Dear John: Regarding the recent letter you got from D.L., asking what he could do with his $200,000 that he doesn’t want to take risks with, I may have an answer.
I retired about eight years ago at age 63.
From 1974 to about 2005 I specialized in municipal bonds. (Yes, I am aware of Detroit, etc.)
What I still do for my own portfolio is this:
I buy currently callable muni bonds, those that were issued at least 10 years ago. These bonds all have coupons of 4 percent to almost 6 percent.
There is no real appreciation potential here, but I buy them for the income.
Assuming that D.L. buys a bond that he can be comfortable with (I have purchased AAA to BBB-rated bonds), with maturities from 2014 to about 2021, the most that the investor can lose is the premium he may have paid.
On average, I need to hold the bonds about 90 days to break even — that is, until the coupon accreted equals my premium.
Once I make it past that point, I have a positive yield. I have been using a broker, and yes, I pay “retail,” even though I was in the business for more than 30 years.
The guy finding me these bonds works hard and knows the entire story about sinking funds; amounts called, if any; etc., and he has to make a living, too.
Maybe three or four of these bonds have been called within that 90-day period, but the vast majority of my bonds have not been called.
Therefore, my tax-free yield is between 2.5 percent to almost 5 percent, depending on the maturity of the bonds.
By the way, I live in New York state but buy bonds from throughout the country. I pay the tax to NYS on the interest on my non-NY bonds. J.F.
Dear J.F. Thanks for the advice. I will pass it along.
But everyone pay attention to one line in this: “Yes, I am aware of Detroit, etc.”
There are a number of municipalities in trouble. So you could get stuck with stinker bonds.
Dear John: I’m writing on behalf of my father. He was recently diagnosed with cancer, and while he was in the hospital recovering from surgery, he went over his prepaid minutes on an archaic Verizon plan. They charged him more than $300 in overages.
He and I separately appealed to Verizon, explaining that he had been in the hospital for a week, was unknowingly receiving calls from land lines, had just been diagnosed with cancer and was a retiree living on a fixed income. They [offered] a $61 credit, no more.
Additionally, he walked into a Verizon store near his home to inquire about buying a $99 iPhone 5c. Again, he explained that he was a retiree and a cancer patient. The Verizon employee told him the best deal he could get would come to $760.
I have tried to speak to managers but have been given the runaround. My dad has neither the time nor the mental energy to fight this, and I find the whole thing disgusting, in the truest sense of the word.
I’m wondering if there might be any way you could help. A.A.
Dear A.A.: Done!
I spoke with Verizon on your father’s and your behalf, and the company has refunded the extra money he paid. As you know, before that was done your father decided to change from Verizon to AT&T, so he was charged an early-termination fee.
He still made out. Had he waited to switch, I probably could have gotten a better deal, but you and he seem satisfied anyway.
Verizon was apologetic for the mix-up, and the company acted pronto after I contacted it about the problem. So let’s chalk this up to a misunderstanding.
Now allow me to lecture all the salespeople and clerks and phone answerers and customer-service reps who are the public points of contact for consumer products.
It doesn’t take much for your company to be put in an embarrassing position. So wise up. Treat people nicely and you won’t have to be answering to your boss the next time a newspaper calls about a customer gripe. Really, is it worth it?