Listen Money Matters - Free Your Inner Financial Badass. All The Stuff You Should Know About Personal Finance.

A few months ago we did an introduction to bonds episode. We wanted to get a little deeper into the topic and a listener, Eric, agreed to help us out.  As you heard in the disclaimer, this is a complex topic. Stick with it though, it will all make sense by the end of the episode.  There are many types of bonds but the most basic description would be, a bond is an IOU. A coupon is the interest payment and you get that on a semi-annual basis until the bond matures. At maturity, you get the face value back.  A government bond is a treasury bond. These are often the benchmark that other bond rates are based on.  Agency bonds are issued by government-sponsored agencies like Fannie May. Mortgage-backed securities are mortgages sold off by the mortgage lender. Corporate bonds are what many of us are familiar with. These are sold when a company needs to raise money.  A municipal bond is issued by a city, town, state, or even a water company to fund expenses. Even Yankee Stadium has bonds! The yields are lower but fro