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Welcome to some new Weekend Reading about another important subject: do you need fixed income?<\/p>\n
(I want to thank some readers and their email questions related to this subject over the recent months.)<\/p>\n
Just before that subject, and our current asset mix, some recent reads on my site\u2026<\/p>\n
And\u2026this week I posted this: some back-of-the-napkin examples about retirement numbers and rules to consider.<\/a> In that post there are some good starting points for your retirement income planning journey but at the end of the day, when you need real math done, please consider a retirement income plan beyond these rules of thumb.<\/p>\n The short answer for me: \u201cI do!\u201d<\/p>\n \u2026and maybe you should consider the same\u2026read on.<\/p>\n In short, just as the term sounds: when you own fixed income you get paid<\/strong>.\u00a0<\/p>\n There are many types of fixed income instruments, though bonds, bond funds, bond ETFs, etc. are probably the best known but not the only ones to consider.<\/em><\/p>\n Fixed income products are instruments issued by a government, a corporation or another entity to fund their operations. These products provide a fixed rate of return for a set period of time. That could be via bonds (consider bonds like an IOU from someone) but fixed income products also include GICs or money market funds. The reason why fixed income products can be so appealing in a portfolio is because fixed income securities have less correlation with the stock market \u2013 so there is less investment risk. I believe owning fixed income can offer DIY investors like you and I the chance to diversify: yes, you can still own your stocks for income and growth but as the name suggests fixed income can also deliver a stable stream of income too \u2013 for less risk.<\/strong><\/p>\n The return you generate from fixed income is taxed differently from return generated from equity. Capital gains and dividends are taxed favourably, while interest earned on fixed income holdings is taxed as income. Something to be mindful of\u2026<\/p>\n<\/div>\n Here is a very valuable post on this subject: Taxation of income.<\/a><\/strong><\/p>\n Weekend Reading \u2013 Taxation of Income<\/a><\/p>\n<\/blockquote>\nWeekend Reading \u2013 Do you need fixed income?<\/strong><\/h3>\n
What is fixed income?<\/strong><\/em><\/h3>\n
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