Dear Mr. Berko: I'm thinking about building a municipal bond portfolio. I'll be retiring next year and probably have more current income and money than I'll ever need. I'm not bragging. I just had more luck than any man is supposed to have and I'm thankful for it. So I contribute a lot of money each year to various charities and do it quietly. Now I want to invest a lot of money in tax-free bonds because I'm certain that my personal taxes will increase significantly in the next few years. While I can afford to pay much more, common sense asks: "Why should I, if I can legitimately avoid doing so?" I'd much rather reduce the amount I pay every year and make up for it by donating more money to charities I choose than contribute to the government's coffers only to see the money doled out for things I don't approve and to people who have been given opportunity but eschew responsibility. I've never been in the stock market and it's probably a good time to do so, but I'm neither greedy nor a gambler. So I have decided to build a portfolio of municipals to give me a solid, tax-free income. My daughter, who lives in Delray Beach, Fla., sent me an advertisement for a Miami-Dade County, Fla., Special Obligation Convertible Compounded Accreted Bond, which is insured. The bond will cost $600 per $1,000. Please tell me about this bond and what you think. I would invest in 100 of them for $40,000 profit at maturity in 22 years. — W.E., Durham, N.C.

Dear W.E.: This Miami-Dade County, Fla., Special Obligation Convertible Compounded Accreted Bond maturing in October 2030 is priced at $600 per each $1,000 bond. It has a 5 percent coupon. If you decide to purchase $100,000 of these bonds, they would cost you $60,000 and it is possible you will make a $40,000 profit at maturity in 22 years. That 5 percent coupon indicates you will receive $5,000 a year.

However, Miami-Dade County won't pay you a centime in interest until Oct. 1, 2013, which is nearly five years from now. For those empty five years you'll be out of pocket $25,000, which ain't chopped liver. It seems that the brokerage is trying to bump some uglies through its inventory and I'd rather swim in raw sewage than put $60,000 in this offal.

The brokerage firm Raymond James underwrote this bond in 2005 as an original issue discount at $750 per $1000. However, the bid side of this bond, what it can be sold for, is $530 per $1,000. That means it has crashed almost 25 percent since Raymond sold millions of these things to its clients. I know Standard & Poor's rates it A-plus. However, I trust the ratings of S&P and Moody's Investor Services about as much as a lab rat would trust a research biologist.

Now you live in Durham, N.C., which is one of the most delightful cities in this country. Wonderful people, great schools, a healthy business climate, good transportation, less than 480,000 residents, superb cultural activities, a strong tax base, median household income of $46,000, 85 percent of the people have high school diplomas, 43 percent have bachelor's degrees, a very low crime rate and exceptional public services. So if this bond were issued by the City of Durham, I'd recommend it in a Minnesota minute.

But Dade County is a Third World country and Miami is its cesspool. Its tax base is declining, crime is rampant, few folks have completed high school, the median income is $16,600 a year, the political base is corrupt, schools are crumbling, Spanish is the dominant language, real unemployment is over 9 percent, public services are overwhelmed, etc. ad nauseum and so on. I think you get the picture. Frankly, I doubt that Miami has the necessary "people capital" to attract investment money for infrastructure maintenance, for new business development, to build new schools or for community cleanup.

So, you've got to be dumber than do-dah to invest $60,000 in that Rube Goldberg detritus. I have serious doubts that Miami will be able to redeem that bond when it matures in 22 years.

Do build a portfolio of solid municipals. But don't rely on those funky bond firms like Liebenthaler or FMS, who must solicit clients through large newspaper ads. The big boys, like Morgan Stanley, Merrill Lynch, A.G. Edwards, and Charles Schwab, have inventories of high-grade municipal bonds that are infinitely superior to that Miami-Dade County junk. So, thank your daughter for her help, but I think you can easily find the right brokerage in Durham to help you.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, FL 33429 or e-mail him at malber@comcast.net. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

COPYRIGHT 2008 CREATORS SYNDICATE, INC.

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