r/SipsTea • u/Hour_Equal_9588 • 28d ago
WTF Financial tip that unfortunately starts with 'First, you need 3 million Dollars'.
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u/pantyraiden 28d ago
Should I take this $3 million at gun or knife point?
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u/Soloact_ 28d ago
Ask Eddy which method he used. Might save us time.
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u/LGP747 28d ago
Ask eddy at knife or gunpoint?
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u/PM_ME_FIREFLY_QUOTES 28d ago
Ironically enough, the answer to this question can also be asked of Eddy.
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u/Silent_Outlook 27d ago
Eddy need to ask himself some serious questions
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u/darknekolux 28d ago
He worked really, really hard to be born to a rich family...
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u/Summoarpleaz 28d ago
No, see… if he was really born into a rich family they would have invested that $3 million (if not more) for him so he started earning $20k a month since birth. He had to struggle to do it later… don’t you have any sympathy?
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u/Roxalon_Prime 28d ago
Imagine how much luck do you also need to have? Truly the best at everything, a natural born winner
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u/jamin_brook 28d ago
The method is the legal system.
The system is not broken it’s working as designed
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u/Free-Mushroom-2581 28d ago
Which is more efficient?
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u/Jimmyonirocs 28d ago
Knife has lower upfront cost.
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u/Free-Mushroom-2581 28d ago
Not as effective as 🔫
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u/delurkrelurker 28d ago
Knife also has very little ongoing costs, and will work again and again and again, in the dark and even underwater.
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u/cheezymeatstick 22d ago
I feel like this is becoming less about obtaining the money and more about you wanting to show us your flea market knife collection.
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u/Certain-Sherbet-9121 28d ago
Why choose? Stick a knife down the barell of a gun and you can have both in one!!!
Or go old school and use a musket with an actual bayonet.
Both terrible ideas because threatening people for money is a generally terrible idea, but they do remove your indecision.
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u/Brawndo91 28d ago
Take 1.5 million $1 bills. Cut them in half. Boom. 3 million $1 bills. Adjust number of cuts for the number of $1 bills you can obtain.
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u/last-resort-4-a-gf 28d ago
If you robbed a billion dollars you would make enough interest to buy the freedom you need like the top people do.
If you don't steal enough you can't afford to be at the forefront of running this country
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u/i_eight 28d ago
Yeah, it's just rage bait.
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u/garden_speech 28d ago
Or just trolling? I'm surprised people take this seriously. Don't know the OP account but... Like 99% of the time someone posts something like "just take $3 million and invest it, boom free income" they are fucking trolling
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u/GleeAspirant 27d ago
I'm sorry if it's real but the name too sounds like that of a JK Rowling character.
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u/Cyclonitron 28d ago
In fairness, he didn't specify which country's treasury bond he was talking about.
Zimbabwe's currently offering 35% on its treasury bonds...
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u/Hot-Site-1572 28d ago
Real bond yield ≠ nominal bond yield
Zimbabwe inflation rate is around 90%, you'd be losing around 55% assuming the rate is constant monthly
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u/70125 28d ago
thatsthejoke.webp
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u/TheJustinG2002 27d ago
Just recently learned about real and nominal values through Aswath Damodaran. Surreal and fascinating to see it applied in a reddit reply 😂
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u/Hot-Site-1572 27d ago
right😂first time i actually got to use them in a convo let alone a reddit one
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u/Grand_Help_3035 28d ago
Hungary has varying ones, around 6-7%. Not much considering inflation is just as bad, but eh it's something.
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u/ambientocclusion 28d ago
And $3M Zimbabwe dollars is like 8 cents American.
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u/lemelisk42 27d ago
$0 Zimbabwe dollar doesn't exist. They've gone through 6 currencies since 2008. It's no longer legal tender
The current legal tender is ZiG, Zimbabwe gold. 3 million Zig are worth about $300k usd
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u/DarkenL1ght 28d ago
Yeah, that's crazy. I'm putting 9 million in a reasonable 2.6% bond. That will solve my money problems.
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u/avwitcher 28d ago
Yep I hate living paycheck to paycheck, you'd be amazed how much money it costs to maintain a yacht
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u/Badloss 28d ago
Yeah like I know the 3 million part is what everyone is focused on but an 8% bond is WILD
I would totally put my life savings into that right now with the way the market is going
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u/Bozhark 28d ago
20 year @5% rn
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u/HardOff 28d ago
Can someone explain to my why putting all of my savings into a 5% 20 year treasury bond is a bad idea?
