With The Proper Savings Plan Or With A Lucky Financial Windfall, Many Of Us Are Ready To Start Investing. However, If You Didnt Take Any Economics Classes In High School Or In College, You May Not Be Familiar With The Basics. Having Seen The Morning Financial News For Years, Youre Probably Familiar With Terms Like Stocks, Bonds, Commodities And Wall Street, But You Might Not Know Exactly What They Mean. Lets Take A Closer Look At Exactly What A Bond Is.A Bond Is Described As A Debt Security. Now, Dont Let That Term Confuse You, Consider It Much Like An I.O.U. When You Invest In The Bond Market, What Youre Doing Is Giving Your Money To Something, Whether It Is A Corporation, A Government, A Federal Agency Or A Municipality That Is Known As A Bond Issuer. Now, What Do You Get In Return For This Act Of Faith? You Get Interest. When You Buy The Bond, You Agree To Receive A Particular Interest Rate From Whoever You Bought It From, And Then Once The Bond Matures, You Get However Much You Bought The Bond For Back (usually The Face Value Of The Bond.)The Different Types Of Bonds You Can Choose From Are Varied. Most People Have Heard Of War Bonds That Are Issued By The Country To Raise Money For War. These Were Extremely Popular During World War II And Became A Very Patriotic Thing To Do. There Are Also Things Like Asset And Mortgage Backed Securities Bonds, Bonds Issued By Foreign Governments And Many Other Kinds.Now, Bonds Sound Like A Pretty Good Investment, But It Doesnt Sound Like Something Thats Going To Make You Rich Overnight. Well, That May Be True But That Doesnt Mean That Bond Investing Is A Bad Thing. Think Of Investing In Bonds As Good Long-term Planning. They Are Perfect For Families That Need To Save For Their Kids College Education. If You Dont Have Kids, Dont Worry, Bonds Are A Fantastic Way To Save For Retirement. Bonds Are Also Highly Recommended To Have As Part Of Your Investment Portfolio. No Matter How Much Risk You Can Afford, Its Good To Have A Rock Solid Investment, Too, So If Things Dont Work Out Well With Your Other Investments, You Have Something Reliable To Fall Back On. Todays Bond Market Is Varied And There Are Options For Everyone, Whether Youre Just Out Of College And Are Looking Ahead Or If You Are A Wall Street High Roller And You Need An Anchor To Your Portfolio. Investing In Bonds Can Be A Fun And Educational Way To Begin Investing, And You Likely Wont Lose Your Shirt In The Process.
