It is always a good idea to pay down bad debt first (credit cards, auto loans, unsecured debt, etc). I also recommend building up an emergency fund of 3-6 months expenses before starting an investment program. If you have a 401K that matches, then you should take advantage of the program while working on your emergency fund. Once you have that in place, you can invest in Individual Retirement Accounts (IRA’s), increase 401K contributions and look at other investment vehicles depending on your time horizon and individual needs.

Submitted by Ben Leyhew, MBA, Wealth Advisor

One way to provide income on a tax free basis is through the use of municipal bonds.  A Tennessee municipal bond is free from both federal and state income taxes.  Currently, yields on municipal bonds are low due to the low Federal Funds target rate.  But, when you factor in the tax savings, many times the “tax equivalent yield” is greater than a comparable taxable bond or certificate of deposit.  Give us a call and let us show you how to generate tax-free income through municipal bonds.

Authored by:  Jeffrey O. Brown, CPA, CFP

*Subject to availability and change in price. Subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Interest income may be subject to the alternative minimum tax.  Federally tax-free but other state and local taxes may apply.