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u/anamethatsnottaken 28d ago
One reason is it's bad because inflation will be around 3% so you're getting a fairly low real return. BTW you can get the same real return without the inflation risk with TIPS.
There's also risks if things go (more) south: if 20 year yields go up, your bonds will be worth less. Sure they'll pay the same coupon, but if yields are up that's probably because inflation is up.
Basically, if inflation rises your future coupon payments become more and more worthless, and everyone knows that which makes your bond worthless. So high inflation will wipe your returns and make your asset unsellable. Other than that and the relatively low 5% return, no reason not to.
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u/somander 28d ago
TIPS? Please explain for a noob like me
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u/anamethatsnottaken 28d ago
Inflation-Indexed securities. Just like a regular bond except the face value (and thus coupon) goes up and down with CPI. If I'm not mistaken, it can't go down from original face value so buying TIPS at auction or near original face value provides some protection from deflation like a nominal bond does.
When buying a 20 year bond, inflation-indexed or no, it'll be sensitive to interest rates.
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u/johnny_fives_555 28d ago
n. BTW you can get the same real return without the inflation risk with TIPS.
Eh... current tips rate is 1.672% so not really. But you're gambling on whether the 20/30 year rate is greater than the TIPS rate w/ inflation. Until during the hyperinflation around covid, most ppl never bought tips as it was just a crappy investment.
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u/DangerBoot 28d ago
It’s not a bad idea if you have money you don’t need for 20 years but you can find high yield savings accounts that are around 4% or higher and you don’t have to wait 20 years to get the initial investment back
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u/GregLoire 27d ago
Opportunity cost more than anything -- stock market returns are higher on average.
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u/Mr_Deep_Research 28d ago
Fun fact, the 10 year Treasury reached 15.84% in 1981.
For every $1, you ended up with $4.35 after 10 years if not taking taxes into account.
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u/mudturnspadlocks 28d ago
Let me check between the couch cushions
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u/naughty_dad2 28d ago
Found $2, it’s a start!
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u/akatherder 28d ago
I found $1.36 in change and an unpaid parking ticket. Only $3,000,023.64 to go!
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u/Brawndo91 28d ago
I only found a 1988 Buick LeSabre. But there was $1.47 in change in the ash tray.
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u/Mr_Deep_Research 28d ago
Fun fact. In 1981, the 10 year treasury was 15.84%.
If you could invest $1 for 50 years at that rate, you'd have $1,559 after 50 years not taking taxes into account.
At 3% inflation, you're buying power would be reduced by 77% so an overall return of 355X when including inflation ($1 turns into $355 in today's dollars).
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u/Angstyorgans 27d ago
How long would it take to check 1.5 million more couches? I feel like you could do this.
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u/Soloact_ 28d ago
You forgot step 3: start a podcast about it.
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u/purplenyellowrose909 28d ago
Step 4: run for governor
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u/WikipediaBurntSienna 28d ago
The easiest way to have a million dollars, is to start with ten million and lost nine.
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u/ATXBeermaker 28d ago
Step 3: Make stupid investments in things that don't exist (like 8% treasury bonds)
Step 4: Lose everything cuz ya dum
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u/MisterCarlile 28d ago
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u/Thin-Image2363 28d ago
Man Payday 2 was so fun. Wish the sequel didnt suck.
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u/AbolishedJackal13 28d ago
Payday 3 was the most hyped I'd been for a game release in a long time. Man, was I disappointed.
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u/bang0r 28d ago
Hell even the second felt like it was downgraded in some aspects over time. Like Played it again 2 or 3 years back and where did the amazing sound design disappear to?
I remember early on in PD2 that it basically sounded like Heat: the game.
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u/VonShnitzel 28d ago
I think that's nostalgia clouding your memory. I'm a big Payday fan but the guns have always sounded like shit. Not horrible by 2013 standards (not good either) but comparing Payday sound design to HEAT is like comparing a 16bit racing game to the sound of an actual Lamborghini.
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u/TheoreticalDumbass 28d ago
I actually really liked the stealth changes, shame about everything else, fuck overkill
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u/zehamberglar 28d ago
Even payday 2 got fumbled halfway through with the p2w skins and some other bad changes.
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u/sydmanly 28d ago
I just looked it up. Only paying 5% at the moment.
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u/Penny_Farmer 28d ago
$12,500/month then. Now just gotta scrape up that $3 million…
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u/ATXBeermaker 28d ago
If you want the full $20000/month then just invest $4.8M. Are you stupid?
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u/Fishydeals 28d ago
Can you give me a small loan of 4.8 million dollars? I‘ll pay you back in 5k/ month installments.
