Municipal Bond Funds Become Higher Risk

Since buying into muni ETFs (in late 2025) and muni mutual funds (early to mid 2026), they have been relatively stable despite all the volatility this in 2026.  This gave me confidence that this was a good investment option for my retirement paycheck strategy, even though the strategy targeted for consistent payments and not consistent principal.   However, this strategy still needs to experience a market downturn prove its value.

In recent back testing, I discovered that while the principal was relatively constant in the 2008 downturn, the principal fell significantly in the 2022 bear market.   Why the difference?  My conclusion is interest rates decreased in the 2008 recession, while interest rates and inflation increased in the 2002 bear market.

Bond prices go in the opposite direction of interest rates and hence the difference between the two years.

At this point, it appears interest rates are more likely to go higher than lower, resulting in more downward pressure and volatility on bond and bond fund prices.  If this happens, this will be a real time test of the retirement paycheck strategy, which tries to maintain consistent payments even if the principal declines.

At the same time, I can put more money into bonds and bond funds with higher interest rates.  However, I will be scaling in for the possibility the interest rates will increase over a year or more.

For more on  The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial, investment, nor bond advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Test of My New Investing Strategy

Today, Micron (MU) reports earning after the market closes.  Possibility, there will be a lot of volatility after earning and guidance is reported, either up or down.  I'm going to just hodl and not worry about it with my new investing strategy, which creates a monthly retirement "paycheck" independent of market volatility.

Thus, I am hodling my shares of MU, without gritting my teeth.  Which ever way the stock moves after hours and tomorrow, won't affect my retirement "paycheck" this month.  In addition, I have conviction that memory chips will continue to be limited in supply, which means MU profits will be improving since the price of chips is going up.

Instead of checking on MU every minute of today, I power washed our deck, "touched some grass," and checked on MU during my breaks.

Update: Although MU closed down slightly, it was up about 16% AH due to outstanding earnings.  Woohoo!

For more on The Practice of Personal Finance, check back every  Wednesday for a new segment.

This is not financial, stock picking, nor stock investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Being Prepared for the Next Recession or Bear Market

"No one rings a bell at the top of the market." ~ Wall Street Adage

In the past, I was constant worrier about a market crash destroying my retirement savings. 

I'm not calling a top, but I'm prepared for one.   Currently, I'm not buying an new equity positions, nor adding to any existing equity positions.   Over the past few months, I've been increasing our fixed income positions thought bond and bond funds, building a monthly, though variable, paycheck.

I don't know if have regular investment income via dividends and interest is a good solution yet, since the strategy has been tested with a significant down turn yet.   However, it has done well with high volatility and a short term correction.   Whether it works with a bear market?  We shall find out.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2017 Achievement Catalyst, LLC

Inflation and Interest Rates Like the 70s-80s Again?

Inflation and interest rates in the late 70s and early 80s grew rapidly.  I remember gas prices doubling, interest rates rising, and gold and silver hitting new highs.  Inflation reached 13%.  Mortgage rates reached as high as 17% in my area.   When mortgage rates dropped, I felt lucky to get a mortgage at 12% in the early 80s.  I was also able to get a 5 year CD at 14%.  The 20 year treasury bond yielded 15%.

The stock market suffered also.  The Dow hit 1000 in 1972, fell 50% and didn't reach 1000 again until 1982.

Will the 70s - 80s happen again?  Right now, it looks probable but not certain.  To reduce market risk, I'm keeping a large proportion of our investments in short term money market funds.  I'm holding back on buying additional stocks and bonds to wait for the direction of interest rates.

For more on Crossing Generations, check back every  Thursday  for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Bond Values Drop when Interest Rates Rise

Most of my account values are falling due to interest rates rising.  That's because bond/CD values go down when interest rates go up.  Similarly, bond/CD values go up when interest rates fall.

I'm not worried about bond/CD values going down since my plan is to hold to maturity, which means I receive 100% of par value, which is usually the issue price. While waiting for maturity, I am paid a 4-5% total annual payment for holding the bond/cd, no matter what the interest rate is.   The bond/CD payment is what is really important to me, and it will be consistent no matter what the interest rate is.   

