Last time, I talked about my (thankfully?) fruitless attempt to buy tax liens as an alternative investment vehicle. I was initially attracted by the promise of high returns, but ultimately left feeling like what I was trying to do was—if not exactly unethical—certainly not very seemly. I didn’t want to profit on people’s misfortune.
But when I expand the scope of this inquiry a little further, it bumps up against services with similar outcomes, such as with peer-to-peer lending services like Lending Club and Prosper. Same thing: high return potential, but due to another user’s borrowing.
We don’t like to borrow around here for ourselves (as getting rid of debt is a prerequisite for becoming wealthy). We don’t encourage our neighbor to borrow money. All of which leads to a bit of an unfortunate reality that one of the major investment products available to us is a kind of debt.
I’m referring, of course, to bonds.