Hello Everyone,
So I just paid my house off and am now unconventionally financially independent. I say unconventionally (maybe this is the wrong word for this ..I don't know) because while I am able to net about $13-15k a year after all expenses and taxes, this is mainly due to me living in my basement and renting the rest of the house out. My house is nice, the basement is comfortable, I'm single, no kids, about to be 35, so I'm totally content with the situation. I have a small office building that is paid off and rented out as well, which makes up the rest of my total income thus far (I am currently not working). I also inherited another home that is fully paid off, but am letting a close elderly relative live there for free. So I have (3) paid off properties in total - My House $450k approx. value, small office approx. value $325k, and the inherited house approx. value $500k. When the inevitable happens, I will be able to rent the inherited house out as well, or sell it. I have no car payment, no student loans, etc. ..no other debts whatsoever. Along with the house, I did inherited two pieces of land that I intend to sell as well, approx. value for both lots is about $80k ..and just to complete my financial life story, I have about $300k in a retirement account that I no longer contribute to.
With that said, more to the point in question, I have an additional $355k sitting in a bank account right now, basically doing nothing. I was hot and heavy on purchasing another rental property for a while, but have since changed my mind because I really don't want to manage another property. Things are so seamless for me now and I'm enjoying the freedom so much that I kind of have this voice going off in the back of my mind, saying 'if it ain't broke, don't fix it!' every time I think about purchasing another rental property. Haha ..you know? I also have no interest in investing in the stock market at this point in time either. So ..I've convinced myself that a tax free state municipal bond fund is the way to go. I was thinking of putting $250k into one, with a tax free annual yield of 3%, which comes out to about $625 a month in return. This will help me stay in the lowest tax bracket and bump my net income up to about $20k a year. My thinking is that after doing this, I'll have about $100k left in the bank for emergency, I'm getting a nice return off of a pretty safe (???) $250k investment, and I can start investing this extra $20k annual income into riskier things like stocks throughout the years to come. My main train of thought here is that I have no family aside from one elderly person, I don't plan on having kids, so why make riskier investments to chase bigger returns that I won't be able to fully use or leave for anyone when I die? ..so I'm always thinking, 'just protect what you have, no need to chase huge returns, and when the time comes you can sell everything, buy a smaller/cheaper house, drive an old truck and live an easy/simple life until it's up'. I also have this idea that if my quality of life is currently good and I can live comfortably, why not just save some of that extra income and invest in stocks lightly, so I'll just have more to invest in stocks when the next, larger, market correction does come ..???
What are your thoughts on a state muni bond fund as a safe investment? Is $250k a lot to be putting into just one single bond fund? Any alternatives or other points of view from experieince? Would love to hear some thoughts on any or all parts of my spiel. Thanks guys!