That is my strategy for retirement income at this time so that I can be stock market volatility agnostic.  This will be one of the first tests on the strategy.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, fixed income, nor retirement advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Holding Off Buying More Fixed Income for Now

Arrrgh!  Interest rates are going up.  Recently, I've been buying 20 year Treasuries which are yielding 5%.   I've been scaling in just in case interest rise.

I'm going to stop buying the 20 year Treasury for now and wait for interest rates to be close to 5.5% before resuming.  I will also stop buying municipal bond funds at this time due to interest rates rising.

However, this will be a good test of my current strategy of creating a retirement paycheck and being agnostic to stock market and interest rate volatility.  We'll see how the strategy weathers this event.

Of course, it works until it doesn't and YMMV.

For more on  Ideas You Can Use, check back every Tuesday  for a new segment.

This is not financial, investment, nor fixed income advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Buying 20 year Treasuries Yielding 5%

Historically, 5% has been a good yield to get on a CD or Treasury bond.  I've decided to lock in that return for 20 years with some of my fixed income funds.  When I started working my goal was to save a million dollars and earn 5% interest to yield $50,000 per year.   That would have been about 2-1/2 times my starting salary. 

Of course, critics will note that I wasn't accounting for inflation and increased lifestyle amenities back then.   However, in my experience, 5% has been on the higher end, but not the highest, of interest rates.  So, I've decided to lock in 5% for 20 years for a portion of our investments in fixed income.   If interest rates go up, I can invest some more at higher rates.  If interest rates go down, I already will get 5% for up to 20 years.   Since it is uncertain which way rates will go, getting 5% long term seems like a win-win for me.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial, saving, nor interest rate advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Locking In Higher Interest Rates to Help our Retirement

When I started working in the 1980s, I calculated that I could retire on $1 million invested at 5% interest.  After all, that was 150% of my starting salary.  Of course, interest rates even went higher, making a million dollars a good goal.

From 2009 to 1019, it looked like retirement was going to require significant more investment funds, when interest rates dropped below 0.5% for CDs.   Then having a million dollars didn't look so good as a retirement plan since it would only yield less than $5,000 per year.   The path to retirement looked dismal.

Then in 2019 interest rates starting rising, with rates peaking in 2023 to 2025 at about 5%.   that means a million dollars now yield $50,000 per year instead of only $5,000.   It also means less retirement savings is needed to retire comfortably.

While interest rates may still go up, I'm locking in 4-5% interest rates on part of our savings for 10-20 years through Treasury bonds and CDs.   Yes, interest rates rising and inflation are a risk, but the bigger risk for us is interest rates going back to 1% or less for an extended period.

Here's my simple logic.  If rates go up, I can always reinvest maturing bonds at the higher rate.   If rates go down, I have to reinvest as at a lower rate, which makes this the higher risk option. So I am scaling in to long term fixed rated bonds and CDs over the next few weeks and months.

For more on  Reflections and Musings,  check back every Friday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

20 Year Treasury Yielding 5%

I'm buying the 20 year Treasury since it's yielding 5%.  Yeah, there are risks with locking up money that long.  Inflation could increase significantly.  The U.S. government could default. 

A worst scenario for our retirement is the 20 year Treasury yield goes down for a long period to 1% as it did in 2020, or hovers around 2.5% as it did from  2012 to 2019.   That would reduce our retirement income significantly.

I am ok with the risk that interest rates go up, even if it is to 7-10%, since I don't think it would be more than for a couple years, which is survivable.  And we would still have some cash to invest at those higher rates.

For more on Strategies and Plans, check back every Monday  for a new segment.

This is not financial, investment nor fixed income advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Avoiding New Complex Investment Opportunities

In the past few years, I have been offered the opportunity to invest in Fixed Index Annuities and Private Credit.  Fixed Index Annuities were advertised as never going negative but participating in the gains of the stock market.  Private Credit was advertised at higher returns for little or no additional risk due to superior vetting by the company.  Both of these options are now being offered to main street retail investors, which is the reason I can now participate.

I'm usually skeptical about investment options that previously were only offered to institutions and now being offered to main street investors.  First, the options are presented as get great investment opportunities just like big institutions.  Second, they often are introduced as low risk opportunities.

• Fixed Index Annuities -  This was the first one I learned about.   It is an annuity that is pegged to a stock index, typically the S&P 500, but has downside protection.   The annuity has a downside floor, which is typically 0%, meaning the investment cannot have a loss.   However, the gains are capped, meaning that the gains won't necessarily match the index for large gains.  In addition, this is an annuity, which has restrictions on when and how much can be withdrawn in the future. The benefit is there is never a loss.
  
