We collect cookies to analyze our website traffic and performance; we never collect any personal data. Cookie Policy
Accept
The Tycoon Herald
  • Trending
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Money
    • Crypto / NFT
  • Innovation
  • Lifestyle
    • Lifestyle
    • Food
    • Travel
    • Fashion
    • Leadership
  • Health
  • Sports
  • Entertainment
Reading: How To Grab Tax-Free 5% Dividends From Elon Musk’s Latest Twitter Episode
Sign In
The Tycoon HeraldThe Tycoon Herald
Font ResizerAa
Search
  • Trending
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Money
    • Crypto / NFT
  • Innovation
  • Lifestyle
    • Lifestyle
    • Food
    • Travel
    • Fashion
    • Leadership
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© Tycoon Herald. All Rights Reserved.
How To Grab Tax-Free 5% Dividends From Elon Musk’s Latest Twitter Episode
The Tycoon Herald > Money > How To Grab Tax-Free 5% Dividends From Elon Musk’s Latest Twitter Episode
Money

How To Grab Tax-Free 5% Dividends From Elon Musk’s Latest Twitter Episode

Tycoon Herald
By Tycoon Herald 5 Min Read
Share
SHARE

(Photo credit should read ROBYN BECK/AFP via Getty Images)

AFP via Getty Images

I’m guessing you heard about the plunge in Tesla TSLA (TSLA) stock spurred by founder Elon Musk’s recent tweet asking if he should sell 10% of his shares.

(The tweet—a poll of Twitter users—garnered a positive response, by the way; Musk says he’ll abide by it.)

I know—another bizarre Musk tweet doesn’t seem to mean much to us income investors. But this one is different, because as hard as it may be to believe, it’s telling us one thing: buy municipal bonds—an asset class many investors dismiss as “sleepy.” That’s not true: there’s a reason why “munis” are favored among billionaires, starting with their huge tax-free dividends.

And what Musk’s tweet is telling us (even if Musk himself doesn’t realize it) is that if we buy munis today, through closed-end funds (CEFs) like the one we’ll discuss below, we’ll get in just before a rush of new investors. And we’ll be pocketing yields that could be worth more than 8% to us, too!

Muni Bonds: Musk’s New BFFs?

Let’s start with why Musk posted this poll: he was responding to recent talk in DC about taxing the unrealized stock-market gains of billionaires. Specifically, the prospective tax aims to curb their regularly used strategy of keeping their shares unsold and borrowing against them to fund their lifestyles, thereby skirting the capital gains taxes they’d have to pay on any sales.

But if unrealized gains were taxed, billionaires would likely sell more shares and, more importantly, find tax-advantaged alternatives. That’s where munis come in.

The Muni Hack to Tax-Free Income

MORE FOR YOU

Many investors yawn when they hear about munis because the benchmark index fund for the asset class, the iShares National Muni Bond ETF (MUB), yields a paltry 1.9%. And a long-term return chart for MUB is pretty flat compared to the S&P 500.

But if you dig deeper, munis get a lot more interesting. Remember that MUB’s 1.9% income stream is 100% tax-free for qualifying investors (and most Americans qualify). That means, to get the equivalent of that 1.9% cash flow with dividend-paying stocks (or real estate investment trusts or junk bonds), you’d have to get a 3.2% yield if you’re in the highest tax bracket.

Of course, us CEF investors know that we can do a lot better than MUB by skipping the ETF option and going with a muni-bond CEF.

A Muni-Bond CEF Whose 4.9% Yield “Transforms” Into 8.1%

That brings me to the fund we’re spotlighting today, the PIMCO Municipal Income Fund II (PML), which yields 4.9% tax-free. That’s equal to an 8.1% taxable yield if you’re in the highest tax bracket.

PML Versus Taxable Yields

CEF Insider

What’s more, PML has easily beaten MUB in the last decade, with a solid 8.9% annualized total return. In other words, it’s done just what we CEF Insider members want it to: deliver strong and steady price gains while letting us enjoy our dividend in peace. (It’s worth noting, as well, that our default risk is low here: fewer than 0.001% of muni bonds default.)

Muni-Bond CEFs Give Us a “Heads You Win, Tails You Win” Setup

If an unrealized-gains tax is pushed through, or even if just a hike in billionaires’ taxes goes through, money will inevitably shift into the muni-bond market, moving prices higher.

And even if none of these tax plans materialize, anxiety about higher taxes on the rich won’t go away—a billionaire tax has been a talking point for over a decade now. And while that’s in the ether, investors will see value in top-performing muni-bond funds like PML, due to their lower volatility and tax-free income streams.

