How Bonds Fit Into Your Financial Portfolio

There are plenty of ways to earn income – but each source is unique. From savings accounts to the stock market or even becoming an online entrepreneur, the possibilities are endless.

But there is no such thing as a “silver bullet” investment opportunity for any individual. You have to create a package deal that works for your lifestyle. That’s according to contributor Glen Rosenberg, who explains in the audio above.

In order to get the lifestyle that you want – financial independence and greater free time – individuals need a diversified financial portfolio. The important aspect of creating a portfolio is considering what kind of investment vehicles are realistic for you, and to find out how they can work in tandem.

According to Glen, bonds are such an investment. Although they are just one aspect of a successful, diversified portfolio, bonds are a very important player on your financial team.

In the audio above, Glen illustrates that the spectrum of investments spans from left to right. On the left, investments are less involved and such investments don’t necessarily yield a high return. Such conservative investments are typically savings accounts and highly dependable sources of income.

On the right side of the spectrum are investments that require a lot more involvement and yield a greater return. However, such investments are less dependent sources of income and can, in fact, be volatile. For example, becoming an internet entrepreneur through an ecommerce business – an endeavor difficult to get in and out.

But there’s a balance between these extremes – and that’s where bonds come into play.

Bonds operate as just one cylinder of an individual’s financial engine. More conservative bonds – such as municipal bonds discussed in part two of this podcast series – are a great source of consistently passive income that can be utilized to pay for one’s living expenses. Bonds are a tax-efficient way to generate a consistent albeit moderate income.

The best part? Bonds are a super marketable investment and are easily bought and sold.

The flexible yet consistent revenue stream that bonds yield make them a perfect fit for an individual searching for an investment form to supplement their financial portfolio. There are plenty of different bonds available – investors just need to find the right one for their goals.

 

MORE BOND INVESTING TACTICS ON CAPITALISM.COM:
• PART 1 – Why a Long-Term Investment Strategy Matters – An Audio Series on Bond Investing
• PART 2 – Spending Your Money: Are You a Stock Investor or a Bond Investor?