Originally Posted by Earl E Retyre
How many years out do you need to commit to in order to get 4.5% return on an A rated munibond? Are you sure that this is protecting from inflation 10, 20 ... years from now?
My bond portfolio of 500K, I own about 85 AA rated insured muni bonds, each bond worth $5,000 and I do not own more than 3 bonds with any municipality. I am 47 years old and I build a bond LADDER
portfolio with maturity dates from 2017 to 2024. I get close to $23,000 per year in interest and I use the money to buy more bonds. My portfolio grows about 4.5% annually and will always be ahead of inflation. It took me almost 2 years to buy 85 AA rated insured muni bonds because the 4.5% don't come on the secondary market offten.
Note: My bond portfolio is only about 15% of my net worth, it's a very safe bet against inflation and very liquid if needed.