Why Would You Want a Tax Lien Certificate?

Tax lien certificates present you with an outstanding package of benefits.

HIGH YIELD

The main attraction of tax lien certificates is their consistently high yield.

Exactly how high this yield is depends on where you invest. In Arizona, the top rate is 16%. Florida pays up to 18 % . When tax lien certificates are bought at auction, your actual rate is determined by competitive bid. If this sounds confusing (and it should), The point here is that tax lien certificates should be prized as high-yield interest investments. At these rates of interest, this is more than just nice; it is a road to real wealth.

To get an idea of what a real difference those extra percentage points make, use the “Rule of 72.” This is a quick way of telling how long it will take you to double your money. lt works like this: Whatever your percentage of interest, divide it into 72. The answer will tel1 you how many years it will take your principal to double.

For example, if you are earning 5% at a bank, your money will double in just over 14 years. A corporate bond yielding 6% will double your money in 12 years. An 11% return in the stock market (the historical average) will double your money in just over 6 years and 6 months. By contrast, keeping your money in Florida tax liens at 18% will double your money in 4 years!