68: Municipal Bonds, How Insiders Scale Their Tax Free Income
Invest Like a Boss
Sam Marks Johnny FD Derek Spartz
4.8 • 518 Ratings
🗓️ 24 August 2017
⏱️ 62 minutes
🧾️ Download transcript
Summary
Michael Foster, the ‘CEF Professor’ from Contrarian Outlook, joins us for another episode to explain how to use municipal bonds to scale your tax-free income.
During this episode, you'll find out how to buy municipal bonds, determine if you should buy an individual muni bond, and understand the risk levels of the entire process. You'll learn how a municipal CEF operates, what tools to use, and how interest rates impact closed end funds. Listen to the end to hear Michael's top three muni funds and what Sam and Johnny Invest into themselves.
Links:
Contrarianoutlook.com
The CEF Newsletter
Where are we:
Sam/Michael - Bangkok
Johnny - Ukraine
Recommended:
Link to the newsletter: CEF Insider
2 Recent Articles on Municipal Bonds:
The Shockingly Common Mistake That’s Costing You Thousands
These 6%+ Yielders Are a Screaming Bargain
The muni funds recommendations discussed:
Neuberger Berman New York Intermediate Municipal Fund (NBO)
Nuveen New Jersey Quality Municipal Income Fund (NXJ)
Pioneer Municipal High Income Trust (MHI)
Discussed:
ILAB 63 – Talking CEFs for 9.9%+ Yield with ‘CEF Professor’ Michael Foster
Books:
Start Here – Recommended Reading
Time Stamps:
06:09 - Are muni bonds boring?
07:27 - Why others invest in muni bonds?
09:01 - Tax considerations
10:02 - Three ways to buy municipal bonds
10:40 - Should you buy an individual muni bond?
13:00 - How does a municipal CEF operate?
15:25 - Average cap size
17:10 - Close end funds and rising interest rates
23:03 - Market trends and sell off
25:15 - Tools, software, and historical returns
26:59 - What is the risk level?
27:06 - Default rates
29:29 - California, New Jersey, Illinois
34:46 - Should you worry about fees?
38:55 - Recommended muni funds
48:42 - Investing in muni bonds
57:36 - Wealthfront investments
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Copyright 2017. All rights reserved. Read our disclaimer here.
Transcript
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| 0:00.0 | Big, big thanks to FreshBooks, the super easy to use cloud accounting software. |
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| 0:09.7 | freshbooks.com slash invest and enter Invest Like a Boss in the How Did You Hear About Us section? |
| 0:15.5 | Welcome to the Invest Like a Boss podcast. I'm Sam Martz and I'm Johnny FD. We're self-made |
| 0:20.2 | entrepreneurs who invest our own money and use modern technology to invest like a boss. Join I'm Sam Marks and I'm Johnny FD. We're self-made entrepreneurs who invest our own money |
| 0:21.6 | and use modern technology to invest like a boss. Join us each week for exclusive interviews with our |
| 0:26.1 | network of modern investors, business owners, and multimillionaires to discover new ways to invest our |
| 0:30.7 | hard-earned cash. Hey guys, it's Johnny and welcome to episode 68 of the Vest Like a Boss podcast. Here's San |
| 0:38.2 | Marks. |
| 0:39.2 | Johnny, we are going to try to take a very boring subject, municipal bonds, dress it up, |
| 0:45.1 | and make it as interesting as possible. |
| 0:47.2 | Muni bonds. Come on, buddy. |
| 0:50.7 | Munis. Yeah, we're not 68 years old. |
| 0:54.2 | I know, I know, but there's something that is so attractive to them to me. |
| 0:57.8 | And I think it's because I keep hearing all these really successful people talking about municipal bonds and, hey, sometimes boring as sexy when it comes to making money. |
| 1:08.0 | Yeah, you know what? |
| 1:08.6 | You're right. |
| 1:09.0 | And if I can get a guaranteed, you know, 5% and live off of that, instead of doing like a standard |
| 1:15.3 | drawdown of, let's say, you know, I have half a million dollars, I can draw down 4% a year |
| 1:22.4 | and have that theoretically last me for the next 30 years. |
| 1:26.1 | If I can just make a guaranteed 5%, that means I never have to draw down at all. |
| 1:31.5 | Yeah, exactly. |
... |
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