From a very young age we are taught that a bank is the safest place in the world to keep your money.
Then as we get older we go from a piggy bank full of coins to a square piece of plastic with your name on it. This card represented the key to the vault, where all your paper and digital money would now be stored. And right then, you became a card carrying member of one of the Big 4 banks and possibly a loyal customer for life.
The large majority of us were content with ‘small print’ assurances that our money was safe; we didn’t question the status quo.
That is, until the global financial crisis of 2008 brought the shady commonplace practices of the international banking industries – and the multinational establishments that bankroll them – firmly into the spotlight.
The collapse of seemingly untouchable banking institutions and the realisation that multi-trillion dollar bail-outs were needed to keep major players in our global economy afloat forced everyday people to wake up to the fiscal foolishness and wonder just how safe their little nest egg was?
Like many other Australians, I too begun to question whether keeping all my money in the bank was the best way to protect my wealth and plan for my families’ future. A little research exposed some uncomfortable truths.
Are Australian Banks A Safe Place to Keep All Your Money?
4 simple facts that indicate they’re not…
1. National Australia Bank, Westpac AND the RBA received emergency funds in excess of 50 Billion USD from the US Federal Reserve. All vital signs indicate Australia is an economy on the rise. With the explosion of our mining industries some might say we’re experiencing an exponential incline. So that begs the question why our big boys were standing in line with their hands out?
2. The banks don’t speculate with their money, they do it with your money. When an entrepreneur takes on a new or risky venture, many do so using someone else’s funds and banks operate in the same way. When they make irresponsible loans and gamble on unstable markets, they like to do it with someone else’s money. Yours!
3. Australian banks aren’t lending to small business owners. As our banks become more cautious against any lending that doesn’t come with a government backed guarantee, small business owners are finding it’s becoming more difficult to access the full portfolio of financial services available from their banks.
With banks preferring to lend to those acquiring large sums of potentially life long debt, like new home owners, multinational corporations and of course other banks, small business owners will find there’s little relief out there if their business hits hard times or needs funding to grow. This is despite the high bank fees, hidden levies, and the fact that it’s our savings which are being used to finance lending to others. Does this seem fair to you?
4. No bank is an island; they’re all in it together. Even if your bank has been one of the few that has operated with some kind of financial integrity it will not escape the global economic mayhem that is only just getting started. The impact of financial derivatives which in actuality have no inherent value, affect the entire banking system and very small changes in asset prices can have very large consequences. And no bank is totally insulated from the actions and consequences of other banks – including yours.
The days of quietly following the chorus line are over. Anyone who wants to protect their hard earned savings and investments needs to start asking difficult questions and researching their options.
And that’s our mission at Ultimate Money: We help everyday Australians protect their long-term financial future and make sure you’re informed of saving and investment opportunities the banks won’t tell you about.