Understanding how to build a bond ladder can be a game changer for your financial portfolio. That's why on this week's episode, Josh and Austin break down the concept into simple steps, discussing the benefits of creating a diversified bond portfolio with staggered maturities. They'll share their tips on selecting the right bonds, managing risk, and optimizing returns over time. Tune in to gain practical insights that will empower you to make strategic decisions about your investments and achieve greater financial stability.
For the full transcript, links, and resources, visit theinvesteddads.com/193
Sign up for our exclusive newsletter here!
The Invested Dads: Website | Instagram | Facebook | Spotify | Apple Podcasts
Understanding how to build a bond ladder can be a game changer for your financial portfolio. That's why on this week's episode, Josh and Austin break down the concept into simple steps, discussing the benefits of creating a diversified bond portfolio with staggered maturities. They'll share their tips on selecting the right bonds, managing risk, and optimizing returns over time. Tune in to gain practical insights that will empower you to make strategic decisions about your investments and achieve greater financial stability.
For the full transcript, links, and resources, visit theinvesteddads.com/193
Sign up for our exclusive newsletter here!
The Invested Dads: Website | Instagram | Facebook | Spotify | Apple Podcasts
Welcome to The Invested Dads Podcast, simplifying financial topics so that you can take action and make your financial situation better. Helping you to understand the current world of financial planning and investments, here are your hosts, Josh Robb and Austin Wilson.
Austin Wilson:
All right. Hey, hey, hey, welcome back to The Invested Dads Podcast, a podcast where we take you on a journey to better your financial future. I am Austin Wilson, Co-Portfolio Manager at Hixon Zuercher Capital Management.
Josh Robb:
I'm Josh Robb, Director of Wealth Management at Hixon Zuercher Capital Management. Austin, how can people help us with our podcast?
Austin Wilson:
We would love it if you would subscribe if you're not subscribed already. That way you get new episodes each and every Thursday when they drop. If you could leave us a review on Apple Podcast, Spotify, or wherever you listen, that would be great.
Today we're going to be talking about why you may want to and how to construct a bond ladder. Bonds are in. Bonds are exciting. They have never been this exciting in our lives.
Josh Robb:
All right. Bond ladder, that's obviously an upward moving thing, I'm assuming, right? You're climbing out of-
Austin Wilson:
You're climbing something.
Josh Robb:
... climbing out of the low savings account yields to a higher yielding portfolio. First of all, always a caveat, everything we talk about, not a recommendation-
Austin Wilson:
Nope.
Josh Robb:
... but we'll be talking about a asset class within the investing world, and you're going to have to decide whether it fits in your strategy. You can talk to your financial advisor, but we're just going to talk about what is a bond and why you'd want a ladder of them, physically-
Austin Wilson:
Physically.
Josh Robb:
... or in an investment. We do have an episode on bonds.
[1:34] - High-Level Overview of Bonds
Austin Wilson:
Yeah, we should link that in the show notes. But at a high level-
Josh Robb:
High level... Give me a bond.
Austin Wilson:
... a bond is a loan.
Josh Robb:
Okay.
Austin Wilson:
So Josh Robb, suppose he has a corporation... and so this would be a corporate bond we're talking about here... and he needs to raise some capital for-
Josh Robb:
I need some money.
Austin Wilson:
... a project-
Josh Robb:
Improvement.
Austin Wilson:
... improvement.
Josh Robb:
Expansion.
Austin Wilson:
It could be just growth, whatever that may be. So Josh issues a bond. He issues a bond, which is essentially a loan to the open market, where this would go. Then I would go buy, and I would get interest payments in exchange for loaning my money to Josh for this. Now, the less likely Josh is to pay me, the lower his credit worthiness, the higher my interest rate would be, and the more likely the lower my interest rate would be, there's less risk.
