Investing all money in high yield income fund?

[Dan44]

TMF advises to invest sitting cash into a high yield income fund that earns no less than 5% it mentions T. Rowe Price in the book which is currently giving a 5.11% tax free return as seen here http://www3.troweprice.com/fb2/fbkweb/snapshot.do?ticker=PRFHX

Is anyone else doing this? Just curious.

 

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[jon.a]

Nope, I'm still working on accumulating enough wealth to make it worth while.

 

[theag]

[HASHTAG]#landfill[/HASHTAG]

 

[Ubermensch]

TMF advises to invest sitting cash into a high yield income fund that earns no less than 5% it mentions T. Rowe Price in the book which is currently giving a 5.11% tax free return as seen here http://www3.troweprice.com/fb2/fbkweb/snapshot.do?ticker=PRFHX

Is anyone else doing this? Just curious.

LOL.

"Sitting cash."

What's that?

$40,000 to $100,000. $100,000 another $100,000. $300,000, $500,000. $1,000,000... as the song goes.

My cash doesn't "sit."

It's up all night working while I sleep.

And I'm constantly flipping it to lay the foundation for the empire.

What do you do with a brick of cash?

Lay it down next the other brick you just laid.

That's the only way to build a wall.

One brick at a time.

 

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[Dan44]

I am talking about folks who are not reinvesting their profits but saving it. This came from the TMF book and I'm curious how many people are doing it.

 

[jon.a]

[HASHTAG]#landfill[/HASHTAG]

Okay, maybe now.

 

[biophase]

LOL.

"Sitting cash."

What's that?

$40,000 to $100,000. $100,000 another $100,000. $300,000, $500,000. $1,000,000... as the song goes.

My cash doesn't "sit."

It's up all night working while I sleep.

And I'm constantly flipping it to lay the foundation for the empire.

What do you do with a brick of cash?

Lay it down next the other brick you just laid.

That's the only way to build a wall.

One brick at a time.

This is fine until the wall gets knocked over and you have to start from scratch again. Don't put everything on the wall.

 

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[ZCP]

We are about to start and were looking for tax free muni's / etc. Thanks for the link!

While we could probably leverage the money better in our businesses, want to teach my boys to 'pay yourself first' and diversify 'some' of your earnings.

 

[biophase]

We are about to start and were looking for tax free muni's / etc. Thanks for the link!

While we could probably leverage the money better in our businesses, want to teach my boys to 'pay yourself first' and diversify 'some' of your earnings.

I have stock in FMN. 6%-7% tax free yield. Have been dollar cost averaging in it for over 10 years. Just something to look at.

 

[Dwight Schrute]

Here's MJ's explanation on that topic

I wouldn't put all my eggs in one basket...

 

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[MJ DeMarco]

TMF advises

No where in TMF do I advise investing ALL your money in a high yield income fund. A high yield income fund is just one of many options to deploy cash into an income producing return. Those investments alternatives change with the markets and the economy. Such an investment might have been good 5 years ago when I wrote TMF, it might not be now. Diligence doesn't take break. Things change and so do the best options for parking money.

 

[Kak]

Not so fun on a day like today when I lost all of my gains for the last 6 months... But overall it works for me.

My growth fund is extremely diversified.

 

[Shredder83]

Not so fun on a day like today when I lost all of my gains for the last 6 months... But overall it works for me.

My growth fund is extremely diversified.

Markets are so choppy these days that I'm staying totally away! Short term cash only right now. Munis, if you look at the underlying assets... there hardly are any! Gov on all levels is awash in debt and 5% yield ain't cutting it for me. There is a reason why Greek bonds are in the teens %-wise.
Personally, I pefer 20% cash on cash return from a simple rental property.

 

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[zr1]

I diversify across multiple tax free munis above 5% and a managed portfolio of dividend stocks. Always have cash on hand to balance your emotions during market swings.

I can retire now since I reached my fastlane goal, but the process of creating and building systematized businesses that runs on their own is addictive and can't see myself doing anything else until I die. That in itself is the best reward. Being an entrepreneur for life allows you to print money and enjoy freedom instead of working for it and becoming its slave.

I enjoy living off of the business income only still and never touching the money tree. I would rather continually create passive businesses than touch or live off the money tree because I really enjoy reinvesting and watching my investments grow. The money tree is just my insurance in case for some reason I can't work anymore.


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[MJ DeMarco]

I diversify across multiple tax free munis above 5% and a managed portfolio of dividend stocks.

+1 ... this is pretty much the aim of the money system I describe in TMF... when you part with (invest) your money, always expect a cash return, either monthly or quarterly. I'm not in the game for price appreciation or capital gains. If I lend out cash, I expect a return. If I invest in your business, I expect a dividend.

Today is a good reminder on why the stock market is not how you should be building your wealth empire.

 

[MKHB]

+1 ... this is pretty much the aim of the money system I describe in TMF... when you part with (invest) your money, always expect a cash return, either monthly or quarterly. I'm not in the game for price appreciation or capital gains. If I lend out cash, I expect a return. If I invest in your business, I expect a dividend.

Today is a good reminder on why the stock market is not how you should be building your wealth empire.

Just when you thought TMF principles couldn't get any more relevant....bam!
Stock gamblers...err investors, if you think this is a buying opportunity you obviously haven't been around for long.
Trees do not grow to the sky.

 

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[MattCour]

I have stock in FMN. 6%-7% tax free yield. Have been dollar cost averaging in it for over 10 years. Just something to look at.

You just reinvest the dividend every month or do you spend any of the income ?

Has the yield changed much over 10 years? I'm a little nervous about fluctuations in the yield of muni ETFs.

 

[TonyStark]

Great discussion. Bump.

 

[MJ DeMarco]

I diversify across multiple tax free munis above 5% and a managed portfolio of dividend stocks. Always have cash on hand to balance your emotions during market swings.

I can retire now since I reached my fastlane goal, but the process of creating and building systematized businesses that runs on their own is addictive and can't see myself doing anything else until I die. That in itself is the best reward. Being an entrepreneur for life allows you to print money and enjoy freedom instead of working for it and becoming its slave.

I enjoy living off of the business income only still and never touching the money tree. I would rather continually create passive businesses than touch or live off the money tree because I really enjoy reinvesting and watching my investments grow. The money tree is just my insurance in case for some reason I can't work anymore.

Sounds like you have an incredible story of a Fastlane dimension, care to share?

 

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[MattCour]

This was an interesting topic, I'd be curious to see how the high yield income funds have done in such a volatile market.

I'm also curious to see how the yields on closed end muni bond funds change with interest rates . . . To Be Continued

 

[tetal]

In this low interest rate environment everyone is searching for yield. Personally, I would stay away from municipal/state debt--think Detroit.

The fund invests a substantial portion of assets in below-investment-grade municipal or "junk" bonds and may buy bonds in default as long as they do not exceed 10% of assets.

Bond Maturity Diversification2
as of 01/31/2016
% of Total Net Assets
0 - 1 YRS 3.7%
1 - 5 YRS 5.4%
5 - 10 YRS 6.0%
10 + YRS 84.8%