Bonds

What are Municipal Bonds?

Posted May 16, 2011 by Bernz

If you are familiar with investing at all, you already know that there are two basic types of investments. The first type of investment that many people hear about on television and from other news media is a stock. Buying stock in a company is like becoming a part owner of the company. If the company does well, you can make money, but you also risk losing money if the company does not do so well. While stocks may be great investments for some people, they are not the right choice for everyone and every investment situation.

The second type of investment is a bond which is very different from a stock. While a stock is like purchasing part of a company, a bond is more like lending your money to the issuer, possibly a company or an organization. Bonds are also different because they are bought with an end date in mind. With a bond, you will not see the value increase or decrease, but you will be paid interest during the term of the bond.

There are a few different kinds of bonds, but one of the most popular kinds of bonds for investors, especially those in the higher tax brackets, is a municipal bond. Local governments issue municipal bonds which are the preferred choice for some investors because they are tax exempt unlike other bonds. If you are interested in purchasing a municipal bond, you will not have to pay tax, either to the state government or federal government, on the interest you earn from the bond.
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Posted in Bonds, Investing Basics, Investing Strategies | No Comments »

Surety Bonds for the Entrepreneur

Posted July 5, 2010 by Matt Bruns

Surety bonds can make a world of difference for fledgling entrepreneurs.

They are key risk-mitigation tools that can insulate business owners from financial harm and reassure consumers that you’re committed to consumer protection. They’re also mandatory for scores of industries and business types, from construction and health care to travel agencies and janitorial services.

But they’re also often misunderstood, if they’re even considered at all.

How Surety Bonds Work

Surety bonds are basically three-party agreements among a principal (the company performing the duty), the obligee (the entity receiving or licensing the work) and the surety company that issues the bond. In the construction industry, contract bonds help ensure that projects get completed, subcontractors get paid and bids are legitimate.
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Posted in Bonds, Financial Education, Financial Goals, Investing Basics, Retirement Planning | 2 Comments »


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