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Return To Bonds Article Archive   Easy Tax-Free Income By Paul D. McDonald, MBA by Paul D. McDonald, MBA Municipal Bonds are bonds issued by cities, counties, and states. Currently, the federal government has declared that 'dividend income' -- money paid to the owners of the bonds -- is free from federal income taxes. Municipal Bond Funds are professionally managed collections of money that invest in these bonds. Therefore, the income from these mutual funds are also tax-free. Consider this idea: place a portion of your money into municipal bonds to provide immediate tax-free income, and place the remainder into other investments that might provide a higher return. Any gains that come from your more aggressive investments can then be used to 'feed' your secure municipal bond funds. Congratulations! You have now achieved a growing base of secure, tax-free income and still have the ability to participate in any long-term market gains. Plus, because you have your secure income, you dont have to worry about the stock market fluctuating. Mutual funds will fluctuate in value and the amount received when sold may be more or less than the original investment. Before investing in any mutual fund, please read the prospectus carefully regarding fees and expenses. About the Author: Paul D. McDonald, MBA is a financial professional specializing in working with seniors and business owners. He assists people in making decisions on retirement planning, investing, insurance, budgeting, debt management, and many other critical financial decisions. Paul welcomes calls on the subject at the toll-free number 1-877-711-1264 or you can visit his website at http://seniorfinances.blogspot.com/. Buy Savings Bonds

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