"Fixed Income Investments"
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Fixed income investments come in many styles and sizes, but they tend to have many common characteristics.
Fixed Income Investments Provide Income That Doesn't Go Up
That income is "fixed." It's static. It's not going to grow
If you think I'm making that sound negative -- yeah, you're right.
Don't get me wrong. They're perfect for many people. A good investor should know the investments for fixed income that're available to them.
But frankly, the very term brings back unpleasant memories for me. In 1985 I was a telemarketer selling magazine subscriptions. Back in those days, we hand-called numbers from sheets torn from the Haines Criss-Cross Street Directory.
If we got a neighborhood full of nice young people, we made a lot of money that night. If we were given an apartment house full of senior citizens, we were in deep trouble.
I wish I had a dollar for every elderly, quavering voice who told me . . .
"I'm on a fixed income."
Most of them, I'm sure, meant Social Security. Some had private or government pensions. Some of the men maybe received Veterans Administration checks.
Some of them probably got income from annuities or investments, but too small amount for them to consider buying a magazine subscription.
They used to make me angry, since they were limiting my own income.
Fixed Income is Better Than No Income -- Obviously -- but is Not Ideal
I wanted to scream at them, "Hey, everybody has a fixed income. If I had an infinitely large income do you think I'd be working this crummy part time job?"
But sad, too. When you're retired, that means you stop working, but does it mean that your income should be "fixed?"
Or if it is fixed, let's "fix" it at a level high enough for you to enjoy life. You should be able to buy things you enjoy on the spur of the moment.
Here're some of the things you should understand regarding fixed income investments in general:
Interest -- the time value of money
Inflation -- the Greatest Risk
Other Risks of Income Investing
Advantages of fixed income investments
And here're particular fixed income investments:
Tax lien certificates
Certificates of deposit / Savings certificates
Notes
Preferred stocks
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