Amanda Stanhaus

Tag: corporate bond

Corporate Bond

loan to a company.

(Originally published on Amanda Stanhaus’s financial literacy vocab blog: XO, Bettie Vocab.)

 

Boys:Men::Bonds:Maturity

image

I’m glad I have reached the point in my life that I am not waiting for boys to mature into men, and instead I am waiting for my bonds to mature into money!

There are many types of bonds and I had a bit too much creative time on my hands, so below I describe them in their boy equivalents. Click on the bold for the classic definitions.

Callable bond: His ex-girlfriend takes him back.

Corporate bond: The well dressed, business type that meets me on time unless the market is hurting.

Coupon bond: Without fail, I’m given gifts twice a year.

Discount bond: He is still hurting from his last relationship, but if I stick it out I could be one lucky lady.

Government bond: The young politico raising money to make the world a better place.

Junk bond: Good at sweet talking $$ out of me. Not sure if I will every get my $$ back…but if I do, it will be much more than I gave him.

Premium bond: Top of the line trust funder.

Zero coupon bond: The type who gives no gifts, but I’m well-rewarded at the maturity.

image

(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)

Bond

Bonds are not redeemable to meet James Bond. Bummer…

(click on the bold-faced vocab words:))

Instead, Uncle Sam is starving. He needs me to spot him some $$. A bond is a more official version of spotting $$.

I’ll get my $$ back when the bond matures.

A bond’s coming of age story includes semi-annual coupon payments until Uncle Sam returns my $$.

Companies also sell bonds. Corporate bonds are thought to be riskier than government bonds. A company cannot directly control its revenue and cash flow like a government can (i.e. tax policy and printing $$).

If the American Government is unable to pay me back, most likely we will have bigger problems on our hands (à la alien invasion). A space helmet could be a fun new accessory though!

image

(Originally published on Amanda Stanhaus’s financial literacy blog: XO, Bettie.)