"What are the Advantages of TIPS :: Treasury Inflation Protected Securities

come join the fun of investing for income

Don't envy my great retirement -- Join the fun!

This site contains the pieces of the income investing jigsaw puzzle -- now get the Big Picture so you secure your financial future by creating an ever-growing income from investing

The most obvious advantage of TIPS, of course, is the protection of your spending power against inflation. This makes TIPS a much better investment for many investors than all other fixed income investments, for which inflation is a constant thief of spending power.

Another big advantage is that these Treasury Inflation Protection Securities are backed up by the full taxing power of the United States government. Therefore, they're for all practical purposes as risk free as all other Treasury bills and bonds.

Also, the interest and increase in principal paid by TIPS is not taxable by your state or local government

They are exempt from all but federal taxes.

If you would want to sell your TIPS, they are liquid. You could sell them. However, if you do so, you are subject to the market risk that they are not worth the principal. If interest rates have gone higher since you bought your TIPS bond, other investors will not pay full-price for your bond, since they can buy bonds that pay a higher rate of interest. The way to avoid this is just to hang onto your TIPS bonds until they reach maturity.

Because the index the Treasury uses for measuring the inflation rate is the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers (CPI-U), published monthly by the Bureau of Labor Statistics (BLS), if you live in a rural area with a lower rate of inflation that cities, you may actually increase your spending power.

Next: Who would benefit from buying TIPS

Click to watch brief (30 second), exciting video on finding financial freedom through investing for income . . .

Now experience for yourself the joy of securing your retirement through income investing!

Want more income -- now or when you retire? Get your free eCourse:

Learn the Secrets of Investors Who Make Money in Both Bull and Bear Markets . . . Good Times and Bad!

Before the subprime mortgage mess makes stock market goes down more . . . before the stock market goes up, making dividend paying stocks more expensive . . . before the rising cost of gas, gold and food -- and the sinking U.S. dollar -- put the world into a recession . . . before retiring baby boomers start selling off their growth stocks . . . before you need investment income just to eat!

7 reasons to invest for income cover  

7 Reasons to Invest for Income -- NOW More Than Ever

Rick Stooker



It's easy. Just enter your first name and email address into the form below.

Yes, Rick, I want to start securing my financial future and my retirement now

(NOTE: I greatly respect your privacy. I will never sell, rent, share or give away your email address to anyone. There is no obligation. You can unsubscribe at any time. After you click the button, you'll be taken to a page to thank you.)

income investors make more money

Or, you can subscribe to the 7 Reasons to Invest for Income Now More Than Ever RSS feed. Just click on the orange RSS feed icon below:

7 reasons for income investing


Custom Search

Disclaimer:

I am not a financial advisor. I am not a broker. I am not a financial planner.

I have no professional licenses.

I am a wide reader and an independent thinker and this site gives my opinions on the subject of income investing.

Nothing in this site is to be construed as professional advice.

I am not responsible for the results of your investment decisions.

Past results are no guarantee of future returns.

You must read, think over what I say, make your own investment decisions and take responsibility for your own life, including the results of your investment decisions.

Continuing to stay on this site implies your acceptance of these terms.

Income Investing Site Full Website Agreement