How and where do I buy bonds?

What are bonds how do I buy them or use them, how do they work, how do I gain from them, where do I get one?

• Answer:

  A bond, in a nutshell, is a loan you make the a corporation or government (for example a War Bond). They are purchased through brokers, but some organizations, such as the government, allow people to buy them directly. When you loan money to the organization, they keep it for a set period of time to improve their business (or in the government's case, buy war machines, repair schools and so on). That means that during this time, you don't have the money to spend on yourself. To pay you back for the lost opportunities, your opportunity cost, the organization pays you back with interest at the end of the bond (some bonds pay interest during the life too, but thats too complicated for a quick answer). You do gain money on interest, but depending on your investment style and risk aversion, it may or may not be enough to cover your opportunity cost. If you are interested in buying government bonds, contact a government office (ususally the post office can point you in the right direction. Corporate bonds are typically handled through brokers.