Watch the great Cicero and the brilliant Kelly Coughlin debate municipals bonds versus bank owned life insurance (BOLI). Part 3 topic: Cost to Acquire Asset
And now we begin Part Three of Debate in Rome. The subject today is Cost to Acquire Asset, Cicero versus Coughlin, Munis versus BOLI. On the subject of Cost to Acquire Asset, Cicero, the floor is yours.
Costs to Acquire Asset: When you purchase a municipal bond you do not pay a commission. The sales and trading charges are included in the purchase and sales price of the bond.
Costs to Acquire Asset: As Honorable Cicero well knows, there is a hidden markup and markdown included in the purchase and sale of bond. This is reflected immediately in the as the difference between the bid and ask. Research shows that purchases of muni bonds in increments less than $ 1 million will result in a higher purchase price or lower sales price of around 1.5%. While BOLI certainly pays a fee to its insurance brokers, this fee is NOT deducted from the cash value of the asset.
On the subject of Cost to Acquire Asset, by a show of hands who thinks Muni bonds are better?
Who thinks BOLI is better? BOLI wins Cost to Acquire Asset Test. BOLI wins one full point.
That is it for Part Three of Debate in Rome. The subject was Cost to Acquire Asset: Munis vs Boli, Cicero vs Coughlin. Coughlin and BOLI win. In Part Four, they will debate Cost to Dispose and Liquidity: Munis vs BOLI, Cicero vs Coughlin