Senator
Thinks s/he gets paid by the post
I am beginning to see a small need for bonds. Not because I think need them, but because everyone says I need some. My Fidelity rep, my co-workers, etc. When everyone thinks you are crazy but you, you must be crazy…
I do not need bonds for income. My rentals provide ~4X what I need for income. Well over $150K per year. I am 56 now. I have a ~$1,260 monthly pension at 65, SS of $3,000+ at 70. VA Disability of $133 a month which includes free healthcare.
I do not need bonds for a reallocation strategy so I can avoid selling for income. My dividends are right at $2,000 per month currently, all reinvested. If I had to, I could take that $2K, plus my pension at 56, and live on it (no new truck or travel).
My Equities, compared to my total NW, are ~35%. Rental equity is ~60%. Cash 5%. I have paid off many rental properties and put large down payments on them, with interest rates of over 5%. Buying bonds would only make equities a smaller percentage of my total NW. My Equities are all mostly index ETFs. IVV, IVW, DVY, QQQ, IWM, etc.
At ~62, I plan on selling some real estate and putting that money in some sort of bond fund.
If I bought bonds, it would likely be a Minnesota Bond fund, like SMTFX, that gives ~2.4% tax free. My tax rate would be 25%. That is a better return than my S&P or DVY. Just no growth.
Why do I need bonds?
I do not need bonds for income. My rentals provide ~4X what I need for income. Well over $150K per year. I am 56 now. I have a ~$1,260 monthly pension at 65, SS of $3,000+ at 70. VA Disability of $133 a month which includes free healthcare.
I do not need bonds for a reallocation strategy so I can avoid selling for income. My dividends are right at $2,000 per month currently, all reinvested. If I had to, I could take that $2K, plus my pension at 56, and live on it (no new truck or travel).
My Equities, compared to my total NW, are ~35%. Rental equity is ~60%. Cash 5%. I have paid off many rental properties and put large down payments on them, with interest rates of over 5%. Buying bonds would only make equities a smaller percentage of my total NW. My Equities are all mostly index ETFs. IVV, IVW, DVY, QQQ, IWM, etc.
At ~62, I plan on selling some real estate and putting that money in some sort of bond fund.
If I bought bonds, it would likely be a Minnesota Bond fund, like SMTFX, that gives ~2.4% tax free. My tax rate would be 25%. That is a better return than my S&P or DVY. Just no growth.
Why do I need bonds?