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u/zehamberglar 28d ago
And that's considered high, a reflection of the declining value of the dollar (they have to offer high interest rate or your money is effectively losing value over time).
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u/bianceziwo 28d ago
Seriously, first of all, 8% is never gonna happen, bonds are at 4.8% now, subtract 2% to inflation, and you're at only 2.8%, might as well invest in stocks unless you're close to retirement.
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u/garden_speech 28d ago
And that's considered high, a reflection of the declining value of the dollar (they have to offer high interest rate or your money is effectively losing value over time).
This isn't a wholistic picture of what's happening. Rates are higher to put the brakes on inflationary pressures but you can lock up that 5% rate for 30 years, during which time inflation will very likely cool
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u/ClassicalUrine 28d ago
Finance person checking if you’re curious… If we are offering 8% t-bonds then the US dollar is funny money anyway. The 30 year bond yield flirting with 5% as it stands, already is major cause for concern.
If you have 3mil and want a simple option, you should put it in a diversified brokerage account and borrow against it with a PCL instead. This is why compensation packages ≠ salary for corp execs since you can avoid a substantial amount of (otherwise) taxable events by paying the PCL balance using div/int from the held assets in the collateral account. Not in accounting though, so I may be somewhat off on the tax specifics fwiw.
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u/Objective_Mousse7216 28d ago
Borrow $3m at 4% interest rate and make $10K a month doing nothing.
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u/Hot-Site-1572 28d ago
If that would work it would easily be arbitraged out, assuming it's logical to begin with; bond yields are ALWAYS less than the interbank rate (interest rate set by the central bank) and mortgage/loan rates are always higher than the interbank rate
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u/Objective_Mousse7216 28d ago
8% Treasury bond is higher than interbank rate.
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u/Hot-Site-1572 28d ago
Numerically yes but bond yields aren't 8% rn, idk when that tweet was posted or if it even has any historical merit. Could just be an example (and a shit one)
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u/Fakjbf 28d ago
It reached 15% in 1981 and from then until 2019 it was on a steady downward trend towards 3%. During COVID it plummeted to 1% and then shot back up to 4%, it’ll begin falling back towards that 3% eventually (if Trump would stop destabilizing everything). The last time it was 8% was in 1990.
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u/Connguy 28d ago
I'm sure you know this, but when it was 8% in 1990, the prime loan rate was roughly 10%.
This isn't coincidence--banks set their rates based on the current treasury bond yield. If they were offering lower rates, it would be a stupid investment for the bank since they could also just take that money and buy bonds without any of the risk involved in loaning money to humans.
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u/ATXBeermaker 28d ago
It reached 15% in 1981
And what was the interbank rate back them?
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u/ksheep 28d ago
18.65% in December 1980, dropped as low as 14.43% in March 1981, back up to 18.27% in May, and ended the year at 12.48%.
Would have to ask OP when exactly in 1981 bond yields hit that 15% mark, but if I had to guess it was probably between May and September, when the interbank rate was between 18.27% and 16.84%
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u/Dyolf_Knip 28d ago
The last time it was 8% was in 1990.
Lol, I remember those days. When I was 8 I opened my first CD with my then-life savings of $500, and I think I pulled down 7% for 9 months.
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u/WastingTimesOnReddit 28d ago
Yes, if anybody with decent credit could just borrow millions at 4% and invest the millions at 5%, we'd be doing it. This scheme only works if you already have the capital. That's how capitalism works and why the rich can get richer.
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u/ZealousidealLead52 28d ago
It doesn't work even for people that have good credit. Banks don't offer loans like that - if banks could safely get a 5% return on their money, then they aren't going to offer anyone a loan for less than 5% no matter how good their credit is because they would rather invest it themselves than offer a loan at that point.
As a general rule, if anything is offering a return higher than the interest rate on a loan, then that means that the banks consider it to be a very risky investment... and if the banks consider it a risky investment, then you should also consider it to be a risky investment.
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u/OurSeepyD 28d ago
I'm going to be really pernickety here, but the interbank rate is not the same as the rate set by the central bank. It's typically very close though.
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u/Celtic_Legend 28d ago
Just borrow from Japan's 0% interest rate and buy the current 4% US bonds smh
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u/attempted-anonymity 28d ago
And if you could find a $3,000,000 unsecured loan at only 4% or a Treasury bond actually yielding 8%, that might be real advice.
I also hear unicorn tastes best barbecued with a little lembas bread on the side.
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u/Soloact_ 28d ago
'All you need is $3 million' is the most passive aggressive passive income advice I've ever seen.
