In this episode of Invest in Minutes, Amelia Starling explores the world of municipal bonds and how they can benefit your investment strategy. Learn about their tax advantages and diversification benefits, plus practical tips. Time is your greatest asset, so invest in minutes!

BOOK RECOMMENDATION

Today's recommended reading is Investing in Municipal Bonds by Phillip Fisher. You can view the book on Amazon here. I personally recommend this book, and this is not sponsored. But I must disclose that this is an Amazon affiliate link. This means I earn a small commission if you use this link (here⁠) to buy the book. Thank you.

TRANSCRIPT

Hi. I'm Emmy Starling, and this is Invest in Minutes: financial advice for people on the fly. Today, we're talking about municipal bonds and why they belong in your portfolio. Bonds are the way businesses and governments borrow money. Basically, you are loaning them your money, and they promise to pay it back, with interest. Munis are bonds issued by state and local governments to finance public projects. They have several advantages. First, they are usually exempt from federal and state taxes. This makes them a perfect source of passive income that is not consumed by taxes and can be reinvested over and over again. Second they tend to be relatively low risk. Still, there are no guarantees. Third, they have relatively high yields, at least compared to treasury bonds. Think of them as being in between treasury bonds and corporate bonds in terms of both risk and yield. Finally, municipal bonds can be a great way to diversify your portfolio. Again, by filling the gap between treasury bonds and corporate bonds, munis make a great addition. Here are a couple of practical tips: One: Do some research on the municipality or state issuing the bonds. The Great Recession is a reminder that cities really can go bankrupt. Two: Consider investing in a diverse portfolio of municipal bonds to avoid having all your risk concentrated on one municipality or state. My book recommendation for today is Investing in Municipal Bonds by Phillip Fisher. I'll put a link down in the show notes. And remember, your time is your most valuable asset, so why not invest in your minutes?