Fixed Income

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DEFINITION of 'Fixed Income'

A type of investing or budgeting style for which real return rates or periodic income is received at regular intervals at reasonably predictable levels. Fixed-income budgeters and investors are often one and the same - typically retired individuals who rely on their investments to provide a regular, stable income stream. This demographic tends to invest heavily in fixed-income investments because of the reliable returns they offer.

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BREAKING DOWN 'Fixed Income'

Individuals who live on set amounts of periodically paid income face the risk that inflation will erode their spending power. Fixed-income investors receive set, regular payments that face the same inflation risk.

The most common type of fixed-income security is the bond; bonds are issued by federal governments, local municipalities or major corporations.

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