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Don't Invest In Bonds Until You See This! (Don't Make The Mistake!) · Triple Da Money

• 0:00
  SPEAKER_02: Quick recap, a bond is a loan.
• 0:02
  SPEAKER_02: You lend money, you get paid interest, and you get your principal back.
• 0:06
  SPEAKER_02: Today we find out it matters a lot who you're lending to.
• 0:10
  SPEAKER_01: Which is why I'm about to win this entire debate in about 10 seconds.
• 0:14
  SPEAKER_01: You have never won anything in your entire life.
• 0:17
  SPEAKER_02: Three bonds, three arguments, one of them is lying.
• 0:21
  SPEAKER_02: One of them is boring, and one of them is telling the whole truth and it's costing you votes.
• 0:26
  SPEAKER_02: Let's go.
• 0:27
  SPEAKER_02: Rules.
• 0:28
  SPEAKER_02: Each of you makes your case on why someone should send you their money instead of to the other two.
• 0:33
  SPEAKER_02: Then we roast each other, and the audience decides who they'd actually give their$2,000 to.
• 1:57
  SPEAKER_00: See, she agrees with me, and she still made it sound like an insult.
• 2:01
  SPEAKER_01: So basically, your whole pitch is I'm boring, but I show up.
• 2:05
  SPEAKER_00: My pitch is I've never once ghosted anybody in 250 years.
• 2:09
  SPEAKER_00: Beat that.
• 2:12
  SPEAKER_02: Okay, now it's my turn.
• 2:14
  SPEAKER_02: I'm the corporate bond, and I'm issued by real companies.
• 2:18
  SPEAKER_02: The big established been around a while kind.
• 2:22
  SPEAKER_02: I'm paying you more than the government bond does because I'm carrying slightly more risk.
• 2:27
  SPEAKER_01: How much risk?
• 2:29
  SPEAKER_02: Depends on the company.
• 2:30
  SPEAKER_02: That's the whole point.
• 2:31
  SPEAKER_02: Before you lend to any company, you check its credit rating.
• 2:34
  SPEAKER_02: There are agencies that actually grade companies on how likely they are to pay you back.
• 2:39
  SPEAKER_02: The same way a report card grades you on how likely you are to actually do the homework.
• 2:43
  SPEAKER_00: She's the only one of us that brought paperwork to a costume fight.
• 2:47
  SPEAKER_02: Because the paperwork is the entire pitch.
• 2:50
  SPEAKER_02: If the company's rating is strong, I'm nearly as safe as Brandon.
• 2:54
  SPEAKER_02: And the company pays a little bit more.
• 2:56
  SPEAKER_02: That is a genuinely great deal when you find it.
• 2:59
  SPEAKER_00: And if the rating's not strong?
• 3:01
  SPEAKER_02: Then congratulations, you've basically found your way right over to him.
• 3:06
  SPEAKER_01: Okay, my turn.
• 3:08
  SPEAKER_01: Forget everything they just told you.
• 3:10
  SPEAKER_01: I'm the cool bond.
• 3:12
  SPEAKER_01: And I'm about to make you rich.
• 3:14
  SPEAKER_01: Look at this yield.
• 3:16
  SPEAKER_01: Numbers like this from companies like mine?
• 3:19
  SPEAKER_01: You're not gonna find this from these two.
• 3:22
  SPEAKER_01: I'm talking about real money.
• 3:24
  SPEAKER_02: True.
• 3:24
  SPEAKER_02: Cool bonds, also known as junk bonds, do pay considerably more.
• 3:30
  SPEAKER_02: That's not a trick.
• 3:31
  SPEAKER_01: Thank you.
• 3:32
  SPEAKER_02: The trick is why they pay more.
• 3:35
  SPEAKER_02: These bonds are from companies that credit agencies have labeled as a real risk of not paying you back.
• 3:41
  SPEAKER_02: The extra money you're being paid, that's the company bribing you to take that chance.
• 3:45
  SPEAKER_01: Don't look at my financials, by the way.
• 3:47
  SPEAKER_01: They're not even relevant.
• 3:48
  SPEAKER_00: That's like the exact opposite of not relevant.
• 3:52
  SPEAKER_01: Look, sometimes junk bonds turn it around and become way better than anyone really expected.
• 3:58
  SPEAKER_02: Yeah, sometimes.
• 4:00
  SPEAKER_02: But sometimes it doesn't.
• 4:02
  SPEAKER_02: And that's called a risk and not a real guarantee.
• 4:05
  SPEAKER_01: Okay, when you say like that, it does sound a little worse.
• 4:08
  SPEAKER_00: So let's get this straight.
• 4:09
  SPEAKER_00: You pay more because nobody thinks you're gonna pay them back.
• 4:12
  SPEAKER_00: I prefer the cool one.
• 4:14
  SPEAKER_02: And you pay the least because you're the safest possible thing on the stage.
• 4:18
  SPEAKER_02: You're basically the group project partner that does 100% of the work and only asks for a B minus.
• 4:26
  SPEAKER_00: I'll take it.
• 4:26
  SPEAKER_00: I mean, I've never had to say trust me and mean it ironically.
• 4:31
  SPEAKER_01: And you're just him with slightly better numbers and worse posture.
• 4:35
  SPEAKER_02: I'm literally sitting up straight right now.
• 4:38
  SPEAKER_01: Metaphorically.
• 4:40
  SPEAKER_00: At least you tell him what happens if your company doesn't actually pay.
• 4:43
  SPEAKER_01: You could lose some or a lot of what you put in.
• 4:46
  SPEAKER_01: I can't hear you.
• 4:47
  SPEAKER_01: You could lose your whole investment.
• 4:49
  SPEAKER_01: Are you happy now?
• 4:51
  SPEAKER_02: That's the actual trade-off underneath all the costumes.
• 4:54
  SPEAKER_02: More reward almost always means someone out there decided there was more risk baked in.
• 5:01
  SPEAKER_02: Nobody's just handing out free money.
• 5:04
  SPEAKER_02: So who actually wins?
• 5:06
  SPEAKER_02: Honestly, it depends on you and what you're saving for and when you actually need the money.
• 5:12
  SPEAKER_00: If it's money that you absolutely cannot afford to lose and you're fine with having a small return, then a government bond or a strong corporate bond does the job.
• 5:23
  SPEAKER_01: And if you have money, you're fine throwing away, chasing a bigger upside.
• 5:27
  SPEAKER_02: A small slice of junk bonds is how some investors play that, knowing full well that some of those bets won't pay off.
• 5:38
  SPEAKER_01: Hearing this all out loud, I might not actually be winning this debate.
• 5:41
  SPEAKER_01: You are never winning this debate, buddy.
• 5:44
  SPEAKER_02: Government bonds, safest, but with the lowest payout.
• 5:47
  SPEAKER_02: Corporate bonds, a little bit more reward, a little bit more risk, but it all comes down to the company's credit rating.
• 5:56
  SPEAKER_02: Junk bonds, highest payout, but there's a real risk of losing a lot of your money.
• 6:01
  SPEAKER_02: Because junk just means lower credit rating and not a guaranteed jackpot.
• 6:07
  SPEAKER_00: Higher reward almost always means someone decided that there's a higher risk hiding underneath it.
• 6:13
  SPEAKER_01: And check the rating before you check the yield.
• 6:16
  SPEAKER_01: I learned that one the hard way.