"Understand the Advantages of Fixed Income Investments"
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Fixed income debt instruments or debt obligations do have many important advantages, of course
Fixed income investing plays an important role in the portfolios of many people, including many wealthy people.
If you have enough money or you're very old, you could live the rest of your life simply on your income from fixed income investment products.
Of course, "enough money" is a subjective term. Some people would be extremely happy to add just the interest income from $50,000 to their annual income. For those people, adding that to their Social Security would be enough money to pay off their gas bills and they'd be happy.
Some people have $100,000,000 but would hate the idea of knowing that if they put all that into fixed income funds, inflation would eat away at its purchasing power. They would insist on some proportion of their portfolio going into investments that grow one way or another.
So there's no absolute right or wrong. Probably you fall somewhere in the middle of those two extremes, as do I.
It is worth remembering that many elderly people today live solely on Social Security and/or some type of pension. They never saved a penny and they're not even sorry. They live in paid off homes or Section 8 apartments. They don't go anywhere or do anything or buy anything except necessities -- and wouldn't even if they won the lottery tomorrow.
But that's not the lifestyle I want for myself, and I assume it would not satisfy you either -- or you should be watching TV, not wasting your time thinking about investing for income.
Here are the advantages to investing in fixed income
1. Legal rights in case of bankruptcy or dissolution.
2. Higher yields
3. Lower volatility of return
4. Lower risk
5. Flexibility
6. Large variety
7. Predictability and reliability of income
8. Stabilize portfolio returns if included with stocks
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