Hey venture capital investors, are you looking to get rich quick on mobile apps? Are you thinking about backing the latest mobile app that teaches you a foreign language while you cook the corresponding cuisine? How about a mobile app that makes mobile apps? Want to throw $1 million behind an app that lets you know where Cool Ranch Doritos wrappers are at all times, even if the wrappers are in trash cans?!
If you’ve got an itching impulse to invest that cool million right away…don’t. Instead, take a minute and buy a cash management bill.
A cash management bill is a short-term security that matures between several days and three months. They're sold by the U.S. Treasury Department to cover short-term cash needs and reserve funding while the government waits for tax revenue to come in.
They’re sold in $1 million increments.
That’s huge for you, fearless VC investor. Because if you own one of these, you’ll have just enough time to rethink the terrible investment that would have been an app designed to tell color blind people what color signs are on the road…but you have to look at your phone to read the color while operating the car. See? There are some bad ideas out there.
Related or Semi-related Video
Finance: What are Government Bonds?52 Views
finance a la shmoop. what are government bonds?
now we're gonna narrow this question a bit and declare these bonds to be US [hands shape the question]
government bonds. our answer would be a tad different if we were discussing
bonds backed by North Korea Nigeria or Egypt so US government bonds come in a
few flavours. generally speaking they range in duration that is how long it
takes for them to mature and the principal get paid off. short-term US
government paper it's a fancy term for a bond ,refers to things that come due in a
year or less. that's short-term. year or less. and then there are Treasury bills
which come in a variety of durations and our price like this note how different
these look versus just you know buying a bond .but when you buy a bond it has a [chart shows prices]
face amount of say a thousand bucks for what is called its par value. that piece
of paper might agree that clown shoes incorporated which is where most
congressmen get their Footwear of course, will pay 30 bucks twice a year to the
holder for 10 years, and then pay back the original thousand bucks invested
it's like a normal vanilla bond, the interest rate here in this case is 6%
per year, but many US government notes are sold at auction which means they
sell at a discount to their par value. well regardless of how they're sold US [auction with a clown in attendance]
government bonds are backed by what is generally perceived in the world as the
most certain or secure financial backing. even more powerful than Google .if sorry
Larry and Sergey we're just keeping it real. the bonds are backed specifically
by the US government's right to tax its citizens. and oh they tax us. do they ever.
so now you can stop wondering about that bottomless hole a third or more of every
paycheck vanishes into. [portion of paycheck flies down dark hole in the ground]
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