POPULAR THINKING TODAY holds that you can never be too thin or too rich. We guarantee that this book will not make you thin. however, we do believe it will help you to increase your wealth. these pages present detailed information on all types of bonds and also offer financial planning and investment advice that teaches you how to conservatively preserve your capital and make money with bonds.

This section explains the history, language, and basics of bonds. once you've read and digested this material, you'll be better equipped to evaluate the information and strategies we present in the remainder of the book. you may think that this is too much work. Why should you bother learning all this? after all, you can take the easy way out and invest in stocks or diversify in bond funds without too much thought. Here's why. If you believe such a stock- or fund-based investment approach affords safety, you may be missing out on an important fundamental concept. Here's one way to explain it: Bonds come due. You know when you'll get your principal back. You'll get it if you invest in high-grade bonds. Neither stock nor bond funds—nor any other investments—come due as do bonds and automatically return your principal.

In addition, every moment of every day, whether you're awake or sleeping, the interest on your bond is compounding and accumulating. When the bond pays interest, the money will flow into a money market account, if you so direct your broker, earning interest there until you're ready to reinvest it. If the great bugaboo of inflation raises its head, that should be no concern of yours unless you purchased long-term bonds. In fact, rising interest rates are an opportunity to invest at higher returns. With each rising sun, your bond comes one day closer to maturity. The passing of each year brings it closer to redemption, when it will repay at face value.

When inflation lights a fire under the yields, driving down the price of your individual bond, that's no reason to despair. Your bonds will pay out their face value at maturity. Meanwhile, you can reinvest your interest at the higher rates, giving you an overall higher yield-to-maturity than you might otherwise have had if rates had not risen. You'll get your invested dollars back and get a higher yield than you had expected. If you reinvest the interest, your assets will grow through the geometric magic of compound interest. You will earn interest on interest as well as interest on your principal with every day that passes.

You earn interest on interest plus interest an your principal, which grows with every day that passes. You have the opportunity for better yields if there's inflation, you're protected from the worst returns in a deflation, and you get your money back. Sounds like a pretty good deal to us.