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Municipal Bonds

Municipal Bonds. By: Manasseh Santos Period 7 Money Management. What is a Municipal Bond?. A Municipal Bond is a bond issued by your local government or their agencies. Limitations o f Munis.

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Municipal Bonds

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  1. Municipal Bonds By: Manasseh Santos Period 7 Money Management

  2. What is a Municipal Bond? A Municipal Bond is a bond issued by your local government or their agencies.

  3. Limitations of Munis • Municipal Bonds are often exempt from federal income tax and may be exempt from state income tax, However depending on the purpose may not be exempt from taxes. • You are not able to use the money as it is truly an investment. • You cannot claim your money until a specific date.

  4. Who Would Use This Fund??? • Out of the different type of investors out there, I believe there is a wide range of people who would would use a purchase and use a municipal bond. • The reason being is that there are great benefits from Investing in a Municipal bond. • The greatest benefit is lending your money for a certain period of time and getting your money back plus interest.

  5. How Do You Make Money With MB?? • Simple Interest Equation • Interest= Principal x Rate x Time • Example I= (20,000)(.08)(1) I= $1600 As you can see if a person were to lend their local government $20,000 so that they can build a new school, the person lending the money would make 8% interest on the $20,000 that he lent and would receive the money in one year.

  6. Economic Climate • Due to Municipal Bonds being a debt obligation issued by states, cities, counties, and other government entities, there is no actual economic climate that this type of account works best in. • Another reason is because the state or federal government promises to pay you back a specified amount of interest, so no matter what the economy is like you the lender will receive your money back.

  7. Where Can You Purchase Munis? • You can purchase Municipal Bonds or Munis as they are referred to at a Municipal Bond Bank or banks like Bank of America. • However, due to technology now days it is more convenient for people to purchase municipal bonds online.

  8. How Much Money Do you need? • Depending on the purpose of the Municipal Bond the cost of a municipal bond can vary within a wide range.

  9. Is There Any Risks??? • There aren’t a lot of risks for Municipal Bonds due to the fact that you are lending money to your local, state, or federal government in which they promise to pay you back on a certain date. • If there is one risk it would be lending a certain amount of money in which might take away from your living expenses.

  10. Examples of MB Investment Returns

  11. 3 Sources • http://en.wikipedia.org/wiki/Municipal_bond • http://www.investinginbonds.com/learnmore.asp?catid=8&subcatid=53 • http://chartingtheeconomy.com/chart

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