# 🍆 Muni – Rev

By [Let Them Eat Cake](https://paragraph.com/@ltecake) · 2022-06-21

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**TL,DR: Like supporting a local farm, municipal revenue bonds support a local project**

Municipal Revenue Bond / Farmstand Squash

*   directly supporting a local organization
    
*   quality of product depends on the success of the project
    

Eatamology “Municipals” or “Munis” are bonds issued by municipalities including state and local governments. When designated as a “revenue bond”, munis generate revenue from a specific project, such as tolls from a new bridge or ticket sales from a sports stadium. Like a farmstand, revenue bonds encourage investment from local people back into their community.

Financials Revenue bonds are typically riskier investments than generic municipal products because the entire loan is backed by an individual project rather than the city itself. When investing in a muni, capital gains are tax exempt for local investor.

Power of Tax Exempt Imagine you pay $1,000 for a bond that pays 5% interest over 10 years. You will receive $25 every 6 months which totals $500 over 10 years. You will also receive $1,000 at maturity as the principal payment. Capital gains = money received - money invested, which is $500 ($1,500 - $1,000). If the bond is taxable you may owe the government up to 20% of your gains in taxes, which is $100, reducing your gain to just $400. The local investor however can avoid this additional fee, receiving the full $500 in exchange for the local investment.

Nutrition Facts Price: Par Issue Frequency: bi-annually Maturity: Medium Interest/Coupon Amount: Low - Medium Coupon Type: Zero Yield: Low - Medium Tax Status: Tax Exempt

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*Originally published on [Let Them Eat Cake](https://paragraph.com/@ltecake/muni-rev)*