Josh Robb:
Yep. So if I said, hey, I got this opportunity to add onto my building, and I need a million dollars to do that. I need it today because I'm going to start the building, and that's going to give me more money because I have a bigger building to do whatever business I do. So I would go out and sell 10 bonds, whatever it is, and people would buy them, and I would get my million dollars. So I have what I need today, and as a result... Let's say it's a 10-year bond... I would say, okay, throughout these next 10 years since you've let me borrow your money, thank you, I'm going to give you some payments along the way as a thank you for letting me have your money upfront. I get to do my stuff, expand my business, grow, and I'm paying you interest.
Austin Wilson:
Correct.
Josh Robb:
I'm paying you those payments maybe twice a year or whatever. Then once that 10 years is up, boom, I give you back your money. If you bought my million dollar bond, I paid you interest along the way, then you get your million dollars back. That's what a bond does and how it works.
Austin Wilson:
Now, on paper, you buy bonds at par, which is exactly their face value, and you get it back at the end. In the real world, it's not always that simple because we're buying and selling fixed income securities, bonds, in the open market based on supply and demand. So you may, based on what your interest rate of Josh Robb's bonds is, you will either pay a premium or a discount to the market to get your bond.
Josh Robb:
I offer 4% interest, but there's a business next door to mine who also is raising money, and they're offering 5% interest.
Austin Wilson:
Yours is going to say that this-
Josh Robb:
That's more appealing to somebody lending money. They get more interest. So I'll have to adjust my price to make mine as appealing.
Austin Wilson:
You're going to trade at a premium.
Josh Robb:
I'm going to be trading at a discount because I'm offering less interest.
Austin Wilson:
Discount, yes. You're correct.
Josh Robb:
I need to get some way of motivating you, so instead of you lending me a million dollars, you may only have to lend me $900,000 to get the same thing.
Austin Wilson:
Absolutely.
Josh Robb:
Yes. All that to say-
Austin Wilson:
That's a bond.
Josh Robb:
... bonds are lending money. They get paid back.
Austin Wilson:
With a stock, you are owning things, an asset. With a bond, you're loaning things. That's kind of a good way to remember it. Let's talk about why you may want a ladder of bonds. Now, a ladder is really just a way to say you want to have this portion of your assets in the fixed income market... and we're going to get into different kinds of fixed income securities... and you want to take away some of the interest rate risk by buying bonds at various maturities over a longer set period of time than just a year or whatever. What this could be is staggering your bond purchases, and let's say you have a million dollars and you want a hypothetical 10-year bond ladder, you could divide that by 10 and buy a bond that matures every single year for 10 years.
Josh Robb:
Hundred thousand dollars each time.
Austin Wilson:
As each bond matures... so you're going to buy one that's essentially going to mature this year. As that bond matures, you'll get your hundred thousand dollars back. Then if you're doing it as vanilla as you can, take that hundred thousand dollars and go buy one the next year. So you always have a 10-year bond ladder. That's an example of what a bond ladder is. Now, why would you want to do this? It's because interest rates make bond prices move actually a fair bit in the short terms. Over long terms, they don't. At the end, you're always going to get your money back at maturity, provided the company doesn't go bankrupt. That is why as interest rates move up and down, your bond value moves up and down, but you don't want any of that to be kind of impacting your overall picture because you have too much eggs in one basket, right?
Josh Robb:
Yes. Correct.
Austin Wilson:
This essentially means that you'll have a consistent stream of income. Those two components are why a lot of people like bond ladders because they get a steady stream of income that they can count on, and they take away a lot of the interest rate sensitivity of bonds themselves.
Josh Robb:
Yes, and an important note, this only works with bonds that are maturing in the future because bonds that have already matured, that would be called a former, not a ladder.
Austin Wilson:
That would be called a former, not a ladder. Good joke.
Josh Robb:
There you go.
Austin Wilson:
It wasn't not even his dad joke-
Josh Robb:
It's not even dad joke. Just thought of it. All right.
[6:24] - 1st Step to Building a Bond Ladder: Talking to Your Financial Advisor
Austin Wilson:
Let's talk about how you may go about building a bond ladder.
