I Bonds: Best Time to Sell?
Sean Mullaney and I discussed ‘I Bonds’ on Episode 447 and just after we published that episode I came across this short, but amazingly thorough article from the Doctor of Credit website called ‘When to Sell off Our I Bonds’ thanks to a post in our ChooseFI Facebook group.
This is the article you are looking for if you purchased Series I Bonds at the height of their interest rates in 2021 and 2022 and want to know the best time to sell so you minimize the interest lost with the 3-month penalty (you lose the last 3 months of interest if you sell your I Bonds within the first 5 years).
Capital Gains Taxes 101
Two weeks ago in the newsletter I included a section on income limits for the 0% Federal Tax rate on long-term capital gains, and my friend Jesse from The Best Interest blog and podcast sent me an email with his excellent article on Capital Gains Taxes 101 that I think will be really valuable for many of you to read.
This is truly a FI 101 topic that is foundational to understand what capitals gains are and how they are taxed. We’ll all deal with this at some point in our lives, so it is best to be armed with the info now before you go to sell any mutual funds or stocks.
A quick note on two of my recent guest podcast appearances:
I was on Jesse’s The Best Interest podcast a few months ago in Episode 54, and thought the conversation was a fascinating one.
I was also a guest on the Frugal Friends Podcast two weeks ago and I had a blast chatting with Jen and Jill. This is a fun one to check out: What Financial Independence Looks Like Today with Brad Barrett.
Their ‘bill of the week’ question at the end was a story I’ve never told before on a podcast, so that was cool to tell my entrepreneurship origin story!
The Benefits of Nature in 20 Minutes
Thanks to a tip from FI Weekly readers Rachel and Sarah, I recently devoured the book ‘The Comfort Crisis’ by Michael Easter. The subtitle says it all:
“Embrace Discomfort to Reclaim Your Wild, Happy, Healthy Self.”
This is an important book.
One of the easiest yet most consequential actions I plan to take after reading it is simply spending more time outside. The following quote directly from the book shows why this is so important:
“In 2016, she (Rachel Hopman) led a study that found something as painless as a 20-minute stroll through a city park…can cause profound changes in the neurological structure of our brains. This leaves us feeling calmer and with sharper and more productive, creative minds…
There’s a little magic in 20 minutes. This was confirmed by Hopman’s colleagues at the University of Michigan. They discovered that 20 minutes outside, three times a week, is the dose of nature that most efficiently dropped people’s levels of the stress hormone cortisol. The catch to that study, of course, was that the participants couldn’t take their phones outside with them.”
ChooseFI Community Taking Action This Week
- Lauren said, “My partner’s car died in the road earlier this week, and we had to have it towed home. We live in a condo so it’s hard to work on a car in a crowded parking lot, but with the input of the tow truck driver, a family friend, and a few YouTube videos, we were able to confirm the car’s fuel pump was bad. The mechanic quoted over $1000 for the part and labor so, after a few more YouTube videos, we even decided to do the work on our own…in our crowded parking lot! We ordered the part for a whopping $106 through RockAuto and then changed it out ourselves! We also needed a new fuel pump fuse, but that was found easily enough at O’Reilly’s. So, what was going to be a $1200 fix at the mechanic ended up costing us about $120 for parts and an hour of our time. Not only that, but we also feel far more confident about being our own mechanic in the future! We were so proud of our accomplishment and wanted to share!”
- Jamie said, “This one is actually more like a 10% win: I used the calculator on your site to find out my FI date: only FIVE YEARS if I keep everything the same!!!! But I have plans to house hack in the next year or two which will enable me to contribute more. I have always been under the impression that I have about 15 years left, so this has made a HUGE difference in my outlook. (It probably would be about 15 years if I hadn’t started listening to your show and cutting back my expenses and learning about travel rewards, etc.)”
- Melvin said, “My 1% better was using my Capital One Venture X card to purchase a flight using my $300 travel credit and the getting a $100 credit back due to the price drop protection. I was then able to use that for a one night stay at a 5 star hotel in India for only $8!” (Brad note: This is the card I’m currently using and have an in-depth writeup about it on our Top 10 Recommended Rewards Cards for August post)
- Erika said, “My 1% better is optimizing some time! As a wife, mom, and full time employee; one of my biggest frustrations is planning meals for the week and writing out a grocery list. I made a list of 25 meals we enjoy (5 meals a week for 5 weeks) and I have attempted to organize them in a way to use leftovers from one meal for another later in the week or ingredients we don’t use as commonly into back-to-back weeks so I can use the ingredient up. As an example, on Monday this week we had roasted broccoli so I roasted extra, on Tuesday we had chicken and I prepared a few extra breasts, on Wednesday we had a stir-fry style dish and used the leftover chicken and broccoli. Or, as a second example, sour cream is an ingredient we don’t always use up so one week we are having baked potatoes with sour cream and the next week we are having enchilada casserole which should use up the sour cream. After I thought my list was optimized, I made a grocery list for each week and then I made shopping lists in my Wal Mart app, “week 1”, “week 2” etc. So, now my meals are planned out Monday-Friday and all I have to do is click “add all to cart” and my grocery shopping is complete! We are only on week 2 so I am sure there will be some tweaking and changes but I feel like I have finally hacked my biggest time nemesis!”
- Garrison said, “I did two things this week that made my life 1% better. The first is that I finally got up the nerve to sell my car. I’ve been reading Mr. Money Mustache for the last two years and always wanted to bike to work but couldn’t bring myself to do it in 115 degree heat. I borrowed a friend’s ebike and it made the trek to work totally doable. So, I sold my car this week and bought an ebike. This will save me lots of money on gas, insurance, and maintenance. I’m also looking forward to getting outside more and getting some exercise. The second thing in did was finally read Die With Zero. This helped me to realize there are some experiences I just can’t wait on. I was putting off redoing my backyard and investing more money but decided to dial back some investing to finish my backyard. My two-year-old really loves to be outside and if I wait I’m going to miss the opportunity.”
- Zack said, “My 1% better I would like to share with everyone is the greatness of stock bags. My wife and I have always been great at cooking our meals at home but were always having to buy chicken/vegetable stock/broth for our recipes until we started making our own! The process is super easy, we just have two gallon-sized Ziplocs we keep in our freezer and any time we are cutting the ends off of onions, celery, or any other vegetable part we would usually throw away we keep in the Ziploc until it is full, then we put it in a big pot with water and limited seasoning and we have our own stock to use for all of our recipes! We do the same with all of our meat bones. This is probably only saving us 1% of our total grocery bill but is so satisfying to know we are adding more homemade elements to our cooking while also eliminating food waste.”