Financial Term Explorer
Fixed Income
Investments paying predetermined regular amounts like bonds. More stable than dividends but no growth potential.
📝 Definition
**Fixed Income** investments pay predetermined interest amounts, like bonds and CDs. Unlike dividends, amounts are fixed and predictable but vulnerable to inflation.
In Simple Terms
Getting exactly $500 monthly as promised - doesn't rise or fall. Predictable but loses value with inflation.
Example
$100,000 in 4% bonds = $4,000 fixed annual interest.
💡 Practical Tips
- 1Include bonds for portfolio stability.
- 2Bond prices rise when interest rates fall.
⚠️ Common Mistakes
High inflation erodes fixed income's real value.
❓ Frequently Asked Questions
Dividends vs bond interest - which is better?▼
Dividends offer growth and inflation protection; bonds offer stability.