  I have typically avoided annuities as an investment.  Funds are usually tied up for many years and there is a high up front fee. Typically, it is costly to access more than the allowed withdrawal amount. Finally, it depends on the worthiness of the insurance company, who earns a high fee for offering the product.
  
  
• Private Credit - This provides non bank loans at higher rates to borrowers who may have difficulty qualifying for loans from traditional banks.  Investors provide funds and usually commit to investing these fund for 5 to 10 years or longer without withdrawing.  Returns are in the 8-12% range.
  
  I asked for a prospectus.  It was about 800 pages and a significant portion was devoted to detailing possible risks.   Also, there are possible capital calls (request for additional funds), there was a lockup period of several years, and limited withdraws above a certain amount.
  
  

Overall, the complexity, potential high risk and lack of flexible access to invested funds were enough negatives for me to decline participating.   At this time, I am glad I made this decision since the stock market has delivered above average returns higher than the cap of Fixed Index Annuities and more than expected defaults are occurring for Private Credit.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Striving to be Volatility Agnostic

Maintaining consistent monthly income is my current strategy for our retirement savings.  My goal is to maintain a specific income range, no matter what the stock market is doing, especially when it is declining.  To do this, I am investing in fixed income (CDs, bonds, and mutual funds) and dividend stocks, and reducing dependence on gains in stocks.  In addition, we have monthly Social Security payment and a quarterly distribution from a rental property.

Up until the end of 2025, the strategy has been working, but it has been mainly an advancing market.   Now, the test will be in a declining volatile market at is happening currently.  I'll see now if the "monthly paycheck" can be maintained in 2026.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial, investment, nor fixed income  advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Muni Bond Funds Pay Based on Accrual, Not 100% on Ex Date

I've been buying municipal bonds funds for the federal tax exempt interest payments.  On January 25-28, 2025, I bought some T Rowe Price municipal bond funds,  PRIHX, PRFHX and PRTAX.  Since this was before the ex-dividend date of January 31, I expected to get the full month's interest payment.  That's what happens with stocks purchased before the ex-dividend date.

When I checked on Friday, January 30, 2026, the date of the ex-dividend, I only received 1/10 or less of the expected dividend.  I called the brokerages, and they gave a couple of explanations/recommendations.  First, wait until until Monday.  Sometimes, it takes an overnight adjustment to correct the issue.  Second, one brokerage said several people had the issue and it was being corrected.   I also called T Rowe Price.  They said that the dividend had not been posted on their website yet and therefore, I should wait.

On Monday, February 2, 2025, there was no change and I call Schwab back for more assistance.  The agent put me on hold and consulted with the mutual fund specialists.   After a few minute, he explained that the bond mutual funds paid dividends on a accrual basis, i.e. a prorated amount based on how long I owned it.   Hmm...  I didn't know that.   I called T Rowe Price and confirmed.

After further investigation, I learned many bond funds use the accrual method to pay monthly dividends. 

Disclosure:  I was not compensated by T Rowe Price  nor Schwab for writing this post.

For more on The Practice of Personal Finance, check back every  Wednesday  for a new segment.

This is not financial nor mutual fund investing advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Private Placement Investment Opportunities for Regular Investors

Options such as Private Equity and Private Credit have only be available to institutions and high net worth accredited investors and not been offered to investors like myself... until recently.    The lure of Private Equity and Private Credit as always been higher returns, which are sometimes significantly higher, than available in traditional investments and bonds.   The tradeoffs are a minimum investment amount  and a lockup period. Now, registered investment advisor (RIA) firms are offering small "slices" to their clients at lower minimum investment amounts.

I have been offered both through my brokerage accounts.  For due diligence, I asked for the prospectuses.  They were an inch thick and up to 800 pages.  The prospectuses described the multiple investments in each offering and the expected returns.  It described the lockup period, periodic withdrawals/distributions and if future contribution were expected.   A significant part of the prospectus was focused on risks of loss.    

Overall, I decided the additional returns was not worth the loss of flexibility to access funds and the additional risk.  I've decided to pass on Private Equity and Private Credit at this time.

