BONDS ARE DEBT, YOU WANT TO OWE OR WON
PERSONAL FINANCE: DISCUSSION BONDS
Ques 1 - If you were offered stock options in your company instead of 50% of your pay,
would you take them? Why or why not?
Ans - Even if the company offers me the best deal for the stock option. I won’t be opting
for the option. For the fact that the company I am working for is one the best in the
market. There are few reasons that I will be considering for saying NO. I believe that
the investment should be diversified. If you are planning to give away 50% of your
income in the stocks, then as per my understanding, you are putting out lots of risks.
You can manage or save more by not investing in stock options. Money is the
necessity of living and the future. The stock option won’t be great.
Ques 2 - Read the Article.
Ans - Insights regarding both the articles-
I have read many articles on different approaches concerning stocks, bonds, or fixed
income. After reading these articles, I eventually gave myself a path to think and
understand what these terms would mean in the real financial world. How and what
kind of risk would be associated with these in respect to the investment. Few
takeaways would be on the lines of bonds that are debt securities issued by
corporations, governments, or other organizations and sold to investors. Bonds also
tend to pay regular and stable interest rates. Making them well-suited for those on a
fixed income. Eventually, fixing the fixed income is possible for an individual
investor to buy a single bond, but it also requires a significant amount of assets to
build a diversified portfolio.
Ques 3 - Answer the following questions -
A) Would you buy a bond as an Investment?
Yes, buying bonds as an investment is a good option when you want to save more
money. I believe that investment in bonds gives you a valid guarantee, and there is
always a low risk with these kinds of investments. Basically, this kind of investment
is less risky if compared with stock investment. Also, these offer less retune on
investment. one can always be traded for a higher price.
B) If you owned a company, would you issue a bond/take out a loan to run your
business? why do this vs. issuing stock?
I have my own company, and the best part is that I do issue bonds to run my business.
I believe that issuing bonds is profitable because it helps you raise operating capital
and fund financial transactions. There are multiple advantages to this like you are not
diluting the ownership of the company. There is a saying - buy stocks when you want
to eat well, and buy bonds when you want to sleep well. Bonds are always a safe
option even if, in bankruptcy, bondholders are toward the front of the line to receive
their money back.
C) You can own a bond separately or buy a broad selection of bonds in a mutual fund or
ETF. Which way would you buy bonds for your own investment purposes?
Investing in individual stocks and bonds, pros would be you can choose
exactly what you invest in. Still, the consideration would be that the process
can be time-consuming and potentially costly. And you are on your own when
it comes to rebalancing. Another question is, do you want to know the price of
your investment when you buy or sell it? If yes, then true invest in ETFs. You
GARIMA VISHNOI | BUSI 710 | DMGT | SPRING’ 2021 | PERSONAL FINANCE DISCUSSION 1
PERSONAL FINANCE: DISCUSSION BONDS
Ques 1 - If you were offered stock options in your company instead of 50% of your pay,
would you take them? Why or why not?
Ans - Even if the company offers me the best deal for the stock option. I won’t be opting
for the option. For the fact that the company I am working for is one the best in the
market. There are few reasons that I will be considering for saying NO. I believe that
the investment should be diversified. If you are planning to give away 50% of your
income in the stocks, then as per my understanding, you are putting out lots of risks.
You can manage or save more by not investing in stock options. Money is the
necessity of living and the future. The stock option won’t be great.
Ques 2 - Read the Article.
Ans - Insights regarding both the articles-
I have read many articles on different approaches concerning stocks, bonds, or fixed
income. After reading these articles, I eventually gave myself a path to think and
understand what these terms would mean in the real financial world. How and what
kind of risk would be associated with these in respect to the investment. Few
takeaways would be on the lines of bonds that are debt securities issued by
corporations, governments, or other organizations and sold to investors. Bonds also
tend to pay regular and stable interest rates. Making them well-suited for those on a
fixed income. Eventually, fixing the fixed income is possible for an individual
investor to buy a single bond, but it also requires a significant amount of assets to
build a diversified portfolio.
Ques 3 - Answer the following questions -
A) Would you buy a bond as an Investment?
Yes, buying bonds as an investment is a good option when you want to save more
money. I believe that investment in bonds gives you a valid guarantee, and there is
always a low risk with these kinds of investments. Basically, this kind of investment
is less risky if compared with stock investment. Also, these offer less retune on
investment. one can always be traded for a higher price.
B) If you owned a company, would you issue a bond/take out a loan to run your
business? why do this vs. issuing stock?
I have my own company, and the best part is that I do issue bonds to run my business.
I believe that issuing bonds is profitable because it helps you raise operating capital
and fund financial transactions. There are multiple advantages to this like you are not
diluting the ownership of the company. There is a saying - buy stocks when you want
to eat well, and buy bonds when you want to sleep well. Bonds are always a safe
option even if, in bankruptcy, bondholders are toward the front of the line to receive
their money back.
C) You can own a bond separately or buy a broad selection of bonds in a mutual fund or
ETF. Which way would you buy bonds for your own investment purposes?
Investing in individual stocks and bonds, pros would be you can choose
exactly what you invest in. Still, the consideration would be that the process
can be time-consuming and potentially costly. And you are on your own when
it comes to rebalancing. Another question is, do you want to know the price of
your investment when you buy or sell it? If yes, then true invest in ETFs. You
GARIMA VISHNOI | BUSI 710 | DMGT | SPRING’ 2021 | PERSONAL FINANCE DISCUSSION 1
