When it comes to planning your financial retirement many people focus on the different types of accounts that you can use in which to defer payments or avoid taxes for a little while but very few people discuss in depth the specific things in which you can invest those funds that you have so carefully squirreled away for the important day that is to come in the dark dank future that seems as though it will never arrive.
Those of a most conservative temperament find greatest contentment in fixed income securities designed to protect principal value. Such persons will stick pretty closely to savings accounts, bonds, or preferred stock. For those of more flexible temperament, willing to accept in good grace the wider fluctuations in market value characteristic of common stocks, but still primarily interested in income, there are some well-tested issues to choose from. These are the common stocks of substantial companies, widely held by institutions which have paid dividends for many years.
Before investing in bonds, you must understand some things about bonds. Understanding what kind of bonds to purchase, what maturity date to purchase, is necessary before you begin to invest in them. Par value, maturity date and coupon rate. These three characteristics of a bond are the most important things to consider before purchasing a bond. Buying a bond without thoroughly studying these characteristics of a bond is the surest way to make the wrong decision.
A corporation is a peculiar thing. A corporation, at least in the eyes of the law, is actually a legal entity, having been born by virtue of its charter; it has certain rights and privileges which are conferred upon it by the state which issued its charter, which specifies the total capitalization and the amount of stock and/or bonds which may be issued; should any further amounts be required, then the charter must be amended.
Bonds are simply a loan, an investor owned utility (IOU) in which an investor loans money to government agency or to a company for a period of more than one year. In return, the agency or company issues bonds that promise to pay original principal along with interest on a specified date called maturity date.