What bonds are

Bonds are massive loans. Organizations like corporations, cities, and national governments make it. And through them they borrow money from multiple sources. There are various kinds of bonds, based on the issuing organization:

  • national bonds (less risky and profitable),
  • municipal bonds,
  • company bonds (more risky and profitable).

You can gain money from these investments in 2 ways.

  • Interest payments: every bond pays a certain interest, based on the issuing conditions. And at the end of the loan you have your money back.
  • Profit from sale: you can resell the bond in the secondary market. With a higher price than what you paid at the beginning you make a profit. (As you can immagine this is were stuff get super complicated. I prefer to go for a more passive and stress-free approach. So I will not go deeper on this, at least for this issue).