Josh Robb:
Side note, this same concept works for other interest paying, maturing things, CDs, those type of things.
Austin Wilson:
CDs, yeah.
Josh Robb:
Exactly. Yep. You can see those used a lot.
Austin Wilson:
I think it really starts with talking with your financial advisor, and this is going to be a caveat we're going to say more than once. But when you sit down with your financial advisor, you determine your goals that you want for all of your money in general and determine that a sleeve of that can be achieved with a bond ladder. So know your investment objectives, your return objectives, your risk tolerance, your income stream desired. That is how you're going to determine that with your financial advisor. Look at the big picture. See if fixed income in general or specifically a bond ladder fits into how you want to invest to meet your goals and go from there. So that's step one. But really you can use this to generate income that you can use for living. You can use this to save for certain events or expenses that are far away. These are reasons you could use a bond ladder.
[7:26] - 2nd Step to Building a Bond Ladder: Choosing Bond Type
Austin Wilson:
Number two is very key as well. Choose your bond type.
Josh Robb:
There's types of bonds?
Austin Wilson:
There are types of bonds. There are government bonds, which, big news, the Fitch just downgraded the US. They're one step below perfect investment grade.
Josh Robb:
I saw a thing that was talking about that-
Austin Wilson:
From AAA to AA+?
Josh Robb:
... that said, at this point, Microsoft has a higher bond rating than the US government. And so the question is... You'll enjoy this... in order for Microsoft, who also has stock or equity to use their discount models, they have to use a risk-free rate, which by default people use the government's short-term bonds, should they switch to their own bond for a risk-free rate because they're actually more stable in theory than the US government?
Austin Wilson:
Here's what I will say. The reasons why the US got downgraded, and we should really probably have an episode on this-
Josh Robb:
If people want to go to sleep, yes.
Austin Wilson:
... is largely around a longer term trend of fiscal irresponsibility-
Josh Robb:
And the governments-
Austin Wilson:
... matching your inflows and your outflows, and then discussion over not being able to pay your debt. Those two components together have created what we have today. This isn't the first time this has happened. This happened again in 2011 when S&P did the same thing. Yes, the government's going to pay its debt, but this is more of a warning than anything. This does not mean that the government is not going to pay its bills. But all that being said, government bonds, specifically federal government bonds are considered risk-free, and they are generally the most liquid and stable bonds that you can buy.
Josh Robb:
There's a big market for them.
Austin Wilson:
There's a big market, not just in the US-
Josh Robb:
Global.
Austin Wilson:
It is the biggest around the world because everyone wants US dollar-denominated bonds. But there are also bonds of localities. Those are called municipal bonds, and there are different regions that do this. There are states that do this. There are local governments and schools, and they can do it from tax revenue. They can do it for general obligation, all kinds of different ways that they get income for that-
Josh Robb:
Schools, all that kind of stuff, yep.
Austin Wilson:
... schools, income tax, school tax-
Josh Robb:
Property tax, yep.
Austin Wilson:
... all these things.
These are ways that these municipalities will fund themselves but also fund the debt that they're incurring to grow, to develop, to do what they want to do. That's municipal bonds.
Now, Josh, what is the key thing about municipal bonds?
Josh Robb:
And some government bonds because there's some, like E bonds and EE bonds, all the I bonds, some offer tax savings. Some are tax-exempt. Municipal bonds are tax-exempt.
Austin Wilson:
Not all.
Josh Robb:
Not all.
Austin Wilson:
But close.
Josh Robb:
And depending on where they're at and which types you get... And the same is true with government bonds... There are some that depending on what they're used for and how they're done are tax-exempt. That is the appeal to some people is you save some income tax on those because, again, most bonds, not all because there are zero interest bearing bonds, but those that pay at interest, you will owe income tax on.
But some government and municipal bonds, you do not owe that tax, whether it's state or federal, depending on what type of bond you have.
