15. What is a Bond?

[jeromerocks123]

just what i needed !!!!

[johnpaulsialafau]

@KilgoreTrout1907 Wow, you have some issues.

[johnpaulsialafau]

thumbs up. Man you make things so much easier.

[budegbe]

why are bondholder meeting seen to be important?

[savingandinvesting]

@budegbe Bondholder meetings are seen to be important as they are often called in relation to changes to the terms of bonds, the waiving of certain conditions and/or restructuring of the bonds or the company. These matters often require the consent of the bondholder, who when a company has difficulty making bond payments in an extreme case, have priority over the equity in the capital structure. Hope that helps, Michael.

[aviomaster]

@MrMick73 -- Well almost everything you buy in USA is Made in CHINA you pay Chinese with dollars , Chinese stockpile these dollars close to 2 Trillion ,

That is where China gets Dollars, Also China buys USA bonds and USA is obliged to pay China back with interest that is how USA goverment borrows the money, Also Chinese are debasing their money so that STUFF sent to USA is Cheap for Americans to buy.

[MrMick73]

Does anyone know ... How does a country lend money to America ? How can china lend American money to the USA ?

[mokauroots]

thanks mate!

[daddyjuju]

when an investor buys a bond..how do they know the "terms" of debt or interest rates...knowing how much he or she is going to get back

[savingandinvesting]

An investor only really knows what will get back when bond 'risk-free' meaning no risk of default. For all other bonds there is a risk of default/non-payment. Bond terms provide coupon and the principal & maturity (pot. risk of non-payment/no coupon). Knowing price, coupon, maturity and face value, yield can be calculated. Features are in the name of bond and description. US Gov Bond exmple: UNITED STATES TREAS NTS 3.37500% 11/15/2019 (Coupon 3.375%/yr paid semi-annually, maturity Nov 15, 2019).

[jaymeforeshew]

THANK YOU sir.

My first year university accounting exam is in like 10 hours... haha

Nobody could give me a straightforward answer, until this.

Thanks so much

[jaymeforeshew]

@jaymeforeshew incase you cared, I still failed. thanks for nothing.

[johnpaulsialafau]

@jaymeforeshew I hope you're not blaming the video for your failure. lol

[chanman486]

bonds are secure? I didn't know they were back by collateral.

I thought bonds were relatively low risk debt instruments that are backed by the people's faith in the government agencies that issue them.

[ZR1Terror]

Let's say I have 10K in my bank account can I bid on a job that will total up to more than 200K? Can I get a bond to do the job?

[Catchetat]

thx fully understood! how about mini-bonds? r they just small versions of these bonds debts? Can you talk about the Lehman bankruptcy if possible? Thanks and keep up the good work!

[ashleyo154]

What's the difference between bonds and debentures (if there is one?).

[savingandinvesting]

The two terms are sometimes used interchangeably, but in the US - a debenture is a type of corporate bond that is backed only by the credit worthiness of the issuer and not a specific collateral or cash flow stream. So it allows corporations or governments to borrow in an unsecured fashion (meaning that the assets are not set aside as well against which the borrowing takes place). Treasury bonds would typically be considered debentures. Hope that helps, thanks for interest - best regards, MF

[djsoulo]

In regards to birth certs: They are a type of bond (if you will) that is tied into the social security of the new birth. The birth certificate is then put up as a bond from the government to the federal reserve which then gets its loan from the international bankers. Basically, the gov gets loans off your existence by guaranteeing that you will be in debited into the workforce, even at an early age. It is the epitome of human resourcing. I think that is what "rerund5" was eluding to.

[darkspeed62]

How to bond holders absorb debt then?

[savingandinvesting]

The buyer of the bond (the bondholder) if buys a US or UK government bond for example then has lent money to the government (the issuer of the bond). At maturity the bond would typically be expected to be repaid and the bondholder would get money back after typically collecting some interest in the form of coupons along the way. Hope it helps - please advise if further questions. Best Regards, Michael.

