Browse Category: Investing

Investing

Investing 101: All About Bonds

BondsAs we continue our series on the basics of investing, we next turn our attention to bonds.

In my opinion, bonds get a bit of a bad rap in the FIRE community.

Bonds can be a bit more complicated and more challenging for an individual investor to purchase than bank products, and may not generate the same returns as stocks, but I think bonds can still play an important role in many portfolios.

As a general rule, bonds fit in between bank products and stocks when considering risk and reward. Over the long run, you will probably earn more by investing in bonds than in bank products, while also taking more risk. Over the long run, you will probably earn less by investing in bonds than in stocks, while also taking less risk.

That said, there are exceptions to every rule. Investing in certain high yield bonds or distressed debt can be extremely risky – but also potentially offer significant rewards.

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Investing 101: Bank Products

Bank ProductsLast month, I started a series of posts about investing, to help build a foundation of knowledge for readers who are newer to the topic.

As I noted in my initial post, bank products are probably the most familiar type of investment to many readers, and include products provided by your local bank or credit union, such as savings accounts, checking accounts, money market accounts, and certificates of deposit.

We’ll start with a list of things to consider before investing in any bank product, and then go into more specific details about the primary types of investments you can get at a bank.

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Investing 101: The Basics

As someone who has been investing for decades, I often assume every reader has a similar background to mine.

But in reality, that’s not the case.

This is a good thing, because if every potential reader had the same experiences, knowledge, and perspective as I, there would be no reason for anyone to read anything I write!

In the first couple months of Retiring On My Terms, we’ve discussed a wide variety of topics:

InvestingGarage Sales.

Solar Energy.

401(k)s.

The cost of long commutes.

And even old water heaters.

Today I’m beginning a series of posts that will hopefully help build a foundation of knowledge around personal finance and investing for those who are newer to these topics.

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The Easiest Money You Will Ever Make

What if I were to offer you an investment providing a guaranteed return of 50% or more?

Immediately.

You put in $1.00 today.

And it instantly turns into $1.50!

Or in many situations, $2.00!

You might suspect I was up to financial chicanery, a la Bernie Madoff.

But everything I am going to discuss today is completely legitimate.

And taking full advantage of this opportunity may be the one of the most important things you can do to begin securing your financial future.

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