OPINION

JUST PLAIN TALK: Additions and amendments to earlier columns

Buz Livingston
Buz Livingston

When Steve Goodman and John Prine wrote "You Never Even Called Me by My Name," they added lyrics to the finished product, sort of what I'm doing today. A loser covered it, but we won't call his name.

I-bonds

Earlier this year I recommended I-bonds. As a reminder, I-bonds track the Consumer Price Index for Urban Consumers (CPI-U) and pay over 3.5% through October. While the yield is sweet, their inflation-tracking component makes I-bonds ideal for an emergency fund. A wise man once told me that all you want from an emergency fund is maintaining purchasing power and not losing value. An I-bond is as low-risk as you can get.

A reader correctly pointed out paper bonds are difficult to redeem. Banks used to be the go-to place to cash them in, but times have changed. Credit unions, which cater to government employees, civilian and military, are a better choice if you need to redeem a paper bond. Even better, beginning in 2012, the Treasury Department ended direct purchases of paper bonds, both Series EE and I. Now, Treasury Direct only allows electronic purchases. Cashing in an I-bond online is easy as buying something on Amazon. Paper bonds are still issued as an option for tax refunds. Paper bonds, regardless of their age, can be converted to digital bonds.

Ben Graham, who taught Warren Buffett at Columbia, argued investors should look for a "margin of safety" when evaluating stocks. Your portfolio, too, ought to have a margin of safety; I-bonds help.

Hurricane Planning

Floridians like to fancy themselves as fearless warriors staring down a hurricane. But, in reality, government subsidies help ... a lot. Let me count the ways.

In 2012, I saw a lakefront lot with a Gary Johnson for President sign. Libertarians like Johnson believe in small government. If it weren't for the National Flood Insurance Program (NFIP), the homeowner would have zip for flood insurance. Let me rephrase affordable flood insurance. In 2020, NFIP had a projected $1.4 billion shortfall because premiums aren't sufficient to cover costs.

Hurricane forecasting is remarkably better now with little, if any, help from private businesses. There's no economic incentive to gather the data necessary for tracking storms and hurricanes. My go-to guy is "Mike's Weather Page," but everything he has comes from a government agency.

After the storm, people complain if FEMA doesn't get there fast enough. But FEMA is an acronym for Federal Emergency Management Agency. Not only does FEMA help people directly affected by a hurricane, but the agency also funds debris removal. For example, clean-up costs for hard-hit Baldwin County, Alabama, were over $65 million. FEMA covers 75% of clean-up costs. Without FEMA's assistance, property owners would be on the hook.

Florida gets more federal revenue than we pay in federal taxes. Washington's generosity allows us to have no income tax and low property taxes, full stop.

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.