You Can Buy Bonds in the Culinary Institute of America Now

It's less risky than investing in a restaurant

Investing in a restaurant is risky, no question about it. But investing in the school that trained the restaurant’s chef? That might be a safer bet.

The Culinary Institute of America, the famed culinary school where chefs from Roy Choi to Anthony Bourdain got their educations, is selling millions of dollars worth of bonds. Bloomberg reports the money will be used to renovate and make improvements to its California and Hyde Park, New York facilities — and, hopefully for investors, will provide a hefty return.

So how, exactly, do municipal bonds work? Essentially, if an investor buys a municipal bond, she is loaning money to the agency (in this case, the CIA) in exchange for a set number of interest payments. The bonds don’t come without risk but tend to be a bit safer than other investments — such as investing in a hot new restaurant that might be closed in less than a year.

Financial analyst Howard Penney says an investor in a similar municipal bond could expect to see returns in the “low single digits.” That’s right on par with most municipal bonds, which tend to yield lower returns than stocks over the long term — though they often come with less risk and, in some cases, are tax-free.

For now, the school seems like a fairly solid bet, at least from an investor’s point of view: Bloomberg notes both tuition and enrollment are up slightly from five years ago. Tuition is currently at $40,690 per year (compared to $35,965 five years ago) and enrollment is at 2,940 (compared to 2,785 five years ago).

But for prospective students, the potential returns look less bright: On average, chefs with culinary degrees only earn 12 percent more than chefs who didn’t attend culinary school, and the average pay for a culinary arts professional is about $40,000 a year, making the prospect of paying back a $40K education rather grim.

• Anthony Bourdain Culinary Alma Mater Serves Up Municipal Bonds [Bloomberg]

• Culinary Schools Are Getting More Expensive — Should You Go? [E]