatically lose money….
By contrast, your rental house will make you $4,000 AFTER inflation….and you will probably raise rents next year.
I guess it all depends how you define risk, right?
How do YOU define risk? What returns are YOU looking for? Please leave a Comment or share this post.