Are tax lien certificates a good investment?

TAX LIEN CERTIFICATES

Are tax lien certificates a good investment in any economic climate? They are one of, if not the most amazing investment available.

If you’re interested in getting in on what’s making investors double-digit returns, while many other investments may be losing money, keep reading.

2020 really was one of the worst years economically with the stock market not doing very well overall, interest rates at historical lows, and other investment vehicles, like bonds and CDs, not even keeping up with inflation.

The stock market has been a roller coaster that has left most investors disgusted. Returns on investment in many stocks and even mutual funds has a lot of investors looking to put their money elsewhere.

Because of all this, tax-lien certificates are looking more and more like one of the top investments this year.

ARE YOU IN THE SAME SITUATION I WAS?

Before I go on, a bit of background on me.

I’d been doing a lot of studying about how to financially survive, and possibly even thrive in today’s economic conditions.

I would never claim to be an investment genius. If you would’ve asked me, “Are tax lien certificates a good investment?” a few years ago, I would either have asked you what they were or said that I have no idea.

I was just the average person, trying to get by financially, and eventually get out of the rat race.

I spent years working my way through university, but I’d always had to work for a living and really wanted to get out from underneath my load of bills and start enjoying my life.

My goal was a simple one, stop worrying about bills and see the world, maybe with someone special.

Maybe you want to go fishing instead of going to the factory or see more museums instead of being chained to your desk.

How about getting out of the office more often, and playing a little more golf, or tennis, or just about anything? 

Then keep reading. What I’m about to share with you will make you stop asking, “Are tax lien certificates a good investment?” and convince you that tax lien certificates are a valuable tool for making those goals a reality.

Up until recently, in all my work and study, I didn’t learn or know anything that was different from what almost everyone else knew about financial security.

Sure, we all were taught to try to buy a house, start planning for retirement as soon as possible, and all that common wisdom.

What I couldn’t do was stop working, or to be honest, see anywhere off in the horizon where I’d be able to. It definitely was a case of no matter what my job was, it was always just a different treadmill or hamster wheel. 

I couldn’t anticipate the real-estate and financial crash of 2008, or predict the virus and how it harmed the world economy. So my 401K, Roth IRA, and savings took a beating.

ARE TAX LIEN CERTIFICATES A GOOD INVESTMENT COMPARATIVELY?

When we ask the question, “Are tax lien certificates a good investment?” we definitely need to compare them with these other investments and how they would have compared then.

For the last few years, I’ve been studying investing, the markets, and how to adapt regardless of the financial climate.

All the experts I read repeated how a diverse portfolio was essential. It was basically the old adage, don’t keep all of your eggs in one basket. So I examined my situation, but it was not looking good.

At the end of my self-assessment, I knew I had to look outside of the normal mix of stocks and bonds. I also was not willing or able to stop working and go back to school or leave my future up to another expert.

So I asked my best friend, the smartest guy I know, if he could suggest anything that would get me closer to my goal of financial freedom. He actually gave me something, or rather someone, that would change my life.

ARE TAX LIEN CERTIFICATES A GOOD INVESTMENT? ASK TED THOMAS

That someone was Ted Thomas. Ted is an educator, publisher, and author who specializes in an area of real estate that I had no idea existed.

I’d been looking into real estate, but I quickly ruled out just getting another mortgage on a house. I’d been down that road, and it got me no closer to financial freedom.

Then something I had never heard of came up: Tax Liens. So I went to Ted’s site, and that was where my education began. With any good opportunity, you need to know as much as you can.

I asked my friend, “Are tax lien certificates a good investment right now?”

First of all, tax liens have been around for almost 200 years, so they’re nothing new.

Second of all, they might not be as well known as stocks and bonds, but a quick search will show they’re known by many authorities as good investments in any economic climate. Take a look.

At the very least, here are nine things you should know when asking, “Are tax lien certificates a good investment?”

When I went through the first part of Ted Thomas’ program, I began to get excited and shared what I learned with family and friends. The same questions kept popping up. What everyone wanted to know was…

Are tax lien certificates a good investment in economic times like what we are going through now?

My answer was, “It may be the best time ever to get involved in tax liens.”

The worse the economy is doing, the more tax liens become available.

What’s going on with the economy now is a perfect example of something that causes people to fail to pay their back taxes. As a result, counties all over the country issue tax lien certificates, often called ‘tax liens.’

INVESTING IN TAX LIENS IS SOCIALLY RESPONSIBLE INVESTING

You see, when property owners can’t pay their back taxes, local governments can’t properly function.

That’s because they depend on those tax dollars to pay for schools, police, fire departments, and a host of other services needed to keep neighborhoods running safely.

Are tax lien certificates a good investment if they contribute to the local government’s ability to provide essential services? By my definition they are, and that’s not something that can be said for many other investments.

More and more people want to earn a healthy return on their investment while doing something good at the same time. This is often referred to as socially-responsible investing.  

So while some mutual funds are making money by speculating and actually betting against the success of some companies, when you invest in tax lien certificates, you’re helping fund essential services for counties.