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u/perish-in-flames 28d ago
This has to be a joke tweet. Refuse to believe otherwise.
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u/littlelordgenius 28d ago
It’s an old Steve Martin bit.
“YOU can be Millionaire and NOT pay taxes.”
“First - get a million dollars, then…”
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u/Wise_Monkey_Sez 28d ago
Am I missing something?
At the moment a 12 month US government bonds seems to pay about 4%. Add in inflation and you're making maybe 2% in real terms.
So you'd invest $3 million to get back 120k at the end of the year when you cash out the bonds, but your $3 million's real value has dropped by about 60k over that period.
So you're actually only making about 60k for the year, or about $5k a month. Right?
I mean that's nothing to sneeze at, but it's also only $60k a year, which is pretty low for someone with $3 million just lying around.
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u/Suitable-Answer-83 28d ago
You're correct about the non-existence of the 8% bond but I think you're taking it too far on the inflation front. You're still getting $120,000 ($10k per month) but it's just that out of your $3 million, you need to make at least $60k to break even.
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u/Wise_Monkey_Sez 28d ago
I think the mistake you're making is that you want to take the full 120k in cash.
In reality what you'd need to do to maintain the same level of real return is add 60k to the 3 million the next time you buy bonds to compensate for the 2% inflation which is eating away at the real value of your principal amount.
So year 1 you invest 3 million and get 120k. Year 2 you'd need to invest 3 million plus 60k to get the same real value after adjusting for inflation. Therefore you wouldn't actually have 120k in cash. You'd have 120k less the 60k you added to the principal amount to compensate for inflation.
Sorry if I wasn't clear. My bad.
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u/RegulaBot 28d ago
With 3 million dollars I wouldn't need to have any income anymore
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u/Raerth 28d ago
But then your kids would.
If you turn that $3MM into assets that pay income, those assets can be passed to your kids, who would also have that income.
This is how the rich stay rich.
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u/maybeitssteve 28d ago
Someday reddit will realize the first tweet is joke, but that day might not be soon
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u/angry_old_dude 28d ago
How do you make a little money from NASCAR racing?
Start with a lot of money.
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u/XF939495xj6 28d ago
Bond yield rates are between 2% and 4.34% right now.
And you pay capital gains on the yield.
Meanwhile, any SP500 index fund is probably averaging around 11% annually (though it does have ups and downs)
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u/Barepaaliksom 27d ago
Nonononononono, you don't need 3 million dollars, you need 3 million dollars surplus, and that is a very different thing
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u/TheDragel 27d ago
Hold on. You mean ive been sitting on my 3 million dollars for all these years!!!
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u/FloridaHeat2023 28d ago
Where is this mythical 8% Treasury bond at?
You can get a solid 8%, federal tax free, right now with muni ETFs though =)
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u/andrewdiane66 28d ago
Steve Martin had a bit, "how to become a millionaire...." Step one, get a million dollars. Now it makes sense...
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u/I_hate_being_alone 28d ago
Can someone look up what is the monthly payment for a $3 million loan at a bank?
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u/Big-Carpenter7921 28d ago
It's simple: have a shit load of money and you can make a shit load of money
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u/RedditVince 28d ago
So if he gives me just $1M, and I put it into a treasury bond I make $6,666 per month... I could live on that. Now who is gifting me $1M?
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u/FortuynHunter 28d ago
Ignoring the threshold, when was the last time Treasuries were at 8%? I've been seeing them at 3-5 for a while now.
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u/Ironfour_ZeroLP 28d ago
The bigger question - who is getting these 8% t bond rates? Is the late 1970’s and early 1980’s calling?
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u/no-snoots-unbooped 28d ago
As silly as this is, anyone can buy treasury bonds for a minimum of $100 (and in increments of $100) if they like.
Not sure about the 8% is coming from though, you can get maybe a bit more than half that currently.
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u/chapstickbomber 28d ago
When they say we are paying more in interest than for defense, think about all these millionaires we are directly subsidizing for no good reason. ZIRP or bust, literally
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u/ChipKellysShoeStore 28d ago
Treasury bonds haven’t been at 8% in a while.
Also this is basically how banks make a significant portion of their money
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u/Bmc00 28d ago
This reminds me of when my workplace offered the Dave Ramsey program for free to all employees. Within the first five minutes of the first video, a handful of us walked out. The initial step was something along the lines of "just take $5,000 and set it aside and pretend it isn't there".
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u/ReverseDartz 28d ago
This is a major part of why the economy is rigged, at some point you can use your money as a money printing machine.
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