Tax Free Monthly Income at a Discount

Monthly Income Opportunities From Equities

I like monthly income, so I keep my eyes peeled for monthly income opportunities.

In 10 Year Equity Income Returns, we discussed one of the benefits of investing in closed end funds: at times it is possible to acquire assets at a discount, 90 cents on the dollar, 80 cents on the dollar, or more! Buying at a discount saves money and can remove risk from the overall investment equation.

Today, we are looking at a closed end fund run by Nuveen:

The chart tells us that it is not a volatile investment – we would actually expect this since its focus is income. It is a good practice to take a look at the chart if for no other reason than to understand how your investment can expand and contract. Some do not care to see their hard earned money contract which is just one of the costs of investing.

We do live in a universe that pulses – we breathe in; we exhale; our muscles contract; then they relax; our heart contracts; and our heart relaxes. The market is the same – contract, expand, contract, expand…

Yahoo finance has a great database of financial information on public companies. The second screen shot is from their site.

The price of the security is labeled one.

At two, the annual dividend of 82 cents and yield is listed.

This particular security pays monthly and has a payout of 6.1%.

You can’t find that yield in a savings account.

It is important to note that for many in the United States the income is tax free.  This money is just like saving money. Depending on personal tax brackets, the yield rises with each marginal change in taxes.

Three, is the NAV or net asset value of the security. If the underlying portfolio were liquidated today, the estimated