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I recently cashed out a Canada Savings Bond I had from when I was a kid and I after taking into account inflation I made about $8 while the government had my mo
by thebrain 7y ago
I recently cashed out a Canada Savings Bond I had from when I was a kid and I after taking into account inflation I made about $8 while the government had my money for 20+ years.
- mapleoin 7y agoHow much did the bond cost?
- thebrain 7y agoI was really young so it was just $500.
- unlinked_dll 7y agoBond rates are supposed to track the inflation rate so it's nice to see it functioning as intended
- cheez 7y agoDepends which "inflation" measure is being used.
- 3fe9a03ccd14ca5 7y agoDepends on which asset classes are used.
- acpacp 7y agoWell, at least you beat inflation
- typpo 7y ago$500 CAD in 2000 would have to be ~$705 now in order to beat inflation, according to Statistics Canada - so his $8 return was not great. https://www.in2013dollars.com/canada/inflation/2000?amount=500 https://www.in2013dollars.com/canada/inflation/2000?amount=5...
- core-questions 7y agoHe said "after taking inflation into account" which means it must have been like $713 CAD in the account ;) Enough profit to buy a shitty meal at Tim's.
- typpo 7y agoOops, I misread that! Thank you
- all_blue_chucks 7y agoBond values in most countries have risen so phenomenally over the past few decades that they almost kept up with stock returns. It is unprecedented in history. Your situation is not typical.
- outside1234 7y agoThis actually is a demonstration of an efficiently priced near zero risk asset. Your Canadian bond was probably priced in Canadian dollars, which have a near zero risk of default (Canada can just print more dollars to pay it), so the pricing of these bonds should be such that it is largely inflation plus a vanishingly small premium for the black swan default. $8 sounds about right.