Austin Wilson:
Before we continue, you brought up a word I want to explain, a zero-coupon bond is what it's called really. That is an interesting thing that might throw a wrench in your bond ladder. If you're using it for a stream of income, a zero-coupon bond... So the coupon is that interest payment that Josh Robb gives Austin Wilson for loaning him money, right... a zero-coupon bond really just means that I go buy Josh's bond at a discount that would incorporate the interest payment already-
Josh Robb:
And I get it at the end.
Austin Wilson:
... and then give me my money back at the end, which brings the gap up from the discount I bought it to par, right?
Josh Robb:
Yep.
Austin Wilson:
That's not really as applicable in a bond ladder scenario. You typically would not want-
Josh Robb:
You don't ladder zero-coupon bonds.
Austin Wilson:
Yeah, you would not want to ladder a zero-coupon bond. So a couple other types of bonds you talked about, municipal corporate bonds. Microsoft was the example you brought up. Most corporations have the ability to issue debt to fund their capital requirements. Big corporations like Microsoft and Apple are some of the best and most stable and lowest yielding because they're the least risky ones out there. But almost all corporations are able to do that, and it helps them to meet their corporate needs there.
Then the other fixed income securities are things like mortgage-backed securities. You can ladder out, certificates of deposit, all kinds of things like that. I would say that from a financial planning perspective, which kind of account type could have an impact on which kind of bond you're looking into. In a taxable type account, you may be more considering of municipal bonds and things like that because, well, in most instances you're going to be able to at least get federal tax exemptions from that. But if you're looking at other types of accounts, potentially tax deferred-
Josh Robb:
It does matter.
Austin Wilson:
... it doesn't matter. You could get corporates and be fine to go there, so high yield bonds, crazy stuff. Those are bonds types, so choosing that is very key. Some people mix their bond types in their bond ladder, and that's not a huge deal, but a lot of times it makes most sense based on your strategy to keep them the same.
[12:27] - 3rd Step to Building a Bond Ladder: Selecting the Duration
Josh Robb:
Third point is select your ladder length. How many years out, what total duration should your bond ladder be? Then you could divide that, divide your dollars by how many years your bond ladder is, and then get how many dollars per year in bonds maturing you should have. A lot of people do a five-year or a 10-year, a six-year, or an eight-year. There's not necessarily a right or wrong. It depends on your needs for your liquidity at any given point in time.
Because you mentioned this as maybe it's for a specific need, I knew some that time the maturities around payments due for college expenses. They bought these bonds that were maturing in the months prior to when tuition was due, so you'd build that out based on that. It was a four-year bond essentially with payments twice a year for tuition.
[13:14] - 4th Step to Building a Bond Ladder: Diversifying Maturities
Austin Wilson:
And the fourth step, diversify the maturities. Again, you've already established your ladder length, and then you know how many dollars... and you might have more than one bond per year, but it's generally the good to look at it in dollars maturing per year. You might have two different bonds per year or three different bonds per year, depending on how big your account is-
Josh Robb:
Spread those out for the year. Yeah, it depends.
Austin Wilson:
Yep. Yep. How you want your cashflow to come in is kind of key here. But then say you have a million dollar 10-year bond ladder, you could have a hundred thousand per year, and you could have that for two $50,000 bonds maturing at six months apart during the year. You can really work it out however you want, but that is a good way to do that.
Now, Josh, I had a question for you. As my favorite financial advisor, here, say Austin Wilson wants to create a bond ladder. I've got a million dollars today to start a bond ladder. Should I dollar cost average buying my bonds or buy them all at once or pick and choose, try and time things?
Josh Robb:
It's a little different in that when you think of the stock market... If I wanted to buy Microsoft or Apple, just think of any large company, there's a lot of stock out there, so the only thing that fluctuates is the price, which is just moving based off of news. But the availability's there.
