Investments advisor Suzie Orman is high on series I Bonds. She is recommending that people buy them. And she also had some advice for people thinking of quitting their jobs during the so-called “Great Resignation.”
Investopedia explains that a series I bond is a non-marketable, interest-bearing U.S. government savings bond that earns a combined fixed interest rate and variable inflation rate (adjusted semiannually). Series I bonds are meant to give investors a return plus protection on their purchasing power.
The Treasury Department says that I bonds have an annual interest rate derived from a fixed rate and a semiannual inflation rate. Interest, if any, is added to the bond monthly and is paid when you cash the bond. I bonds are sold at face value; i.e., you pay $50 for a $50 bond.
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“This is a fabulous investment,” Suzie Orman told CNBC of series I bonds.
“Given that inflation is probably here to stay for some time, even with a three-month interest penalty in years two through five it’s still worth it, believe it or not,” Orman said.
This is because, while the bonds only pay out at face value, the holder gets a coupon rate payout every few months. So, in spite of inflation, the extra percentages will add up over the life of the bond.
Born Susan Lynn Orman was born in 1951 in Chicago to Jewish parents Ann and Morry Orman, Suze Orman is a financial advisor and television commentator. Her father was an immigrant from Kiev. She is best known for her “The Suze Orman Show” where Orman dispensed financial advice for many years.
As for the Great Resignation, Suzie Orman is warning people not to be so quick to quit their jobs. Since the world started to come out of the Coronavirus pandemic there has been a labor shortage in a number of fields. This, coupled with people getting to use working remotely, has created a situation where many people feel free to quit their jobs at any time since there are plenty of other job openings out there.
Suzie Orman, however, thinks that people should stay put, for now at least. CNBC reports that more than 4.4 million Americans quit their jobs in April, and job openings hit 11.9 million. And this is part of what is feeding the current wave of inflation, but with the Federal Reserve raising interest rates it won’t be long before companies decide to do without certain staff positions and new job openings dry up.
Suzie Orman said in an interview with CNBC, “We may find that certain corporations start to cut back because their expenses are so high [and] their stocks maybe aren’t doing what they want them to be doing.”