[ovandocarter]

coupons , so ... do you mean that we dont get a return in money that we can spend how ever we like

[savingandinvesting]

They are called coupons because in the past there were physical coupons that were attached to the bonds that would be removed and returned for cash. Today this is electronic largely. That is why these payments are referred to as coupons, and why this term is used in this context - they are not like the shopping coupons.

[itsabomberscope]

Great video. Some people say birth certificates are "BONDS" what do you say to this? Thanks.

[savingandinvesting]

Thanks for comment. Not heard this before - not a bond in the security sense i.e. a securitized debt obligation. Perhaps some link is possible hypothetically but birth certificates are not bonds for saving and investing purposes as I am sure you know. Thanks and best regards, Michael.

[itsabomberscope]

Thank you.

[rerund5]

Birth Certificates are in fact a form of Currency.Notice they are printed on bank note or bond paper.

[seeksoft]

very well presented, keep up the good work!

[followyourgut]

what is the relationship between the bond yields on the US treasuries (2 yr , 5 yr , etc) and the fed funds rate set by the FOMC? if someone could help me out, thanks

[salashaska223]

awesome vid, thanks a bunch...

[doctorofghetto]

Basically, Bonds are safer to earn money that you invested in, while stock is take that can inflate/deflate at anytime.....But, if I want to make twice as much money within the week, instead of the month, my best bet is stock?

And, if stock is a good thing to use for short-term earnings, is it good from this current government bailout situations going on with these corporations, especially if shares are as much as $1 each from Fannie Me, Freddie Mac, and/or soon to be Sallie Mae?

[savingandinvesting]

Bonds safer than stock for same company - debtholders get repaid first. Gov bonds in US considered risk-free, i.e. very safe. Historically stocks have offered better return over many periods although vol higher and timing argued to be impossible - as we can see from recent bank probs, even the pros having trouble making money albeit across overall activities & incl. writedowns.

Stock for short-term earnings v difficult as timing big issue - would rec Video on Time Impact - Hope it helps. Best R

[falgunprajapati]

Thanks for sharing your knowlege and provide help to save the money and investing in a proper, low risk market with potential returns.

[bebha05]

wa a u takig abut

[alexzur]

what are penny stocks.?.and are they good?

[savingandinvesting]

In US-are low priced stocks (<$5) that trade off-exchange (OTC). Disclosure rqmts and liquidity lower and can be more easily manipulated -tend to do well when investors seeking a lot of risk (often v strong markets). Generally deemed very high risk as not good visibility on co. fundamentals and room for manipulation. Takes away from purpose largely of stock investing - picking stocks knowing fundamentals hard enough. Not a core element of most successful saving and investing plans!

[mikehuntrx1]

im only 15 and this shit i dont know why is interseting to me. my life long goal is to be finacialy secure as an adult is there anyone out there with some advice for me? Thanks

[megaead69]

make sure you get good math scores on your sats then make sure you do tough things

[usherMadigan]

Can also make video on How to buy bonds. Thanks the video.

[JaxFloridaLocal]

Where would a good place for beginner investor such as myself to purchase a bond?

[savingandinvesting]

You would be more likely to purchase a fund that invests in bonds. That way you get diversification - this is also easier to buying and selling individual bonds is more difficult to do and the cost of some bonds is very high. You would go to a bank or asset management company that offers saving products. The fund manager would buy and sell the actual bonds as per the mandate of the (bond) fund, and you would buy a small piece of the fund. Hope this helps.

[albinplhh]

You'll find some helpful links at those sites: _TradeStockBond.com_ _StocksBondsInvestment.com_ _StockBond.org_ or __StockBonds.org_

Good Luck in a New Field.

[mattskydiving]

thanks that video helped.

[DTD]

thanks that helped

could you post a video explaining more?

[mangsuankhai]

Really useful introduction for a financial illiterate like me

[randomv3iwer]

You are not alone this, I'm illiiterate in finance too. and my accountning and finance classes are murders