Florida Municipal Bond - How can I make money using Florida muni bond funds?
In Florida, where the sunshine can often warp the mind into thinking that life is always bright and shiny, it does the investor good to
keep some money in a secure market. The Florida Municipal Bond is a long-ranging bond that can be purchased on-line or
at a financial institution. It is sold to the public to assist in funding for the state of Florida. It is issued to investors and serve as loans
made to the local government, so that the government can complete a particular project. For example, the state may need funding for a storm sewer
project, housing, construction or to repair the roads.
The Florida Municipal Bonds, like other Munis, are tax exempt from federal income tax, and most often local tax agencies as well. As
investments in projects that will benefit the people of Florida, these bonds help investors contribute to their local community without taking
out the checkbook.
The FL municipal bond has a maturity as low as nine months and as high as forty years, making them popular among investors simply
for their flexibility. Investors also like FL muni bonds because they can be sold easily, even before the maturity has been reached, and
they also easy to buy over-the-counter, through banks and credit unions. They are sold in $5,000 increments.
There are two kinds of Florida Municipal Bonds. Below is a short description of each:
" General obligation issue: These are more secure than the specific issues, as they are backed by state and federal aid. These bonds have
a less formal route use, as general funding for the local community where it was issued
" Specific Revenue Obligation issue: These bonds are less secure than general obligation issues. In general, specific revenue issues are
sold to fund local construction or utilities projects, and as such they rely on the success of the project for repayment, although they are
still backed by insurance, so they are re-paid regardless.
The only disadvantage to the Florida muni is the relative insecurity, since investors never know for sure if a bond may be called
early. But as investors deal with risk everyday, they often realize the chances before buying; it can be worth the risk to buy a Florida
Municipal Bond simply to help their community.