Learn How to Build Wealth Volume 2–Bonds…Moore Bonds
In previous activities we introduced bonds. Unlike buying shares in a company when bonds are purchased they are done by lending money to either a company or government. Often times when businesses or governments want to raise money they borrow it. The entity that wishes to borrow the money is called the issuer. When we buy bonds we are lending money to the issuer.
Like most other borrowing transactions there is a cost to using other people’s money. The borrowing cost is called the interest rate and is paid to the lender in fixed payments. The interest received can provide a fixed income to those that lend money.
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