Expert: Paul Henneman - 6/13/2004

Question
What are t-bills, is there a  minimum requirement, and how do I buy them and make money from them?  thanks.

Answer
Jeffrey,
 Thank you for your question! My main area of knowledge is with stocks, but perhaps I can provide some basic information to get you started. Treasury Bills are essentially "negotiable debt obligations of the U.S. government securied by its full faith and credit and issued at various schedules and maturities. The income from Treasury securities is exempt from state and local, but not federal, taxes". I took this definition from 'Barrons Dictionary of Finance and Investment Terms', a great resource available at Amazon.com or most major bookstores if you are interested. Therefore a t-bill is essentially a loan by you to the goverment. You give the government a sum of money, and they promise to pay it back with interest in a specified amount of time. T-bills are generally considered absolutely safe investments as they are backed by the government, although the interest rate you will earn on your investment will be fairly small.  T-bills are short term. Treasury notes are intermediate term with maturities of 1 to 10 years, and Treasury bonds are long term with maturities of 10 years or longer.
I hope this helps! Please do not hesitate to follow up with me if I can be of any additional service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com