You’re also helping the property owner by buying them more time to pay off their back taxes and avoid losing their home.

ARE TAX LIEN CERTIFICATES SAFE?

When some people ask, “Are tax lien certificates a good investment?” what they’re really asking is, “Are tax liens a safe investment?”

The answer is, yes, tax liens are generally a lot safer than most stocks and mutual funds.

Though the percentage of interest may vary, tax lien certificates are guaranteed by counties to pay a locked-in percentage of return, and they’re secured by real estate. 

Approximately 95% to 97% of the time, the property owner pays the back taxes owed. This is referred to as redeeming the certificate.

In this case, the lien holder gets paid the full percentage that the lien is guaranteed. If that doesn’t happen, then another process begins, and the lien holder gets the property.

However, today we want to concentrate on what happens most of the time. Again, over 95% of tax liens get redeemed, which means it’s paid off by the people who owe the back taxes.

ARE TAX LIEN CERTIFICATES A GOOD INVESTMENT? ASK THE PROS

If we were to ask an investment professional which stocks or even mutual funds guaranteed a healthy rate of return  about 95% of the time, they would have to say none.

With stocks and mutual funds, there’s never a guaranteed return. That’s because of the very nature of stocks. With a stock, you’re purchasing fractional ownership in a company.

Mutual funds are simply groups of stocks, or a combination of stocks, bonds, commodities, real estate, etc…in which the mutual fund and you are the owner of a percentage in the fund. 

So the actual value of the stock is determined by many factors. Some of these factors are supply and demand of the stock, state of the economy, investor confidence, and company performance.

With all those factors and more affecting the cost of stocks, their value can swing widely and quickly. Even a mere rumor can set it off.

Individual stocks or specific mutual funds may occasionally earn well, but they also carry the risk for large losses.

Tax liens don’t have those risks. If you don’t like the percentage of interest offered by the tax lien, you don’t bid or buy it. If you do, and you buy it, then your rate of return is locked in.

I like knowing what I’m getting is a lot better than rolling the dice with my financial future. 

TAX LIEN INVESTING PROS AND CONS

You may be surprised to know that as you start attending and participating in tax lien sales, you’ll likely see institutional buyers representing large investment firms, that have been enticed by the high rates of return. 

The good news about this is that this shows that the yields are high enough to attract the big boys.

Of course that makes it vital that you be well educated and prepared in order to succeed. These guys have been studying tax lien investing strategies, and you want to do the same.

More good news, though, is that there are millions of tax lien certificates to choose from, and even after the big boys make a showing, there’s still a more than an ample amount of great deals left on the table if you know what to look for.

It doesn’t matter if you buy tax lien certificates online, or in person, there is real money to be made. Just make sure you know everything you can before going into the fray.

When many people ask, “Are tax lien certificates a good investment?” they’re really wanting to know “Is buying tax liens profitable?”

The answer is absolutely yes, but the rate of return varies from county to county, and state to state, and even from lien to lien at each auction

Let’s use Florida as an example. Florida works on an auction principle called reverse bidding.

What that means is in Florida the rate of return offered on a tax lien certificate starts at 18%, and with each round of bidding, the rate goes down.

Obviously these variables make it important that buyers are knowledgeable. That’s why I strongly suggest Ted Thomas as a source of information for anyone who wants to make sure their investment will indeed be profitable.

There are plenty of examples of Ted Thomas investors earning over 16%, 18%, 24%, and even up to 36% interest, which by my standards is a spectacular return, especially when lots of stocks have been losing value lately.

At this point, I’ll ask you, “Are tax lien certificates a good investment?” 

AVERAGE STOCK MARKET RETURN: 7%

Even excluding the year 2020, the stock market has seen an average rate of return of between 8% and 12% over the last two decades. The actual number many experts are using is often 7%.

That means that if you compare the Standard and Poor’s 500 biggest corporations in America to tax lien certificates, tax liens earned a higher rate of return in many cases.

IN CONCLUSION

If your criterion for deciding, “Are tax lien certificates a good investment?” is based on socially-conscious reasons, then I would have to say absolutely.

I can’t think of many things I would rather know my investment was doing than providing for schools, fire departments, police, and keeping neighborhoods running safely.

If when you ask, “Are tax lien certificates a good investment?” you’re asking, “Are they safe?” Again my answer is yes, if you know the rules and do your homework.

If you mean can you earn a healthy return on your investment? My answer is definitely yes. So take a look at tax liens.

You can learn this from Ted Thomas, who has literally spent decades going to every state, hundreds of counties nationwide, to uncover the best way to invest in tax liens and tax deeds.

For over 25 years, Ted has helped people learn everything they need to take advantage of this impressive investment opportunity, and you will be glad you did. 

Ted not only has a tax lien certificate investing course, but unbelievable resources to help you, and coaches who have been buying tax lien certificates for years. 

If you want to know more, Ted has a home study course called Safe Haven, that will teach you a lot about tax liens and tax deeds. Safe Haven normally sells for $197, but Ted will give it to you for FREE, so you can get started today.  


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