Village community development bonds

[daca55]

A friend of mine noticed in the newspaper an ad for District 12 Village Community Municipal Bonds, These were municipal bonds and they were all sold out. There was no information in the ad as to where to buy the bonds for District 12. Does anyone know about how one can participate in obtaining these municipal bonds if they do it again for District 13? Looking for good municipal bonds to invest in for tax benefit. All info much appreciated.

Bob

[champion6]

I vaguely remember seeing an ad in the Daily Sun prior to the offer date of the bonds. I think it was placed by the firm handling the sale of the bonds and included contact info.

So stayed tuned for further developments.

I can't remember reading that District 13 has been created. Have you seen an announcement that is has?

[daca55]

I vaguely remember seeing an ad in the Daily Sun prior to the offer date of the bonds. I think it was placed by the firm handling the sale of the bonds and included contact info.

So stayed tuned for further developments.

I can't remember reading that District 13 has been created. Have you seen an announcement that is has?

Haven't seen anything yet but I am keeping my eyes open. Thanks for your input.

[thetruth]

There has been some question as to whether these bonds are tax free.
Second hand story from a friend. He had bought some of a previous issue AND THEY WERE CALLED.
Do they represent good value? I do not know.

[thetruth]

Haven't seen anything yet but I am keeping my eyes open. Thanks for your input.

I would call a broker-hopefully you have an account.

Far as I know, OR THINK I KNOW, they would be a new issue so there is no commission on them. NOT REALLY TRUE-the commission is already in the issuing price of the bond.

Heck, you might ask at the Villages Community Bank. They have people who gently try to sell investments. They are owned by the Villages. If, nothing else, I would expect they have someone who can direct you.

[jojo]

I purchased them from FMS bonds.

[daca55]

I would call a broker-hopefully you have an account.

Far as I know, OR THINK I KNOW, they would be a new issue so there is no commission on them. NOT REALLY TRUE-the commission is already in the issuing price of the bond.

Heck, you might ask at the Villages Community Bank. They have people who gently try to sell investments. They are owned by the Villages. If, nothing else, I would expect they have someone who can direct you.

Thanks for the info. I am curious about these bonds and will check with the Community Bank.

[daca55]

I purchased them from FMS bonds.

Not familiar with FMS bonds could you provide a little info about them? Thanks

[thetruth]

I've never heard of them either BUT, as I posted previously. If, they are a new issue the commission is already in the offer price. They will be the same price anywhere. Based on previous experience. Bonds today are,:book entry," translation, computer dots and dashes. You need a broker to hold them.
If, you open an account with a NEW FIRM they can and likely will charge you extra fees. THAT WOULD OF COURSE REDUCE YOUR TRUE NET RETURN.

[manaboutown]

Not familiar with FMS bonds could you provide a little info about them? Thanks

https://www.fmsbonds.com/about-us/

[jojo]

My contact for FMS bonds is Edie Nasello, Sr. Vice President 800-741-1103. She works directly with The Villages.

[champion6]

Unless you are interested in the novelty of owning bonds associated with our CDDs, why not consider these Vanguard offerings - no load & low cost:
Vanguard Bond Mutual Funds (https://investor.vanguard.com/mutual-funds/list#/select-funds/asset-class/month-end-returns)
Vanguard Bond ETFs (https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns)

[jojo]

Unless you are interested in the novelty of owning bonds associated with our CDDs, why not consider these Vanguard offerings - no load & low cost:
Vanguard Bond Mutual Funds (https://investor.vanguard.com/mutual-funds/list#/select-funds/asset-class/month-end-returns)
Vanguard Bond ETFs (https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns)

Champion6, I own four different Vanguard bond funds and none of them in recent times are paying what these bonds are paying. I like having some fixed rates in my portfolio. That said, it is challenging to discern what the expense rates are and I'm sure it's greater than Vanguard. Overall, Vanguard cannot be beat for low expense rates.

[dave042]

Unless you are interested in the novelty of owning bonds associated with our CDDs, why not consider these Vanguard offerings - no load & low cost:
Vanguard Bond Mutual Funds (https://investor.vanguard.com/mutual-funds/list#/select-funds/asset-class/month-end-returns)
Vanguard Bond ETFs (https://investor.vanguard.com/etf/list#/etf/asset-class/month-end-returns)

the stock market is where you make money. bonds don't offer you any protection from default. if too scared to pick individual stocks, go with an S&P or NASDAQ index fund. the fees on them are minimal. whatever you do, don't buy mutual funds. their fees are crazy high.

[thetruth]

I'm no expert BUT, for me a large part of knowledge is knowing what you don't know. I AM NOT ADVISING-JUST TRYING TO HAVE YOU AWARE.