Bonds, there's a limited quantity of bonds. Like you mentioned, if I'm Josh Robb's business and I only put out a handful of bonds for what my needs, so it's not like there's millions and millions of shares out there like you would think of a large corporation of stocks. Bonds are a little limited. It is a little harder when you're building these ladders out, depending on the size that you're working with, to find bonds that fit your needs. You may say, I have a 10-year ladder, a million dollars in building this out, and as you look through the different years, man, there's not a lot of choices for this one right here in particular that I like. So you may have to or be forced to kind of spread that out.
The other thing is if you're asking me right now, we just had a very rapid increase of interest rate hikes. The Fed is potentially looking at maybe being close to that peak. They may be done or a little bit more, so you're not going to see much upward. What you could miss out on is if I buy a 10-year bond-and then interest rates go up, I could have bought an eight-year bond two years from now maybe at a higher interest rate. So you're kind of playing that, but now it's not a horrible time to be buying bonds if you're looking for yield. You're probably collecting a little bit higher interest rate than you had a couple years ago.
Overall, it really depends on your goals, what you're trying to do, but there's a lot more limited quantity when you're looking for specific bonds than there is stocks. It's just a different way of shopping for those.
[15:52] - Dad Joke of the Week
Austin Wilson:
Absolutely. That's halfway through our list. Josh, I think we can take a break.
Josh Robb:
Yes, I have a dad joke for you.
Austin Wilson:
Oh, you said it's a good one.
Josh Robb:
It is about bonds.
Austin Wilson:
Oh, man.
Josh Robb:
What is the difference between men and bonds?
Bonds mature.
Austin Wilson:
Bonds mature. I thought you were going to say something about fixed.
Josh Robb:
Nope. Nope. Nope, bonds eventually mature.
[16:16] - 5th Step to Building a Bond Ladder: Shop Around
Austin Wilson:
That's funny. All right, we got four more. Let's get through them.
Number five, after you have determined how long your ladder needs to be, how many bonds you want based on each maturity, all of that, then you get to go choose your specific bonds, and I actually kind of enjoy this.
Josh Robb:
That is fun.
Austin Wilson:
Going shopping, I call it. You bring a cart. You go, you just shop the sales, you try and find good deals. You do it on whatever platform you trade on. It's likely the ability to go find bonds. You can also work with your advisor to do this for you, and that's what I would recommend most people do who don't live in this world. But you need to research and select individual bonds that meet your criteria based on maturity, based on type of bond, based on yield, all of these different things here.
I would say that it's very good to keep an eye on the credit rating of the bond you're buying. Now, lower credit rating, of course is going to have higher yield, and that sounds great until companies go bankrupt. That does happen with lower credit rated bonds, so keep that in mind as you go. Really just look at an overall, say, hey, this is kind of the risk tolerance I have for this and this is the type of bond and the credit quality I'm looking for this ladder and kind of stick with what works for that throughout the maturity duration there.
Josh Robb:
I'll tell you with that, too, especially if you're building on a ladder like this. Let's say you're buying municipal bonds, pay attention to what or where you're buying. If I buy, let's say in my build out, my two-year, I find a great bond in Ohio. Great. Then if I'm looking in my six-year section as I'm building this out, oh, here's another Ohio bond. Now I have $200,000 of that million dollar portfolio in Ohio municipal bonds, be careful where you go-
Austin Wilson:
Diversify.
Josh Robb:
... diversify because a lot of places will issue bonds on a continual basis, so that you may end up with owning the same exposure to some potential default in multiple areas.
Austin Wilson:
It would be the same thing for corporate bonds.
Josh Robb:
Corporate bonds is the exact same way.
Austin Wilson:
Corporate bonds, we don't want to buy... You might get great yields if there's certain pipes in the cycle, but when they want to buy all energy bonds. Some energy bonds are good, but let's have some technology bonds. Let's have some consumer bonds-
Josh Robb:
Bank.
Austin Wilson:
... and some banking bonds so we can spread out our risk, which is really the key.
