The lesson learned? Don't buy individual bonds that place you at risk if the issuer fails. Instead, buy a fund that invests in thousands of bonds. The diversification helps protect against the risk that problems might hurt a particular issuer.
Q: I want to know if I should take the First-Time Home Buyer Tax Credit, which gives me a $7,500 loan interest-free from the government for 15 years. I would keep the money safe in a bank CD and pay it back over 15 years. I may be able to earn $1,500 total on the $7,500 over 15 years (at 2.5 percent annual return). But is it unethical to take the government's money if not needed and capitalize on it? I am curious to hear your thoughts on this.
A: If you qualify for a tax break, take it.