BONDS-you can buy individual bonds or a bond fund. Some will wonder how a bond fund pays a higher rate than you can get with individual bonds. READ-you will find that a bond fund-all the ones I am aware of- are leveraged. TRANSLATION=they borrow against bonds they already hold to buy more bonds. IN MY MIND, that is buying on margin.
There is interest involved AND AN INCREASED RISK..
The interest paid by a bond, unless they are tax free bonds, is taxed at the highest income tax rate you pay. If, I recall the max rate is around 46%. Stock dividends have a highest rate of 15%
My brother-in-law, who is no dope, just bought 30 year bonds. It is no secret that THE FED will be increasing interest rates. My brother in law told me-PLEASE DON'T LAUGH-HE IS NOT A DOPE-he planes on holding bonds to maturity. HE WILL BE 71+30=101 WHEN THEY MATURE-OH AND THEY ARE ZERO COUPON BONDS-NO INTEREST PAID FOR 30 YEARS.

STOP-before you buy anything ask yourself WHY and understand other options AND WHY YOU ARE MAKING THE CHOICE TO BUY WHATEVER IT IS.

Since, we KNOW, we will not live forever. Far as stocks, bonds, real estate, it pases ti your heirs at the value at the time of your death.

ROTH IRA-You pay the tax on your IRA now but not as you spend the money-SOUNDS GREAT. Except if you are foreced to do a minimum withdrawal from a regular IRA, you pay tax only on what you HAVE TO withdraw. After you pass away, any balance goes to your HEIRS. You can set up an inherited IRA for them and they too will HAVE TO do a minimum withdrawal. They can elect to take more but not less than the minimum. I have one from my parents.
Thanks to the high rate of return from the stock market.After the FORCED withdrawals and the high market returns, it is actually more than they orignally left to me.
Sadly, they did not have much so it is not much BUT, IT IS A GIFT THAT KEEPS ON GIVING. .

[thetruth]

the stock market is where you make money. bonds don't offer you any protection from default. if too scared to pick individual stocks, go with an S&P or NASDAQ index fund. the fees on them are minimal. whatever you do, don't buy mutual funds. their fees are crazy high.

There are books on everyone of the things you mention.

Bonds don't offer any protection from default. If, you think it is worth what you will pay for it by reduced yield, you can purchase insured bonds.
Stocks? The term default, is not the proper ones BUT, KODAK-comes to mind. ENRON-comes to mind. BP was destroyed. GE has???

RE: MUTUAL FUNDS
I assume you are comparing them with ETFs. Each time you buy shares in an ETF you pay a COMMISSION. Commissions have dropped in recent years-IT HAS NOT ALWAYS BEEN $5.00. EVEN THE MANAGEMENT FEES-some companies with 401Ks etc get lower management fees on the same funds that others buy and pay full fees-diff is about 1/3 less. Vanguard with probably amung the lowest fees in the industry offers ADMIRALTY shares. With a balance of ?????? 50,000 in the funds I know about, the fees for the same fund drop by 1/3.

[784caroline]

I have owned these bonds since 2008 and they fit for me a good part of my tax free portfolio. The bonds that were being questioned by the IRS were the Recreation Bonds issued by the Villages but that objection has been dropped a few years back.

The Community Development Bonds are NOT the Recreation Bonds. These are the bonds that are attached to each and every new house in The Villages that pay for the infrastructure supporting that particular VCCD District. They are not insured BUT you and I live here and you certainly dont see many foreclosures on homes never mind people not paying their bonds. In fact many people pay these bonds back early. You are guaranteed the first 5 years of interest payments which are made twice a year. After the first 5 years depending upon how many of the bonds have been prepaid by the homeowners in that District, the VCCD can randomly call via a lottery system which particular bond (in $5K increments) to call in early at par. SO if you paid 100 for the bond you would get 100 back...if you paid 95 for the bond you would get 100 back. It is very likely the vast majority of these bonds will be called in 10 years from issue date...ie never reach maturity ..you in essence are getting long term rates with a good chance it will be a short term play ie less than 10 years.

I have tried to buy these bonds either as new issue or on the after market from 3 different brokers...they could not get them. Note these bonds will fluctuate in price but you will not lose any money (unless you sell below par) but you will still get your semi annual dividend payment Federal TAX FREE. If you bought the bonds at par(100) or less you will at least get your money back when or if the bonds are ever called early or even at the 10 year mark.

These Bonds can be bought through FMS BONDS in Boca Raton Contact Edie Nasello at 1-800-741-1103. They get a good majority of these after market bonds via estate settlements.

BTW...with bond funds (Vanguard/Fidelity etc) you can lose money if interest rates rise because you have no specific maturity date upon which the individual bonds can be redeemed.

Any questions on these bonds send me a PM.

[daca55]

Great post! Very informative concerning my original post. I PM you.