Josh Robb:
And same is true. You mentioned this. When you're looking for it, don't just say, oh, that's giving me my most interest. Example, municipal. You may find there's some Detroit bonds that are offering a little bit more and you say, well, you know what, they kind of bankrupt themselves a little bit ago. Maybe I don't want to hang out there for too long. So, yeah, just be careful. There's a reason why if you're looking apples to apples, why one is higher than the other, and there's usually because the more risk, they offer more interest to entice you.
Austin Wilson:
I would also say that you often, depending on where you're buying, have the ability to filter on insure bonds. If a bond has insurance, that's essentially saying that the issuer has paid a third party to take on some risk in case of default, and you're going to get a lower coupon, for sure, but you're also going to take on less risk. Sometimes that's worth paying up for it. It just depends.
Josh Robb:
Those are getting harder and harder to find, too.
Austin Wilson:
Those are getting harder.
Josh Robb:
Since '08, '09, they've really had a harder time with that.
Austin Wilson:
After you've chosen your specific bond, you have a basket, you packed up the cart-
Josh Robb:
You're ready to go.
[19:31] - 6th Step to Building a Bond Ladder: Placing Orders
Austin Wilson:
... and you're ready to go check out, you have to go place your order. This is number six. Place your orders. You choose all those bonds. You either do that through your brokerage, your financial advisor, your platform, whatever you're doing on yourself. That's okay. Just make sure you're getting good prices and not paying crazy fees because in today's world, you should have very limited if any fees when you're buying these sort of things. So check that, make sure it seems reasonable before you check out, pay for your bonds and stuff like that.
Josh Robb:
That's right.
Austin Wilson:
That's number six, place the orders.
[20:02] - 7th Step to Building a Bond Ladder: Reinvestment Planning
Austin Wilson:
Number seven, reinvestment plan.
Josh Robb:
Oh, yeah.
Austin Wilson:
A bond ladder, as I mentioned earlier, as that year one matures or however many there are, you need to go, ideally go buy one at the end of the ladder the next year or the next six-month period or whatever that means-
Josh Robb:
Or fill in holes if you weren't able to find one-
Austin Wilson:
Fill in holes. Yep, exactly. So that's a reinvestment plan. You're going to receive that principle amount when the bond matures, and you've probably built up a little bit of cash in that account as well, so you can determine what you want to do with the cash that you've received an interest. But your principle amount should ideally then be placed in a hole in the ladder or the end of the ladder at that time. This makes sure that at any given point in time, you have a full ladder. You're smoothing out your returns. You're smoothing out your risk at all different times for your fixed income sleeve that we're talking about right here with your ladder here. So that's the reinvestment plan.
[20:51] - 8th Step to Building a Bond Ladder: Monitoring & Adjusting
Austin Wilson:
The eighth and final point and step is to just continually monitor and adjust things. Interest rates are going to move. The bond market's going to have wonky stuff happen. I mean, look at the last couple of years. It's been rates were nothing, rates are a lot, bonds lost value, bonds gained value. It's just insane how things move in the short term. That's why having that diversified long-term ladder is going to be key because it's going to take away some of that volatility over time.
Then just make sure that you're overlaying all of that with your financial goals. Have things changed? Do you need more money sooner or less money sooner? You can adjust the length of that ladder however you want to. With most bonds, they are liquid enough to buy and sell them. If you need to adjust things, you can. You're not locked in most instances, so that's a handy thing there. So, yeah, that's kind of the eight steps of building a bond ladder.
Josh Robb:
I like that. I think, again, CDs are the same way. For people who are looking for a more stable interest producing concept, a ladder is nice because overall you get a higher yield for that timeframe. You talked about this. That 10-year bond in theory should pay more than the short one-year bond in theory.
Austin Wilson:
In most instances, yes.
Josh Robb:
The idea then is over time, you end up owning 10 10-year bonds because you're always buying one far out on the ladder. So as they keep maturing, all those short-term bonds become long-term bonds, and then you end up with a higher yield overall. It's a great strategy if you need income. Now, historically speaking, bonds struggle with keeping up with inflation over the long-term.
