In this post I’d like to do the following:
* Explain how to read a bond offering table
* Discuss the differences between a regular municipal bond and a zero coupon municipal bond
* Highlight who should consider buying zero coupon municipal bonds
I’m currently laser focused on building a significant municipal bond portfolio over the next three to four years due to higher interest rates, potentially higher taxes for middle income earners, and a world where there may be more geopolitical uncertainty. Further, I feel it’s a good idea to protect the ~200% equity gain since the bottom fell out in February 2009.
I’ve spent a lot of time figuring out how to slice my income below a 33% marginal federal tax bracket (<$112,500 for individuals, <$225,000 for married couples under the proposed Trump tax plan) and I just can’t make it work without killing a lot of golden geese. Therefore, whether my marginal federal tax bracket is 33% or goodness forbid, 39.6%, the percentage is too high for my liking, especially when you add on 10.3% – 11.3% California state tax and another 7.65% – 15.3% FICA tax.
For those of you who also feel your income taxes are too high and don’t need additional income, this post should be of particular interest to you.