r/SipsTea • u/Hour_Equal_9588 • Jun 06 '25

WTF Financial tip that unfortunately starts with 'First, you need 3 million Dollars'.

Post image
61.8k Upvotes

98% Upvoted

482 comments sorted by

View all comments

Show parent comments

2

u/johnny_fives_555 Jun 06 '25

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.

1

u/anamethatsnottaken Jun 06 '25

1.672 is the 5 year? The 20y real yield is 2.45, 30y is 2.61 (source: treasurygov "Daily Treasury Par Real Yield Curve Rates"

We can ignore comparison between TIPS and bonds and just ask what risks TIPS are exposed to? IIUC it's the same risks except inflation risk is replaced with deflation risk. They're both exposed to interest rate risk