4-Minute Money Ideas
About This Show
The “4 Minute Money Ideas” audio article is based on weekly articles that Douglas Goldstein, CFP® writes in “The Jerusalem Post.” In easy-to-understand language, Doug explains retirement planning, investment basics, how to invest an inheritance, and how to open a U.S. brokerage or IRA account when you live in Israel (or anywhere outside the United States). If you follow Doug’s investment advice in the newspaper, or whether you learn about financial planning and investing from his many books, you’ll enjoy these very short podcasts.
Most Recent Episode
Can Bonds Increase Income from Your Investment Portfolio?
2 days ago
Can Bonds Increase Income from Your Investment Portfolio? By Douglas Goldstein, CFP® - helping olim handle U.S., IRA, investment, and brokerage accounts from Israel A retired widow met with me last week to discuss how to increase income from her investment portfolio. I reviewed her account and made some suggestions for restructuring her investments to get predictable income. We spoke a lot about bonds. Here’s why: Bonds pay a set amount on a fixed schedule, so if you are looking for predictable income, bonds may work for you. A bond’s interest rate is often commensurate with the level of risk; if you buy a “high-yield bond” (or “junk bond”) you get a higher interest rate than if you buy a high-quality bond. A well-designed portfolio incorporates different types of bonds in order to diversify risk and maximize returns, and it reflects the risk tolerance of the client. Build a bond ladder Another way to diversify risk while creating a predictable income stream is to use a technique called “bond laddering.” This means you buy a series of bonds with successive maturities, such as one, two, three, four, and five years. When the first bond matures at the end of the first year, you reinvest the principal in a new five-year bond at the prevailing interest rate. The following year, when the next issues matures, you do the same thing. This way, you have ongoing and dependable returns. You can customize the rungs of your ladder (i.e., the amounts of money you wish to invest), the height (meaning the longer and shorter term investments), and materials (types of bonds, like corporate or government bonds) to suit your own personal needs and risk tolerance. Bonds do have risks, so be sure to speak to your financial advisor, or get in touch with my office, to determine which specific bonds may be right for you. Two videos on bond ladders Watch two short videos about creating a bond ladder at: www.Profile-Financial.com/bond-ladder. If you have investments in the United States or are interested in receiving dependable income from your portfolio, call my office (02-624-2788). Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.profile-financial.com. He is a licensed financial professional both in the U.S.