Capital Maximization Tips

Why T-Bills?

T-Bills are the most liquid financial instrument in the Market. Transactions are frictionless (no fees) and even during periods of heightened volatility the instrument remains stable and liquid. Most retail investors leave cash in a checking account earning 0.01% or give up 20 to 30 Basis points using a "High Yield" savings account. Meanwhile, the "Risk-Free Rate" (what the US Government pays to borrow money) is significantly higher.

Vehicle	Yield (Est.)	Risk
Checking Account	0.01%	None (FDIC)
High Yield Savings	3.3% - 3.4%	None (FDIC)
US Treasury Bills	3.6% - 3.68%	Zero (Gov Backed)

How to Execute:

You do not need to lock your money away for years. You can buy 4-week, 8-week, or 13-week bills.

• Open a Brokerage Account: Charles Schwab, Fidelity, or Vanguard with the latter two brokerages offering an "Auto-Roll" (automatically reinvesting when a bill matures).
• Select "Fixed Income": Search for New Issue Treasuries.
• Auction vs. Secondary: Buy at "Auction" to get the par value without paying spreads (1 to 2 basis points) or purchase in the secondary Market.
• Hold to Maturity or Sell When You Need Cash: Interest accrues over the duration of the maturity allowing you the ability to sell while collecting interest at any time, or just wait till maturity.

Additional Tips

• Set up automatic transfers from your checking account to your brokerage account to keep cash working.
• Consider laddering bills of different maturities to lock in higher yields during future easing cycles.
• Monitor the Risk-Free Rate as it can fluctuate based on economic conditions and Federal Reserve policy changes.
• When you sell securities or real assets move the proceeds into T-bills. Keep your idle cash working at all times.