Do you want to make a serious impact on your long-term goals but feel stuck with the minimal returns from an interest-bearing savings account? High-yield bonds might be the solution to your investment dilemma.
What are high-yield bonds and are they ultimately the right investment for your portfolio? Learn more about them in this detailed guide!
What are High-Yield Bonds?
Bonds are a way for you to loan money to a government or a corporation that needs to fund a major project. Treasury bonds lend money to Uncle Sam while corporate bonds lend money to publicly or privately held companies.
In other words, you are giving a loan in exchange for the entity paying interest on your investment.
Most people who are interested in growing their financial portfolio want to see the highest return on investment. Corporate bonds are often the first place to look, as they typically have a higher yield compared to other types of bonds.
Worthy bonds fall into this category of higher-yield corporate bonds, but you won’t be investing in lining a CEO’s pocket. Instead, we invest in Main Street over Wall Street, dedicating the funds from the bonds we sell to community real estate projects including affordable housing.
Imagine earning a competitive yield (_xx% Fixed APY) with a low entry point all while making a real difference in the community. Worthy bonds allow you to make a positive impact, even if you don’t have tons of money to invest. You can get started for just $10!
Benefits of High-Yield Worthy Bonds
Bonds are an attractive way to start investing for future income. There are tons of benefits to bonds, and high-yield bonds have even more benefits. Here are some of the reasons why you might want to move forward with Worthy bonds.
Returns that Outpace Inflation
Are you tempted to keep all your money in an interest-bearing savings account rather than risk investing in something that could earn more? The problem is that most of the interest rates on savings accounts aren’t able to keep pace with inflation, so you’re actually losing money in the bank.
High-yield bonds are the solution for anyone who wants to outpace inflation. Worthy bonds have a _xx% Fixed APY, making them one of the best options on the market.
Faster Returns
Another thing to consider is the maturity rate of high-yield bonds. Treasury bonds have long maturities and they want you to hold them for twenty to thirty years, while corporate bonds might only require five years. Worthy bonds have no maturity dates, so you can sell when you’re ready to make a big purchase. This shorter turnaround time means that you get faster returns and can reinvest to increase your profit faster.
Diversification
Whether you are new to investing or a seasoned pro, you’ve likely heard the advice to diversify your portfolio. Along with investing in stocks, which can be riskier, bonds give you more security without sacrificing a major return on your initial investment.
Both investment vehicles have their place in your portfolio, and the stocks in your 401k will work hard for you in retirement. But bonds are a great way to branch out and save for a goal sooner than retirement, like a house, car, or college fund – and they offer more oomph than your savings account!
Liquid
Most Worthy bonds are demand bonds, which means they can be sold at any time to cover immediate needs. Their liquidity is one of our best reasons to invest because it ensures that you have money at your disposal whenever you need it. That said, don’t sell without a good reason. It’s best to hold the bonds for as long as possible because interest compounds and gets you the most bang for your buck.
Downsides of High-Yield Bonds
While there are tons of benefits to high-yield bonds, there are some areas where they can be a bit less desirable. Consider whether these downsides might prevent you from investing in bonds – and how you can get around them with Worthy bonds.
Sometimes Inaccessible
Some corporate bonds require you to be an accredited investor and put down a high minimum if you want to invest with them. For many corporate bonds, the minimum to invest is $1,000, but each bond will be slightly different. This is highly dependent on where you invest, but Worthy helps everyone get in on the benefits of high-yield bonds.
We aim to make investing in high-yield bonds easier. Anyone can get started with us for just $10. That’s just 1 percent of what the typical corporate bond requires!
Not Knowing Where Your Money Goes
Where does your money go? It’s an important question to ask before you start investing. If you’re frustrated with big banks and Wall Street, you might not like the idea that most corporate bonds funnel more money into large, publicly traded companies.
Worthy is different. We are privately owned which means we get to decide where bond proceeds go – and we choose to invest in community real estate projects to help make a community impact rather than contributing to the coffers of Wall Street and big banks. From affordable housing to small businesses, we’re committed to a people-centric approach to investing that you can feel good about.
How to Buy High-Yield Bonds
Most high-yield corporate bonds will require you to trade on the open market or go through a broker. But this isn’t your only option!
Worthy bonds can be easily purchased from your phone or laptop without a broker – and with no fees to buy or sell! You can even set up roundups and recurring purchases to automatically build your savings over time with minimal effort and no change to your lifestyle. If you’re ready to get started with your first bond investment, get started here!