For more on  Crossing Generations, check back every Thursday  for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Buying High Yield Muni Bond Funds

To reduce our taxable income, I've been keeping cash in a Municipal Money Market Fund.  It pays less than taxable money markets, but keeps our taxable income below threshholds for tax benefits, such as deductions and credits.    However, due to seasonality, the interest payments are very low in January, less than 1% in mid January.   This caused me to look for Municipal Bond funds that pay higher interest, with some risk.

I found some high yield Municipal Bond Funds.   I decided to go with PRFHX is the T. Rowe Price Tax-Free High Yield Fund.   Dividends are around 4%, federal tax free, which is higher than my taxable money market interest I've been receiving.

Disclosure:  I was not compensated by T. Rowe Price for this post.  I have already purchased PRFHX for several of out taxable accounts.

For more on  Ideas You Can Use , check back every Tuesday for a new segment.

This is not financial nor tax advice advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Time to Lock In Higher Long Term Interest Rates

As I prepare our 2025 Federal Tax return, I decided to compare what we earned in taxable interest in 2021 with 2024 on those tax returns.    Recall, interest rates on savings, bonds and CDs were very low prior to 2021.

I was shocked to learn about the growth in taxable interest rates in that time frame.   If our taxable interest was X in 2021, the taxable interest in 2024 was 16X.   In 2024, interest was 40% of our  adjust gross income (AGI), while in 2021 interest was 3% of our AGI.

Since late 2023, interest rates have been declining.  I used to be able to get around 4-5% for 5+ years CDs.  Now the best I can do is about 4% and many are callable in the first few years.

In the next few weeks, I will be working lock in some interest rates at around 4% for about 10 years using Treasuries and Agency bonds.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Bought a CD Because of Bank Name

It also had the highest interest rate.  I just bought a CD from IncredibleBank.   It was a 3 month CD paying paying 3.6%.  My other choice was Bank of America at 3.55%.  Both were brokered CDs offered through Schwab.  Both are FDIC insured.

What a name:  IncredibleBank.   LOL.

It was an easy decision.  Also, I know have not purchased a CD from that bank before and didn't need to check if I was exceeding the FDIC insurance limit.

Disclosure:  I was not compensated by IncredibleBank, Bank of America nor Schwab for this post.

For more on Reflections and Musings, check back every Saturday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Get High CD Rates and Great Service at Credit Unions

Bricks and mortar banks in our area used to have very low interest rates on short term CDs , around 0.02 to 0.03% for all except for promotional CDs that had competitive rates.  Although longer term bank CDs are better nowadays they still are not competitive.  Usually, I buy CDs from my broker, which had competitive CDs at market rates. A few years ago, I checked out our local credit union, and they had very competitive rates.   So we opened a few CDs with a local credit union.

A couple weeks ago, we renewed some CDs that had matured at the credit union.  Today, I checked the CD rates at the brokerage, and they were 0.3% lower than the credit union CD.   Woohoo!  We decided a few years ago to stay at the credit union for part of our fixed income portfolio for diversification.

At the credit union, we get the benefit of working with the same representative over past few years.  We like having the personal connection and contact, which doesn't happen when buying CDs online.  Finally, if we like the current CD rate, we can allow autorenewal for the same term.   Maximum simplicity.

For more on Ideas You Can Use , check back every Tuesday for a new segment.

This is not financial nor CD advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Use Custodial Accounts to Make Dividends/Interest Tax Free

Here's a hack to reduce taxes on interest and dividends earned for the family.   Put the assets in a custodial account for a minor dependent.  In 2025, the first $1350 of a minor dependent's unearned income in 0%.   Unearned income includes dividends, interest, and capital gains.  There are other ones, like IRA distributions, rents and royalties, but probably not relevant for most dependents.

$27,000 earning 5% interest is $1350 annually, which is tax free if earned in a dependent's custodial account.   No tax return needs to filed if unearned income is less that $1350.

The only requirement is all the funds in a custodial account must be used for the benefit of the dependent.  However, that is easily done.  Funds withdrawn can be used for the dependent's allowance or the fractional part of their rent, food, clothing, education expenses.  Therefore, the interest/dividends earned can be easily withdrawn and spent on an annual basis to comply with IRS regulations regarding custodial accounts.

For more on Crossing Generations, check back every  Thursday for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC