Bank Holdings?

guido

Well-known Member
Hello,

Most people are poor I guess?
This chart is from this year......

Guido.
a267163.jpg
 
Who would leave over 10K in an account that probably pays less than 1% and maybe even as low as .05 %
 
It's a bit difficult to interpret that chart without knowing exactly what question was asked. And how much money one needs in savings depends a lot on how much it costs to live; if you're spending 10K a month you need more in savings than someone who lives on 2K.

Supposedly <a href="https://www.gobankingrates.com/making-money/jobs/survey-great-recession-aftershocks/">61 percent of adults don't have enough savings to cover their expenses for six months</a>. But that means 39 percent do have enough, which is a bit more encouraging that your chart would suggest.

A particular item of concern is the number of people who don't have bank accounts. Your chart shows 21 percent with "I don't have a savings account" and 28 percent with zero dollars in an account. (Aren't those both the same thing?) But the FDIC says <a href="https://www.theatlantic.com/business/archive/2016/10/fdic-underbanked-cfpb/504881/">7 percent don't have bank accounts</a>. So apparently your chart only applies to savings accounts, and doesn't include "savings" in checking, CD or money market accounts.
 
(quoted from post at 21:33:19 05/08/18) Hello,

Most people are poor I guess?
This chart is from this year......

Guido.
a267163.jpg

back in the '80s when times were hard on some of us, kids in parochial school, two old cars, house note, car notes.. working two or three jobs... sick kids and no raise in 10 years... a 20% paycut and then a 18 month layoff.. it 'bout did us in.. we had no savings and lots of cc debt. we scrambled and got through it and learned a lesson..

now.. no debt, credit cards payed off each month... and we have savings, but it ain't in the bank, their interest rates are an insult and their fees are criminal... and if they close tomorrow, you're screwed.. mine is safe, secure and at arms reach.
 
The problem with banks is that due to current laws, they don't have to pay depositors a decent return on their investment!
 
As mentioned, hard to figure out some of that info; no account and zero in an account, aren't they the same? It's interesting to see, but not sure we can draw conclusions from it.

With .003 interest rates, having $10,000 or more at the bank is kinda foolish too. There are better paying places to store savings for sure! I get 3% plus no income tax on much of mine.....

Smart folk have a lot of savings, not at a bank account, so would look like zeros on this chart?

Net worth, or some other chart would be more informative.

Paul
 
Many workers today are paid by direct deposit and they never see a check or cash. Most have no idea what they really make because they use a debt card and spend until the card is down to zero until the next pay period. Several of the internet banks such as Ally do pay 1.5% on savings and I am seeing some of the FDIC insured CD's at 2.5 - 4 %.
 
(quoted from post at 08:59:48 05/09/18) Many workers today are paid by direct deposit and they never see a check or cash. Most have no idea what they really make because they use a debt card and spend until the card is down to zero until the next pay period. Several of the internet banks such as Ally do pay 1.5% on savings and I am seeing some of the FDIC insured CD's at 2.5 - 4 %.


if the SHTF senario ever happens I think 75 % of the population would be scrounging thru trash looking for food in a month... if we had an EMP event..predictions say 80-90 % of the population would be dead in a year... scary..,. everyone needs to put something back... not money... but food, clothes, necesseties ... money will be firestarters.
 
I do merely for the insured no risk involved--and i am at that age I don't need to make any more money as i still am saving money each year
 
Regardless of the question asked or the correctness of the chart, I believe its a good generalization of conditions. When I was young and raising a family I was more on the Right side of that chart, however, as I grew older n wiser and worked a career and saved and family was raised, I moved to the Left side. That's where I believe as one grows older AND IF THEY HAVE THE MEANS that's where its best they be.

John T
 
jniolon; This posting and your earlier one on this topic are intriguing, but slightly puzzling. In the first you say ?we have savings, but it ain't in the bank.... mine is safe, secure and at arms reach.? In this second one you say, ?money will be firestarters.? Can you tell me what it is that you keep close to you that you consider to be more secure than money? I don?t mean to pry, but this is a puzzle that has interested me for more than thirty years. Regardless of whatever I?ve been able to think of that would retain its value through one level of disaster, it?s always possible to imagine a further level of disaster, or an unforeseen change, that would render it worthless. If a person converts their wealth to food, survival gear, firearms and bullets, etc. then at a certain point it would be necessary to have that disaster to be able to get the value back out of whatever it is they?ve hoarded.

Stan
 
Agreed.

I keep a small amount in savings, my checking account carries most of my "cash" (except what's under the mattress). But my IRA holds the bulk of my "savings". The idea that people use a savings account to accumulate wealth is a 100 year old idea.
 
Yes, interest rates are a joke. Someone I talked to whose an architect said when they design a church, they tell them to plan on 5% inflation over as long as it takes the church to come up with the money to build. Evidently "real world" inflation is, to no ones great surprise, worse than "they" say it is. So, who would leave money in there hoping for 2% a year or whatever? You'd be better off buying precious metals and burying them in the back yard.

For the quantities of money tho - I'll say this. I saw a picture of a homeless man standing beside a well-dressed yuppie type waiting for a crosswalk. Written under the yuppie was something like "Net Worth: -$318,465. Under the hobo was "Has $7". It really makes you think. I honestly believe most people in the western world are either completely broke or worse, deep in debt.
 
(quoted from post at 19:33:19 05/08/18) Hello,

Most people are poor I guess?
This chart is from this year......

Guido.
a267163.jpg

IMNSHO, very few people in the US are actually 'poor'. However, there are many, many people in the US who don't know how to save, or budget. The notion of consumerism from retailers, fast food, and media is that money which comes into your hand must be spent. It is not for keeping, it is for spending. Thrift has become a four letter word in the US.
 
"A $500 surprise expense would put most Americans into debt"

But I agree - for most people, this is because of choices they make. Related story, I once helped my GF get some insurance quotes for her car - and one man I talked to at one of the companies said the majority of callers still owe money on their vehicles, even 5-10+ year old ones. Its a rare
exception for him when someone calls in and actually owns their vehicle.
Untitled URL Link
 
(quoted from post at 09:54:33 05/09/18) jniolon; This posting and your earlier one on this topic are intriguing, but slightly puzzling. In the first you say ?we have savings, but it ain't in the bank.... mine is safe, secure and at arms reach.? In this second one you say, ?money will be firestarters.? Can you tell me what it is that you keep close to you that you consider to be more secure than money? I don?t mean to pry, but this is a puzzle that has interested me for more than thirty years. Regardless of whatever I?ve been able to think of that would retain its value through one level of disaster, it?s always possible to imagine a further level of disaster, or an unforeseen change, that would render it worthless. If a person converts their wealth to food, survival gear, firearms and bullets, etc. then at a certain point it would be necessary to have that disaster to be able to get the value back out of whatever it is they?ve hoarded.

Stan

Hey Stan... Money is only as good as the faith people have in it. It ain't backed by anything. If a financial crisis happens, our currency is useless. We should spend all we can as fast as we can to obtain what we need to live... food, water, survival equipment, guns, ammo. Katrina was a lesson.. and it was one city. If a national emergency like an EMP happened it would stop all deliveries of needed goods... grocery and drug shelves empty in three days (there is no back stock other than what's on the coming trucks) You haven't seen viciousness until you see someone trying to get food for the kids. Flat screens or high $$ sneekers don't matter then. If it goes a step further and a catastrophic event (EMP... Major epidemic event,.... ) it's one of those EOTWAWKI things... the government can't do a thing to help... Katrina was the example... imagine a city like Chicago or New York City full of people and there is no food, no electricity, etc... and they don't can't cook with their cell phones.

I've got reserves... food, water, guns, etc and money put away to get me as comfortable as I can be till it's useless.

FEMA says 65% of Americans are not preparing AT ALL for a disaster... even though they say they are concerned about it...

As for recooping the investment ??? I can eat it, or use it to hunt something I can eat and protect what I have to eat... AFA the money... it's a loss... IF there were a disaster that shut down the gov. and IF it was able to recover with help from friends and enemies... I'd bet the US Dollar won't be the currency of the future.

just my thoughts...opinionss

john
 
jniolon; Thanks. That answered my question. The problem of an all or nothing approach is that it's all or nothing. My reason for asking what you had that was the equivalent of a bank account except that it was at arm's reach was to find out if you had discovered something more stable than money to hold. You're probably right about an EOTWAWKI scenario, but that's a very narrow focus. In the whole history of the world, every other disaster is more common than an EOTWAWKI type of event. War, famine, depression, natural disaster, hyperinflation, terrorist event, government failure, and many others are relatively common occurrences. Only a few of these are going to be best met with stockpiled freeze-dried food and automatic weapons. Uninsured earthquake damage to your house? Maybe having some money would be more useful.

Stan
 
You nailed it money should be used as the vehicle to transfer wealth not looked on as being wealth in itself and those that do put their faith in paper or computerized currency as being wealth will be sorely disappointed one day.
 
Chart is incomplete doesn't show the percentage of people holding cash,Silver,Gold,etc in hand and not dealing with a bank or only using a bank account to do things like pay bills.
 
It doesn’t hurt to have a portion of your spare money in several CD’s scattered around in different banks. They don’t gain much but that sum of money won’t devalue. Holding them in several banks spreads out the risk. That’s assuming we have the discipline to sock some away in the first place.
 
