Sand Castles vs T-Bills

Right now?

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.