Michael Foster is the Lead Research Analyst for Contrarian Outlook. For more great income ideas, click here for our latest report “Indestructible Income: 5 Bargain Funds with Safe 7.3% Dividends.”

Disclosure: none

You Might Also Like

How To Make A Funds: 12 Simple Methods To Do It (The Full Information) – Dollarsanity

10 Outdated-Normal Cleansing Suggestions from Grandma – Dollarsanity

Wedding ceremony On A Funds: Get $30K-Like Wedding ceremony For $5K or Much less – Dollarsanity

80 Issues I Stopped Shopping for to Save Money Quick and Pay Off Debt – Dollarsanity

50 Small Business Concepts For Ladies – Dollarsanity

TAGGED:MoneyThe Forbes Journal
Share This Article
Facebook Twitter Email Copy Link Print
Beverly Hills Plastic Surgeon Useless at 68
Entertainment

Beverly Hills Plastic Surgeon Useless at 68

Beverly Hills Plastic Surgeon Useless at 68 After Deadly Neck Surgical procedure Printed July 8, 2025 6:34 AM PDT A widely known Beverly Hills plastic surgeon has died after a…

By Tycoon Herald 2 Min Read
Wall Road turns extra bullish on US shares regardless of Donald Trump’s tariff threats
July 8, 2025
’16 & Pregnant’ Star Whitney Purvis is Now Being Investigated by the Feds
July 8, 2025
British GP: McLaren keep Oscar Piastri penalty ‘very harsh’ as F1 group says nonetheless ‘issues to evaluation’
July 8, 2025
Find out how to assist Texas flood survivors. And, well being organizations sue RFK Jr.
July 8, 2025

You Might Also Like

80 Timeless Frugal Residing Suggestions That Nonetheless Work At present – Dollarsanity
Money

80 Timeless Frugal Residing Suggestions That Nonetheless Work At present – Dollarsanity

By Tycoon Herald 18 Min Read
Easy methods to make Money on Pinterest With out a Weblog – Dollarsanity
Money

Easy methods to make Money on Pinterest With out a Weblog – Dollarsanity

By Tycoon Herald 35 Min Read
21 Web sites The place Wealthy Individuals Giveaway Free Money – Dollarsanity
Money

21 Web sites The place Wealthy Individuals Giveaway Free Money – Dollarsanity

By Tycoon Herald 12 Min Read

More Popular from Tycoon Herald

MEET THE FATHER OF COADUNATE ECONOMIC MODEL
BusinessTrending

MEET THE FATHER OF COADUNATE ECONOMIC MODEL

By Tycoon Herald 2 Min Read
Woman Sentenced to 7 Days in Jail for Walking in Yellowstone’s Thermal Area

Woman Sentenced to 7 Days in Jail for Walking in Yellowstone’s Thermal Area

By Tycoon Herald
Empowering Fintech Innovation: Swiss Options Partners with Stripe to Transform Digital Payments
InnovationTrending

Empowering Fintech Innovation: Swiss Options Partners with Stripe to Transform Digital Payments

By Tycoon Herald 7 Min Read
Sports

LPGA Tour: Japan’s Akie Iwai surges to share lead with Lauren Coughlin and Ingrid Lindblad in LA Championship

Japan's Akie Iwai shot an eight-under 64 taking part in alongside her twin sister to share…

By Tycoon Herald
EntertainmentTrending

RTH TV Outshines LONG TIME BROADCAST COMPANY: The Future of Broadcasting Unveiled

In a striking shift in the television landscape, RTH TV has surpassed NBC in viewership and…

By Tycoon Herald
Trending

U.S. Blew Up a C.I.A. Post Used to Evacuate At-Risk Afghans

A controlled detonation by American forces that was heard throughout Kabul has destroyed Eagle Base, the…

By Tycoon Herald
Leadership

Northern Lights: 17 Best Places To See Them In 2021

Who doesn’t dream of seeing the northern lights? According to a new survey conducted by Hilton, 59% of Americans…

By Tycoon Herald
Real Estate

Exploring Bigfork, Montana: A Little Town On A Big Pond

Bigfork, Montana, offers picturesque paradise in the northern wilderness. National Parks Realty With the melting of…

By Tycoon Herald
Leadership

Leaders Need To Know Character Could Be Vital For Corporate Culture

Disney's unique culture encourages young employees to turn up for work with smiles on their faces.…

By Tycoon Herald
The Tycoon Herald

Tycoon Herald: Your instant connection to breaking stories and live updates. Stay informed with our real-time coverage across politics, tech, entertainment, and more. Your reliable source for 24/7 news.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact Us

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Terms of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices
© Tycoon Herald. All Rights Reserved.
Welcome Back!

Sign in to your account

Lost your password?