If your smart enough to have some real money, your smart enough not to have it in a bank. Or their brokerages etc. My suggestion is to learn on your own. Salesmen only help themselves, not you. Vanguard or Fidelity is a good start.
 
no savings account I have my money in cows and tractors if worse comes to worse I can still eat the cows
 
Matter of terminology. They use my money. They ought to pay a fair price. Yes they aren't a "hedge fund" but they don't pay what hedge fund pays either. I know nothing at risk nothing for a return.....so the saying goes.....at my age I can't afford risk. Loosing half on a bet takes making 100% just go get back where you were at the time of the loss plus the percentage you aren't making on the 100% you're trying to get back..
 
Ally pays 2.5% on 5 year CDs over $25k. FDIC insured. They have investment services too as a separate branch. Local bank pays 1.1%, another pays 0.9%. Really as nice a bunch of folks as you would choose to know. You do know that Ally Bank is what the Feds did to GMAC back when they bailed out GM. I have this and a 2011 Silverado to say that the government CAN get things right........sometimes.
 

Interest rates are based on the federal prime lending rate. Banks cant pay you any more if you can borrow the money cheaper, and then put it in their account and make them pay you for it. They operate on a tiny margin. Banks take your savings and uses it for loans, and has to pay rent, electricity, payroll, and taxes.

Those who hope for high interest rates are crazy. I can remember when a house loan was 16% or even more. That caused rapid inflation and your money is almost worthless, and buys less and less every year. A 100 bucks would buy less and less everyday.

Be happy with low interest rates while they last. To complain shows poor understanding. Some folks will cry if you give them hot apple pie.

And banks are insured by fdic so your savings IS secured!!!!

Credit Unions however may not be insured, so be careful there.
 
15% is crazy high, but less than 1% is crazy low.

Actually the high interest rates were caused by inflation - high interest rates did not cause inflation. The problem with cheap money is that it encourages risk - the kind of risks that cause housing bubbles and highly leveraged loans on everything from farm land to car loans. Low interest rates are what led to the massive credit crunch in 2008.
 
I agree the lower the better it makes people take their money and do something productive with it instead of sitting on their butts and collecting a check from the bank on the interest.
 
(quoted from post at 18:29:54 05/11/18) sotxbill, sounds like you own bank stocks. The only way to they'll get a large sum from me.

NO, but to blame banks for low interest rates is pretty ignorant. They do not control the interest rates.
 
(quoted from post at 08:59:53 05/12/18)
(quoted from post at 18:29:54 05/11/18) sotxbill, sounds like you own bank stocks. The only way to they'll get a large sum from me.

NO, but to blame banks for low interest rates is pretty ignorant. They do not control the interest rates.

When interest rates are low, put your money to work in rent houses or other sources instead of doing NOTHING. When interest rates are high, you can put your money to work by loaning it... to the bank.

Money is just like owning equipment. It can just sit in your driveway and make no money or you can put it to work.

Technically putting it in a bank, just means its safe from robbery as your not able to put it to work, or safeguard it. Any interest paid on it is extra.
And to all the uneducated, fdic has been insuring bank deposits since the great depression and banking regulations require banks to stay solvent. Either way your money is safe unless you exceed the insurance limit for that account. A married couple can have 3 different accounts at one bank and still have all three insured, then have 3 savings accounts at the same bank. Then you can go to another bank and start over. Its not rocket science. I know some OIL WELL farmers that have every bank in town filled up. Beware that credit unions are not banks per se and regulated different!!!!!!!(although that has been slowly changing.)

Old man yells at cloud!
 


Blaming banks for low interest rates is like blaming your wife for you being stupid.


Blaming banks for low interest rates is like blaming your son for you being ugly.

Blaming banks for low interest rates is like blaming your tractor for crooked rows and no rain.
 
Most live beyond their means and have nothing left to save.

However....... If CD's and savings accounts paid 3-5% interest, this country would be under water. We could not pay the interest on the $20 trillion national debt. Do the math, there are a lot of zeros in a trillion!

Read "The Creature From Jekyll Island". You will have a better understanding of the Federal Reserve and National Debt.

Bill
 
Rates are posted in the lobby and there is competition, not much but rates vary around here. News media hasn't done much coverage of
the Fed and interest rates like times in the past where the stock market got the shivers, but they are slowly increasing. I'm waiting to see
just when the changes are going to be reflected in the fees paid to the depositors.....so far they have just continued to fall.
 


yes, and that is why there are banking rules as to how much a bank can loan over their assets. Banks do get fined or taken over when they violate the rules. Yet occasionally a bank can fail, but at much less risk to the public.

If the whole economy breaks down, yes, there will be no banks, but also there will nothing to buy anyway. No food, no milk, no gas. You will have other problems than worthless paper money.
 

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