Tuesday, September 30, 2008

Banks ...


The principle is .... Bank makes money from you. So if you think you can make money out of banks, then you must be more naive than the banks.

Having said that, it doesn't mean you cann't make money WITH the banks, together with them ...

Unfortunately due to banking history and its old pratices, they will hide everything they think is benefiting you.  ( btw, before there are moneys, there are already banks ).  Although they are regulated by goverment to protect you, but they still have the room "Not To Voluntarily Offer You Information".  

With Banks, if you don't ask the right question, you will NEVER get the right answer.

So all the traditional banking products including Saving Accounts and Fix Deposit just let you get by.  You don't really earn anything from there if you consider inflation.  In the past, Banks didn't want you to know about Mutual Funds and Insurance.  But now they don't have that choice anymore.

In short, you put your money in Saving Accounts and Fix Deposit when you don't know what else to do with them.  AND you think its higher risk to keep them in your own place.  If someone stole your money from your place, you lost them.  If someone stole your money from the bank you deposit into, usually you will still get your money back, thanks to legislation and laws.
Inflation => You Lose
(Saving Accounts + Fix Deposit) - Inflation -> You Lose LESS
But you still don't earn.

(don't assume yet, mutual fund and insurance aren't going to get you out of your rat race neither, if its that simple, I wouldn't need to start a blog at all)

9 comments:

** OUT OF TRACK 思 想 出 軌 ** said...

VERY interesting and intriguing to get me reading. Apparently you have just successfully attracted your first potential client - a no-income housewife...
hehe...

facts about Bank - we know it already but good to have it proof here once again :))

** OUT OF TRACK 思 想 出 軌 ** said...

It reminds me about current sharing from my life investor and planner about Investment Banks and Banks.

After Y2k, US flat rate was lower till 1.5.% so money is floating around Everywhere bcos of the burst of tech bubble. Banks(B&IB) injects $ to real estates to have property prices went up crazily. IB repayment become MBS (Mortgage Backed Securities) - most banks & govn. invested in these MBS = return of MBS is directly related to their ability to repay mortgage and property price but NOW, BOTH are vainshed in air, MBS becomes rubbish. Banks invested MBS from OUR money and when MBS failed=banks has not $ repay to general public.

another thing, after 90s, most econ activities mainly relate to financial and property, and these are both collapsed now, ppl become unemployed..cos it was all fast money so it led ppl rushed/engaged into this short cut of life over traditional career=make things=inventions. ppl are lost now and life seems are totally manipulated by Big players...

Over the past decade we have no invention but diseases=new diseases. (we had Internet in the decade before) If this situation persist, we might need to back to traditional biz and back to original lifestyle...

therefore, organic food, original lifestyles are being focused right now...

life is sad, in our pov :(((

** OUT OF TRACK 思 想 出 軌 ** said...

sorry the original point was: Investment Banks are no long exist in future and all are turning to Bank only cos our Big players realized there is no more credit in the world - no investion -no new money. Credit was from dream/illusion (property/financial)

Michael Tsen said...

I am not quite sure I get what you mean but I think I do ... :)

The stuff you mention ... is what I call 'derivative'. The parts after the fundamentals will be that.

Basically that is the thing about Finance. Its all about plugging things from the air, creating something from nothing.

Long time ago, there wasn't such thing call Money. Today money is very real and exist.

yes today there are many derivatives that do more harm than helps. But eventually the few good ones will stay on and become a norm in future. then new derivatives will surface out again ... generations by generations.

In some sharing, I refer this as "The Secret", creating anything from nothing and its possible ...

In other sharing, I call this the root of all sins ...

that's why I think starting this blog is important. If one has a strong fundamental, then he can 'play' with the derivatives ... else he will just become one of the victims, 95% of them.

** OUT OF TRACK 思 想 出 軌 ** said...

I was trying to comment about Banks and the bad of bankers :((( plus the 'vanish' of IBs in near future and the story behind it.

You have outgrown of the situation where 95% of us feeling sad about the world and being manipulated and go with the flow. And you want to do something to help us. Wish you luck. But we are all stubborn animals with very limited 'resources' on hand :(

Anonymous said...

the only way to earn from banks is to buy their shares but technically you are earning the capital gain from the stock market....but you do earn FD interest + dividends as well.

now is the good time to pick some banking stocks

Lee Wee Tak

Michael Tsen said...

been waiting but PBB hasn't dropped enuf yet :)

Urilla said...

Good post.

Michael Tsen said...

thankx, urilla