What Are The Advantages And Disadvantages Of Selling The EE Savings Bonds?

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When it comes to financing education, having options like stock and EE Savings Bonds pre-established can enable the options to become more open. In this case, my desired school costs $100,000 to attend. I have the option to sell my 1,000 shares of Apple stock that is currently at 97.92 or my 1,000 EE Savings Bonds (with $100 denominations and 4.25% coupon rate) that are five years from their 30-year maturity date. I also have the option to sell a combination of both. If I were to sell only my Apple stock at today’s current rate, I would have $97,920 which would mean that I would be short roughly $2,100. Whereas, if I were to simply sell my EE Savings Bonds upon maturity in five years, I would have the $100,000 needed to finance my schooling. …show more content…

Whereas, if I waited to sell there is a possibility that the stock could be worth less in the future. Likewise, the advantage of selling my EE Savings Bonds upon maturity in five years would be that I would be able to walk away owing nothing on my educational expenses. Where, with only selling my Apple stock I would have to come up with nearly $2,100 to ensure all costs are covered. The disadvantage of only selling my EE Savings Bonds is that I could lose out on $4,250 by waiting ten years past maturity and an additional $17,000 in payments for the following one to four years after. Nonetheless, an advantage of selling a combination of both stocks and bonds would be that I am not selling all of either my stocks or bonds. This enables them to both build over time, hopefully, and future investments to be made. A disadvantage of selling a combination would be the risk of not allowing the full EE Savings Bonds to mature which could end up making future values smaller. The same can be said about stocks, by selling a portion it could result in either a higher or lower payout in the future were I to …show more content…

Since my stock does not quite cover the full costs of my desired school, going with a combination would ensure that all costs are covered. In order to do this, I would sell half of my 1,000 shares of Apple stock at today’s current rate of 97.92. This would provide me with $48,960 which is nearly half of my educational expenses. This means that in order to ensure all costs are covered that out of my 1,000 EE Savings Bonds I would need to sell just over half and would choose to sell 550 bonds that would cover the remaining costs. Because they mature in five years’ time to be $100,000 by selling 550 bonds, I would stand to have $55,000 from this to finance my educational expenses. While I could lose additional money from doing this in the future, financing my education is a cost that I would chose the make. This would enable me to have a total of $103,960 in order to finance my educational costs which would enable me to ensure all costs are fully

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