How to invest in bonds and get rich

Remember you are in the world of the wise and wise people must be wise investors, in my article Investing where it counts I discussed some of the best ways to invest your money in order to attain freedom. In that article, I talked about bonds and how they can make you a person of success and achievement. However, we talked about corporate bonds then, this time we are going to look at the government bonds, if you were planning to give up on reading more of this article, I advice you to stay around for a few minutes since the information below may positively change your life for ever.

Bonds are used by governments all over the world to borrow money from the public to achieve their economic goals like curbing inflation. The good thing with bonds is that you will have utmost security about your money or investment and the sides of being a creditor to your government, most important of all, bonds normally have a good interest rate at the gain of an investor.

You do not need a lot of money to invest in bonds, many country requires initial investment capital of not more that $60. You there fore have a chance to increase your capital if you only save a little for the cause of bonds.

Allow me use the word Treasury bonds and not just bonds, this is because bonds are majorly for the corporate companies which need to borrow money from the public and since this article majorly refers to the government bonds, the word Treasury bonds will be appropriate.

What are Treasury bonds?
Treasury bonds are long term debt instruments with tenors of normally 2,3,5 and 10 years. They may be issued at per value, at a discount rate (below face value) or at a premium (above face value)

Investors in Treasury bonds are paid a fixed coupon interest amount normally every after 6 months based on the face value of the bond until the maturity date. The investor will also earn interest by buying bonds on discount or lose some interest by buying at a premium or earn only the coupe interest by buying at per value

Who can invest in Treasury bonds?
Bonds can be acquired by residents and non-residents who have opened up CDS (Central Depository System)accounts, the investor can be any individual, organization, or corporate and must have attained a contractual age of 18 years as it is in most countries.

What is Central Depository System?
This is an electronic register which register the investors, auction government securities, create and store electronic investor’s securities and also performs the task of security redemption at maturity. You can call it the central processing unit for bond transactions. It is better to understand such things before you go in for Treasury bonds.

How to apply for Treasury bonds
As with many other security transactions, you can acquire bonds directly from your government, there are normally registered primary dealers who can help you in you in the application process. These are normally big commercial or investment banks, Such institutions must be well capitalized and must have a clearing account with the central bank.

How will you earn from Treasury bonds.
You can always re sell your bonds to a primary dealer, or any other Treasury bonds investor or you can a security exchange for a broker to find a buyer. Take a scenario where you are about to face a fore closure or a debt repayment date is drawing nigh, reselling your investment (bond) will come in to save. Remember that as a wise man, who visits the world of the wise, you can resell your bonds at a higher price than the one you bought them at.

You can use a bond certificate to acquire a loan from most of the financial institution; a bond certificate is widely accepted as security for your loan. You can use that money to carry out development plans, in a sense you can go for a band just as a way getting security for your future loans. That is a very nice idea to drive you to success.
Treasury bonds grow profits normally after every 6 months, the interest you get will be based on the coupon interest rate and whether your bid was priced at a discount, par or premium. If you bond has a 10% interest and you invested 100 millions, you will be getting 10 millions (coupon interest) after every 6 months until the maturity date.

Investing in bonds is one of the best ways to save your money, many times, the interest you will receive from your bonds is always far higher from that you get from other financial institutions including banks. Why would you save your money from home and get the same amount after a certain time when you have a better way to invest? I think you should give bonds a try, I know you will come back to thank me when you have made some fortune.

I know there are many things you may not understand about bonds, my article Bonds and Treasury bills terminologies will help you understand everything. I wish you luck in your investments