Free Stuff
Do you remember when you were a kid and you looked forward to being the first person to open a new box of cereal at breakfast? Why? You looked forward to getting those free prizes inside the box. It could be anything from a small plastic toy in the cellophane or clear plastic wrapper or a coupon that allowed you to send to the manufacturer to receive the cool toy that was advertised on the back of the box. It could have been anything from a Pink Panther 5 in 1 spy kit or a Flintstones car, but it was exciting. Best yet, they were all free!
Taxable Investment
Kids still love getting free stuff and though we have aged and moved on, we still love free stuff. That is why we are always excited when we get something free. We didn’t earn it, it just came to us. Uncle Sam also gives free stuff and they are called tax free investments, which allows the investor to invest in a mutual fund or bond, but there is no tax attached to the bond or fund. After the bond matures and the person receives the maturity price, it is still untaxed. Taxpayers, especially if they are in a higher bracket than normal middle-class people, get really excited about tax-free bonds or investments. Investment experts explain the two kinds of investments this way. First, there are mutual funds that are income funds which a person invests in, sometimes called exchange-traded funds, which show a return to the investors in the form of a dividend to shareholders. This dividend is paid at different times of the year. This income find is taxable.
The Difference and Advantages
Talk about having your cake and eating it too. With the taxable income, the investor receives his income from the investment while the investment goes on and hopefully grows in value. The non-taxable municipal bonds only give their value when the bond becomes mature. An investment professional can fill in all the gaps in investing in tax-free investment, but the point here is to enjoy things when they are free. A person could begin to think to themselves what are the best tax-free investments they could invest in and reap the rewards?
Tax-free Investments
On the other hand, a tax-free fund usually refers to a municipal bond fund, which is a non-taxable investment. It is non-taxable because the municipality or state from which it exists wants to attract investors to invest in the bond in order to have money for their projects, but when the bond matures in 1-20 years, the bond is non-taxable. The state gets their projects funded by creating the bond and the investor receives his non-taxable income at the maturity of the bond. What is the importance of being the recipient of this tax-free gift to you and your family?
Survival mode
There may be a motive here that goes back to our ancestors in the stone age. Our instincts drive us to make preferences, so say the social scientists, and these preferences map our movement throughout the world we live in. One person has a preference for one kind of music or art, while another has a different preference. Our stone-age ancestors may have preferred the woolly mammoth over the bear for meat because it was easier to trap and kill, easier to skin and carry. Killing a small bear didn’t do the tribe much good for very long. We end up sticking with the most important choices we need for our own survival. We get what we need to survive and move on to the next step in our lives. It is much like our ancestors, devoid of many modern things when they had to make choices with limited resources.
Matters That Are Meaningful
In the end, we love getting free things because they make us feel the freedom of living and give us a lightness to our lives. We do not have to expend ourselves to receive them, nor do we have to give anything in return, since they are a free gift, whether from someone we know or the state in the form of tax-free bonds. Whether it is a birthday gift, a promotion, they are all gifts from one person to another, simply because they wanted to give something to someone else.
Pinstripe Magazine Staff
Online Men’s Lifestyle Magazine on Gear, Grooming, Girls, Gadgets
