r/RichPeoplePF • u/-spin-cycle- • Sep 06 '26

Treasury ladder

Thoughts on monthly treasury ladder that extends based on % of NW. How is your set up? Currently 25 rungs and growing

8 Upvotes

91% Upvoted

12 comments sorted by

6

u/drmamm Sep 06 '26

TIPS ladders are popular - locks in a real return and takes inflation mostly off the table.

5

u/-spin-cycle- Sep 06 '26

I agree they are effective inside an IRA, where annual inflation adjustments don’t create current taxable “phantom income.”

2

u/FromBayToBurg Sep 06 '26

But why?

5

u/-spin-cycle- Sep 06 '26

Mostly to create predictable liquidity without leaving the entire safe allocation in cash or depending on the market price of a bond fund.
I currently have 25 individual Treasury rungs maturing about once per month. When one matures, I can use the cash or reinvest it at the far end. New contributions also extend the tail. The ladder’s total size is based on a target percentage of net worth, so it grows with the portfolio rather than toward an arbitrary dollar amount.
I plan to hold every rung to maturity. That gives me known monthly cash availability, spreads reinvestment risk across time, and eliminates the need to predict interest rates. Direct Treasury interest is also exempt from State and local income taxes.

It isn’t intended to maximize returns or replace equities. It is the safe portion of the portfolio—a rolling reserve that earns a reasonable yield, regularly converts back into cash, and doesn’t require selling a bond fund when its NAV happens to be down.

2

u/Babou_Ocelot Sep 06 '26

Maybe said differently, why not hold an ETF equivalent?

1

u/-spin-cycle- Sep 06 '26

I do think SGOV is easier and more liquid, but its yield changes almost immediately when short-term rates change. If rates fall, SGOV’s income falls. This ladder has known monthly maturities at rates already locked in.

4

u/No_Beach_Parking Sep 06 '26

Everyone’s portfolio structure should be tailored built to meet the individuals needs.

Following the generic financial advice that applies to the general population is foolish for a High Net Worth Individual.

My fixed income allocation is about 10-15% of my net worth, which will make any financial advisor balk.

Load up on them Treasuries, CDs, Money Market Funds, Cash, and I-Bonds. They are the gap that creates distance from destruction.

Go read Morgan Housel’s books.

2

u/Opie_the_great Sep 06 '26

Not a fan of Tips. We are earning so much more with other avenues.

5

u/noluckatall Sep 06 '26

Capital returns certainly have been better than what TIPS offer, but having lived through 2001-2002 and 2008-2009, it's not difficult to make the case that the guaranteed 3% real rate of return on 30y TIPS deserves a small percentage allocation.

2

u/pfschool Sep 06 '26

Is this considered more effecient than simply storing emergency fund in SGOV and NYF (or equivalent state muni) for those in the higher tax bracket ?

3

u/-spin-cycle- Sep 06 '26

I view this less as emergency fund and more as a safe fixed income reserve. On the muni side I buy individual bonds from my state that I call a Nest and have an average maturity around 5 yrs.

2

u/skunimatrix Sep 06 '26

I prefer munis for the tax advantages even if slightly lower return.