Is it good to invest in government bond?

I want to have a steady source of income from investing but (a) I don't want to spend time figuring what stock to buy and (b) I don't want to risk my money. A friend suggested government bonds because regardless of the market fluctuations, the government pays the interest. Is this a good advice? If so how should I start? I'm 25 if that helps any.

PS. I don't want to become rich but let's say I want to make $3000 a year from my investment.

In order for you to get $3,000 a yr you are going to need about $60,000 in Govt bonds that are paying about 5%.

You might be able to find some bonds that will give you a slightly higher Yield to maturity but you will have to go out further on the maturity.

Yes, Govt Bonds are safe investments but you still have risks involved and can lose money! This is due to interest rate risk. Basically if you buy a bond and decide to sell it before maturity and interest rates have gone up you will have lost money.

At your age, I really would suggest investing in some mutual fund or ETFs that will pay you dividends if you need current income.

But if you insist in something safe I would suggest a high yield savings account or money market. Due to the interest rate environment today you can get pretty attractive yields without having to purchase bonds with long maturities. You should look into www.emmigrantdirect.com or www.ingdirect.com. I think Emmigrant is paying 5.05%

If you're trying to make some money you can choose low risk investments, like stock funds or index funds or mutual funds and make higher return on your capital invested

gdz,

Global Investors Community. Money Making Instructions

http://www.moneyhowto.com

Only if you don't mind killing innocent babies with bombs in Irak.

The interest rate for government bonds is usually lower than other forms of investment, but it is safe and there may be tax benefits

You are 25 years old? Avoid bonds(5%), you will barely beat inflation(4% average over the last 70 years) plus if interest rates go up(because of inflation) you'll be stuck holding low interest bearing bonds.

If you save $250 per month($3000 per year) for 40 years in a solid growth mutual fund(American Funds Growth Fund or Pioneer Fund) earning an average of 12% a year, you will have almost $3,000,000 when you turn 65.

But it sounds like you already have $60,000($60000 x 5% = $3000 per year). If you take that $60,000 and invest it in the funds mentioned above you would have approximately $1,200,000 in 25 years.

Choose wisely weedhopper!

I began investing in 1985 my first investment was a 90 day Treasury bill. In answer to your question yes government bonds are a very good place to start investing. They offer security and the backing of the government. Also Treasury bills,notes and bonds are exempt from Federal taxes, municipal bonds offer the same and often times more benefits. Important: Do your research. For example: When is the date of maturity? What is the yield for that time period? Do not hesitate to ask questions. By the way from my experience I can say you will most likely wind up considering the stock market. When and if you do index funds are a good beginning.