What Do You Know About Bond Investing?

Stephanie Ann Williams Tulloch who had a bond portfolio from birth. She went to community college then to a four year college financed by her bond investments. Her first A1 new car was financed by bond investments at high school graduation. Her and her husband made a down payment on their first home using the remainder of her bond investments. The bad news, she went on to get her MBA, that was financed by her income from working. But she did open an IRA and she is investing in non-investment grade bonds for her retirement 35 years from now.    

One of my readers told me that I only talk about bond in my blog but talk very little about other investments. I replied, “Why do you think my blog is called BOND INVESTMENTS.”

I think it is time to take a test to see what you know about Individual bond investing.  I notice some readers are still confused when it comes to this subject, so I want to help diminish the confusion.

1.            A corporate bond is an IOU that means that the corporation borrowed money from the lender. T or F


2.       ABC 7% of July 2, 2057 bond usually means that ABC Corporation will pay the bondholder 7% of the principal of the bond with a final payment of principal and interest on July 2, 2057. T or F  


3.      ABC Bond Fund and ABC 7% of July 2, 2057 have the same interest payments, ratings, risk, and maturity dates. T or F


4.      A Bond Fund matures at a future date? T or F


5.      Common Stock in ABC Corporation may or may not give a dividend. T or F


6.      A Corporate Bond can be bought and sold more easily if it was marketed on a Bond Exchange. T or F


7.      If ABC Corporation went out of business, the stockholder would have a better chance of getting any money after liquidation of the company than the bondholder. T of  F


8.      Corporate bonds are guaranteed by the state or the US government. T or F   


9.       ABC 7% of July 2, 2057 (issued at $1,000 each) if bought at $600 and paying interest every January 2 and July 2 would pay the bondholder an appreciation of $400 profit at maturity. T or F


10.  ABC 7% of July 2, 2057 (issued at $1,000 each) according to the indenture will pay bondholders $35 on January 2 and $35 on July 2 of each year until and including July 2, 2057. T or F  

These are the things that you must know if you are going to be a corporate bond investor. You can make good money in bond investing if you know the fundamentals.  I have been making no less than one percent a month since the year 2008. I have more than tripled my money in my IRA in that time investing primarily in corporate non-investment grade bonds. 

Damine, Daniel, and Stephanie on vacation in Pittsburgh, Pa. Because of bond investments, she learned enough in college to bypass US red tape, go to Jamaica and bring back a husband. Plus she started a business making a 6 figure salaries.  Daniel is now 8 years old and runs in the USATF national arena. He is already known around the world for his track and field experience. He also has investments directed at his college career in 10 years. The bad part, they will not give me any money. 

This is what an aggressive bond investment program can do for you and your family. If you look at this as me bragging then you will never learn anything from what I tell you. If you look at this as a model for what you can do with financing your life then you will be better off. All it takes is the will to do it. You make your plan and work your plan!

Here are your answers: 1)T; 2) T; 3) F; 4) F; 5) T; 6) T; 7) F; 8) F; 9) T; 10) T 

If you got zero or one wrong, you should be investing in bonds because you know what you are doing.

If you got two or three wrong, you may be a bit confused about the fundamentals but can overcome this by reading back issues of my blogs on this subject.  

If you got more than three wrong, you need to read up on the subject by reading back issues of my blog. At this point, any broker, banker, or insurance salesman can rip you off due to lack of investment education.