Bond

Know Bond? James Bond?

Now forget him.

Because the bonds in finance have nothing to do with the likes of him (though life would be so much more interesting if they did).

Bonds are like IOUs. Some old, poor, broke entity (usually the government, but sometimes a corporation) needs money. So it borrows it from other people (who are much better at managing their funds—we hope) in the form of bonds.

The entity doing the borrowing issues a bond (often these are made to look like some innocent little kindergartner’s attempt to counterfeit money) for the amount it’s borrowing...and then some.

It’s kinda like saying, “Hey, buddy, ol’ pal. You let me take this money from you today, and guess what? I’ll pay that amount back to you...plus a little extra...on so-and-so date.” Yeah...that's what friends are for.