Austin Wilson:
Sure.
Josh Robb:
And so like you said, if you buy a hundred thousand dollar bond when it matures in 10 years or however your length, you get your principal back, you get the hundred thousand. Well, inflation over that same timeframe means everything's more expensive, so while you collected interest, if you don't have that interest along with the bond to reinvest, you're going to put a hundred thousand dollars, which is less purchasing power. So your bond portfolio over time actually is reduced in purchasing power if you're not reinvesting some of that interest along with it. Just something to keep in mind. Still a great way because you do see historically less volatility than you do in the stock market.
Austin Wilson:
True. Last year was kind of an anomaly.
Josh Robb:
But, overall, that's what it's designed for, people who need that income.
Austin Wilson:
As a reminder, bond laddering is a long-term strategy. It's not something that you could just look at for three months and have it all figured out because it takes time to smooth out returns. It takes time to smooth out your income requirements, and that's kind of the benefit and the beauty of it all. I think it's also key to look back at years like 2022 and say, we need to know that there are a lot of risks in bond holding, in general. So while you didn't sell, you haven't necessarily lost yet, your bonds on a face value, in terms of what you can get for them in the market through last year are probably quite a bit depressed in value. That's because interest rates went up. Now those will work themselves out over time, and you will get par value back at the end if you hold them to maturity, which is what most people recommend doing with a bond ladder strategy as we have right now. But there are a lot of factors moving bond prices, yields over time.
[24:12] - Should You Invest in Bond Ladders?
Austin Wilson:
Again, always smart to talk to your financial advisor because they hopefully know what they're talking about in this area here. Which brings my question to you, Josh. Should you invest in bond ladders?
Josh Robb:
Well, the answer is, depends.
Austin Wilson:
Oh, man.
Josh Robb:
My favorite answer in the world.
Austin Wilson:
I'm shocked.
Josh Robb:
You've said it a couple times. You really need to talk with your advisor and make sure that owning fixed income, owning bonds fits within your plan and your goals. But if you are, this is one way of diversifying your bond investments and building out a plan to collect a higher interest yield over time. Do you need a bond ladder? I don't know. It depends what your goals are. Like I said, I've seen it used in many different ways, providing income and retirement, providing some stability. I mentioned the college tuition, timing the maturity dates to when you had tuition and just collecting some interest along the way. All different reasons why you could use one. It really just depends on your plan.
Austin Wilson:
Absolutely. Well, that is bond ladders in a nutshell. Again, that was the 50,000-foot view of what a bond ladder is. But, hopefully, that helps because bonds are a hot topic right now. Interest rates are higher than they've been in some time and people are all the sudden interested in fixed income again. So that was hopefully helpful. Thank you for listening.
Again, if you had someone asking about bonds, asking about a bond ladder, share this episode with them. Hopefully, they'll enjoy it and learn some as well. And if you have any ideas, here's a reminder, you can always email them to us, hello@theinvesteddads.com. Any questions, any comments, we'd be happy to talk to you about that. But until next week, have a great week.
Josh Robb:
All right, talk to you later.
Austin Wilson:
Bye.
Thank you for listening to The Invested Dads Podcast. This episode has ended, but your journey towards a better financial future doesn't have to. Head over to theinvesteddads.com to access all the links and resources mentioned in today's show. If you enjoyed this episode, and we had a positive impact on your life, leave us a review. Click subscribe, and don't miss the next episode.
Josh Robb and Austin Wilson work for Hixon Zuercher Capital Management. All opinions expressed by Josh, Austin, or any podcast guests are solely their own opinions and do not reflect the opinions of Hixon Zuercher Capital Management.
This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Hixon Zuercher Capital Management may maintain positions in the securities discussed in this podcast. There is no guarantee that the statements, opinions, or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk including the potential for loss of principle. There is no assurance that any investment plan or strategy will be successful.