They currently pay more like 4.75%. The tax
equivalent yield is over 6, but that isn't really what the income is. The income on a well rated, insured 30 year Municipal Bond is around $47,000 per year
per million of face value. And, as you infer in your piece, depending on the state in which you live and exactly what type of bond it is determines whether or not taxes will be owed on that interest. In short, not all Munis are completely tax free. There are things to be aware of like "Phantom Income" on Zero Coupon Bonds, Capital Gains on bonds bought at a discount and things to avoid like stadium bonds, unless you don't mind paying taxes on the income.
I'd like to add a few points, if I may.
You didn't mention US Treasuries. Rule of thumb;
If you want to know how much you can
safely bank each year in interest payments for a given amount invested, go with the Ten Year Treasury rate. The Ten Year Treasury is the internationally recognized "Risk Free Rate". When you hear the term "risk free rate of interest", they are talking about the 10 year. Currently, the 10 year is paying a 3.625% coupon and is
selling for just slightly more than par - 101 and 17.5 32's percent of par. Par is $1000.00 or how much the bond is redeemed at when it matures. That means it would cost you $1,015,468.75 to buy $1,000,000 face value of those bonds. You buy those bonds of recent issue and you'll receive $36,250 in interest payments per year per million and at the end of ten years you get your million back.
You can build a completely liquid Treasury bond portfolio that will have money maturing every week and be paying interest every month at any brokerage firm with a bond desk. You don't need an "interest bearing checking account". What you need is an account with a major brokerage that has a healthy bond desk. With that account you can get a credit/debit card issued against it and check writing privileges. With large sums of money you are better off at a brokerage than you are a bank. Banks are fine for the mill or so you want to have as fun money. For everything else, use a brokerage. If a concern is FDIC insurance....keep in mind that that insurance is basically backed by US Treasuries. So there you go.
Move to Florida. Or one of the
6 other states that have no state income tax.
I agree - set up an LLC. Send an attorney to collect the check in the name of the LLC. If you have to appear at a press conference, do so in disguise and give your name as the president of your LLC. Stay as low profile as possible.
Throw your current cell phone off a bridge into deep water.
The only people to get the number of your new cell phone are your attorney, your Financial Advisor and only those closest to you who can KEEP THEIR MOUTHS SHUT.
The more you win, the less you want to deal with the likes of the Fidelity's of the world. They have low fees because they offer crap service. You get what you pay for. If you have no clue about investing, Fidelity is just as able to screw you over as anyone else. People get bent out of shape about paying investment fees but if you are getting crap returns, it doesn't matter if you don't pay much in fees to get them. Crap returns are still crap. I'd rather pay 2% in an annual fee to realize an 8% return than pay no fees and get 6%.
Talk to the richest person you know and ask them who they deal with and/or ask for the richest person
they know and ask that person for their advisor. They might have a
portion of their money at Fidelity or Vanguard, but not all of it. Not by a long shot.
Get your passport and GET THE FUCK OUT OF DODGE! For a year. At least. Go to Australia. Take the Siberian Express. Go lose yourself on Lake Powell on a houseboat. Just go away and don't come back until the hoopla has washed over.
Keep in mind the ten percent rule on big purchases. Buying a large boat - anything that needs to be kept in the water - will likely fall in that category. That means it will cost you 10% of the price of the boat just to keep it in the water. A million dollar boat will run you $100,000/yr to own. The same is nearly true for some real estate.
3 out of 5 big money lottery winners in this country declare bankruptcy within 5 years, primarily because they have no idea how to handle large sums of money, they don't learn how to say "NO!" and they get and take crappy advice from the worst sources.
Within the last year there were two large ($100 mill plus) Powerball winners. One was a young man from Louisiana (If I remember correctly) and the other was won in Ohio. The two winnings were about 6 weeks apart. The Louisiana winner appeared on "Good Morning America" the VERY NEXT DAY. The Ohio winner took an entire month before coming forward and the money was collected by an attorney in the name of a Trust.
Of the two, who do you think will keep more of the money the longest and will make the least news in the years ahead?