Over medium low heat, cook the bacon until just before starting to turn crispy. this step should take around 15 minutes.
Remove the bacon from the pan using a slotted spoon leaving the rendered fat in the pan.
With the pan still over medium low heat, add the red onion and cook until caramelized. Stir every 5 minutes or so as over stirring will cause the caramelization to take miuch longer. This step should take around 30 minutes
Once the onion have finished caramelizing, add the garlic and cook for another 2 minutes.
Add the bacon back to the pan along with the honey and brown sugar. Mix to incorporate all ingredients. Continue mixing and cook for another 2-3.
Add the water to the pan. Mix to incorporate. Simmer for 10 minutes.
Then add the balsamic vinegar and bourbon to the pan. Mix to incorporate. Continue simmering until a majority of the liquid has evaporated and the consistency is very jam-like. This step should take about 10 - 20 minutes.
The bacon jam can be used immediately or cooled and refrigerated. The jam will most likely harden in the refrigerator so you can microwave it for a few seconds to bring it back to its normal thickness.