Investing For Dummies, 7th Edition

Chapter 7

Exploring Bonds and Other Lending Investments

In This Chapter

Getting the most from a bank

Selecting the right type of bonds for you

Choosing among individual bonds and bond mutual funds

Understanding other lending investments

Lending investments are those in which you lend your money to an organization, such as a bank, company, or government, which typically pays you a set or fixed rate of interest. Ownership investments, by contrast, provide partial ownership of a company or some other asset, such as real estate, that has the ability to generate revenue and potential profits.

Lending investments aren’t the best choice if you really want to make your money grow. However, even the most aggressive investors should consider placing some of their money into lending investments. The following table shows when such investments do and don’t make sense.

Consider Lending Investments If …	Consider Ownership Investments When …
You need current income.	You don’t need or want much current income.
You expect to sell within five years.	You’re investing for the long term (seven ...